Seeking a Day in Court: When Litigants Reject Tenders of Damages

The Supreme Court has ruled (again) that state laws purporting to condition the enforceability of arbitration agreements on grounds not ennumerated in Section 2 of the Federal Arbitration Act are themselves unenforceable on Supremacy grounds.  I teach that principle in my class using Southland v. Keating, and now I can use this more recent case.

Many smarter and more sophisticated students of arbitration law will provide commentary on the AT&T Mobility decision, but I was struck by an article in the same day’s New York Times noting that, after waiting nine years, the family of Mark Bavis, a passenger on one of the planes that rammed into the World Trade Center, is about to go to trial in its wrongful death suit against United Airlines and other defendants.

What’s the link?  Both claimants were offered full reimbursement for their loss.  Both rejected the offer — not because they thought it inadequate, but because they wanted to prove something other than damages. 

What is it that Americans seek, in the expensive, protracted and uncertain world of the courts, when they don’t seek damages for their injuries, but proceed with the horrors of litigation litigation anyway?

The Bavis’s are one of 90 claimants who rejected the offer of compensation by the victim’s compensation fund created by Congress in the wake of the attack.  Their lawyer has been quoted:

“The Bavis family feels very strongly that the information about how checkpoint security failed wholesale on Sept. 11 needs to be brought out into the public light,” Migliori said.

He said the family, which includes the victim’s twin brother, his mother and other siblings, has the support of many other families who had brought 95 lawsuits on behalf of 96 victims. All other lawsuits were settled.

As previously noted on this Blog, the claimant in the AT&T case had also been offered his damages.  In his dissent in the AT&T opinion, Justice Breyer proffered a rhetorical question, when confronted by the fact that the company offered to pay the claimant’s entire claim of $30.22, “What rational lawyer would have signed on to represent [the claimant] in litigation for the possibility of fees stemming from a $30.22 claim?”

I trust Justice Breyer didn’t mean this to suggest a standard of review, but the unintentional implication nevertheless remains:  If the damages arising from a claim do not attract an attorney, then restricting the claimant to asserting an individual claim couldn’t be fair.

In many people’s worlds, attorneys are not the litmus test of fairness.  A board game that is missing parts can be returned to the toy store for a complete game, without an attorney’s getting involved.  An overcharge on a credit card bill or a dispute in an E-Bay transaction or a problem with a neighbor’s barking dogs can all be resolved to everyone’s satisfaction without an attorney’s assistance.  Happens all the time.  Why is the absence of sufficient attorney fees relevant to the Court’s consideration of the AT&T case?

I think the answer in AT&T is that the claim asserted was not overcharging an individual, but committing fraud upon a large group of consumers, and that the claimant’s counsel wanted fees based on an award of larger damages than his client’s injury. Representing his client’s interest was never really in the game except insofar as he was part of a class whose damages had many more than one zero.  And AT&T’s offering to satisfy his client’s damages — or even treble his damages — didn’t cut it.

Similarly, the Bavis family seeks to show that the defendants were negligent.  They have professed utter uninterest in being compensated for the wrongful death of their family member.  Instead, they want to show bad acts of the defendants, just as the claimants in AT&T wanted to show bad acts of the mobile phone company.

I don’t know the answer but I think I know the question:  Is it the job of a court to determine liability in order to award damages, or is it the job of a court to determine liability for its own sake?

I invite readers to review Federal Rule of Civil Procedure 68 and consider whether the courts are the right place to assert actions with respect to which full damages have already been tendered.  Even more tantalizing, where the amount in controvery is a basis for federal court jurisdiction, can (or should) a court continue to assert jurisdiction when a party refuses an offer of that amount?

  1. Thanks, Peter, for the provocative post. My take on the issues touched upon in your article probably differs from that of many of your readers.

    The vast majority of cases settle. Only a tiny percentage go to trial (4% in state courts and 2% in federal court, according to a recent academic paper). A system that produces bargained solutions in the vast majority of cases can be fairly viewed and understood as a bargaining device, and that is the purpose for which the justice system is generally used. For example, the lawyer in the class action case that you cite presumably sought class certification so that he would have bargaining leverage to extract a substantial settlement.

    In stark contrast, the family of the 9/11 victim is clearly not using the justice system as a bargaining device. Nor are they, like many of the small number of parties that actually go to trial, refusing to settle because third-parties might condemn them for doing so (e.g., cases often try because one party would be better off losing and blaming the jury rather than settling). Instead, this family appears to be doing something that is almost unheard of: they appear to be genuinely and thoughtfully attempting – with full knowledge of the risks – to use the justice system as a process to uncover and establish truth.

    The Defendants could use the rule you cite (Rule 68) to marginally increase the risks that the family would face by going to trial (and the Defendants would have every right to do so). But that marginal increase in risk would clearly not be enough to scare this family into accepting a substantial settlement rather than proceeding through trial.

    In response to your central question (“Is it the job of a court to determine liability in order to determine damages… or to determine liability for its own sake?”), I would suggest that the answer may be neither. Whatever the “job” of the court and the civil justice system as a whole might be said to be, its central function is (1) to deprive people of justification for taking the law into their own hands, and (2) in actual practice (and without providing people with justification for taking the law into their own hands), to provide people with a strong incentive to settle disputes via bargaining. In the case of this family the first goal was accomplished, but the second goal was not. It’s very rare to find people that have such faith in our justice system and – regardless of whether one thinks that faith is justified – one can only wish that family the best.

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