TIME IS MONEY: AN EMPIRICAL ASSESSMENT OF NONECONOMIC DAMAGES ARGUMENTS.

• Author: Campbell, John

TABLE OF CONTENTS INTRODUCTION I. BACKGROUND A. The Law of Non-Economic Damage Arguments B. Literature Review II. EXPERIMENTAL DESIGN A. Research Questions B. Stimulus and Manipulations C. Respondents III. RESULTS A. Effects on Damages B. Liability Determinations C. Effects on Case Value D. Replication with Student Sample IV. LIMITATIONS V. IMPLICATIONS CONCLUSION APPENDIXES A. Survey of State Non-Economic Damages Law B. Histogram of Damages Awards by Scenario C. Regression Analysis D. Variance Comparison INTRODUCTION

One of the most difficult tasks imposed upon a jury in deciding a case involving personal injuries is to determine the amount of money the plaintiff is to be awarded as compensation for pain and suffering. No method is available to the jury by which it can objectively evaluate such damages.... The chief reliance for reaching reasonable results ... must be the restraint and common sense of the jury.

Beagle v. Vasold, 417 P.2d 673, 675 (Cal. 1966) (citing C. MCCORMICK, MCCORMICK ON DAMAGES [section] 88 (1935))

Flying down a highway at seventy-five miles per hour, the tread on the front left tire of an SUV separates. The SUV crashes, paralyzing the driver. At trial against the tire manufacturer, the plaintiff's attorney argues the design of the tires was negligent, asking the jury to find the defendant liable and to award damages. To support the request for economic damages, the attorney provides the jury with past medical bills, calculates lost wages, and totals other economic harm, such as the need to modify the plaintiffs home to accept a wheelchair. Opposing counsel denies liability, but argues in the alternative that the economic damages are much lower, providing competing expert opinions. After closing argument, the jury receives jury instructions providing clear guidance on how to determine liability and economic damages. The abiding hope is that a reasonable award allows the tort system to serve its dual purposes of recompense and deterrence.

"Jurors report being deeply challenged by the task of arriving at damage awards." (1) Non-economic damages, which on average account for 50%-80% of the total jury award, are particularly difficult for jurors because they are not tied to bills, lost income or future healthcare costs. (2) They are, instead, an effort to quantify human suffering. And they matter. A retired person who is severely injured may have almost no economic loss, but he or she might suffer in severe pain the rest of his life.

So, what can attorneys say to jurors in closing argument on this important and difficult topic? What impact will their argument have? Could it unfairly swing impressionable jurors grasping for anything to hold onto? Could arguments about damages could seep into findings on liability?

These questions matter for plaintiffs, defendants, the justice system, and society as a whole. Yet, courts have embraced wildly differing, contradictory approaches to how attorneys may address non-economic damages in closing argument. (3) In particular, courts differ on whether the attorney is permitted to break down the years that the plaintiff will suffer with her injuries and disabilities into smaller units of months, days, or even minutes--a rhetorical strategy known as a "per diem argument" (even when not limited to days in particular). Some courts allow per diem calculations of the amount of time a person will suffer but prohibit suggesting a particular dollar amount (e.g., "plaintiff has 2,225,000 minutes of suffering left in his life; award what you think is fair"). Others allow a lump sum demand but no per diem calculation to support it (e.g., "please award $4,000,000 for pain and suffering"). Still others allow both approaches together--an argument that quantifies how long the plaintiff will suffer in a unit of time then multiplies it by a fixed amount in order to support a total demand (e.g., "58,240 hours left to be awake and in pain multiplied by $7.50 per hour, supporting an award of $436,000"). Finally, some states forbid attorneys from saying anything at all about the time a person will suffer or an appropriate amount, leaving the work entirely to the jury.

Each regime is purportedly justified by assumptions about how lump sum and per diem calculations will impact a jury. (4) Some courts speculate that per diem calculations will give jurors a false sense that damages are certain, and this will result in runaway awards. (5) Other courts speculate that per diem calculations help jurors quantify pain and suffering damages, as they provide jurors with guidance when deciding a difficult issue. (6)

These are of course empirical questions. This article provides a complete index of the contradictory legal regimes by classifying every state and then randomly assigning mock jurors into one of the regimes, controlling all other information presented. After exposing jurors to a rich forty-minute trial stimulus, including all components of a real trial and legally appropriate instructions, we measure both liability findings and outcomes, just as real jurors decide cases. To enhance generalizability, we replicate our own results with a convenience sample of law students.

We find that per diem arguments do not dramatically increase awards as many states assume; they do, however, impact liability awards, despite the fact they should be conceptually separate. Indeed, per diem arguments increase liability awards by about 10%, a counterintuitive result that no state law contemplates.

The article proceeds as follows. In Part I, we systematically survey the fifty state laws on per diem and lump sum arguments to identify four distinct legal regimes. We also review an expansive literature that sheds light on the potential arguments for having one set of rules or the other. In Part II, we lay out the design of our experiment. In Part Ill, we discuss results, including outcomes on amount and variability of damages awards, binary case outcomes, and case expected value. In Part IV, we discuss methodological limitations and implications for law, policy, and strategy. A short conclusion suggests directions moving forward. Appendices provide citations to support the fifty-state survey and additional statistical analyses.

1. BACKGROUND

   1. The Law of Non-Economic Damage Arguments

      We undertook a fifty state (plus D.C.) review to identify state court decisions addressing what closing argument tactics are permissible for guiding the jury's non-economic damages decision. We found that the states fall roughly into four categories:

      1. states that allow a lump sum demand and per diem calculations to support the demand (twenty-four states);

      2. states that allow a lump sum demand but do not allow per diem calculations to support the demand (nine states);

      3. States that allow per diem calculations for the time plaintiff will spend with pain and suffering, loss of enjoyment, etc., but that do not let the plaintiff convert those into a dollar demand (two states);

      4. states that prohibit both lump sum demands and per diem calculations (four states).

      The list above covers thirty-nine states. In addition, there are eight states that leave closing argument to the "sound discretion" of the trial court, including how non-economic damages are argued. Four states that have no clear appellate or statutory law providing a definite answer regarding lump sum demands and per diem calculations. In those states, our informal conversations with practitioners suggest the reality on the ground is that judges have their own preferences across the four dominant approaches, but there is no prevailing statewide practice. Table 1 below displays each category and the respective states. (7)

      As can be seen in Table 1, almost 50% of all states (twenty-four) allow a plaintiff to make a lump sum demand and to support that demand with a per diem calculation. states that allow this approach often support this rule by stating that closing arguments are allowed to rely on "inferences" from the evidence. This is consistent with the view that a closing argument is just that--an "argument." And since closing argument is based on inferences, the jury can accept or reject the arguments. For example, in rejecting a challenge to lump sum demands and per diem calculations, the California Supreme Court noted attorneys are "permitted to discuss all reasonable inferences from the evidence." (8) Courts also suggest that both a lump sum demand and a per diem calculation are a logical extension of how jurors decide damages--as per diem arguments track how a jury may calculate damages from the evidence. For example, the California Supreme Court has said that, "[i]t would be paradoxical to hold that damages in totality are inferable from the evidence but that when this sum is divided into segments representing days, months or years, the inference vanishes." In states that allow per diem arguments, the concern that such arguments will produce impermissibly high awards is typically rejected. For example, a D.C. court expressed faith in juries, stating that it has "confidence in our juries' ability to distinguish between argument and evidence." (9) The same court also noted the power of trial courts to remit verdicts if they were excessive. (10)

      In nine states, courts concluded a lump sum demand is allowable, but per diem calculations are impermissible. The most common justifications for this position are that per diem calculations are either misleading or too easily manipulated. For example, the Illinois Supreme Court held that per diem calculations create "an illusion of certainty." (11) New Hampshire's Supreme Court held that per diem arguments are too susceptible to manipulation, stating, "[t]he mathematical formula applied to the plaintiffs pain and suffering ... for her life expectancy of 233,600 hours can result in any amount that the imagination of counsel deems advantageous." (12)

      Even within these nine lump sum states, there is some...