DAMAGESDAMAGES

Part IIPart II

In re Estate of Ferdinand E. In re Estate of Ferdinand E. Marcos Human Rights Marcos Human Rights

LitigationLitigation

U.S. District Court, Hawaii (1995)U.S. District Court, Hawaii (1995)

BackgroundBackground

Marcos was President of Philippines beginning in Marcos was President of Philippines beginning in 19651965

Philippines Constitution contained a two-term limit Philippines Constitution contained a two-term limit like the U.S. Constitutionlike the U.S. Constitution

About a year before he would have to leave office, About a year before he would have to leave office, he suspended the Constitution and declared martial he suspended the Constitution and declared martial law through Proclamation 1081, with the official law through Proclamation 1081, with the official purpose stated as:purpose stated as: ““To maintain law and order throughout the Philippines, To maintain law and order throughout the Philippines,

prevent or suppress all forms of lawless violence as well as prevent or suppress all forms of lawless violence as well as any act of insurrection or rebellion and to enforce obedience any act of insurrection or rebellion and to enforce obedience to all the laws and decrees, orders and regulations to all the laws and decrees, orders and regulations promulgated by [Marcos] personally or upon [his] direction”promulgated by [Marcos] personally or upon [his] direction”

BackgroundBackground

Proclamation 1081 set the stage for the Proclamation 1081 set the stage for the dictatorship that developed thereafter, and dictatorship that developed thereafter, and resulted in “acts of torture, summary execution, resulted in “acts of torture, summary execution, disappearance, arbitrary detention, and disappearance, arbitrary detention, and numerous other atrocities”numerous other atrocities”

Jury found defendants (Marcos’ estate) liable to Jury found defendants (Marcos’ estate) liable to 10,059 plaintiffs, awarding them $1.2 billion in 10,059 plaintiffs, awarding them $1.2 billion in exemplary damagesexemplary damages

Compensatory DamagesCompensatory Damages

Plaintiffs wanted to use random Plaintiffs wanted to use random sample of plaintiffs to represent the sample of plaintiffs to represent the damages suffered by the classdamages suffered by the class

Defendants claimed this deprived Defendants claimed this deprived them of due process and the 7them of due process and the 7thth Amendment right to trial by juryAmendment right to trial by jury

Dannemiller’s Plan (Kish Dannemiller’s Plan (Kish Formula)Formula)

Universe: 9,541 valid claims, separated into 3 Universe: 9,541 valid claims, separated into 3 categories:categories:

1) torture victims1) torture victims2) summary execution victims2) summary execution victims3) disappearance victims3) disappearance victims

Sample: 137 randomly selected claimsSample: 137 randomly selected claims Confidence level: 95%Confidence level: 95% Each sample plaintiff would receive the individual Each sample plaintiff would receive the individual

amount calculated, while those in the remaining amount calculated, while those in the remaining population would each receive the average population would each receive the average amount for their category, as calculated from the amount for their category, as calculated from the samplesample

MethodMethod

Special Master was appointed to:Special Master was appointed to: Supervise depositions of sample Supervise depositions of sample

plaintiffs plaintiffs Serve as expert on damages, reviewing Serve as expert on damages, reviewing

deposition transcripts and claim formsdeposition transcripts and claim forms Make recommendations on Make recommendations on

compensatory damages for the 137 compensatory damages for the 137 claimants as well as remaining class claimants as well as remaining class members to the jurymembers to the jury

MethodMethod

Special Master reviewed the depositions for:Special Master reviewed the depositions for:

1) whether the abuse claimed fell under 1) whether the abuse claimed fell under the the definitions which the jury used at the definitions which the jury used at the liability phase liability phase (torture, summary execution, (torture, summary execution, and and disappearance)disappearance)

2) whether the Philippine military or 2) whether the Philippine military or paramilitary paramilitary was involved in such abusewas involved in such abuse

3) whether the abuse occurred between 3) whether the abuse occurred between September September 1972 and February 19861972 and February 1986

ResultsResults

137 randomly selected plaintiffs137 randomly selected plaintiffs 67 torture victims67 torture victims 52 execution victims52 execution victims 18 disappearance victims18 disappearance victims

Special master recommended an amount of Special master recommended an amount of damages for each category, but jury didn’t have damages for each category, but jury didn’t have to accept itto accept it

Jury returned verdict for total of over $766 million Jury returned verdict for total of over $766 million (about $1 million less than Special Master (about $1 million less than Special Master recommended)recommended)

Damages for TortureDamages for Torture

Ranked each claim from 1-5, with 5 being the worse in terms of Ranked each claim from 1-5, with 5 being the worse in terms of abuse and sufferingabuse and suffering

Special Master found the claims were similar enough within each Special Master found the claims were similar enough within each of these categories that he could recommend a standard damage of these categories that he could recommend a standard damage amount to each victim within that groupingamount to each victim within that grouping

Evaluations included considerations of:Evaluations included considerations of:1) physical torture1) physical torture2) mental abuse2) mental abuse3) amount of time torture lasted3) amount of time torture lasted4) length of detention if applicable4) length of detention if applicable5) physical and/or mental injuries5) physical and/or mental injuries6) victim’s age6) victim’s age7) actual losses (i.e. medical bills)7) actual losses (i.e. medical bills)

Damages for Summary Damages for Summary Execution and DisappearanceExecution and Disappearance

Factors in determining damages included:Factors in determining damages included: Whether there was any torture firstWhether there was any torture first The actual killing or disappearance (wrongful The actual killing or disappearance (wrongful

death)death) Family’s mental anguishFamily’s mental anguish Loss of earningsLoss of earnings

Cap of $120k maximum Cap of $120k maximum None for victims who didn’t workNone for victims who didn’t work When witness didn’t provide an amount, the average When witness didn’t provide an amount, the average

for the victim’s occupation was usedfor the victim’s occupation was used

Due Process IssueDue Process Issue

Right of defendant to try every single Right of defendant to try every single claim versus efficiency and practicalityclaim versus efficiency and practicality

Trying each of the plaintiffs in this case would Trying each of the plaintiffs in this case would take decadestake decades

Due process goes both waysDue process goes both ways Court concludes that “inferential statistics Court concludes that “inferential statistics

with random sampling produces an with random sampling produces an acceptable due process solution to the acceptable due process solution to the troublesome area of mass tort litigation”troublesome area of mass tort litigation”

Due Process IssueDue Process Issue

Court uses the balancing test used in Court uses the balancing test used in Mathews v. Mathews v. Eldridge Eldridge to help decide this issue:to help decide this issue:1) Private interest affected1) Private interest affected

Liability has already been determined, so it’s really just the Liability has already been determined, so it’s really just the amount of damages paid outamount of damages paid out

Each plaintiff still has to prove their claimEach plaintiff still has to prove their claim2) Risk of erroneous deprivation of that interest through 2) Risk of erroneous deprivation of that interest through

the procedures usedthe procedures used Weighs in favor of the statistical method because the Weighs in favor of the statistical method because the

verdict would probably have been MORE in a one-on-one verdict would probably have been MORE in a one-on-one trialtrial

3) Government’s interest3) Government’s interest One-on-one trials would be much more burdensome on the One-on-one trials would be much more burdensome on the

Court in terms of time and cost; maybe some claims would Court in terms of time and cost; maybe some claims would never even get determinednever even get determined

Due Process IssueDue Process Issue

One of the primary purposes of due One of the primary purposes of due process is to maximize accuracyprocess is to maximize accuracy

Common assumption that awarding Common assumption that awarding nonsample plaintiffs the mean damages nonsample plaintiffs the mean damages award from the sample will under- or award from the sample will under- or overcompensate many people with overcompensate many people with respect to the “right” amount they respect to the “right” amount they would get in an individual trialwould get in an individual trial

Due Process IssueDue Process Issue

What is the “right” damages award? What is the “right” damages award? Saks and Blanck suggest the concept of Saks and Blanck suggest the concept of the the correct correct

damages amount is an illusiondamages amount is an illusion ““Every verdict is itself merely a sample from the larger Every verdict is itself merely a sample from the larger

population of potential verdicts”population of potential verdicts” In traditional cases by accepting only one verdict, we’re In traditional cases by accepting only one verdict, we’re

therefore accepting some likelihood of errortherefore accepting some likelihood of error So individualized trials substitute one type of error for anotherSo individualized trials substitute one type of error for another

By conducting “mini-trials” and awarding the average to the By conducting “mini-trials” and awarding the average to the rest of the class by subgroup, we may be ensuring better rest of the class by subgroup, we may be ensuring better accuracy than we could by conducting all individual trialsaccuracy than we could by conducting all individual trials

Note: the more different the individual cases, the less Note: the more different the individual cases, the less accuracy benefitsaccuracy benefits This can be countered to some extent by choosing larger This can be countered to some extent by choosing larger

samples, or by increasing stratificationssamples, or by increasing stratifications

Seventh Amendment IssueSeventh Amendment Issue

Seventh Amendment “was designed to preserve Seventh Amendment “was designed to preserve the basic institution of jury trial in only its most the basic institution of jury trial in only its most fundamental elements, not the great mass of fundamental elements, not the great mass of procedural forms and details…”procedural forms and details…”

Jury determined all the facts during the liability Jury determined all the facts during the liability phase; no need to repeat them in the claims phasephase; no need to repeat them in the claims phase

The rules of evidence and procedure were followedThe rules of evidence and procedure were followed The Tort Victim Protection Act which this case The Tort Victim Protection Act which this case

arises under doesn’t discuss the determination of arises under doesn’t discuss the determination of damages, so the court is left with the discretion to damages, so the court is left with the discretion to create federal common law to deal with the issuecreate federal common law to deal with the issue

In re Chevron U.S.A., Inc.In re Chevron U.S.A., Inc.

U.S. Court of Appeals, 5U.S. Court of Appeals, 5thth Circuit (1997) Circuit (1997)

BackgroundBackground

Chevron used the land in question during Chevron used the land in question during the 1920s for a crude oil storage waste pitthe 1920s for a crude oil storage waste pit

Plaintiffs allege Chevron didn’t secure the Plaintiffs allege Chevron didn’t secure the land after they stopped using it, allowing land after they stopped using it, allowing waste to be deposited therewaste to be deposited there

Chevron then allegedly sold the land for Chevron then allegedly sold the land for residential purposes knowing it was residential purposes knowing it was contaminatedcontaminated

Plaintiffs sued for personal injury and Plaintiffs sued for personal injury and property damages resulting from the property damages resulting from the hazardous materials “migrating into the hazardous materials “migrating into the environment”environment”

Trial PlanTrial Plan

““Bellwether” trial Bellwether” trial 30 plaintiffs30 plaintiffs

15 chosen by plaintiffs15 chosen by plaintiffs 15 chosen by defendants15 chosen by defendants

All adults (unless part of a household represented All adults (unless part of a household represented by an adult)by an adult)

Each chosen individual counts as a single plaintiffEach chosen individual counts as a single plaintiff Focus on the individual claims of the selected Focus on the individual claims of the selected

plaintiffs and the issue of liability of defendant for plaintiffs and the issue of liability of defendant for pollutants giving rise to all of the plaintiffs’ claimspollutants giving rise to all of the plaintiffs’ claims

Bellwether verdicts would be matched to the Bellwether verdicts would be matched to the remaining claims for settlement purposesremaining claims for settlement purposes

WeaknessesWeaknesses

How does resolving the claims of these 30 plaintiffs How does resolving the claims of these 30 plaintiffs resolve the claims of the other 2970?resolve the claims of the other 2970?

What variables exist that impact the claims?What variables exist that impact the claims? Chevron believed the majority of plaintiffs sustained Chevron believed the majority of plaintiffs sustained

no injuries and developed no serious health problemsno injuries and developed no serious health problems Also believed that the class was extremely heterogeneousAlso believed that the class was extremely heterogeneous Contrast to plaintiff’s bellwether selections, which suggested Contrast to plaintiff’s bellwether selections, which suggested

that at least half of all plaintiffs were seriously illthat at least half of all plaintiffs were seriously ill Court decides this is not a legitimate “bellwether trial” Court decides this is not a legitimate “bellwether trial”

because the 30 people chosen are not representative because the 30 people chosen are not representative of the 3000 member group of peopleof the 3000 member group of people Misses all but the most extreme casesMisses all but the most extreme cases

Dr. Frankiewicz’s FindingsDr. Frankiewicz’s Findings

This self-selected sample is not This self-selected sample is not representative of population of plaintiffsrepresentative of population of plaintiffs

The average number of medical complaints The average number of medical complaints per plaintiffs chosen by plaintiffs’ counsel is per plaintiffs chosen by plaintiffs’ counsel is nine, exceeding the average number within nine, exceeding the average number within the entire plaintiff population by 333%the entire plaintiff population by 333%

The medical complaints of plaintiffs chosen The medical complaints of plaintiffs chosen by plaintiffs’ counsel exaggerate the average by plaintiffs’ counsel exaggerate the average severity of the entire class by at least 500%severity of the entire class by at least 500%

How to Correct the MethodHow to Correct the Method

To be valid, the sample must be:To be valid, the sample must be: Randomly selectedRandomly selected Of sufficient size Of sufficient size To achieve statistical significanceTo achieve statistical significance To the desired level of confidenceTo the desired level of confidence

Stratified random sample, as used in Stratified random sample, as used in In re In re MarcosMarcos, would have been preferable, would have been preferable Assuming that the universe is sufficiently Assuming that the universe is sufficiently

homogenous to be able to create effective homogenous to be able to create effective stratificationsstratifications

HoldingHolding

While this trial plan was invalid, a trial court While this trial plan was invalid, a trial court can potentially use a bellwether trial of can potentially use a bellwether trial of legitimately selected, representative legitimately selected, representative plaintiffs and apply those results to the plaintiffs and apply those results to the issues relating to the rest of the class of issues relating to the rest of the class of plaintiffsplaintiffs

The verdicts for the selected plaintiffs are The verdicts for the selected plaintiffs are valid, but under this structure those verdicts valid, but under this structure those verdicts can’t be used to make any inferences with can’t be used to make any inferences with respect to the nonselected plaintiffsrespect to the nonselected plaintiffs

HoldingHolding

Before a court can apply results from a Before a court can apply results from a bellwether trial to a use outside of those bellwether trial to a use outside of those particular cases, it has to find that the particular cases, it has to find that the bellwether cases are representative of the bellwether cases are representative of the larger population of caseslarger population of cases Such finding must be based on solid statistical Such finding must be based on solid statistical

evidence identifying the variables involvedevidence identifying the variables involved Must have large enough sample to provide a Must have large enough sample to provide a

high enough level of confidence in the high enough level of confidence in the accuracy of the resultsaccuracy of the results

Open Questions (Jones’ Open Questions (Jones’ Dissent)Dissent)

Even if a proper bellwether trial Even if a proper bellwether trial does does increase accuracy, could it still be increase accuracy, could it still be unconstitutional?unconstitutional?

What about due process for the non-What about due process for the non-bellwether plaintiffs?bellwether plaintiffs?

What effects do these nontraditional What effects do these nontraditional methods have in the future, when methods have in the future, when the findings may be reassessed?the findings may be reassessed?