Corporations in court: Big business litigation in U.S. federal courts, 1971-1991

Law and Social Inquiry

Volumn 21, Issue 3, 1996, Pages 497-592

  Dunworth, Terence ^a   Rogers, Joel ^b  

^a ABT ASSOCIATES   (United States)

^b UNIVERSITY OF WISCONSIN MADISON   (United States)

Author keywords

[No Author keywords available]

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EID: 9944248246     PISSN: 08976546     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.1747-4469.1996.tb00090.x     Document Type: Review

References (89)

1. See, e.g., ATRA (American Tort Reform Association), Legislative Watch (1993); Peter Huber, Liability: The Legal Revolution and Its Consequences 233 (New York, 1988); Walter Olson, The Litigation Explosion: What Happened When America Unleashed the Lawsuit 7 (New York: Dutton, 1991).
2. See, e.g., ATRA (American Tort Reform Association), Legislative Watch (1993); Peter Huber, Liability: The Legal Revolution and Its Consequences 233 (New York, 1988); Walter Olson, The Litigation Explosion: What Happened When America Unleashed the Lawsuit 7 (New York: Dutton, 1991).
3. See, e.g., ATRA (American Tort Reform Association), Legislative Watch (1993); Peter Huber, Liability: The Legal Revolution and Its Consequences 233 (New York, 1988); Walter Olson, The Litigation Explosion: What Happened When America Unleashed the Lawsuit 7 (New York: Dutton, 1991).
4. See, e.g., T. Dunworth & T. Eisenberg, "The Individual Versus Business in the Courts," The World and I 488 (Washington: Washington Times Corp., 1991); T. Dunworth & N. Pace, "Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-1CJ (Santa Monica, Cal.: RAND Corp., 1990); Marc Galanter, "The Life and Times of the Big Six: Or, the Federal Courts Since the Good Old Days" (prepared for Symposium on the Role of the Federal Courts, New York University, 1987) ("Galanter, 'Life and Times'"); M. Galanter & J. Rogers, "A Transformation of American Business Disputing? Some Preliminary Observations," Disputes Processing Research Program (DPRP) Working Paper #10-3 (Madison, Wis., University of Wisconsin, 1991) ("Galanter & Rogers, 'Transformation'"); Richard Posner, The Federal Courts: Crisis and Reform (Cambridge: Harvard University Press, 1985) ("Posner, Federal Courts").
5. See, e.g., T. Dunworth & T. Eisenberg, "The Individual Versus Business in the Courts," The World and I 488 (Washington: Washington Times Corp., 1991); T. Dunworth & N. Pace, "Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-1CJ (Santa Monica, Cal.: RAND Corp., 1990); Marc Galanter, "The Life and Times of the Big Six: Or, the Federal Courts Since the Good Old Days" (prepared for Symposium on the Role of the Federal Courts, New York University, 1987) ("Galanter, 'Life and Times'"); M. Galanter & J. Rogers, "A Transformation of American Business Disputing? Some Preliminary Observations," Disputes Processing Research Program (DPRP) Working Paper #10-3 (Madison, Wis., University of Wisconsin, 1991) ("Galanter & Rogers, 'Transformation'"); Richard Posner, The Federal Courts: Crisis and Reform (Cambridge: Harvard University Press, 1985) ("Posner, Federal Courts").
6. See, e.g., T. Dunworth & T. Eisenberg, "The Individual Versus Business in the Courts," The World and I 488 (Washington: Washington Times Corp., 1991); T. Dunworth & N. Pace, "Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-1CJ (Santa Monica, Cal.: RAND Corp., 1990); Marc Galanter, "The Life and Times of the Big Six: Or, the Federal Courts Since the Good Old Days" (prepared for Symposium on the Role of the Federal Courts, New York University, 1987) ("Galanter, 'Life and Times'"); M. Galanter & J. Rogers, "A Transformation of American Business Disputing? Some Preliminary Observations," Disputes Processing Research Program (DPRP) Working Paper #10-3 (Madison, Wis., University of Wisconsin, 1991) ("Galanter & Rogers, 'Transformation'"); Richard Posner, The Federal Courts: Crisis and Reform (Cambridge: Harvard University Press, 1985) ("Posner, Federal Courts").
7. See, e.g., T. Dunworth & T. Eisenberg, "The Individual Versus Business in the Courts," The World and I 488 (Washington: Washington Times Corp., 1991); T. Dunworth & N. Pace, "Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-1CJ (Santa Monica, Cal.: RAND Corp., 1990); Marc Galanter, "The Life and Times of the Big Six: Or, the Federal Courts Since the Good Old Days" (prepared for Symposium on the Role of the Federal Courts, New York University, 1987) ("Galanter, 'Life and Times'"); M. Galanter & J. Rogers, "A Transformation of American Business Disputing? Some Preliminary Observations," Disputes Processing Research Program (DPRP) Working Paper #10-3 (Madison, Wis., University of Wisconsin, 1991) ("Galanter & Rogers, 'Transformation'"); Richard Posner, The Federal Courts: Crisis and Reform (Cambridge: Harvard University Press, 1985) ("Posner, Federal Courts").
8. See, e.g., T. Dunworth & T. Eisenberg, "The Individual Versus Business in the Courts," The World and I 488 (Washington: Washington Times Corp., 1991); T. Dunworth & N. Pace, "Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-1CJ (Santa Monica, Cal.: RAND Corp., 1990); Marc Galanter, "The Life and Times of the Big Six: Or, the Federal Courts Since the Good Old Days" (prepared for Symposium on the Role of the Federal Courts, New York University, 1987) ("Galanter, 'Life and Times'"); M. Galanter & J. Rogers, "A Transformation of American Business Disputing? Some Preliminary Observations," Disputes Processing Research Program (DPRP) Working Paper #10-3 (Madison, Wis., University of Wisconsin, 1991) ("Galanter & Rogers, 'Transformation'"); Richard Posner, The Federal Courts: Crisis and Reform (Cambridge: Harvard University Press, 1985) ("Posner, Federal Courts").
9. See, e.g., T. Dunworth & T. Eisenberg, "The Individual Versus Business in the Courts," The World and I 488 (Washington: Washington Times Corp., 1991); T. Dunworth & N. Pace, "Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-1CJ (Santa Monica, Cal.: RAND Corp., 1990); Marc Galanter, "The Life and Times of the Big Six: Or, the Federal Courts Since the Good Old Days" (prepared for Symposium on the Role of the Federal Courts, New York University, 1987) ("Galanter, 'Life and Times'"); M. Galanter & J. Rogers, "A Transformation of American Business Disputing? Some Preliminary Observations," Disputes Processing Research Program (DPRP) Working Paper #10-3 (Madison, Wis., University of Wisconsin, 1991) ("Galanter & Rogers, 'Transformation'"); Richard Posner, The Federal Courts: Crisis and Reform (Cambridge: Harvard University Press, 1985) ("Posner, Federal Courts").
10. See, e.g., T. Dunworth & T. Eisenberg, "The Individual Versus Business in the Courts," The World and I 488 (Washington: Washington Times Corp., 1991); T. Dunworth & N. Pace, "Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-1CJ (Santa Monica, Cal.: RAND Corp., 1990); Marc Galanter, "The Life and Times of the Big Six: Or, the Federal Courts Since the Good Old Days" (prepared for Symposium on the Role of the Federal Courts, New York University, 1987) ("Galanter, 'Life and Times'"); M. Galanter & J. Rogers, "A Transformation of American Business Disputing? Some Preliminary Observations," Disputes Processing Research Program (DPRP) Working Paper #10-3 (Madison, Wis., University of Wisconsin, 1991) ("Galanter & Rogers, 'Transformation'"); Richard Posner, The Federal Courts: Crisis and Reform (Cambridge: Harvard University Press, 1985) ("Posner, Federal Courts").
11. See, e.g., T. Dunworth & T. Eisenberg, "The Individual Versus Business in the Courts," The World and I 488 (Washington: Washington Times Corp., 1991); T. Dunworth & N. Pace, "Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-1CJ (Santa Monica, Cal.: RAND Corp., 1990); Marc Galanter, "The Life and Times of the Big Six: Or, the Federal Courts Since the Good Old Days" (prepared for Symposium on the Role of the Federal Courts, New York University, 1987) ("Galanter, 'Life and Times'"); M. Galanter & J. Rogers, "A Transformation of American Business Disputing? Some Preliminary Observations," Disputes Processing Research Program (DPRP) Working Paper #10-3 (Madison, Wis., University of Wisconsin, 1991) ("Galanter & Rogers, 'Transformation'"); Richard Posner, The Federal Courts: Crisis and Reform (Cambridge: Harvard University Press, 1985) ("Posner, Federal Courts").
12. See, e.g., Galanter & Rogers, "Transformation"; Stewart Macaulay, "Non-contractual Relations in Business: A Preliminary Study," 28 Am. Soc. Rev. 55 (1963).
13. See, e.g., Galanter & Rogers, "Transformation"; Stewart Macaulay, "Non-contractual Relations in Business: A Preliminary Study," 28 Am. Soc. Rev. 55 (1963).
14. Jonathan Rauch, "Demosclerosis," Nat'l J., 5 Sept. 1992, at 1998.
15. See, e.g., Deborah Hensler, "Taking Aim at the American Legal System: The Council on Competitiveness's Agenda for Legal Reform," 75 Judicature 244 (1992); Brookings Institution, The Liability Maze (Washington: Brookings Institution, 1991); G. Butler & B. Miller, "Fiddling While Rome Burns: A Response to Dr. Hensler," 75 Judicature 251 (1992); Stephen Daniels & Joanne Martin, "Myth and Reality in Punitive Damages," 75 Minn. L. Rev. 1 (1990); J. Kakalik & N. Pace, Cost and Compensation Paid in Tort Litigation (Santa Monica, Cal.: RAND Corp., 1986); Peter Huber, "Dan Quayle, the Lawyers and AIDS Babies," Forbes Mag., 28 Oct. 1991.
16. See, e.g., Deborah Hensler, "Taking Aim at the American Legal System: The Council on Competitiveness's Agenda for Legal Reform," 75 Judicature 244 (1992); Brookings Institution, The Liability Maze (Washington: Brookings Institution, 1991); G. Butler & B. Miller, "Fiddling While Rome Burns: A Response to Dr. Hensler," 75 Judicature 251 (1992); Stephen Daniels & Joanne Martin, "Myth and Reality in Punitive Damages," 75 Minn. L. Rev. 1 (1990); J. Kakalik & N. Pace, Cost and Compensation Paid in Tort Litigation (Santa Monica, Cal.: RAND Corp., 1986); Peter Huber, "Dan Quayle, the Lawyers and AIDS Babies," Forbes Mag., 28 Oct. 1991.
17. See, e.g., Deborah Hensler, "Taking Aim at the American Legal System: The Council on Competitiveness's Agenda for Legal Reform," 75 Judicature 244 (1992); Brookings Institution, The Liability Maze (Washington: Brookings Institution, 1991); G. Butler & B. Miller, "Fiddling While Rome Burns: A Response to Dr. Hensler," 75 Judicature 251 (1992); Stephen Daniels & Joanne Martin, "Myth and Reality in Punitive Damages," 75 Minn. L. Rev. 1 (1990); J. Kakalik & N. Pace, Cost and Compensation Paid in Tort Litigation (Santa Monica, Cal.: RAND Corp., 1986); Peter Huber, "Dan Quayle, the Lawyers and AIDS Babies," Forbes Mag., 28 Oct. 1991.
18. See, e.g., Deborah Hensler, "Taking Aim at the American Legal System: The Council on Competitiveness's Agenda for Legal Reform," 75 Judicature 244 (1992); Brookings Institution, The Liability Maze (Washington: Brookings Institution, 1991); G. Butler & B. Miller, "Fiddling While Rome Burns: A Response to Dr. Hensler," 75 Judicature 251 (1992); Stephen Daniels & Joanne Martin, "Myth and Reality in Punitive Damages," 75 Minn. L. Rev. 1 (1990); J. Kakalik & N. Pace, Cost and Compensation Paid in Tort Litigation (Santa Monica, Cal.: RAND Corp., 1986); Peter Huber, "Dan Quayle, the Lawyers and AIDS Babies," Forbes Mag., 28 Oct. 1991.
19. See, e.g., Deborah Hensler, "Taking Aim at the American Legal System: The Council on Competitiveness's Agenda for Legal Reform," 75 Judicature 244 (1992); Brookings Institution, The Liability Maze (Washington: Brookings Institution, 1991); G. Butler & B. Miller, "Fiddling While Rome Burns: A Response to Dr. Hensler," 75 Judicature 251 (1992); Stephen Daniels & Joanne Martin, "Myth and Reality in Punitive Damages," 75 Minn. L. Rev. 1 (1990); J. Kakalik & N. Pace, Cost and Compensation Paid in Tort Litigation (Santa Monica, Cal.: RAND Corp., 1986); Peter Huber, "Dan Quayle, the Lawyers and AIDS Babies," Forbes Mag., 28 Oct. 1991.
20. See, e.g., Deborah Hensler, "Taking Aim at the American Legal System: The Council on Competitiveness's Agenda for Legal Reform," 75 Judicature 244 (1992); Brookings Institution, The Liability Maze (Washington: Brookings Institution, 1991); G. Butler & B. Miller, "Fiddling While Rome Burns: A Response to Dr. Hensler," 75 Judicature 251 (1992); Stephen Daniels & Joanne Martin, "Myth and Reality in Punitive Damages," 75 Minn. L. Rev. 1 (1990); J. Kakalik & N. Pace, Cost and Compensation Paid in Tort Litigation (Santa Monica, Cal.: RAND Corp., 1986); Peter Huber, "Dan Quayle, the Lawyers and AIDS Babies," Forbes Mag., 28 Oct. 1991.
21. These data can be obtained from the Inter-University Consortium for Political and Social Research (ICPSR) at ICPSR, University of Michigan, Institute for Social Research, P.O. Box 1248, Ann Arbor, MI 48106-1248. ICPSR also maintains a site on the World Wide Web which can be accessed by pointing a browser to http.//icpsr.umich.edu/ icpsr_homepage.html.
22. The number is net of mergers, name changes, and other mutations.
23. The difference between the 1971-87 time frame for selection of corporate names and the 1971-91 time frame for observation of data derives from the need to allow sufficient time after a particular firm came into existence for disputes to reach the litigation stage. We acknowledge that the selection of a four-year period is somewhat arbitrary.
24. Given the large amount of controversy in this area, frequent divisions even among individuals "on the same side" regarding major policy choices, and the above-noted lack of agreement even on the basic facts of the matter, the "conventional" view we now characterize is a deliberate construction and certainly not offered as the only view out there.
25. Oliver Williamson, The Economic Institutions of Capitalism (New York: Free Press, 1984).
26. I. R. Macneil, "Reflections on Relational Contract," 141 J. Institutional & Theoretical Econ. 541 (1985).
27. Macaulay, 28 Am. Soc. Rev.
28. M. Galanter, S. Macaulay, & J. Rogers, "The Transformation of American Business Disputing," Project Proposal to the Fund for Research on Dispute Resolution (1989).
29. L. Kenworthy, S. Macaulay, & J. Rogers, "The More Things Change...: Business Litigation and Governance in the American Automobile Industry" (unpub., University of Wisconsin, 1995).
30. Marc Galanter, "Reading the Landscape of Disputes: What We Know and Don't Know about Our Contentious and Litigious Society," 31 UCLA L. Rev. 4, 11 (1983).
31. W. Felstiner, R. Abel, & A. Sarat, "The Emergence and Transformation of Disputes: Naming, Blaming, Claiming...," 15 Law & Soc'y Rev. 631 (1980).
32. Posner, Federal Courts (cited in note 2).
33. The jurisdiction of the federal courts extends to suits between parties who are citizens of different states, and either party to a lawsuit can seek federal jurisdiction (28 U.S.C. 1332).
34. Galanter, "Life and Times" (cited in note 2).
35. Terence Dunworth, "Product Liability and the Business Sector: Litigation Trends in Federal Courts," RAND Working Paper R-3668-ICJ (Santa Monica, Cal.: RAND Corp., 1988) ("Dunworth, 'Product Liability'"); T. Dunworth & N. Pace, "A Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-ICJ (Santa Monica, Cal.: RAND Corp., 1990) ("Dunworth &. Pace, 'Statistical Overview'").
36. Terence Dunworth, "Product Liability and the Business Sector: Litigation Trends in Federal Courts," RAND Working Paper R-3668-ICJ (Santa Monica, Cal.: RAND Corp., 1988) ("Dunworth, 'Product Liability'"); T. Dunworth & N. Pace, "A Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-ICJ (Santa Monica, Cal.: RAND Corp., 1990) ("Dunworth &. Pace, 'Statistical Overview'").
37. Terence Dunworth, "Product Liability and the Business Sector: Litigation Trends in Federal Courts," RAND Working Paper R-3668-ICJ (Santa Monica, Cal.: RAND Corp., 1988) ("Dunworth, 'Product Liability'"); T. Dunworth & N. Pace, "A Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-ICJ (Santa Monica, Cal.: RAND Corp., 1990) ("Dunworth &. Pace, 'Statistical Overview'").
38. Terence Dunworth, "Product Liability and the Business Sector: Litigation Trends in Federal Courts," RAND Working Paper R-3668-ICJ (Santa Monica, Cal.: RAND Corp., 1988) ("Dunworth, 'Product Liability'"); T. Dunworth & N. Pace, "A Statistical Overview of Civil Litigation in the Federal Courts," RAND Working Paper R-3885-ICJ (Santa Monica, Cal.: RAND Corp., 1990) ("Dunworth &. Pace, 'Statistical Overview'").
39. Dunworth & Pace, "Statistical Overview."
40. W. Heydebrand & C. Seron, Rationalizing Justice: The Political Economy of Federal District Courts (Albany: State University of New York Press, 1990).
41. Marc Galanter, "Case Congregations and Their Careers," 24 Law & Soc'y Rev. 371 (1990).
42. Jose Toharia, "Economic Development and Litigation: The Case of Spain," 4 Jahrbuch für Rechtssoziologie & Rechtstheorie 39 (1976).
43. Lawrence Friedman, "Trial Courts and Their Work in the Modem World," 4 Jahrbuch für Rechtssoziologie & Rechtstheorie 25 (1976).
44. L. Friedman & R. Percival, "A Tale of Two Courts: Litigation in Alameda and San Benito Counties," 10 Law & Soc'y Rev. 267 (1976).
45. R. Kagan, B. Cartwright, L. Friedman, & S. Wheeler, "The Business of State Supreme Courts, 1870-1970," 30 Stan. L. Rev. 121 (1977).
46. Ross Cheit, "Patterns of Contemporary Business Litigation in Rhode Island" (prepared for Law & Society Association Annual Meeting, Berkeley, Cal., 1990).
47. Frank Munger, "Law, Change, and Litigation: A Critical Examination of an Empirical Research Tradition," 22 Law & Soc'y Rev. 57 (1988).
48. James Willard Hurst, Law and Economic Growth: The Legal History of the Lumber Industry in Wisconsin, 1836-1915 (Cambridge: Harvard University Press, Belknap Press, 1964).
49. Wayne McIntosh, The Appeal of the Civil Law: A Political-Economic Analysis of Litigation (Urbana: University of Illinois Press, 1990).
50. G. Priest & B. Klein, "The Selection of Disputes for Litigation," 13 J. Legal Stud. 1 (1984).
51. This assumes, of course, that the parties' estimates are normally distributed around their true values and that the parties' estimates are independent of one another. The former assumption is reasonable, but the latter one may not be if information is exchanged between the parties prior to deciding whether to litigate. Of course, any information received by one party from the other should cause the two parties' estimates to converge if it is not misinformation or bluster.
52. J. Bizjak &. J. Coles, "The Effect of Private Antitrust Litigation on the Stock-Market Valuation of the Firm," 85 Am. Econ. Rev. 436 (1995).
53. R. Cooter & D. Rubinfeld, "Economic Analysis of Legal Disputes and Their Resolution," 27 J. Econ. Lit. 1067, 1076 (1989).
54. I. P. P'ng, "Strategic Behavior in Suit, Settlement, and Trial," 14 Bell J. Econ. 539 (1983).
55. R. Cooter & T. Ulen, Law and Economics 486 (Glenview, III: Scott Foresman, 1988).
56. Herbert Kritzer, Let's Make a Deal: Understanding the Negotiation Process in Ordinary Litigation (Madison: University of Wisconsin Press, 1991).
57. K. Chatterjee & L. Samuelson, "Bargaining with Two-sided Incomplete Information: An Infinite Horizon Model with Alternating Offers," 54 Rev. Econ. Stud. 175 (1987).
58. Marc Galanter, "Why the 'Haves' Come Out Ahead: Speculations on the Limits of Legal Change," 9 Law & Soc'y Rev. 95 (1974).
59. S. Wheeler, B. Cartwright, R. Kagan, & L. Friedman, "Do the 'Haves' Come out Ahead? Winning and Losing in State Supreme Courts, 1870-1970," 21 Law & Soc'y Rev. 403 (1987).
60. D. Songer & R. Sheehan, "Who Wins on Appeal? Upperdogs and Underdogs in the United States Courts of Appeals," 36 Am. J. Pol. Sci. 235 (1992).
61. That our last additions to this list came in 1987 is due to the point at which we began the study (circa 1990) and the Fortune and ICPSR data available at that time.
62. T. Dunworth, M. Galanter, & J. Rogers, "Corporations in Court: Recent Trends in American Business Litigation" (presented at Law & Society Association annual meeting, Berkeley, Cal., 1990) ("Dunworth et al., 'Corporations'").
63. T. Dunworth, M. Galanter, & J. Rogers, "Corporations in Court: Recent Trends in American Business Litigation" (presented at Law & Society Association annual meeting, Berkeley, Cal., 1990) ("Dunworth et al., 'Corporations'").
64. Standard & Poor's Corporation, Standard Corporation Descriptions (New York: Standard & Poor's Corp., 1994).
65. Dun & Bradstreet, Million Dollar Directory (New York: Dun & Bradstreet, Inc., 1994).
66. A caveat about this process: When a company has more than one category of business, it customarily has more than one SIC code classifying its activities. However, it was impossible, in this particular study, to determine which aspect of a multifaceted company's activities led to the particular lawsuits that we located. We therefore assigned each company and its assets to the economic sector represented by its primary SIC code, and we did the same thing with the litigation reported in this document.
67. A typical situation was one in which a company changed its name sometime during the 20-year window of this study. When we detected such a change, we searched for litigation under both names, and then combined the results under the latest name that we found.
68. All data are taken from an interview with Merle Sprinzen, Fortune magazine research director, March 1990.
69. The Integrated Federal Court Data Base (IFCDB) is derived from reports on case filings and closings that are made by each federal district and circuit court to the Administrative Office of the U.S. Courts. The Federal Judicial Center maintains the data base, and it is distributed to interested researchers by the Inter-University Consortium for Political and Social Research (ICPSR) at Ann Arbor, Mich.
70. A more extended discussion of the rationale for excluding certain kinds of cases is provided in appendix B. Appendix table B1 documents the effects of the exclusion by specific nature of suit.
71. See, e.g., Dunworth et al., "Corporations"); T. Dunworth & J. Rogers, "Corporations in Court: Big Business Litigation in U.S. Federal Courts, 1971-91" (presented at conference on Changing Patterns of Business Disputing, University of Wisconsin, Madison, 1993).
72. See, e.g., Dunworth et al., "Corporations"); T. Dunworth & J. Rogers, "Corporations in Court: Big Business Litigation in U.S. Federal Courts, 1971-91" (presented at conference on Changing Patterns of Business Disputing, University of Wisconsin, Madison, 1993).
73. S. Wu & U. Manber, "Agrep: A Fast Approximate Matching Tool," Proceedings of the USENIX Conference (Berkeley: Usenix Association, 1992).
74. The converse - that non-F2000 names have been improperly included - is much less likely because an affirmative decision was required before the inclusion of any variant on a corporate name.
75. For a definition of diversity jurisdictions, see note 18 supra.
76. In this article, each case in which an F2000 company is either lead plaintiff or lead defendant is termed an appearance for that company. Because there are some cases in which F2000 companies are both plaintiff and defendant, the total number of appearances is greater than the total number of cases. Our rationale for using the number of appearances rather than the number of cases as the measure of the litigation volume that individual companies face is that we see no difference between a case in which an F2000 company faces another F2000 company and one in which it does not, at least not with respect to the issues we are considering in this section of the report. At other times in the report, the analysis will focus on cases, not appearances. We endeavor to make it contextually obvious to the reader which we are dealing with at any given time. However, in general, the word "appearances" pertains to firms and the word "cases" pertains to lawsuits.
77. As in most categorizations of continuous data, the break points we use are somewhat arbitrary, and litigants at the top and bottom of the Moderate group are more like litigants at the bottom and top of the Mega and Minor groups, respectively, than they are like each other, at least with respect to frequency of appearance. Nevertheless, a categorical approach of some kind is needed to facilitate illustration of distributions of this type, and the adoption of a different schema (e.g., more numerous categories) would not materially affect the interpretations that can be made. Therefore, from time to time in the balance of this report, we employ this three-category breakdown to display frequencies of various kinds. Where appropriate, we will use narrower classifications.
78. Figure 3 maps concentration along a continuum from low to high by computing a statistic known as the Gini coefficient. This is a measure of concentration that would yield a score of zero if all companies within the sector had the same number of suits, and a score of one if a single company had all the litigation. The figure indicates that, certainly for most sectors, the intrasectoral level of inequality in litigation activity is extremely high albeit again at a high, level of sectoral aggregation.
79. The percentages reported in this and other tables in this section of the report apply to F2000 litigation only. In sec. IV, the litigation involving the F2000 firms are compared with the general population of cases.
80. We remind the reader that we are only able to identify the lead party on each side of a case. But many cases involve multiple parties, and if all had been identifiable when we constructed this data base, the number of appearances for any individual company could have been higher. This is especially true for asbestos litigation, which often involves multiple defendants. But though the number of appearances would go up, the overall number of cases would not.
81. Contention continues today. Plaintiffs' lawyers are reportedly feuding with each other and with the asbestos defense consortium known as the Center for Claims Resolution about a $1.3 billion class action settlement for 100,000 future potential claims by asbestos victims. See Andrew Blum, "Plaintiffs' Bar Airs Split on Asbestos Pact," Nat'l L.J., 14 March 1994, at A10. We do not mean to imply here that the asbestos and Dalkon Shield litigation is unimportant or doesn't matter; obviously it does. These and other products have produced devastating situations for those on both sides of the lawsuits that have been brought concerning them. They have imposed an unmeasurable amount of suffering on individuals and families, and billions of dollars in costs on companies. But the life and scope of such litigation is finite. It does not directly involve many firms. As shown above in sec. III, more than 90% of all F2000 asbestos litigation involves only 10 companies. Consequently, we do not believe it should not be taken as a measure of the litigation burden that business in general faces.
82. That these particular products will leave the litigation scene does not mean that there are no others to take their place. The most current example is breast implants. Litigation concerning the damage allegedly caused by faulty implants is taking place in federal courts now. Its magnitude and impact is by all accounts staggering. There was recently a report of a $27 million award to three plaintiffs by a Houston jury. See Barnaby Feder, "Millions Awarded in Implant Trial," National Report Section, N.Y. Times, 14 March 1994, at A7. The proposed settlement for all present and future plaintiffs, involving Dow Coming, Bristol Squibb Myers, and Baxter International, is reported to be $3.75 billion. See Henry Weinstein, "When Law, Tragedy Intersect," Los Angeles Times, 26 March 1994, at 1 et seq. Early breast implant cases were filed as long as a decade ago, but the product did not move to "mass tott" status until late 1991, when new filings courts surged to a volume estimated at 12,000 cases, split about evenly between federal and state courts. This makes the litigation volume for breast implant claims, at least in federal courts, about the same as the earlier volume for IUD Dalkon Shield cases.
83. Though inadequate as a basis for calculating total business litigation volume, or for comparing large and small business litigation patterns, the diversity jurisdiction data below do have some value for estimating litigation outcome patterns for business in general. We therefore return to them in sec. VI, where win rates are reported.
84. In subsequent work, we hope to remedy this, at least in some measure, at least in diversity jurisdiction.
85. While we do not pursue the matter here, there are two basic reasons why this might be the case: the greater stakes they have in cases in dispute, or the greater resources they can bring to bear to those disputes. Unfortunately, available theory and evidence do not permit easy separation and empirical testing of the strength of these competing explanations. The reason is that what is typically taken to signal high "stakes" in business disputing (e.g., firm size, scope, assets, even reputation) heavily overlaps with those things that also signal high resources (deep pockets, full-service law firms, lots of experience in their area, etc.). The cost of litigation may also reasonably be expected to increase at the margin of legal uncertainty on which Priest and Klein and others think all litigation centers (though the fact that costs increase there is a good reason why they might be wrong); if so, there is no reason particular reason to expect litigation to center on that margin, and where it does conventional resource constraints become more operative.
86. In future work, we intend to test the robustness of these and other explanations for changes in the level of litigation. The point here is not to endorse them but to suggest their obviousness as potential explanations of the modest third of the increase not accounted for by a simple increase in economic activity.
87. Lane Kenworthy, Stewart Macaulay, & Joel Rogers, "'The More Things Change...': Business Litigation and Governance in the American Automobile Industry," 21 Law & Soc. Inquiry 000 (1996).
88. T. Dunworth & J. Kakalik, "Preliminary Observations on Implementation of the Pilot Program of the Civil Justice Reform Act of 1990," 46 Stan. L. Rev. 6 (1994).
89. Asbestos cases were excluded from the CJRA evaluation and were consequently unavailable in the case records provided by the 20 districts in response to the CJRA evaluation design. Earlier estimates of the multiparty character of asbestos cases were performed in Dunworth, "Product Liability" (cited in note 20).