Negotiation, Lawyering, and Adjudication: Kritzer on Brokers and Deals

Theodore Eisenberg

doi:10.1111/j.1747-4469.1994.tb00403.x

1 Galanter, Marc, “Worlds of Deals: Using Negotiation to Teach about Legal Process,” 34 J. Legal Educ. 268 (1984).Google Scholar

2 Bedlin, Howard & Nejelski, Paul, “Unsettling Issues about Settling Civil Litigation: Examining ‘Doomsday Machines,’‘Quick Looks’ and Other Modest Proposals,” 68 Judicature 9 (1984); Fiss, Owen, “Against Settlement,” 93 Yale L.J. 1073 (1984); Macklin, Laura, “Promoting Settlement, Foregoing the Facts,” 14 N.Y.U. Rev. L. & Soc. Change 575 (1985); Resnik, Judith, “Managerial Judges,” 96 Harv. L. Rev. 374 (1982); Lee Sarokin, H., “Justice Rushed Is Justice Ruined,” 38 Rutgers L. Rev. 431 (1986). Supporting settlement: e.g., Bundy, Steven McG., “The Policy in Favor of Settlement in an Adversary System,” 44 Hastings L.J. 1 (1992); Flanders, Steven, “Blind Umpires: A Response to Resnik,” 35 Hastings L.J. 505 (1984); Larnbros, Thomas D., “The Federal Rules of Civil Procedure: A New Adversarial Model for a New Era,” 40 U. Pitt. L. Rev. 789 (1989); McThenia, Andrew W. & Shaffer, Thomas L., “For Reconciliation,” 94 Yale L.J. 1660 (1985).Google Scholar

3 Flemming, Roy B., “Ordinary Litigation in America's Civil Courts: Images of Lawyers and Bargaining,” 26 Law & Soc'y Rev. 669 (1992).CrossRef Google Scholar

4 Eisenberg, Theodore, “The Relationship between Plaintiff Success Rates before Trial and at Trial,” 154 J. Royal Statistical Soc'y, series A, 1111 (1991).Google Scholar

5 Ostrom, Brian, Rottman, David, & Hanson, Roger, “What Are Tort Awards Really Like? The Untold Story from the State Courts,” 14 Law & Pol'y 77 (1992); Ostrom, Brian, Hanson, Roger, & Daley, Henry, “So the Verdict Is in—What Happens Next? The Continuing Story of Tort Awards in the State Courts,” 16 Just. Sys. J. 97 (1993). See also Blum, Andrew, “Justice Department Tries to Count Cases,” Nat'l L.J., 17 May 1993, p. 6.CrossRef Google Scholar

6 Clermont, Kevin M. & Eisenberg, Theodore, “Trial by Jury or Judge: Transcending Empiricism,” 77 Cornell L. Rev. 1124, 1177 (1992) (app. B), with Ostrom et al., 14 Law & Pol'y at 85 (table 5). The first cited article shows median jury trial awards for 11 years of federal civil litigation. The second article shows median jury trial awards for three months of state tort litigation in several urban trial courts. In all case categories for which both articles report data, the federal court medians are substantially higher than the state court medians. Kritzer's data have the advantage of having been compiled for both state and federal courts in a single study covering the same time period.Google Scholar

7 Eisenberg, Theodore & Henderson, James A. Jr., “Inside the Quiet Revolution in Products Liability,” 39 UCLA L. Rev. 731 (1992) (products liability cases).Google Scholar

8 Hensler, Deborah, “Taking Aim at the American Legal System: The Council on Competitiveness's Agenda for Legal Reform,” 75 Judicature 244 (1992).Google Scholar

9 To place the comparisons the data allow in context, keep in mind that certain case categories were excluded from the sample or otherwise restricted. Uncontested collections, prisoner petitions, intergovernment suits, probate, bankruptcy, certain agency-related cases, small cases (less than $1,000), and huge cases (a total of 36 cases) were excluded from the sample (JB at 16).Google Scholar

10 The case-counting methodology allowed cases to be coded in as many as four substantive areas (Deal at 19).Google Scholar

11 Donohue, John J. & Siegelman, Peter, “Law and Macroeconomics: Employment Discrimination over the Business Cycle,” 66 S. Cal. L. Rev. 709 (1993); Eisenberg, Theodore & Schwab, Stewart J., ‘What Shapes Perceptions of the Federal Court System 56 U. Chi. L. Rev. 501 (1989).Google Scholar

12 Eisenberg, Theodore & Schwab, Stewart, “The Reality of Constitutional Tort Litigation,” 72 Cornell L. Rev. 641, 655 (1987). See Welsh, Wayne N., “The Dynamics of Jail Reform Litigation: A Comparative Analysis of Litigation in California Counties,” 26 Law & Soc'y Rev. 591, 607 (1992) (noting paucity of studies of state prison reform litigation).Google Scholar

13 For the makeup of the civil rights/discrimination category, see JB at 39.Google Scholar

14 Welsh, , 26 LAW & Soc'y Rev. at 607 (in California, two-thirds of jail reform litigation filings were in state court).Google Scholar

15 These include taxation, zoning, political process, governmental financial obligations, freedom of information, voting rights, immigration/naturalization, and abuse of governmental authority cases UB at 39).Google Scholar

16 This does not include the many government collection actions, where the federal government again litigates more often than state governments. Available data suggest that government data comprise a greater fraction of state court cases reaching jury trial. See Ostrom et al., 14 Law & Pol'y at 83 (cited in note 5) (government is defendant in about 9% of cases tried to juries in several urban state trial courts).Google Scholar

17 John M. Conley & William O'Barr, “Hearing the Hidden Agenda: The Ethnographic Investigation of Procedure,” 51 Law & Contemp. Probs. 181 (1988); Peter Charles Hoffer, “Honor and the Roots of American Litigiousness,” 33 Am. J. Legal Hist. 295, 306 (1989); Sally Engle Merry, Getting Justice and Getting Even: Legal Consciousness among Working-Class Americans (Chicago: University of Chicago Press, 1990); Sally Engle Merry & Susan S. Silbey, “What Do Plaintiffs Want? Reexamining the Concept of Dispute,” 9 Just. Sys. J. 151 (1984).Google Scholar

18 Losing plaintiffs recover a maximum of zero. Kritzer's reported outcomes show many recoveries in the 0–2, 500 range. There probably aren't more negative adjusted outcomes for plaintiffs due to contingent-fee arrangements.Google Scholar

19 A series of RAND Institute for Civil Justice Studies (Santa Monica, Cal.) are important sources of information about costs. James S. Kakalik, Elizabeth M. King, Michael Tray-nor, Patricia Ebener, & Larry Picus, Costs and Compensation Paid in Aviation Accident Litigation (1988) (“Kakalik et al., Aviation Accident Litigation”); James S. Kakalik & Nicholas M. Pace, Costs and Compensation Paid in Tort Litigation (1986); James S. Kakalik, Patricia A. Ebener, William L. F. Felstiner, Gus W. Haggstrom, & Michael G. Shanley, Variation in Asbestos Litigation Compensation and Expenses (1984) (“Kakalik et al., Asbestos Litigation”).Google Scholar

20 Hensler, Deborah R., “Reading the Tort Litigation Tea Leaves: What's Going on in the Civil Liability System 16 Just. Sys. J. 139, 141 (1993) (noting the need for a sustained program of research on litigation behavior and outcomes).CrossRef Google Scholar

21 Monsma, Karl & Lempert, Richard, “The Value of Counsel: 20 Years of Representation before a Public Housing Eviction Board,” 26 Law & Soc'y Rev. 627, 627–30 (1992).CrossRef Google Scholar

22 Orley Ashenfelter & David Bloom “Lawyers as Agents of the Devil in a Prisoner's Dilemma Game” at 12 (unpublished, Princeton University) (but noting that the parties jointly may be better off if neither were represented).Google Scholar

23 Eisenberg, & Schwab, , 72 Cornell L. Rev. (cited in note 12); Schwab, Stewart & Eisenberg, Theodore, “Explaining Constitutional Tort Litigation The Influence of the Attorney Fees Statute and the Government as Defendant,” 73 Cornell L. Rev. 719 (1988).Google Scholar

24 Schwab, & Eisenberg, , 73 Cornell L. Rev. at 770–74.Google Scholar

25 Eleanor E. Maccoby & Robert H. Mnookin, Dividing the Child: Social and Legal Dilemmas of Custody 108 (Cambridge, Mass.: Harvard University Press, 1992) (“Maccoby & Mnookin, Dividing the Child”). Maccoby and Mnookin studied about 1,100 California families in which the parents filed for divorce in either San Mateo County or Santa Clara County between September 1984 and April 1985. They conducted three separate telephone interviews with the divorcing parents over a three-year period and examined relevant court records. Id. at 13.Google Scholar

26 Id. at 109.Google Scholar

27 Id.Google Scholar

28 Monsma, & Lempert, , 26 Law & Soc'y Reu. at 647. Their categories for reasons for eviction are (1) nonpayment, (2) falsification, fraud, or miscellaneous, (3) guests, (4) pets, (5) other trouble behavior. Id. at 635.Google Scholar

29 Id. at 662.Google Scholar

30 Id. at 662–63.Google Scholar

31 Id. at 630. Their article also contains a useful collection of other studies of the effect of representation. Id. at 627–30. They do note one study that did randomly assign cases to represented and unrepresented groups. See W. Vaughn Stapleton & Lee E. Teitelbaum, In Defense of Youth: A Study of the Role of Counsel in American Juvenile Courts (New York: Russell Sage Foundation, 1972).Google Scholar

32 Monsma, & Lempert, , 26 Law & Soc'y Rev. at 662 (cited in note 21). A study of British administrative tribunals also detected lawyer effects. Genn reports that “the presence of a skilled representative significantly and independently increased the probability that a case would succeed.” Genn, Hazel, “Tribunals and Informal Justice,” 56 Mod. L. Rev. 393, 400 (1993).Google Scholar

33 Clermont, Kevin M. & Currivan, John D., “Improving on the Contingent Fee,” 63 Cornell L. Rev. 529, 543–46 (1978).Google Scholar

34 Gergen, Mark P., “The Use of Open Terms in Contract,” 92 Colum. L. Rev. 997, 1016 (1992).CrossRef Google Scholar

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36 Kritzer, Herbert M., Felstiner, William L. F., Sarat, Austin, & Trubek, David M., “The Impact of Fee Arrangement on Lawyer Effort,” 19 Law & Soc'y Rev. 251 (1985).CrossRef Google Scholar

37 Kakalik et al studied aviation accident litigation and distinguished between cases in which defendants did and did not contact plaintiffs with an early offer. They report little difference in mean compensation. Kakalik et al., Aviation Accident Litigation 120 (table B.24) (cited in note 19). Similarly, small differences between mean awards were found based on whether defendants sent a special letter to plaintiffs' families immediately after the accident. Id. at 120 (table B.25).Google Scholar

38 The time lawyers spend on bargaining over a settlement corresponds to intuitively predictable factors. The time is positively correlated with the stakes of the case: the larger the case, the more time the lawyer spends bargaining over a settlement (Deal at 33). Similarly, more complex cases generate more settlement bargaining than less complex cases (id. at 34).Google Scholar

39 Monsma, & Lempert, , 26 Law & Soc'y Reu. at 658–59 (cited in note 21).Google Scholar

40 Alexander, Janet Cooper, “Do the Merits Matter? A Study of Settlements in Securities Class Actions,” 43 Stan. L. Rev. 497 (1991).CrossRef Google Scholar

41 Kritzer properly notes the difference between the bargaining-as-signaling information and the relationship between bargaining and developing information about the case. He is skeptical about the use of game-theoretic bargaining notions to advance analysis of the negotiation process (Deal at 71). This is because much of this bargaining theory focuses on integrative bargaining—bargaining in situations in which both sides can be made better off. The parties can cooperate to enlarge the pie that they eventually will share Kritzer argues that integrative bargaining has relatively little relation to case-level negotiation. The parties are engaged in more distributive bargaining: one side's loss is by definition another side's gain. At one level, Kriner clearly is correct. If plaintiffs receive more, it is from defendants, who thereby retain less.Google Scholar

42 Farber, Henry S. & White, Michelle J., “Medical Malpractice: An Empirical Examination of the Litigation Process,” 22 RAND J. Econ. 199 (1991).CrossRef Google Scholar PubMed

43 Id. at 204 (table 1).Google Scholar

44 P-value<.0001. When defendants forced the good quality care cases to trial, they always won, regardless of care quality. Id. at 205.Google Scholar

45 Farber, & White, , 22 RAND J. Econ. at 215 (table 7).Google Scholar

46 Danzon, Patricia Munch & Lillard, Lee A., “Settlement Cut of Court: The Disposition of Medical Malpractice Claims,” 12 J. Legal Scud. 345, 375 (1983).CrossRef Google Scholar

47 Sloan, Frank A. & Chee Ruey Hsieh, , “Variability in Medical Malpractice Payments: Is the Compensation Fair 24 Law & Soc'y Rev. 997 (1990).CrossRef Google Scholar

48 Id. at 1006, 1015, 1020. Sloan and Hsieh's data include important information about the size and frequency of payments for claims in which a lawsuit is commenced compared to the size and frequency of payments for claims in which no lawsuit was commenced. Only 16.5% of claims were closed before a suit was filed, and they involved relatively small payments. Id. at 1005–6. See also Eisenberg & Henderson, 39 UCLA L. Rev., at 758–60 (cited in note 7) (bulk of compensation in some tort law areas paid after lawsuits are filed).Google Scholar

49 Cheney, Frederick W., Posner, Karen, Caplan, Robert A., & Ward, Richard J., “Standard of Care and Anesthesia Liability,” 261 J.A.M.A. 1599 (1989). The well-known Harvard Medical Practice Study has, to date, published data about the relationship between claims made and medical care. The claims in the Harvard Study's data are not limited to lawsuits filed. See Localio, Russell A., Lawthers, Ann G., Brennan, Troyen A., Laird, Nan M., Herbert, Liesi E., Peterson, Lynn M., Newhouse, Joseph P., Weiler, Paul C., & Hiatt, Howard H., “Relation between Malpractice Claims and Adverse Events Due to Negligence: Results of the Harvard Medical Practice Study I(ii),” 325 New Eng. J. Med. 245 (1991).CrossRef Google Scholar PubMed

50 Brunner, Edward A., “Monitoring Anesthetic Care: New Directions,” 261 J.A.M.A. 1633 (1989).CrossRef Google Scholar PubMed

51 Taragin, Mark I., Willett, Laura R., Wilczek, Adam P., Trout, Richard, & Carson, Jeffrey L., “The Influence of Standard of Care and Severity of Injury on the Resolution of Medical Malpractice Cases,” 117 Annals Internal Med. 780, 781 (1992).CrossRef Google Scholar

52 Alexander, , 43 Stan. L. Rev. (cited in note 40).Google Scholar

53 Caplan, Robert A., Posner, Karen L., & Cheney, Frederick W., “Effect of Outcome on Physician Judgments of Appropriateness of Care,” 265 J.A.M.A. 1957–60 (1991).CrossRef Google Scholar PubMed

54 There is no unique list of case categories. And within gross categories, such as tort, useful subcategories often can be defined. Products liability tort cases, for example, may have characteristics sharply different from automobile accident tort cases.Google Scholar

55 Schwab, & Eisenberg, , 73 Cornell L. Rev. at 733 (civil rights cases vs. other cases).Google Scholar

56 Clermont, & Eisenberg, , 77 Cornell L. Rev., at 1141, 1175–77 (cited in note 6).Google Scholar

57 Eisenberg, , 154 J. Royal Statistical Soc'y (cited in note 4).Google Scholar

58 For state court cases, Kritzer reports stakes only for torts, contracts, domestic relations, and property cases (JB at 34).Google Scholar

59 Eisenberg, , 154 J. Royal Statistical Soc'y at 113.Google Scholar

60 I exclude from the analysis cases with ambiguous procedural postures and default judgments. The data on 1978 and 1985 are partial but substantial. The Administrative Office did not record whether judgment was entered for plaintiff or defendant until fiscal 1979. Inter-University Consortium for Political and Social Research, Federal Court Cases: Integrated Data Base, 1970–1987, ICPSR 8429 (2d ed. Ann Arbor, Mich.: Inter-University Consortium for Political and Social Research, Winter 1989).Google Scholar

61 For a listing of case categories maintained by the Administrative Office, see id.Google Scholar

62 This class of cases is dominated by many settlements in which the parties reach agreement and judgment is entered before the case is resolved by adversarial motion.Google Scholar

63 The pretrial motion cases include the many cases won by motion to dismiss for failure to state a cause of action, cases resolved by summary judgment, and other cases disposed of at the motion stage.Google Scholar

64 Some looseness in the relationship between the success rates in cases with no judgment and the success rare in cases with judgments entered is tolerable. The crucial assumption is that slippage between the no judgment and judgment cases is not systematically biased. And the 74% pro-plaintiff settlement figure yields an overall plaintiff recovery rate similar to that found in other empirical studies. Schwab & Eisenberg, 73 Cornell L. Rev. at 729 n.36 (cited in note 23) (listing results of several studies). Whether such a rate holds for the broad cross-section of litigation embodied in the aggregate figures used here cannot be determined from prior studies. I invoke the other studies to suggest the plausibility of the aggregate results. The 74% plaintiff success figure for success in settled cases is plausible because one presumes that pretrial settlements and withdrawals are dominated by cases in which plaintiffs obtain something. The 27% plaintiff success figure for cases resolved by motion shown also is plausible in that it is, in general, easier for defendants to win a Rule 12(b)(6) motion to dismiss or a summary judgment motion than it is for plaintiffs to obtain judgment via pretrial motion.Google Scholar

65 This is the simple unweighted correlation. Weighting by size of case category increases the correlation.Google Scholar

66 Hylton, Keith N., “Asymmetric Information and the Selection of Disputes for Litigation,” 22 J. Legal Stud. 187 (1993).CrossRef Google Scholar

67 Donohue, & Siegelman, , 66 S. Cal. 1. Rev. (cited in note 11).Google Scholar

68 Eisenberg, Theodore, “Testing the Selection Effect: A New Theoretical Framework with Empirical Tests,” 19 J. Legal Stud. 337, 351, 354 (1990); Eisenberg, Theodore, “Litigation Models and Trial Outcomes in Civil Rights and Prisoner Cases,” 77 Geo. L.J. 1567, 1588, 1591, 1592 (1989). Similar effects should be expected with respect to the decision whether to litigate. When one has accounted for uncertainty (including risk aversion), overoptimism, strategic bargaining, and spite, there likely remains variation in settlement rates across jurisdictions. Local legal cultures matter. Some judges push the parties harder toward settlement than others. The queue for trial differs by locale. Expected outcomes differ by locale. Perceptions of fairness may vary. Although settlement rates do not always vary across regions, they sometimes do. A study of asbestos cases found that trials were much more likely to occur in Missouri, Pennsylvania, and Texas than in other states. Trials were much less likely to occur in California and New Jersey than in other states. Kakalik, et al., Asbestos Litigation 67–69 (cited in note 19).CrossRef Google Scholar

69 Ostrom, et al., 14 Law & Pol'y (cited in note 5).Google Scholar

70 E.g., John P. Gould, “The Economics of Legal Conflict,” 2 J. Legal Stud. 279, 286 (1973); Douglas Rosenthal, Lawyer and Client: Who's in Charge? (New York: Russell Sage Foundation, 1974); Gerald R. Williams, Legal Negotiation and Settlement (St. Paul, Minn.: West Publishing Co., 1983); Theodore Eisenberg, “Commentary on ‘On the Nature of Bankruptcy’: Bankruptcy and Bargaining,” 75 Va. L. Rev. 205, 210, & authorities cited at 210 n.20 (1989); R. Tollison, ed., The Political Economy of Antitrust: Principal Paper by William Baxter 18–21 (Lexington, Mass.: Lexington Books, 1980); Steven C. Salop & Lawrence J. White, “Economic Analysis of Private Antitrust Litigation,” 74 Geo. L.J. 1001, 1025 (1986).Google Scholar

71 Eisenberg, , 75 Va. L. Rev. at 210; Melli, Marygold S., Erlanger, Howard S., & Chambliss, Elizabeth, “The Process of Negotiation: An Exploratory Investigation in the Context of No-Fault Divorce,” 40 Rutgers L. Rev. 1133, 1154 (1988); Schuck, Peter H., “The Role of Judges in Settling Complex Cases: The Agent Orange Example,” 53 U. Chi. L. Rev. 337, 346 n.20 (1986).Google Scholar

72 This could be fear of a single outcome or fear about a range of possible outcomes, each with its own perceived probability of occurrence.Google Scholar

73 Melli, et al., 40 Rutgers L. Rev. at 1154.Google Scholar

74 Schuck, , 53 U. Chi. L. Rev. Google Scholar

75 Eisenberg, , 75 Va. L. Rev. at 210.Google Scholar

76 Salop, & White, , 74 Geo. L.J. at 1027.Google Scholar

77 Overoptimism is not limited to lawyers. See Stuart Oskamp, “Overconfidence in Case-Study Judgments,” 29 J. Consulting Psychology 261–65 (1965), reprinted in Daniel Kahneman & Amos Tversky, eds., Judgment under Uncertainty: Heuristics and Biases 287–93 (Cambridge: Cambridge University Press, 1982).Google Scholar

78 Loftus, Elizabeth F. & Wagenaar, Willem A., “Lawyers' Predictions of Success,” 28 Jurimetrics J. 437 (1988). Lawyer overconfidence was not extremely large, at least compared to overconfidence of physicians. Id. at 440.Google Scholar

79 Marijke Malsch, “Lawyers' Predictions of Judicial Decisions: A Study on Calibration of Experts” at 19 (doctoral thesis, Rijksuniversiteit te Leiden, 1989).Google Scholar

80 Loewenstein, George, Issacharoff, Samuel, Camerer, Colin, & Babcock, Linda, “Self-serving Assessments of Fairness and Pretrial Bargaining,” 22 J. Legal Stud. 135 (1993).CrossRef Google Scholar

81 Maccoby, & Mnookin, , Dividing the Child 67 (cited in note 25).Google Scholar

82 Id. at 213 (table 9.2).Google Scholar

83 “We assume that these differences in perspective between the two parents reflect the fact that each may be quite poorly informed about what goes on in the other's household vis-a-vis the children.” id. at 212.Google Scholar

84 Id. at 145–46.Google Scholar

85 Gross, Samuel R. & Syverud, Kent D., “Getting to No: A Study of Settlement Negotiations and the Selection of Cases for Trial,” 90 Mich. L. Rev. 319 (1991).CrossRef Google Scholar

86 Id. at 343. Their statement that only strategic bargaining can explain their findings of zero-offer trials suggest that they view strategic bargaining as including other reasons for refusing to settle, including efforts to preserve honor and efforts to discourage others from bringing strike suits.Google Scholar

87 Id. at 346.Google Scholar

88 Id. at 344 (table 2).Google Scholar

89 Special Issue: “Longitudinal Studies of Trial Courts,” 24 Law & Soc'y Rev. (No. 2, 1990).Google Scholar

90 Joseph B. Kadane, “Sausages and the Law: Juror Decisions in the Much Larger Justice System,” in Reid Hastie, ed., Inside the Juror: The Psychology of Juror Decision Making 229 (New York: Cambridge University Press, 1993).Google Scholar

91 Flemming, , 26 Law & Soc'y Rev. at 685–86 (cited in note 3).Google Scholar

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