DEBUNKING THE DEEP-POCKET DEFENDANT JURY BIAS

Jurors have been accused of being biased against deep-pocket defendants, or defendants with extensive financial resources.¹  Critics believe juries are more likely to find liability and to award more damages in cases involving deep-pocket defendants.²   But the “deep-pocket theory” is problematic because jurors do not tend to award liability and damages to plaintiffs in civil cases involving wealthy defendants more frequently than for civil cases involving non-wealthy defendants.  And in civil cases where the “deep pocket” defendant is a corporation, factors other than the corporation’s wealth drive the jury’s decision-making process.³

A series of studies performed by Robert MacCoun cast doubt on the role of a defendant’s wealth in awarding damages.⁴  To test the deep-pockets theory, MacCoun constructed fictional personal injury cases where the defendants were described to the jurors as either a relatively poor blue-collar individual, a corporation, or an individual with wealth equal to that of the corporation.⁵  While the deep-pockets theory would suggest that liability and awards would be greater for the wealthy individual and the corporation, the studies instead showed that juries tend to treat poor individuals and wealthy individuals the same.⁶  The studies also found that juries tend to award greater liability and damages to corporations than to individuals, regardless of an individual’s wealth, which suggests that something other than financial resources drives these increased rewards.⁷

Several reasons may explain why juries hold corporations to a higher standard than individuals in civil cases.⁸  For instance, a corporation, unlike an individual, is an organized, structured entity having persons with specialized skills.⁹  Further, a corporation contains groups of individuals, and juries may view groups as more effective in carrying out the corporation’s responsibilities.¹⁰  As another example, corporations often contain individuals that are professionals, and jurors likely hold professionals to a higher level of responsibility.¹¹  And perhaps most importantly, corporations have the potential to impact a large number of individuals, including employees and consumers of their services and products, and as such may be attributed a higher level of responsibility.¹²    

While studies show substantial differences between plaintiffs’ awards from corporate defendants and plaintiffs’ awards from individual defendants,¹³ it is important to remember that individual persons and corporations are not meaningfully comparable.¹⁴   In a study from the 1990s, the Civil Trial Court Network Project found that the overall win rate in tort cases between individuals who sued businesses and individuals who sued other individuals was about the same, but the damages were substantially different.¹⁵  The average damages for individuals suing individuals was $22,400, whereas the average damages for individuals suing businesses was $69,300, which is more than three times greater. ¹⁶   But the differences shown by these statistics are likely due, at least in part, to factors other than the defendant’s wealth. 

In addition to juries holding corporate defendants to a higher level of responsibility, the variety of cases between individuals and businesses may have a significant impact on a jury’s decision-making process regarding damage awards. ¹⁷  The number of nature of the claims and injuries, the defenses, and the legal rules all factor into the jury’s decision-making process.¹⁸  In addition, the process of settling cases differs between individuals and businesses; businesses may routinely settle most relatively small cases whereas individuals may not. ¹⁹  Thus, while it is tempting to accuse jurors of being biased toward deep-pocket defendants, the difference in jury awards between cases involving individuals and cases involving corporations is likely due to other factors than just the defendant’s wealth.