UNITED STATES DISTRICT COURT, EASTERN DISTRICT OF PENNSYLVANIA
June 6, 1979
ZENITH RADIO CORPORATION
MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., et al.; NATIONAL UNION ELECTRIC CORPORATION v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., et al.; IN RE: JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION
The opinion of the court was delivered by: BECKER
I. Preliminary Statement
Certain defendants in these consolidated antitrust cases, alleging that they are so "extraordinarily complex," "so massive as to make them unique in the annals of United States antitrust and trade regulation litigation," and "beyond the practical abilities and limitations of a jury," have moved for an order striking the jury demands of the plaintiffs, Zenith Radio Corporation ("Zenith") and National Union Electric Corporation ("NUE").
This opinion will address and deny defendants' motion.
NUE is the corporate successor to Emerson Radio Co., one of the pioneers in the radio and TV industry. NUE ceased all production of television receivers in February, 1970;
that December, it filed the first of these suits,
alleging that the Japanese defendants and others had conspired to take over the American consumer electronic products industry and to drive NUE out of business. In 1974, after experiencing large operating losses, Zenith filed an action making similar allegations.
The NUE action was then transferred to this district for coordinated or consolidated pretrial proceedings with the Zenith action. See In re Japanese Electronic Products Antitrust Litigation, 388 F. Supp. 565 (J.P.M.D.L.1975).
In Pretrial Order # 182, filed this date, we made the transfer of the NUE action to this district unconditional, and consolidated it for trial with the Zenith action.
The ten principal defendants are Mitsubishi Corporation, a Japanese trading company; Matsushita Electric Industrial Co., Ltd., Toshiba Corporation, Hitachi, Ltd., Sharp Corporation, Mitsubishi Electric Corporation (Melco), Sanyo Electric Co., Ltd., and Sony Corporation, all Japanese manufacturers of consumer electronic products; and two American companies, Motorola, Inc. and Sears, Roebuck & Co. Fourteen other defendants are subsidiaries of the principal Japanese defendants. Of the twenty-four defendants, fifteen are defendants in both suits, seven in the Zenith action only, and two in the NUE action only.
In addition to the twenty-four named defendants, the plaintiffs have identified close to 100 alleged co-conspirators whose business operations span the globe, ranging from dozens of Japanese companies, large and small, to such world industrial giants as N.V. Phillips Gloeilampenfabrieken and General Electric Co.
In capsule form, plaintiffs' complaints allege that the Japanese defendants and their co-conspirators are and have been participants in a conspiracy which, by artificially lowering export prices, has for more than twenty years sought the methodical destruction of the United States' domestic consumer electronic products industry.
The defendants are accused of carrying out the aims of this conspiracy by flooding the United States' market with imported goods at prices so attractive to consumers that domestic producers suffered serious losses, and were either unable to compete or able to do so only by moving some or all of their own production facilities to Mexico and the Far East.
The particular offenses charged in the complaints span the laws of antitrust. The overall conspiracy is alleged to violate §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and § 73 of the Wilson Tariff Act, 15 U.S.C. § 8.
However, the cornerstone of the plaintiffs' case is the allegation that the Japanese defendants have violated the 1916 Revenue Act, better known as the 1916 Antidumping Act, 15 U.S.C. § 72,
by "commonly and systematically" selling their products in this country for substantially less than their actual market value or wholesale price in Japan, and with predatory intent. The defendants are also charged with violating the Robinson-Patman Act, 15 U.S.C. § 13(a), by discriminating in price among American purchasers.
Finally, Zenith charges that Sears, Motorola, and the Matsushita and Sanyo defendants violated § 7 of the Clayton Act, 15 U.S.C. § 18, in connection with the Japanese companies' acquisitions of interests in domestic consumer electronic products manufacturers.
Plaintiffs' claims, adumbrated above, have been spelled out in greater detail in two preliminary pretrial memoranda totalling 410 pages, as well as in answers to numerous contention interrogatories. The plaintiffs' papers seek to portray a worldwide conspiracy said to have lasted over a period of some 30 years and to have involved close to 100 manufacturers, exporters, and importers of consumer electronic products of various national origins.
The defendants maintain that, notwithstanding their voluminous submissions, plaintiffs have failed to elucidate their claims with any degree of precision. They also deny both the legal and factual validity of the plaintiffs' claims. Additionally, certain of the defendants have asserted counterclaims against Zenith.
The counterclaims attack Zenith on two fronts. First, they allege that Zenith, acting alone and in combination and conspiracy with others, used territorial allocations, price discrimination, horizontal and vertical price fixing arrangements and certain "key dealer preferences" in violation of the Robinson-Patman Act and §§ 1 and 2 of the Sherman Act. Second, they accuse Zenith and its co-conspirators of seeking to interfere with its competitors, including the counterclaimants, "by every means available, including the submission of complaints, petitions, testimony and other information to various federal governmental agencies and officials, federal courts, and the United States Congress which were based upon sham, false and misleading allegations and information, without regard to the truth or merits of the claims made." The counterclaiming defendants thus invoke the "sham litigation" theory of antitrust liability recognized in Otter Tail Power Co. v. United States, 410 U.S. 366, 93 S. Ct. 1022, 35 L. Ed. 2d 359 (1973). Defendants have likewise filed extensive preliminary pretrial memoranda detailing their counterclaims.
We are now approaching the end of pretrial discovery. To say that the discovery has been massive would be a considerable understatement. To date over 20 million documents have been produced for inspection. A considerable number of these have had to be translated from Japanese into English. The deposition transcripts completed to date total well over 100,000 pages, and many depositions remain to be taken. The interrogatory practice has been voluminous, coming in wave after wave. We have been inundated with a plethora of discovery motions; in the past few months we have dealt with over 50 Rule 37 motions of various descriptions, and pretrial conferences with counsel for the parties are consuming at least 3 full days per month, mostly to resolve discovery problems. We have entered a comprehensive pretrial order which fixed discovery deadlines and times for filing annotated final pretrial statements and other pretrial material, and set the case for trial in February, 1980.
It is anticipated that the trial will consume approximately one year.
Following the filing of the motion to strike the jury demand, we heard extensive argument thereon. Since it appeared to us that a helpful way of framing the complexity issue was to request the parties to prepare proposed forms of special interrogatories which might be submitted to a jury, we did so and defendants made extensive submissions. Numerous legal memoranda have been filed in connection with the motions, many of them dwelling upon the rash of recent cases where complexity has led to the striking of timely jury demands. We address defendants' motion at this time because we are satisfied that we have an adequate record on which to decide it and because we believe it to be fair to decide the issue sufficiently in advance of trial that the losing party may attempt to obtain appellate review.
We write at length for a number of reasons. First is the current importance of the problem, which appears on the agenda of almost every seminar on class actions, antitrust law and federal practice concerning which we have recently received brochures. Second, we suspect that given the enormous scope of contemporary class action and antitrust litigation, this will not be the last occasion on which the enormous tension between the demands of these massive cases and the mandate of the Seventh Amendment will generate a motion to strike a jury demand on grounds of complexity. Hence, our discussion of the case law may be of help to the bench and bar.
We consider herein only the defendants' arguments that the jury trial demand should be struck on grounds of complexity. We find the other two asserted grounds for their motion plainly without merit, and reject them out of hand.
II. The Parties' Contentions Regarding the Size & Complexity of the Litigation
The defendants' motion is based, as we have noted, on the contention that this litigation is so extraordinarily massive and complex as to be beyond the practical abilities and limitations of a jury. In support of this contention, the defendants emphasize the nature of the conspiracy charged, the statutory claims asserted, the procedural posture of the case, and the anticipated length of trial. The defendants provided the following summary of their contentions in their first memorandum in support of their motion to strike the jury demand:
1. The alleged conspiracy is claimed to have been worldwide, to have lasted over a period of 30 years and to have involved more than 97 manufacturers, exporters and importers of consumer electronic products ("CEP's") of various national origins.
2. Over seventy of the alleged co-conspirators are not defendants in this proceeding. Necessarily plaintiffs will attempt to produce evidence to support their allegations that the non-defendant co-conspirators participated in the alleged conspiracy with the various defendants who are charged in the complaints. This will create complicated and confusing issues for the jury as to whether the defendants and alleged non-defendant co-conspirators knew of, joined and participated in the alleged conspiracy. More confusing will be the question of whether evidence presented as to specific defendant(s) and specific non-defendant co-conspirator(s) has been connected to and is admissible against the various defendants in the litigation.
3. The plaintiffs assert violations based upon various sophisticated and esoteric antitrust and trade regulation laws which few American lawyers let alone untrained laymen or jurors can understand and interpret. The allegations are further complicated by the fact that one of the laws, the Wilson Tariff Act (15 U.S.C. § 18), is rarely used and interpreted in litigation, and the 1916 Antidumping Act (15 U.S.C. § 72) has never been construed or interpreted in a trial situation in its over 60 year history. Even if appropriate and legally sufficient instructions are given to the jury as to the meaning of these laws and the standards of proof which must be met, application of complicated and detailed accounting, marketing, economic and legal evidence to such legal standards and guidelines would be mindboggling for a jury.
4. The trial of these litigations is anticipated to last at least one year.
5. The majority of the defendants are Japanese, their native language has no common basis with the English language and their business records and therefore much of the evidence in these litigations will be Japanese language documents.
6. At the time the trial commences almost nine years of discovery will have been completed, including the production of untold millions of documents and literally hundreds of depositions which will constitute the evidence to be presented. As noted above, a major portion of these documents are in Japanese and will require translation and interpretation. Further, much of the documentation whether in English, Japanese or other languages is of a highly technical engineering and accounting nature.
7. The evidence at trial will consist in part of the testimony of expert witnesses as to the nature of competition and marketing practices in both the United States and Japan CEP industries, accounting practices in both the United States and Japan CEP industries, the engineering and scientific developments of CEPs in both the Japanese and United States markets which will have to be applied to the vast quantity of factual information which will be introduced in both English and Japanese.
8. The cases involve overlapping and different products (the NUE case deals only with television receivers; while the Zenith case deals not only with television receivers but also with radios, stereos, audio equipment, tape recorders and components of such products); the injury claims involve overlapping and different time periods of the alleged conspiracy (NUE 1966 to 1970 and Zenith, 1968 to 1977). Further, the Zenith case challenges the acquisition by two Japanese manufacturers of failing American CEP manufacturers (Matsushita's acquisition of Motorola's color television receiver business and Sanyo's acquisition of Warwick). The Zenith case also includes charges of violations of the Robinson-Patman Act (15 U.S.C. 13(a)) which the NUE case does not.
9. The cases involve overlapping and different parties. The Zenith action involves six parties who are not parties in the NUE action. The Sony defendants are a party to the NUE action but not the Zenith action.
10. The defendants have asserted extensive counterclaims against plaintiff Zenith charging it with engaging in marketing practices in violation of the United States antitrust laws and in a conspiracy with certain other American CEP manufacturers, distributors, labor unions and others to prevent and impede the ability of the defendants in these litigations, particularly the Japanese defendants, from competing in the United States CEP industries through a series of sham and harassing charges, allegations, investigations and legal proceedings. The counterclaims involve highly sophisticated and technical legal and factual evidence which will require the presentation of vast quantities of materials.
11. While these cases are individually extraordinarily complex and involve diverse claims as to products, parties, statutes involved and damage periods, plaintiffs claim they involve a single conspiracy against the defendants and the alleged non-defendant co-conspirators. In such a situation consolidation for trial might seem a logical and efficient utilization of counsels' and the Court's time. However, to consolidate cases which individually are incapable of comprehension by a jury for a trial before a jury would exacerbate and expand the complexity of the trial by a geometric progression which defies quantification.
This summary has been expanded and supplemented in a lengthy affidavit and numerous other submissions.
In their affidavit, the defendants assert that they have produced more than ten million pages of documents; that the plaintiffs have copied one million pages and "expect to introduce several thousand documents into evidence." For their own part, the defendants plan to offer an undefined "major portion" of the 2 million pages they have copied from the more than twenty million pages produced by the plaintiffs.
The defendants' views are also illustrated by the sample special interrogatories submitted so that we might identify the issues to be decided by the jury and assess their complexity.
With respect to the conspiracy claims, the defendants' proposed sample interrogatory contains 23 subparts, to be asked of the jury "for each of the 24 defendants with respect to each of the 108 other defendants and alleged co-conspirators." Together with other subparts which may be required, the defendants suggest that the jury might therefore be asked "over 15,000 separate interrogatories for each relevant product market" as to the conspiracy claims alone. In addition, the defendants argue that because of the thousands of models of consumer electronics products imported and sold by each of the defendants, thousands upon thousands of special interrogatories will have to be propounded to the jury on the dumping claims as well as the other statutory causes of action asserted by the plaintiffs.
The plaintiffs' response to these contentions is simply that the case is large, but not complex. First, they emphasize that they charge only one conspiracy, not many. Therefore, it would serve no purpose to ask the jury to answer a complete set of conspiracy interrogatories for each of the 2,316 possible pairings of each defendant with every other co-conspirator. Instead, they suggest posing "simply the question whether the plaintiffs have proved that the individual defendants have been engaged in an unlawful combination or conspiracy in restraint of trade." As regards the thousands of special interrogatories which defendants say would have to be propounded on the dumping claims, plaintiffs submit that the jury need not decide separately whether there has been dumping as to each of the thousands of models of consumer electronic products involved, and need not perform a separate computation of dumping margins for each of these models.
According to the plaintiffs, the jury's task will be simplified by other factors. First, although there are 24 defendants, they are grouped into no more than ten separate enterprises. Second, the difficulties attending class actions are not present here. Third, plaintiffs note that there are only two cases involved, compared with the 18 separate cases involved in one litigation in which a jury demand has been struck.
In sum, the plaintiffs conclude,
the fact remains that the present litigation involves classic conspiracy claims and proof of exactly the same nature as that which has been presented in dozens and dozens of private antitrust actions and criminal prosecutions across the nation. . . . The issues of motive, intent and conspiracy . . . are of the type routinely submitted to juries in the federal courts on a daily basis. As in most cases involving a number of discrete transactions, the jury will be assisted by presentation of the evidence in a summarized format easily grasped by individual jurors.
We expect that the actual size and complexity of this litigation falls somewhere in between the two extremes portrayed by the parties. We are skeptical of the plaintiffs' efforts to portray this litigation as an essentially simple, "single conspiracy" case, although of course we express no opinion as to what they may be able to prove at trial. We are equally skeptical of the defendants' contentions regarding the number of documents they will introduce and the number of special interrogatories which would have to be submitted to a jury.
By any yardstick, this case is at least as large and complex as the others in which jury demands have been struck. See pp. 923-925 Infra. However, resolution of these disputes as to the Degree of complexity of this case is unnecessary in light of our discussion of the legal issues, to which we now turn.
The issue before us is whether trial by jury, usually available as of right in private, treble-damage antitrust cases, is guaranteed even in a case so massive and complex as to be beyond "the practical abilities and limitations of juries."
The plaintiffs, relying heavily on the decision of the Supreme Court in Fleitmann v. Welsbach Street Lighting Co., 240 U.S. 27, 36 S. Ct. 233, 60 L. Ed. 505 (1916), argue vigorously that the Seventh Amendment guarantees their right to a jury trial, regardless of considerations of size and complexity. In Fleitmann, the Court held that a shareholders' derivative action could not be brought in equity when the underlying corporate claim was one for treble damages for violation of the antitrust laws, because to permit equity jurisdiction over such actions would deprive the defendants of their right to trial by jury:
(T)he inquiry . . . arises why the defendants' right to a jury trial should be taken away . . . .
(W)e agree with the courts below that when a penalty of triple damages is sought to be inflicted, the statute should not be read as attempting to authorize liability to be enforced otherwise than through the verdict of a jury in a court of common law.
On the contrary, it plainly provides the latter remedy, and it provides no other.
Id., 240 U.S. at 28-29, 36 S. Ct. at 234.
Since the Fleitmann decision, it has been regarded as "well settled" that antitrust claims for treble damages are "triable by jury on timely demand of a party." Ring v. Spina, 166 F.2d 546, 550 (2d Cir.) Cert. denied, 335 U.S. 813, 69 S. Ct. 30, 93 L. Ed. 368 (1948). See, e.g., Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 504, 79 S. Ct. 948, 3 L. Ed. 2d 988 (1959); Calnetics Corp. v. Volkswagen of America, Inc., 532 F.2d 674, 690 (9th Cir.) Cert. denied, 429 U.S. 940, 97 S. Ct. 355, 50 L. Ed. 2d 309 (1976); Siegfried v. Kansas City Star Co., 298 F.2d 1 (8th Cir.) Cert. denied, 369 U.S. 819, 82 S. Ct. 831, 7 L. Ed. 2d 785 (1962); Hartford-Empire Co. v. Glenshaw Glass Co., 3 F.R.D. 50 (W.D.Pa.1943).
The defendants concede "the applicability of the Seventh Amendment to all but the most lengthy and complex damage actions." They frame the issue as "whether or not there is a certain small class of cases which are too lengthy and complex to be handled by a jury, and, therefore, must be tried before the Bench." In support of their argument that this litigation can be placed in such a class of cases without offending the constitution, the defendants first argue that complex cases were historically tried in equity. Moreover, they urge us to follow the example of several courts which have recently struck jury demands in large and complex actions, including two antitrust cases. See pp. 923-925, Infra. These courts have found the Seventh Amendment inapplicable to such matters, largely on the authority of dicta in a recent Supreme Court decision implying that the constitutional right to a jury trial in civil actions may sometimes depend on "the practical abilities and limitations of juries." Ross v. Bernhard, 396 U.S. 531, 538 n. 10, 90 S. Ct. 733, 738, 24 L. Ed. 2d 729 (1970).
B. Construction of the Antitrust Statutes: Need We Reach the Seventh Amendment Issue ?
Although the parties have treated the issue before us as depending solely on the scope of the Seventh Amendment right to jury trial, we must first determine whether it is necessary to reach the constitutional issue. " "If there is one doctrine more deeply rooted than any other in the process of constitutional adjudication, it is that we ought not to pass on questions of constitutionality . . . unless such adjudication is unavoidable.' Spector Motor Co. v. McLaughlin, 323 U.S. 101, 105, 65 S. Ct. 152, 154, 89 L. Ed. 101 (1944). Before deciding the constitutional question, it (is) incumbent on . . . courts to consider whether . . . statutory grounds might be dispositive." New York City Transit Authority v. Beazer, 440 U.S. 568, 582, 99 S. Ct. 1355, 1364, 59 L. Ed. 2d 587 (1979). See Ashwander v. TVA, 297 U.S. 288, 346-48, 56 S. Ct. 466, 80 L. Ed. 688 (1936) (Brandeis, J., concurring).
The right to jury trial may, of course, be expressly provided by the terms of a federal statute. See, e.g., Great Lakes Act, 28 U.S.C. § 1873 (tort and contract actions in admiralty jurisdiction involving shipping on the Great Lakes); 28 U.S.C. § 1874 (jury to assess sum due on forfeiture of bond); 11 U.S.C. § 42(a) (right of involuntary bankrupt to jury trial). Because there is no constitutional right to a Nonjury trial, the Seventh Amendment does not prevent either judicial or legislative extension of the right to jury trial, and such statutes raise no constitutional difficulties. See e.g., The Propeller Genesee Chief v. Fitzhugh, 53 U.S. (12 How.) 443, 459-50, 13 L. Ed. 1058 (1852) (Great Lakes Act); 9 Wright and Miller, Federal Practice and Procedure § 2302, at 15 (1971).
On the other hand, when a statute creating new rights or remedies is silent as to the mode of trial, the availability of a jury as of right generally becomes a Seventh Amendment question. Courts fit the statutory claim "into the nearest historical analogy to determine whether there is a (constitutional) right to jury trial." James, Right to a Jury Trial in Civil Actions, 72 Yale L.J. 655, 656 (1963); Ross v. Bernhard, 396 U.S. 531, 543 n. 1, 90 S. Ct. 733, 24 L. Ed. 2d 729 (1970) (Stewart, J., dissenting); Patzig v. O'Neil, 577 F.2d 841, 848 (3d Cir. 1978); Nedd v. Thomas, 316 F. Supp. 74, 77 (M.D.Pa.1970); 5 Moore's Federal Practice P 38.11(7), at 128-128.4 (2d ed. 1978); 9 Wright and Miller, Federal Practice and Procedure §§ 2302, 2316 at 16, 79-80 (1971). See, e.g., Pernell v. Southall Realty, 416 U.S. 363, 375-76, 94 S. Ct. 1723, 40 L. Ed. 2d 198 (1974); Curtis v. Loether, 415 U.S. 189, 193-97, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974); Porter v. Warner Holding Co., 328 U.S. 395, 66 S. Ct. 1086, 90 L. Ed. 1332 (1946); Luria v. United States, 231 U.S. 9, 34 S. Ct. 10, 58 L. Ed. 101 (1913); United States v. Jepson, 90 F. Supp. 983 (D.N.J.1950); Olearchick v. American Steel Foundries, 73 F. Supp. 273 (W.D.Pa.1947). As the Court said in Curtis :
(W)e have often found the Seventh Amendment applicable to causes of action based on statutes. See, e.g., Dairy Queen, Inc. v. Wood, 369 U.S. 469, 477, 82 S. Ct. 894, 899, 8 L. Ed. 2d 44 (1962) (trademark laws); Hepner v. United States, 213 U.S. 103, 115, 29 S. Ct. 474, 479, 53 L. Ed. 720 (1909) (immigration laws); Cf. Fleitmann v. Welsbach Street Lighting Co., 240 U.S. 27, 36 S. Ct. 233, 60 L. Ed. 505 (1916) (antitrust laws), and the discussion of Fleitmann in Ross v. Bernhard, 396 U.S. 531, 535-536, 90 S. Ct. 733, 736-737, 24 L. Ed. 2d 729 (1970). Whatever doubt may have existed should now be dispelled. The Seventh Amendment does apply to actions enforcing statutory rights, and requires a jury trial upon demand, if the statute creates legal rights and remedies, enforceable in an action for damages in the ordinary courts of law.
415 U.S. at 193-94, 94 S. Ct. at 1008 (footnotes omitted).
Thus, if in enacting the antitrust laws Congress has granted the right to trial by jury in antitrust damage suits regardless of their size and complexity, any such limitation to the scope of the Seventh Amendment would be irrelevant. But if the antitrust laws do not themselves guarantee trial by jury on demand, we would have to decide the constitutional issue.
Private damage suits for relief under the antitrust laws are authorized by § 4 of the Clayton Act, 15 U.S.C. § 15, which replaced § 7 of the Sherman Act, ch. 647, § 7, 26 Stat. 210 (1890). Neither section makes any express mention of trial by jury, but the matter does not end there. In Lorillard v. Pons, 434 U.S. 575, 98 S. Ct. 866, 55 L. Ed. 2d 40 (1978), the Court interpreted the Age Discrimination in Employment Act of 1967 as requiring a jury trial on demand, even though that statute is also silent on the issue. In drafting the ADEA, Congress incorporated by reference the remedial provisions of the Fair Labor Standards Act, which courts had held to carry a constitutional right to trial by jury. Because of this, the Court held, the statutory scheme showed that congress "intended that in a private action under the ADEA a trial by jury would be available where sought by one of the parties." 434 U.S., at 585, 98 S. Ct. at 872. The Court's analysis thus applied the "principle of reenactment," a settled canon of statutory construction which presumes that when language with an accepted meaning derived from judicial or administrative interpretation is thereafter used in a statute, Congress intended the language to carry its accepted meaning into the statute. See United States v. Board of Commissioners, 435 U.S. 110, 132-35, 98 S. Ct. 965, 55 L. Ed. 2d 148 (1978); Douglas v. Seacoast Products, Inc., 431 U.S. 265, 278-79, 97 S. Ct. 1740, 52 L. Ed. 2d 304 (1977).
Although the legislative history of the Sherman and Clayton Acts may be susceptible to a similar interpretation, the effort would be somewhat strained. Scattered remarks of several Senators during the debates prior to passage of the Sherman Act show that they assumed that jury trials would be available in antitrust damage actions. See 21 Cong.Rec. 1767 (1890) (remarks of Sen. George); id., at 2643 (remarks of Sen. Gray); id., at 3149 (remarks of Sens. Morgan and George). A belief that parties in treble damage antitrust litigation were entitled to jury trial as a matter of constitutional right is also evident in the remarks of several members of Congress during the debates prior to passage of the Clayton Act. See 51 Cong.Rec. 1466, 88 (1914) (remarks of Reps. Scott and Volstead); id., at 9489 (remarks of Reps. Floyd and Volstead); id., at 9491 (remarks of Reps. Green and Scott).
Moreover, because damages and especially penal damages were a traditional remedy of the courts of law, See pp. 921-922, Infra, Congress was almost certainly aware that litigants in antitrust damage suits would be entitled to trial by jury as a matter of constitutional right. However, mindful of "the difficulty of discerning congressional intent where the statute provides no express answer," Lorillard v. Pons, 434 U.S. at 585, 98 S. Ct. at 872, we find this evidence insufficient to allow an extension of the reasoning of Lorillard to the antitrust statutes.
We note first that since Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 7 L. Ed. 732 (1830), it has been clear and Congress has presumably been aware that the constitutional jury trial right attaches to statutory causes of action involving "legal" rights and remedies.
See Pernell v. Southall Realty, 416 U.S. 363, 374-75, 94 S. Ct. 1723, 40 L. Ed. 2d 198 (1974); Curtis v. Loether, 415 U.S. 189, 193-94, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974). In spite of this, and with the sole exception of Lorillard v. Pons, the Supreme Court has consistently used constitutional analysis to determine the availability of trial by jury when the statute creating a cause of action is silent on the subject. This resort to Seventh Amendment analysis for most causes of action based on statutes implies strongly that mere congressional Awareness of the applicability of the Seventh Amendment, like that evident in the legislative history of the antitrust laws, is not enough to make jury trial available as a matter of statutory construction.
By way of contrast, the legislative history of the ADEA provides much stronger evidence that Congress was not only aware of, but intended that jury trials be available.
In Lorillard, the Court stressed Congress' deliberate choice of certain of the FLSA's remedial provisions, and its rejection both of other portions of the FLSA and of the remedial provisions of Title VII, which, though they accord similar relief, do so in terms not held to carry a right to jury trial. Clearly, Congress could have chosen to incorporate instead the remedial provisions of Title VII, thereby entitling plaintiffs to virtually identical relief, but without a jury.
The Congresses that enacted the antitrust laws were in a very different position. Unlike the backpay available under Title VII, the damages available for antitrust violations cannot be fairly described as "restitution" or other equitable relief. See Bernstein v. Universal Pictures, Inc., 79 F.R.D. 59, 66-67 (S.D.N.Y.1978). And in suits for penal damages, the right to a jury was then as much a part of the constitutional landscape as it is now in trials for criminal offenses punishable by lengthy imprisonment and large fines. When Congress defines certain conduct as a serious offense, it certainly "intends" that the conduct be severely punished, and necessarily Assumes that defendants would have the right to trial by jury. However, it need not "intend" this to be the case; indeed, it might devoutly wish just the opposite, but feel constrained by the constitution.
Such constraint was evidently felt by the Congress that passed the Clayton Act; the discussion there of trial by jury showed less concern for the right to a jury trial than for the constitutionality of the proposed changes in the antitrust laws then being debated. See, e.g., 51 Cong.Rec. 9491 (1914) (remarks of Reps. Green and Scott).
Whereas Congress in the ADEA deliberately chose statutory language known to carry a right to a jury trial when it could instead have provided equivalent "equitable" relief, Congress in enacting the antitrust laws had no such choice, because equity had no remedy equivalent to treble damages. Clearly, it makes much more sense to discern an "intention" in the first situation than in the second.
Thus, because the legislative history of the antitrust laws does not yield the positive evidence of congressional intent required to hold that the plaintiff's right to a jury trial is guaranteed by the statute, we must address the constitutional issue.
C. The Seventh Amendment and the Historical Test
The Seventh Amendment provides:
In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law.
Although the continuing vitality of the Bill of Rights after nearly two centuries may be partly due to our courts' recognition of the need to read twentieth-century meanings into eighteenth-century terms,
the scope of the Seventh Amendment has traditionally been determined by applying a comparatively static, "historical test," which looks to the English common law as it existed in 1791, when the Seventh Amendment became part of the constitution.
See, e.g., Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 99 S. Ct. 645, 58 L. Ed. 2d 552 (1979); Curtis v. Loether, 415 U.S. 189, 193, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974); Baltimore & Carolina Line, Inc. v. Redman, 295 U.S. 654, 657, 55 S. Ct. 890, 891, 79 L. Ed. 1636 (1935) ("The right of trial by jury thus preserved is the right which existed under the English common law when the amendment was adopted."); Dimick v. Schiedt, 293 U.S. 474, 476, 55 S. Ct. 296, 79 L. Ed. 603 (1935). See generally F. James & G. Hazard, Civil Procedure § 8.1 at 347 (1977); 5 Moore's Federal Practice P 38.08(5), at 79-80 (2d ed. 1978).
In looking to the English common law of 1791, the critical distinction is that between "law" and "equity:"
By common law, (the framers of the amendment) meant what the constitution denominated in the third article "law;" not merely suits, which the common law recognized among its old and settled proceedings, but suits in which legal rights were to be ascertained and determined, in contra-distinction to those where equitable rights alone were recognized, and equitable remedies were administered; or where, as in the admiralty, a mixture of public law, and of maritime law and equity, was often found in the same suit. Probably, there were few, if any, states in the Union, in which some new legal remedies, differing from the old common-law forms, were not in use; but in which, however, the trial by jury intervened, and the general regulations in order respects were according to the course of the common law. Proceedings in cases of partition, and of foreign and domestic attachment, might be cited as examples variously adopted and modified. In a just sense, the amendment then may well be construed to embrace all suits, which are not of equity and admiralty jurisdiction, whatever may be the peculiar form which they may assume to settle legal rights.
Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 446, 7 L. Ed. 732 (1830). Accord, e.g., Atlas Roofing Co., Inc. v. OSHRC, 430 U.S. 442, 449, 97 S. Ct. 1261, 51 L. Ed. 2d 464 (1977); Pernell v. Southall Realty, 416 U.S. 363, 374-75, 94 S. Ct. 1723, 40 L. Ed. 2d 198 (1974); Curtis v. Loether, 415 U.S. 189, 193, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974); Ross v. Bernhard, 396 U.S. 531, 533, 90 S. Ct. 733, 24 L. Ed. 2d 729 (1970). Because the Court has applied this rule in such a way as to "preserve the substance of the common-law right of trial by jury, as distinguished from mere matters of form or procedure," Baltimore & Carolina Line, supra, 295 U.S. at 657, 55 S. Ct. at 891, it has been able to accommodate procedural change without being unfaithful to the historical test. See, e.g., Colgrove v. Battin, 413 U.S. 149, 156-57, 93 S. Ct. 2448, 37 L. Ed. 2d 522 (1973) (twelve-member jury not required by Seventh Amendment); Galloway v. United States, 319 U.S. 372, 390, 63 S. Ct. 1077, 87 L. Ed. 1458 (1943) (directed verdict permitted by Seventh Amendment); Gasoline Products Co. v. Champlin Refining Co., 283 U.S. 494, 498, 51 S. Ct. 513, 75 L. Ed. 1188 (1931) (New trial on less than all issues in case may be ordered, even though at common law there was no practice of setting aside a verdict in part); Ex parte Peterson, 253 U.S. 300, 309, 40 S. Ct. 543, 64 L. Ed. 919 (1920) (court appointment of auditor to examine complex accounts between the parties in order to simplify and define issues does not violate Seventh Amendment, as long as ultimate determination of disputed issues is left to the jury); Walker v. New Mexico & S.P.R.R., 165 U.S. 593, 596, 17 S. Ct. 421, 41 L. Ed. 837 (1897) (where jury's general verdict is inconsistent with jury's answers to special interrogatories, Seventh Amendment is not violated by entry of judgment on the basis of the special verdict, setting the general verdict aside). Although in each of these cases the Court approved procedural incidents of jury trials different from those that had been in practice in 1791, in none was the right to a jury trial lost where that right had been enjoyed at the time of the adoption of the Seventh Amendment.
We have noted earlier the defendants' concession that the Seventh Amendment applies "to all but the most lengthy and complex damage actions."
The issue, therefore, as framed by the historical test, is whether jury trials were unavailable in complex matters in 1791.
1. The Accounting Cases
In support of their contention that "at the time that the Seventh Amendment was ratified, . . . litigations involving complex facts or sophisticated business transactions were tried before the Court and not a jury," the defendants cite a number of cases in which plaintiffs proceeded in equity to obtain "an accounting." In some of these cases, the jurisdiction of a court of equity was sustained, even though the matter was cognizable at law, because the complexity of the accounts between the parties rendered the remedy at law inadequate. For example, in Kirby v. Lake Shore & M. S. R. R., 120 U.S. 130, 7 S. Ct. 430, 30 L. Ed. 569 (1887), the Court said:
The case made by the plaintiff is clearly one of which a court of equity may take cognizance. The complicated nature of the accounts between the parties constitutes itself a sufficient ground for going into equity.
Id., at 134, 7 S. Ct. at 432. And in Fowle v. Lawrason, 30 U.S. (5 Pet.) 495, 8 L. Ed. 204 (1831), while holding that the case at bar was not sufficiently complex to justify equity jurisdiction, the Court stated the rule as being that "in transactions (not involving certain fiduciary relationships), great complexity ought to exist in the accounts, or some difficulty at law should interpose, some discovery should be required, in order to induce a court of chancery to exercise jurisdiction." Id., at 503. Accord, H. B. Zachry Co. v. Terry, 195 F.2d 185 (5th Cir. 1952); Quality Realty Co. v. Wabash Ry. Co., 50 F.2d 1051 (8th Cir. 1931); Goffe & Clarkener, Inc. v. Lyons Milling Co., 26 F.2d 801 (D.Kan.1928) (discussing cases), Aff'd on other grounds, 46 F.2d 241 (10th Cir. 1931); Harrington v. Churchward, 29 Law J. Ch. 521 (1860); O'Connor v. Spaight, 1 Sch. & Lefr. 305, 309 (Irish Ch.1804). See Kilbourn v. Sunderland, 130 U.S. 505, 9 S. Ct. 594, 32 L. Ed. 1005 (1889); Standard Oil Co. v. Atlantic Coast Line R. Co., 13 F.2d 633 (W.D.Ky.1926) Aff'd on other grounds, 275 U.S. 257, 48 S. Ct. 107, 72 L. Ed. 270 (1927). Thus, complexity was sometimes a factor in determining the mode of trial. However, because in these cases the plaintiffs could choose whether to seek relief in law or equity, jury trials Were available even if only at the plaintiff's opinion. Moreover, the merger of law and equity in the federal courts casts considerable doubt on the survival of the plaintiff's historical ability to choose a non-jury trial in such matters. These "accounting" cases, therefore, do not help the defendants here.
a. Complex Accounting Cases and the Concurrent Jurisdiction of Law and Equity
Actions seeking an accounting are the descendants of the old action of "Account" or "Account-render," one of the earliest forms of action at common law.
The common-law action of account was never very popular perhaps because it was procedurally cumbersome
and of limited scope
and by the eighteenth century it was largely replaced by other remedies, both legal and equitable.
In some cases there were no incidents of equitable jurisdiction, and the plaintiff had to proceed at law. See, e.g., Fowle v. Lawrason, 30 U.S. (5 Pet.) 495, 8 L. Ed. 204 (1831) (lessor's action for an accounting of rent allegedly due). When the claims underlying the demand for an accounting were equitable claims, equity jurisdiction was exclusive. 5 Moore's Federal Practice P 38.25, at 199 (2d ed. 1978). See, e.g., Newberry v. Wilkinson, 199 F. 673, 678 (9th Cir. 1912) (suit for accounting against administratrix of a decedent's estate); Miller v. Weiant, 42 F. Supp. 760 (S.D.Ohio 1942) (action to compel directors to account for corporate assets); Williams v. Collier, 32 F. Supp. 321 (E.D.Pa.1940) (suit by trustee in bankruptcy to void fraudulent transfer and impose constructive trust); 4 Pomeroy's Equity Jurisprudence §§ 1420, 1421 (5th ed. 1941).
Those cases in which resort to equity was based on the complication of the accounts between the parties fell into a third category the concurrent jurisdiction of law and equity.
5 Moore's Federal Practice P 38.25, at 199 (2d ed. 1978). See e.g., Kirby v. Lake Shore & M. S. R. R., 120 U.S. 130, 7 S. Ct. 430, 30 L. Ed. 569 (1887); Fowle v. Lawrason, 30 U.S. (5 Pet.) 495, 8 L. Ed. 204 (1831); H. B. Zachry Co. v. Terry, 195 F.2d 185 (5th Cir. 1952); McNair v. Burt, 68 F.2d 814, 815 (5th Cir. 1934); Goffe & Clarkener, Inc. v. Lyons Milling Co., 26 F.2d 801 (D.Kan.1928); Aff'd on other grounds, 46 F.2d 241 (10th Cir. 1931). This overlap in the jurisdictions of law and equity gave plaintiffs in such cases the practical ability to choose the forum and thereby the mode of trial. When the plaintiff chose to bring his action at law, the defendant's ability to obtain a non-jury trial was severely limited:
(T)he doctrine is well settled that when the jurisdictions of law and equity are concurrent the one which first takes actual cognizance of any particular controversy ordinarily thereby becomes exclusive. If, therefore, the subject-matter of primary right or interest, although legal, is one of a class which may come within the concurrent jurisdiction of equity, and an action at law has already been commenced, a court of equity will not, unless some definite and sufficient ground of equitable interference exists, entertain a suit over the same subject-matter. . . . The grounds which permit the exercise of the equitable jurisdiction in such cases are the existence of some distinctively equitable feature of the controversy which cannot be determined by a court of law, or some fraudulent or otherwise irregular incidents of the legal proceedings sufficient to warrant their being enjoined, or the necessity of a discovery, either of which grounds would render the legal remedy inadequate. This rule results in part, in the United States, from the provisions of the national and state constitutions securing the right to a jury trial.
1 Pomeroy's Equity Jurisprudence § 179, at 251-252 (5th ed. 1941).
Because Story's view was that "(t)he whole machinery of Courts of Equity is better adapted to the purpose of an account. . . ." 2 Story's Equity Jurisprudence § 591, at 9 (14th ed., 1918), he was distressed by the ability of plaintiffs to bring such actions in the courts of law where they would be tried by juries:
(N)ow the (equity) jurisdiction extends not only to cases of an equitable nature, but to many cases where the form of the account is purely legal, and the items constituting the account are founded on obligations purely legal. Upon such legal obligations however suits, although not in the form of actions of account, yet in the form of assumpsit, covenant, and debt, are still daily prosecuted in the Courts of Common Law, and legal defenses are there brought forward. But even in these cases, as the courts possess no authority to stop the ordinary progress of such suits for the purpose of subjecting the matters in dispute to the investigation of a more convenient tribunal than a jury, unless the parties agree to a voluntary arrangement for this purpose the cause often proceeds to trial in a manner wholly unsuitable to its real merits.
Id., § 581, at 2 (footnotes omitted).
Thus, defendants were not able to have such matters transferred to equity after the plaintiff had brought an action at law. For example, in Williams v. Herring, 183 Iowa 127, 165 N.W. 342 (1917), the defendant sought to have an action transferred to equity on the ground that "the number of items involved" in the business between the parties was "so great that same can be properly tried and determined only by a court of chancery." Although agreeing that "the number of items . . . will be cumbersome and difficult to present to a jury," the court was of the view that they could be presented "in such a way as to reasonably be within the understanding and comprehension of a jury," and held:
The fact that the controversy involves a large number of items of debit and credit arising out of many business transactions, and that same could be more conveniently tried to the court, is not a ground of equitable jurisdiction. The test is not whether the cause can be more conveniently or satisfactorily tried and determined by the court than a jury, but the accounts must be mutual requiring an accounting, or there must be some other ground of equitable cognizance not shown to exist in this case.
In our opinion, plaintiff's cause of action upon both counts was properly brought at law, and he is entitled to a trial thereof by jury.
Id., 165 N.W. at 344-45. See also Crane v. Ely, 37 N.J.Eq. 564 (1883).
These "complex" cases for an accounting therefore reflect only the availability of a jury or nonjury trial at the Plaintiff's option. There is nothing in any of these cases to indicate that the plaintiff could not have chosen to proceed at law, with a jury.
In this respect, they are no different from many other kinds of actions presenting issues which, before the merger of law and equity, would be tried to a jury or to the court depending on the manner in which the plaintiff chose to proceed.
b. The Concurrent Jurisdiction of Law and Equity After Merger
In the federal courts, the merger of law and equity was not intended to affect the scope of the jury trial right; Rule 38(a) requires only that the right "as declared by the Seventh Amendment to the Constitution or as given by a statute . . . shall be preserved to the parties inviolate." However, a problem was presented by those matters in which the plaintiff had previously
had an option as to the mode of trial that excluded any option by defendant or any discretion by the court. . . . (T)he (post-merger) question, properly put, is between giving effect to the plaintiff's former option and giving defendant a counter-option and this involves a decision as to whether jury trial is to be preferred when either party (and not just the plaintiff) wants a jury trial.
F. James & G. Hazard, Civil Procedure § 8.7, at 374-75 (1977).
The problem as it was encountered in the federal system has been ably summarized by Judge Wisdom:
In 1938 merger of the federal courts of law and equity caused considerable uncertainty in the determination of jury trial rights; the liberal joinder provisions and the broad, sometimes mandatory, counterclaim provisions of the Federal Rules mixed legal and equitable causes in a single litigation with unprecedented frequency. . . . The difficulty comes in deciding whether the legal or the equitable cause should be tried first an issue of practical importance to litigants, since the determination of either cause acts as collateral estoppel on common questions of fact in the other. The broad grant of discretion under Rule 42 for a trial judge to order separate trials would seem to imply authority to decide the order of the separate trials, but courts struggled with this problem without clear guidelines. Some decisions rested on the "basic nature" of the case taken as a whole. In many other decisions this test was not recognized and the choice was left to the discretion of the trial judge. On occasion, attempts to apply the "basic nature" test have led to inconsistent results.
Thermo-Stitch, Inc. v. Chemi-Cord Processing Corp., 294 F.2d 486, 488-89 (5th Cir. 1961) (footnotes omitted). The problem reached the Supreme Court in Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S. Ct. 948, 3 L. Ed. 2d 988 (1959), and Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S. Ct. 894, 8 L. Ed. 2d 44 (1962). Beacon Theatres Involved a legal counterclaim to an equitable claim;
in Dairy Queen the plaintiff sought a court trial of an action presenting both legal and equitable claims.
In both cases there were factual issues common to both the legal and equitable claims.
Writing for the Court in Dairy Queen, Justice Black left no room for doubt about the solution to the problem that was to be followed in the federal courts:
After the adoption of the Federal Rules, attempts were made indirectly to undercut (the constitutional jury trial) right by having federal courts in which cases involving both legal and equitable claims were filed decide the equitable claim first. The result of this procedure in those cases in which it was followed was that any issue common to both the legal and equitable claims was finally determined by the court and the party seeking trial by jury on the legal claim was deprived of that right as to these common issues. This procedure finally came before us in Beacon Theatres, Inc. v. Westover . . . .
Our decision (in Beacon Theatres defines) the protection to which that right is entitled in cases involving both legal and equitable claims. The holding in Beacon Theatres was that where both legal and equitable issues are presented in a single case, "only under the most imperative circumstances, circumstances which in view of the flexible procedures of the Federal Rules we cannot now anticipate, can the right to a jury trial of legal issues be lost through prior determination of equitable claims."
Id., at 472-73, 82 S. Ct. at 897. Therefore, the Court reasoned,
the sole question which we must decide is whether the action now pending before the District Court contains legal issues.
Id., at 473, 82 S. Ct. at 897. The Court then examined the relief sought in the complaint, which had been brought by the owners of the "Dairy Queen" trademark against one of their licensees. The plaintiffs asked for injunctive relief to restrain the licensee from using the trademark or collecting any money from its sublicensees, "an accounting to determine the exact amount of money owing . . . and a judgment for that amount." Determining that the claim for a money judgment was "wholly legal in its nature however the complaint is construed," the Court held that the Defendant had a right to a jury trial of the legal claim, including the common factual issues of breach of contract and trademark infringement. Id., at 475-80, 82 S. Ct. at 898-99. Thus, the federal courts, preferring a jury trial at the demand of either party, have determined to give defendants a "counter-option." James & Hazard, Supra, at 377.
There are dicta in Dairy Queen implying that a defendant would not have the same "counter-option" in a complex accounting case. In response to the plaintiff's contention that its money claim was "purely equitable," because it was "cast in terms of an "accounting' rather than . . . "debt' or "damages'," the Court said:
But the constitutional right to trial by jury cannot be made to depend upon the choice of words used in the pleadings. The necessary prerequisite to the right to maintain a suit for an equitable accounting, like all other equitable remedies, is, as we pointed out in Beacon Theatres, the absence of an adequate remedy at law. Consequently, in order to maintain such a suit on a cause of action cognizable at law, as this one is, the plaintiff must be able to show that the "accounts between the parties" are of such a "complicated nature" that only a court of equity can satisfactorily unravel them.
In view of the powers given to District Courts by Federal Rule of Civil Procedure 53(b) to appoint masters to assist the jury in those exceptional cases where the legal issues are too complicated for the jury adequately to handle alone, the burden of such a showing is considerably increased and it will indeed be a rare case in which it can be met. But be that as it may, this is certainly not such a case.
Id., at 477-78, 82 S. Ct. at 900.
The matter, therefore, is in some doubt: In its holding in Dairy Queen, the Court extended the defendant's jury trial right to an issue on which, before merger, the plaintiff could have obtained the court trial it wanted; yet in dicta it suggested that the plaintiff's choice of mode of trial may yet be preserved in complex accounting cases. This question does not appear to have been resolved by any court, although federal courts in other types of cases have generally held that the federal policy favoring trial by jury, expressed in Beacon Theatres and Dairy Queen, requires that either party be able to demand a jury when the action presents issues so triable. James & Hazard, Supra, at 377. See, e.g., Johns Hopkins University v. Hutton, 488 F.2d 912, 916 (4th Cir. 1973) (defendant entitled to jury trial on factual issues in plaintiff's action for recission of contract so long as plaintiff holds claim for damages in reserve should court find that it is not entitled to recission) Cert. denied, 416 U.S. 916, 94 S. Ct. 1622, 40 L. Ed. 2d 118 (1974); Minnesota Mutual Life Ins. Co. v. Brodish, 200 F. Supp. 777 (E.D.Pa.1962) (defendant entitled to jury trial on issues common to plaintiff's equitable claim and defendant's legal counterclaim). Cf. Leimer v. Woods, 196 F.2d 828 (8th Cir. 1952) (jury available upon demand of either party when consolidated or joined legal and equitable claims have common question of fact).
For two reasons, we need not now determine whether the plaintiff's limited right to a court trial of complex accounting cases has survived the merger of law and equity. First, if this Were an action for an accounting, the plaintiff's clearly expressed demand for a jury trial would be controlling, just as it would have been in 1791. Second, this is simply not an accounting case. "There are no accounts between the parties. The cause of action is one arising in tort, and cannot be converted into one for an account." United States v. Bitter Root Development Co., 200 U.S. 451, 478, 26 S. Ct. 318, 327, 50 L. Ed. 550 (1906). See e.g., Broderick v. American General Corp., 71 F.2d 864, 868 (4th Cir. 1934). None of the fiduciary or trust relationships giving rise to an obligation to account are present. See American Air Filter Co., Inc. v. McNichol, 527 F.2d 1297, 1300 (3d Cir. 1975); Sulzer v. Watson, 39 F. 414, 415 (C.C.D.Vt.1889). Nor do the plaintiffs seek an accounting in the sense of disgorgement of "profits made from the unfair use of a plaintiff's trademark or tradename." Robert Bruce, Inc. v. Sears, Roebuck & Co., 343 F. Supp. 1333, 1348 (E.D.Pa.1972).
2. Other Complex Litigation
Because this suit is not an action for an accounting, it is important to determine whether complexity permitted a resort to equity only in accounting cases, or in other kinds of litigation as well.
The availability of equity jurisdiction in cases involving complicated facts was addressed in United States v. Bitter Root Development Co., 200 U.S. 451, 26 S. Ct. 318, 50 L. Ed. 550 (1906) and Curriden v. Middleton, 232 U.S. 633, 34 S. Ct. 458, 58 L. Ed. 765 (1914). In Bitter Root, the United States sought relief in equity after millions of feet of timber were allegedly removed and sold by means of an involved conspiracy. Equity jurisdiction was invoked because, "by reason of the frauds and conspiracies . . . and the complications which have resulted therefrom, no plain, adequate, and complete remedy can be given . . . at law . . . ." 200 U.S., at 462, 26 S. Ct. at 323. But the Court ruled that there was no equity jurisdiction:
The principal ground upon which it is claimed that the remedy at law is inadequate is really nothing more than a difficulty in proving the case against the defendants. The bill shows that whatever was done in the way of cutting the timber and carrying it away was done by the defendants as tort feasors, and the various devices alleged to have been resorted to by the deceased, Daly, by way of organizing different corporations, in order to, as alleged, cover up his tracks, and to render it more difficult for the complainant to make proof of his action, does not in the least tend to give a court of equity jurisdiction on that account. It is simply a question of evidence to show who did the wrong and upon that point the fact could be ascertained as readily at law as in equity.
Id., at 472-73, 26 S. Ct. at 324-25. And in Curriden v. Middleton, the Court reaffirmed this holding, saying, "(M)ere complication of facts alone and difficulty of proof are not a basis of equity jurisdiction." 232 U.S. at 636, 34 S. Ct. at 458.
Moreover, there is evidence that the English recognized the difficulty of large and complex matters for ordinary juries, and found a solution not in equity, but in the "special jury." The early procedures for trial by special jury were unregulated. See Thayer, The Jury and Its Development, 5 Harv.L.Rev. 295, 301 (1892). But in 1730, it was provided by statute that "on the motion of any plaintiff or plaintiffs, defendant or defendants in any action, cause, or suit whatsoever, depending or to be brought and carried on in the . . . courts of king's bench, common pleas and exchequer, or in any of them, . . . said courts are hereby respectively authorized and required, upon motion as aforesaid, in any of the cases before-mentioned, to order and appoint a jury to be struck . . . in such manner as special juries have been, and are usually struck in such courts. . . ." 3 Geo. 2, c. 25, § 15 (1730). The act also provided that the party applying for a special jury was to pay the fees incurred thereby, id., § 16, and that qualification to serve on a special jury was determined on the basis of income. Id., § 18. Some years later, the procedure was altered so that the party applying for the special jury was to pay not only the extra sheriff's fee, but all additional expenses due to the use of a special jury. These amounts were not taxable as costs to the losing party unless the judge certified that "the same was a cause proper to be tried by a special jury." 24 Geo. 2, c. 18 (1751).
According to Blackstone, "Special juries were originally introduced in trials at bar when the causes were of too great nicety for the discussion of ordinary freeholders, or where the sheriff was suspected of partiality, though not upon such apparent cause as to warrant an exception to him." 3 W. Blackstone, Commentaries *357.
The continuing relevance of complexity as a cause for impaneling special juries appears in reported opinions discussing certifications requested pursuant to the 1751 Act. Compare London Bank of Scotland v. Marshall, 4 Foster & Finlason's Nisi Prius Reports 1046 (1865) (certifying the case as proper for a special jury "because the plea, which if proved would have raised a difficult question of law, would in its proof raise difficult questions of fact,") With Humber Iron Co. v. Jones, 4 Fos. & Fin. 1047 (1865) (The judge "declined to certify for a special jury, as it was the ordinary evidence under the general issue."); Cf. Linscott v. Jepp, 8 T.L.R. 130 (Q.B.1891) (In refusing to overturn the decision of a trial judge in a slander case not to allow a special jury, Lord Coleridge said, "There is . . . no difficulty in the trial of such a case so as to require a special jury."); Price v. Williams, 5 Dowl. 160 (Exch.1836) (special jury could be called to determine damages on writ of inquiry).
The defendants' argument that equity was generally available whenever a case presented matters too difficult for a jury relies heavily on two English decisions: Wedderburn v. Pickering, 13 Ch.D. 767 (1879), and Clench v. Tomley, 21 Eng.Rep. 13 (Ch.1603).
In Wedderburn, an action concerning a dispute as to the location of the boundary between the parties' properties, the court found that the matter "cannot be conveniently tried before a jury" and denied the defendant's request for a jury, relying not on any common-law tradition but on Order XXXVI, rules 3 & 26, Rules of Court, 1875.
These rules were promulgated as part of the merger of law and equity in the English Courts effected by the Judicature Act, 1873, 36 & 37 Vict. c. 66, as amended by the Judicature Act, 1875, 38 & 39 Vict. c. 77.
Rule 3 provided that either party could obtain trial by jury of Any action, both those formerly "legal" and those formerly "equitable." Rule 26 was a limitation on Rule 3, and allowed the court discretion to order a trial without a jury in cases which "previously to the passing of the Act could, without any consent of parties, be tried without a jury." This rule "was framed expressly to meet cases which would under the old system (before merger) have been tried in the Chancery Division, And which might be considered, by reason of involving a mixture of law and fact, or from great complexity, or otherwise, not capable of being tried before a jury." Clarke v. Cookson, 2 Ch.D. 746 (1876) (emphasis added). As we would expect in view of this statement of Rule 26 and its purpose, the decisions applying it involved matters which were clearly "equitable" regardless of their complexity. See, e.g., Powell v. Williams, 12 Ch.D. 234 (1879) (suit to enjoin nuisance); Swindell v. Birmingham Syndicate, 3 Ch.D. 127 (1876) (action for specific performance, counterclaim for recission). And in Wedderburn itself, the defendant would have had no right to a jury trial before merger because, as the plaintiff's counsel argued, the action might have been tried at common law, "or the Plaintiff might have come to the Court of Chancery for an injunction." 13 Ch.D., at 770.
Thus, the 1875 rules and the cases applying them do not support the proposition that complexity can make a "legal" issue into an "equitable" one. Indeed, this very question was raised in Sugg v. Silber, 1 Q.B.D. 362 (1876), a patent infringement case which, according to Chief Justice Cockburn, could "be adequately dealt with only by assessors who have the requisite scientific knowledge." Nevertheless, the court concurred in his conclusion that the Judicature Acts and the Rules did not allow a judge "to take away from a defendant the right which he previously had of trying his case before a jury." We conclude that the English post-merger cases demonstrate only that the English used the relative difficulty of trying complex cases before juries as a limitation on the Extension of jury trials to formerly equitable matters. The defendants' reliance on them is therefore misplaced.
The report of the Clench case is set forth in full:
Possession bound by decree, and the party prohibited to sue at common law. Inter Tomley and Clench, it appeared by testimony of ancient witnesses speaking of sixty years before, and account books and other writings, that Francis Vaughan, from whom Tomley claimed, was mulier (legitimate); and Anthony, from whom Clench claimeth, was a bastard; and the possession had gone with Tomley fifty years. In this case the Lord Egerton not only decreed the possession with Tomley, but ordered also that Clench should not have any trial at the common law for his right till he had shewed better matter in the Chancery, being a thing so long past; it rested not properly in notice De pais, but to be discerned by books and deeds, of which the Court was better able to judge then (sic) a jury of ploughmen, notwithstanding that exceptions were alleged against those ancient writings; and that for the copyhold land, the verdict went with Clench upon evidence given three days before Sergeant Williams that Anthony was mulier (31st May, 1 Jacob. 1603).
Clench v. Tomley, 21 Eng.Rep. 13 (1603). This case seems to be the sole support offered for the defendants' contention that "at early common law, at a time when jurors were often illiterate and uneducated, matters involving complex writings were determined by the court." See Bernstein v. Universal Pictures, Inc., 79 F.R.D. 59, 67 (S.D.N.Y.1978). One court has relied upon Clench for the broader proposition that "since long before the American Revolution, the common law recognized that the sheer complexity of a case, in particular a case which involved many complicated documents, was sufficient grounds to deny a jury trial . . .." In re U. S. Financial Securities Litigation, 75 F.R.D. 702, 708-09 (S.D.Cal.1977) Appeal pending, # 77-8213 (9th Cir. 8/29/77).
Initially, we note that a single report of such a venerable case should be approached with caution, because such reports were frequently inaccurate and were "only of those parts of the opinion deemed by the particular reporter to be useful to the lawyer." Dawson v. Contractors Transport Corp., 151 U.S.App.D.C. 401, 411, 467 F.2d 727, 737 (1972) (Fahy, J., dissenting) Citing M. Price & H. Bitner, Effective Legal Research 283 (1953). In any event, we think that the state of development of the jury system in 1603 the historical context of that case demonstrates that defendants' reliance on it is misplaced.
The practice of submitting documentary evidence to juries was, at the time, already long-established. According to one scholar, "Our earliest records show the practice of exhibiting charters and other writings to the jury." Thayer, The Jury and Its Development (II), 5 Harv.L.Rev. 295, 307 (1892). Thayer traces the development of the showing of documents to juries from about 1200 until the fifteenth century "to bring (it) down . . . to the modern form." See id., at 307-311. Thus, if Clench is not to be dismissed as an aberration, it must be explained on some grounds other than the inaccurate supposition that matters involving documentary evidence were kept from juries.
These grounds might be found in the fact that the jury was then still expected to bring its own knowledge of the disputed issues to court. The presentation to the jury of the testimony of witnesses, in fact, came centuries after the presentation of documentary evidence, developing during the fourteenth and fifteenth centuries. See id., at 310, 357-363. The transformation of the jury from a body which came to court knowing the truth of the matter to one which came untainted by prior knowledge, to find the truth from the evidence presented, seems to have occurred largely between the middle of the seventeenth and the end of the eighteenth centuries. See id., at 380-87; 3 W. Blackstone, Commentaries *374-75. In Bushell's Case, Vaughan 135, 124 Eng.Rep. 1006 (C.P. en banc, 1670), habeas corpus was granted to jurors who had been imprisoned for returning a verdict contrary to the evidence and the direction of the court. The opinion of Chief Justice Vaughan in Bushell's case, Supra, demonstrates the continuing importance, long after Clench v. Tomley, of the jurors' personal knowledge of the matters in dispute.
(A) court, Vaughan says, does not charge a jury with matter of law in the abstract, but only upon the law as growing out of some supposition of fact. This matter of fact is for the jury; it is not for the judge, "having heard the evidence given in court (for he knows no other)," to order the jury to find the fact one way rather than the other; for if he could, "the jury is but a troublesome delay, great charge, and of no use." The judge cannot know all the evidence which the jury goes upon; they have much other than what is given in court. They are from the vicinage, because the law supposes them to be able to decide the case though no evidence at all were given in court on either side. They may, from their private knowledge of which the judge knows nothing, have ground to discredit all that is given in evidence in court. They may proceed upon a view. "A man cannot see by another's eye, nor hear by another's ear; no more can a man conclude or infer the thing to be resolved by another's understanding or reasoning." It is absurd that a judge should fine a jury for going against their evidence, when he knows but part of it, "for the better and greater part of the evidence may be wholly unknown to him; and this may happen in most cases, and often doth, as in Granby and Short's Case."
Thayer, supra, at 382-83 (footnotes omitted). It may well have been that the sixty-year old facts of the Clench case "rested not properly in notice De pais " (of the country) because they were matters of which jurors would have had no personal knowledge; since the matter had to be decided solely on the basis of evidence produced in court documents and "the testimony of ancient witnesses" Lord Egerton could easily have felt that a jury would have been, in Vaughan's words, "but a troublesome delay, great charge, and of no use.
Even if Clench demonstrated an unequivocal rejection of jury trials in complex matters, however, it would still be of limited relevance to the matter before us. The historical test, after all, defines the Seventh Amendment right with reference to the practice in 1791 not 1603. Because of the continuing development of the jury system and the constantly shifting boundaries of the jurisdictions of law and equity during those two centuries, any decision as old as Clench provides little evidence of what the practices were 188 years later. See Thayer, Supra, at 380-87; James, Right to a Jury Trial in Civil Actions, 72 Yale L.J. 655, 658 (1963). Moreover, of course, what evidence we do have from the eighteenth century indicates that complex matters were heard in the common law courts, albeit by "special" juries.
We therefore conclude that, as a matter of actual historical practice, matters cognizable at law were tried to juries in the courts of common law, regardless of complexity. Though there was an exception to this general rule, that exception was limited to matters of "account," and further limited by the plaintiff's ability to choose a jury or non-jury trial in such matters.
3. The Rationale of the Complex Accounting Cases
The defendants also suggest that the complex accounting cases demonstrate an "implicit . . . belief that if a jury could not understand the matter being presented, there was not the requisite "plain, adequate and complete remedy at law'." We find the actual historical practice in complex cases sufficiently clear that no recourse to "implicit beliefs" is necessary. However, dicta in a few of these cases show enough mistrust of juries that some inquiry is warranted into the rationale (if any) implicit in the availability of equity jurisdiction in complex accounting matters.
As an initial matter, it is clear that the difficulty of an accounting for juries cold not have had anything to do with the original extension of equity jurisdiction into matters of account, since in the common-law action of account the actual "accounting" was never performed by the jury. The jury's verdict was that the defendant was obliged to account, and the account was then taken by court-appointed auditors. Similarly, when equity took cognizance of such matters, the chancellor appointed a master to undertake the accounting. See 2 Story's Equity Jurisprudence §§ 587, 590 at 5, 6, 8 (14th ed. 1918); note 31, Supra.
Some later courts have, indeed, justified the recourse to equity in such cases on the ground of their difficulty for juries, or at least used that difficulty to determine whether equity jurisdiction was properly invoked. See James, Right to a Jury Trial in Civil Actions, 72 Yale L.J. 655, 663 & n. 48 (1963). However, according to Blackstone, the existence of the concurrent jurisdiction of equity in matters of account is to be explained by the power of courts of equity to compel the production of books and records: "But, for want of this discovery at law, the courts of equity have acquired a concurrent jurisdiction with every court in all matters of account." 3 W. Blackstone, Commentaries *437.
And Story's opinion that "the whole machinery of Courts of Equity is better adapted to the purpose of an account" was expressed without any special mention of juries.
Moreover, since trial to the court or a jury was just one element of the choice between law and equity in a system where the procedures of one or the other had to be taken as a package, it is difficult to assess with any confidence the importance of that one element in any particular change in the respective jurisdictions.
The difficulties attending such speculation have been well described by Professor James:
At no time in history was the line dividing equity from law altogether or even largely the product of a rational choice between issues which were better suited to court or to jury trial. There is little to suggest that the chancellor's initial choice of a procedure borrowed from canon law reflected a considered rejection of jury trial. Rather, the choice between law and equity frequently was made upon considerations of other factors. For when equity procedure took shape it differed from the procedure at law in several important respects. Evidence in equity was produced largely by sworn pleadings and written depositions taken upon written interrogatories, rather than by testimony taken orally and subject to oral cross-examination, all in the presence of the trier of fact. At law the parties to an action were neither competent nor compellable to testify, whereas in equity each party could offer his own sworn statements and also "probe the conscience" of his adversary by propounding written interrogatories, which had to be answered under oath. The chancellor used specific remedies which were not available to the law courts, and the chancellor could handle multiple parties and the possibility of multiple suits in a way that the law courts had not developed. The procedure of each tribunal had to be taken as a package, and each procedure had substantial limitations which the other did not share. In equity the procedure was epistolary, included the statements of both parties, might provide for specific relief and handle multiple parties and suits, and involved no jury. At law the procedure involved oral testimony and cross-examination at a jury trial, relief In rem, and the unavailability of the testimony of either party.
From the above it may be seen that even where the allocation of issues between the jurisdictions was based on rational considerations, it would often be dictated by some factor other than jury trial. When the chancellor was faced with a prickly question of credibility of witnesses, his rational desire for the benefits of demeanor evidence could be satisfied only by sending the issue to the law court with its jury. Where an accounting between business associates was sought, if the inquiry was to have the benefit of the testimony of the parties (the two witnesses who could shed the most sometimes the only light on the matter), it would have to be conducted in equity, where the chancellor would decide questions of fact without a jury. The same thing was true where specific performance of a contract was appropriate rather than damages for its breach, or when unnecessary multiplicity of suits was to be prevented. To put it colloquially, jury trial (or court trial) was often merely the tail of the dog under a system where you had to take the whole dog.
James, Right to a Jury Trial in Civil Actions, 72 Yale L.J. 655, 661-62 (1963) (footnotes omitted; emphasis added). Sometimes, of course, the choice between law and equity had nothing to do with any of the procedural advantages of either system, reflecting instead the political struggle between the King and Parliament. See id., at 663; F. James & G. Hazard, Civil Procedure § 8.2, at 358 & n. 32 (1977).
The proposition that these cases demonstrate some sort of policy or belief that complex matters should not be decided by juries is further weakened by the apparent fact that the "complexity exception" to the "jury trial rule" was limited to matters of account. See pp. 914-918, Supra. This limitation has been explained by some by distinguishing between complication in determining liability and complication in determining damages. See Tights, Inc. v. Stanley, 441 F.2d 336, 340-41 (4th Cir.) Cert. denied, 404 U.S. 852, 92 S. Ct. 90, 30 L. Ed. 2d 91 (1971); Radial Lip Machine, Inc. v. International Carbide Corp., 76 F.R.D. 224, 228 (N.D.Ill.1977).
This explanation is attractive in that it harmonizes two groups of cases by enunciating a rational principle for distinguishing between them. However, it would imply that complex remedial issues in cases other than accounting cases have been (or can be) withdrawn from juries for that reason something of which there is no evidence. Moreover, the assumption that some rational principle is embedded in a practice which may be no more than an anachronistic remnant of legal history is hardly deserving of uncritical acceptance.
We therefore see no basis for finding in the complex accounting cases a rationale, policy, or "implicit belief" that complex and difficult questions of fact, whether of liability or of damages, must be decided by judges rather than juries.
4. Treble Damages and Juries
Earlier in this opinion, we noted that the complex accounting cases were within the concurrent jurisdiction of equity, I. e., they were cognizable at law but could, for some reason, also be brought in equity. See pp. 907-911, Supra. There were many other instances in which, for reasons other than complexity, rights and remedies normally "legal" could be determined in equity. For example, compensatory damages could be awarded in equity as "incidental" in suits seeking specific performance for breach of a contract to convey land, or actions for injunctions against copyright infringement. See F. James & G. Hazard, Civil Procedure § 8.7, at 370-372 (1977). And the "general understanding" prior to merger was that "equity could properly resolve corporate claims of any kind (including normally "legal' claims) without a jury when properly pleaded in derivative suits complying with the equity rules." Ross v. Bernhard, 396 U.S. 531, 536-37, 90 S. Ct. 733, 737, 24 L. Ed. 2d 729 (1970).
But there were certain kinds of claims which were exclusively legal and could never be the subject of an action in equity. Scott v. Neely, 140 U.S. 106, 109-111, 117, 11 S. Ct. 712, 716, 35 L. Ed. 358 (1891) (court of equity has no jurisdiction in a suit where "a claim properly cognizable only at law is united in the same pleadings with a claim for equitable relief.") See Dairy Queen, Inc. v. Wood, 369 U.S. 469, 470-72, 82 S. Ct. 894, 8 L. Ed. 2d 44 (1962). Claims for treble damages the relief sought by the plaintiffs in this suit have traditionally been among those "properly cognizable only at law:"
The right to recover penal damages still remains a right enforceable only in a common-law action. Courts of equity do not award as incidental relief damages penal in character without express statutory (authorization), as has frequently been held in copyright and patent cases.
Decorative Stone Co. v. Building Trades Council, 23 F.2d 426, 427-28 (2d Cir.) Cert. denied, 277 U.S. 594, 48 S. Ct. 530, 72 L. Ed. 1005 (1928). See Fleitmann v. Welsbach Street Lighting Co., 240 U.S. 27, 36 S. Ct. 233, 60 L. Ed. 505 (1916); 5 Moore's Federal Practice PP 38.19(2) & 38.37(2), at 171, 308-308.3 (2d ed. 1978). Thus, even if the exercise of equity jurisdiction over complex legal claims were not limited to matters of account, it would still not extend to this case because of the exclusively legal nature of the relief sought.
D. The Historical Test and Complexity After Ross v. Bernhard
1. Ross and Recent Decisions Striking Jury Demands
In Ross v. Bernhard, 396 U.S. 531, 90 S. Ct. 733, 24 L. Ed. 2d 729 (1970), the Court continued the expansion of the right to jury trial begun in Beacon Theatres and Dairy Queen. The issue decided in Ross was the one that left the plaintiff in Fleitmann without a remedy the presentation of a "legal" claim in a shareholders derivative action, previously cognizable only in equity.
The Court held that the merger of law and equity had removed the procedural barriers to the trial of such claims by jury; derivative actions were thereafter to be viewed as having a "dual nature." The Court held that the purely equitable question of the right of the shareholders to proceed on behalf of the corporation was to be determined by the court, and that the corporation's underlying claims could then be tried by the appropriate method by the court if "equitable," and by a jury if "legal." In order to reach this result, the Court drew from Beacon Theatres and Dairy Queen the lesson that
where equitable and legal claims are joined in the same action, there is a right to jury trial on the legal claims which must not be infringed either by trying the legal issues as incidental to the equitable ones or by a court trial of a common issue existing between the claims. The Seventh Amendment question depends on the nature of the issue to be tried rather than the character of the overall action.
396 U.S., at 537-38, 90 S. Ct. at 738.
It then added the following footnote:
As our cases indicate, the "legal" nature of an issue is determined by considering, first, the pre-merger custom with reference to such questions; second, the remedy sought; and Third, the practical abilities and limitations of juries. Of these factors, the first, requiring extensive and possibly abstruse historical inquiry, is obviously the most difficult to apply. See James, Right to a Jury Trial in Civil Actions, 72 Yale L.J. 655 (1963).
Id. at 538, n. 10, 90 S. Ct. at 738 (dictum) (emphasis added). Since Ross, several courts have struck jury demands on the authority of this dictum, which has been described by one commentator as "a suggestion of infidelity to the (historical) test." Wolfram, The Constitutional History of the Seventh Amendment, 57 Minn.L.Rev. 639, 643 (1973).
The first was Hyde Properties v. McCoy, 507 F.2d 301 (6th Cir. 1974), an interpleader action instituted by the purchaser of a building to resolve conflicting claims to the amount it owed on the notes issued in payment for the building. The building had been purchased from a corporation (IHPT) which then used the notes to redeem the shares held by McCoy, a principal stockholder. "The United States maintained that the redemption of McCoy's stock with the notes was a fraudulent conveyance as to it as a tax lien creditor. McCoy contended that the transfer was a legal redemption of the stock by a solvent corporation." Id., at 304. A four-day jury trial
followed the district judge's denial of the Government's motion to strike McCoy's jury demand, and, after the jury determined that the conveyance was not fraudulent, the court granted judgment n. o. v. for the Government. The court of appeals viewed the Seventh Amendment question as a "threshold issue . . . because it bears directly upon the district court's rulings subsequent to the verdict." Id.
In order to determine whether the issues presented were "legal" or "equitable," the court looked to the Ross footnote as a three-part test, finding as to the first part that "questions involving fraud cannot be classified from custom as solely legal or solely equitable and, as a result, the nature of the remedy sought becomes considerably more important . . .. If a fraudulent conveyance action is brought to set aside a transfer, such a remedy is cognizable solely in equity." 507 F.2d at 305. After noting that the case was "hybrid" because both legal and equitable remedies were theoretically available, the court decided that "equitable relief was necessary for enforcement of the Government's claim." Id., at 306.
Finally, the court considered the practical abilities of juries:
At trial the fraudulent conveyance issue depended upon the solvency or insolvency of IHPT at the time of or immediately after the transfer. The determination of this question involved conflicting issues of fact concerning accounting procedures used to list the assets and liabilities of the corporation. In its opinion, the district court acknowledged that "the issues between the parties were both complex and likely to be confusing in light of the underlying facts and circumstances. . . ." We agree with this observation and consequently find as to the third factor that a jury is not especially well-qualified to dispose of such issues and that a non-jury trial of the issues is both more efficient and more likely to produce a just result.
It then concluded that "there is no constitutional right to a jury trial in an interpleader action when the creditor is proceeding against the fund and seeking to annul the conveyance to the transferee." Id.
The court's view that non-jury trials in such cases are "more efficient and more likely to produce a just result," though contributing to the court's holding, does not appear to have been a major ground for it. The court seemed instead to rely largely on the need for equitable relief;
certainly its opinion cannot be read as holding that complexity alone is sufficient to make "equitable" an otherwise "legal" issue. Similarly, in SEC v. Associated Minerals, Inc., 75 F.R.D. 724, 725-26 (E.D.Mich.1977), the court struck a jury demand after finding that the claims presented and remedies sought were equitable, adding that "to the extent that a jury's ability to properly decide an action may be relevant . . . the issues of fraud and noncompliance with the registration provisions of the securities laws . . . are indeed complex and for this reason are not especially suited by resolution for a jury." However, several other courts have struck jury demands on the Sole ground of size and complexity in cases that would traditionally have been viewed as purely "legal."
The first of these decisions was In re Boise Cascade Securities Litigation, 420 F. Supp. 99 (W.D.Wash.1976), a securities fraud litigation growing out of two corporate acquisitions in which the plaintiffs had received Boise Cascade stock shortly before write-downs of corporate assets caused the stock to lose more than 80% Of its value. Although recognizing that there was no apparent authority for the third part of the Ross footnote, the court found it to be "of constitutional dimensions. It must be seen as a limitation to or interpretation of the Seventh Amendment." Id. at 105. After a review of the complex issues involved in the case convinced the court that "it would be more capable of fairly deciding the facts" than a jury, the plaintiffs' jury demands were struck to preserve both "the appearance and fact of fairness." Id.
The following year, jury demands were struck by the court Sua sponte in In re U. S. Financial Securities Litigation, 75 F.R.D. 702 (S.D.Cal.1977) Appeal pending, # 77-8213 (9th Cir. Aug. 29, 1977). The litigation comprised eighteen separate actions, consolidated for pretrial purposes by the Judicial Panel on Multidistrict Litigation. Five plaintiff classes had been certified; they asserted various securities law claims against "20 or so individual defendants and . . . 80-odd corporate or partnership defendants." Id., at 706. The court's review of the scope of pretrial discovery and the probable extent of the trial reveals a litigation whose magnitude is comparable in many ways to that of the case now before us. See id., at 706-708, 711-714. After reviewing many of the cases discussed above, including the accounting cases, Id., at 708-11, the court distilled the following:
general guidelines . . . for deciding whether a particular case is so complex that equity jurisdiction will attach and permit the case to be tried without a jury.
First, although mere complexity is not enough, complicated accounting problems are not generally amenable to jury resolution. Although such problems often arise only during the damages portion of a trial, they sometimes are present during the liability portion as well. Also, given the comments in Dairy Queen regarding special masters, only a case in which such a special master could not assist the jury meaningfully may be subject to removal from the province of the jury because of complex accounts.
Second, the jury members must be capable of understanding and of dealing rationally with the issues of the case.
And third, an unusually long trial may make extraordinary demands upon a jury which would make it difficult for the jurors to function effectively throughout the trial.
Id. at 711. Because the court found that all three of its guidelines militated against a jury trial, it determined to try the cases without a jury. The only factors considered were size and complexity; the court did not discuss the otherwise legal or equitable nature of the claims made and the remedies sought.
The next decision striking a jury on the authority of Ross was Bernstein v. Universal Pictures, Inc., 79 F.R.D. 59 (S.D.N.Y.1978), a class action asserting antitrust claims on behalf of the composers and lyricists who have written for television and motion pictures. As in the U. S. Financial litigation, the question of a jury's ability to handle the case was raised by the court Sua sponte.
The court in Bernstein regarded the Ross footnote as announcing "a three-fold test to determine the "legal nature of an issue'." It recognized that "(t)he third prong of this test is devoid of cited authority and has been regarded by some as a departure, perhaps unintentional, from former law," but thoughtfully related the practical abilities of juries to the "remedy sought," since "the adequacy of the legal remedy necessarily involves the adequacy of the jury and its competency to find the facts," and concluded after review of many of the cases discussed above that consideration of the practical abilities of juries "(f)ar from being an innovation . . . is actually the restatement of . . . traditional equity powers." Id., at 66-67.
In applying the Ross test, the Bernstein court determined that the pre-merger custom in antitrust cases was to require jury trials, and that the demands for declaratory relief and treble damages were "clearly not equitable,"
but that the estimated trial time of more than four months would make it impossible to empanel a representative jury. Moreover, the court found that "the sheer size of the litigation and the complexity of the relationships among the parties render it As a whole beyond the ability and competence of any jury to understand and decide with rationality." Id., at 66-67, 70. Thus, the order striking the plaintiffs' jury demand was based entirely on the "third prong" of the Ross "test."
The most recent decision striking a jury demand on the authority of Ross v. Bernhard is ILC Peripherals Leasing Corp. v. I. B. M. Corp., 458 F. Supp. 423, 445-449 (N.D.Cal.1978), a treble damage antitrust case. Evaluating the case in the terms of the Ross dictum, the court found that both the premerger custom and the remedy sought were traditionally legal, but that "the third factor of the equation, the practical abilities and limitations of jurors, . . . causes the court to conclude that the issues in this case must be considered to be equitable." Id. at 445.
Many other courts have also indicated that Seventh Amendment questions are to be determined by applying the three factors identified in the Ross dictum. See, e.g., Pons v. Lorillard, 549 F.2d 950, 953 (4th Cir. 1977) ("the three-pronged classical test"), Aff'd on other grounds, 434 U.S. 575, 98 S. Ct. 866, 55 L. Ed. 2d 40 (1978); Minnis v. UAW, 531 F.2d 850, 852-53 (8th Cir. 1975); Farmer-Peoples Bank v. United States, 477 F.2d 752 (6th Cir. 1973); Dawson v. Contractors Transport Corp., 151 U.S.App.D.C. 401, 405, 467 F.2d 727, 731 (1972); Id., 151 U.S.App.D.C. at 410, 414, 467 F.2d at 736, 740 (Fahy, J., dissenting); Fellows v. Medford Corp., 431 F. Supp. 199, 201-02 (D.Or.1977); Polstorff v. Fletcher, 430 F. Supp. 592, 593-94 (N.D.Ala.1977); General Tire & Rubber Co. v. Watson-Bowman Associates, 74 F.R.D. 139, 140-142 (D.Del.1977); Jones v. Orenstein, 73 F.R.D. 604, 606 (S.D.N.Y.1977); Marshall v. Electric Hose & Rubber Co., 413 F. Supp. 663, 667 (D.Del.1976); Cayman Music, Ltd. v. Reichenberger, 403 F. Supp. 794, 796-97 (W.D.Wis.1975); Cleverly v. Western Electric Co., 69 F.R.D. 348, 350-52 (W.D.Mo.1975); Rowan v. Howard Sober, Inc., 384 F. Supp. 1121, 1124-25 (E.D.Mich.1974); VanErmen v. Schmidt, 374 F. Supp. 1070, 1074-75 (W.D.Wis.1974); Chilton v. National Cash Register Co., 370 F. Supp. 660, 662-65 (S.D.Ohio 1974); Richards v. Smoltich, 359 F. Supp. 9 (N.D.Ill.1973). Cf. Rogers v. Loether, 467 F.2d 1110, 1118 (7th Cir. 1972) (alternative ground for holding), Aff'd on other grounds sub nom Curtis v. Loether, 415 U.S. 189, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974).
Not all the lower federal courts have used Ross as the definitive Seventh Amendment test the Second and Fourth Circuits, for example, have questioned the scope and validity of the Ross footnote. See Barber v. Kimbrell's, Inc., 577 F.2d 216, 225 & n. 25 (4th Cir. 1978); United States v. J. B. Williams Company, Inc., 498 F.2d 414, 428-29 (2d Cir. 1974). But see id., at 452-53 (Oakes, J., dissenting). And in a later Seventh Amendment decision, the Second Circuit ignored the Ross footnote entirely. See SEC v. Commonwealth Chemical Securities, Inc., 574 F.2d 90 (2d Cir. 1978). But in no decision of which we are aware has a court reached the conclusion that we reach here that the Ross footnote may not be read as requiring or permitting the consideration of "the practical abilities and limitations of juries" in determining whether the constitutional right to trial by jury extends to matters committed by Congress or the common law to federal district courts.
We have reached this conclusion with great respect for, and mindful of the authority of, the many courts that have reached the opposite result. Our conclusion is based on three considerations: (1) the available evidence shows that the Supreme Court never intended that the Ross footnote be a "test" for Seventh Amendment questions; (2) the proposed "test" is unworkable; and (3) application of the Ross "test" in the manner proposed would be fundamentally inconsistent with the policies underlying the role of the jury in civil actions in the United States. Our reasoning will be set out in the balance of this opinion; because of the extensive authority to the contrary, we do so at somewhat greater length than is customary.
2. Construing Ross
a. Jury Trial Decisions in the Supreme Court Since Ross
It would be at least unusual for the Supreme Court to announce a new rule of constitutional magnitude in dicta, in a footnote, and unsupported by any explanation or citation of authority.
The use of such means to modify Sub silentio a rule of constitutional interpretation that has been consistently followed for decades, if not centuries, would be even more unusual. As one commentator has written, "(T)he footnote is so cursory, conclusory and devoid of cited authority or reasoned analysis that it is difficult to believe it could have been intended to reject such established historical practice or Supreme Court precedent." Redish, Seventh Amendment Right to Jury Trial: A Study in the Irrationality of Rational Decision Making, 70 Nw.U.L.Rev. 486, 526 (1975). Thus, "absent a much clearer statement by the Supreme Court," Skehan v. Board of Trustees, 590 F.2d 470, 490 (3d Cir. 1978), to the effect that Ross authorized a departure from the historical test, we would most likely consider ourselves bound by the prior decisions of the Court approving the historical test.
But we need not decide on that basis, because the Ross dictum is not the most recent entry on the Court's Seventh Amendment slate. We think it very significant that, despite many opportunities to do so, the Court has never proclaimed or apparently recognized that the Ross footnote prescribed a test for the Seventh Amendment.
The Ross case itself is the first and best example of this. In Ross, the argument that the case was too complex for determination by a jury had been raised at every level. The district court found that the issues in the case were not too complicated for a jury, while the court of appeals expressed its doubts that juries were competent to try derivative suits "because of the exceedingly complex nature of many of these actions," but considered it irrelevant because "the Seventh Amendment does not ask that we assess the suitability of a given type of litigation for jury trial." See Ross v. Bernhard, 275 F. Supp. 569, 570 (S.D.N.Y.1967), Rev'd on other grounds, 403 F.2d 909, 915 (2d Cir. 1968), Rev'd on other grounds, 396 U.S. 531, 90 S. Ct. 733, 24 L. Ed. 2d 729 (1970). Opposing the petition for certiorari, the respondents contended that the case was unsuitable for a jury because "a precise and obviously difficult measurement of claimed disadvantage" to the corporation would be required for "each of many thousands of transactions." Respondents' Brief in Opposition to Petition for Writ of Certiorari, at 6-7. The respondents argued that statements in Kirby and Dairy Queen described a general exception to the Seventh Amendment, and that Ross fell within it. See id.; Brief for Respondents, at 17-19.
The petitioners in Ross did not dispute the respondents' position that some cases were too complex for juries, but argued instead that their case was not the "rare case" referred to in Dairy Queen. See Brief for Petitioners at 18; Reply Brief for Petitioners at 10-12.
Thus, the arguments made by the defendants here were squarely presented to the Court in Ross, and the cryptic mention in footnote 10 of "the practical abilities and limitations of juries" may possibly be explained by reference to these arguments. Yet, when the Court considered the claims asserted on behalf of the corporation in Ross, it determined that the claims were "at least in part . . . legal" without any evaluation or even mention of the ability of a jury to understand the issues:
The relief sought is money damages. There are allegations in the complaint of a breach of fiduciary duty, but there are also allegations of ordinary breach of contract and gross negligence. The corporation, had it sued on its own behalf, would have been entitled to a jury's determination, at a minimum, of its damages against its broker under the brokerage contract and of its rights against its own directors because of their negligence.
Ross v. Bernhard, 396 U.S. 531, 542, 90 S. Ct. 733, 740, 24 L. Ed. 2d 729 (1970). The omission of any discussion of the jury's ability to deal with the complex issues presented in Ross implies strongly that the Court did not deem it relevant to the Seventh Amendment issue there.
The next case in which the Court could have applied the Ross "test" was Curtis v. Loether, 415 U.S. 189, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974), in which a unanimous Court decided that the Seventh Amendment required jury trials of actions brought under § 812 of the Civil Rights Act of 1968, 42 U.S.C. § 3612. It did not analyze the problem in the terms of the Ross footnote, but instead stated the rule to be that "(t)he Seventh Amendment . . . requires a jury trial upon demand, if the statute creates legal rights and remedies, enforceable in an action for damages in the ordinary courts of law." Id., at 194, 94 S. Ct. at 1008. The Court then found that trial by jury must be available because the action was analogous to common-law torts,
Id., at 195, 94 S. Ct. 1005, and because the "relief sought here actual and punitive damages is the traditional form of relief offered in the courts of law," Id., at 196, 94 S. Ct. at 1009.
The Supreme Court's omission of the Ross "test" from its discussion of the constitutional issue stands in marked contrast to the opinion of the court of appeals in that case. Expressing uncertainty about the "full implications" of Ross, the court of appeals had first determined that traditional Seventh Amendment analysis required trial by jury, and then independently considered the second and third criteria identified in the Ross footnote, determining that they, too, were consistent with a jury trial. See Rogers v. Loether, 467 F.2d 1110, 1116-18 (7th Cir. 1972), Aff'd on other grounds sub nom. Curtis v. Loether, 415 U.S. 189, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974). Thus, the Supreme Court's exclusive reliance on traditional Seventh Amendment analysis in Curtis represents at least a Sub silentio rejection of the Ross footnote as the appropriate test. Cf. Barber v. Kimbrell's, Inc., 577 F.2d 216, 225 n. 25 (4th Cir. 1978) (questioning continued validity of Ross test in light of its omission from Curtis ).
Later the same term, the Court decided in Pernell v. Southall Realty, 416 U.S. 363, 94 S. Ct. 1723, 40 L. Ed. 2d 198 (1974), that the Seventh Amendment mandated trial by jury of actions under the District of Columbia's summary procedure for evictions. Again, the Court's decision was based on the historical test alone, without any reference at all to the Ross dictum. Id., at 370-81, 94 S. Ct. 1723.
Moreover, in rejecting the analysis of the D.C. Court of Appeals as "fundamentally at odds with The test we have formulated for resolving Seventh Amendment questions," id., at 374, 94 S. Ct. at 1729 (emphasis added), the Court described that "test" by quoting from the distinction between law and equity drawn in Parsons v. Bedford,
concluding that the Seventh Amendment "requires trial by jury in actions unheard of at common law, provided that the action involves rights and remedies of the sort traditionally enforced in an action at law, rather than in an action in equity or admiralty." Id., at 374-75, 94 S. Ct. at 1729.
This view of the Seventh Amendment was reaffirmed by the Court in Atlas Roofing Co., Inc. v. OSHRC, 430 U.S. 442, 449, 97 S. Ct. 1261, 51 L. Ed. 2d 464 (1977) and Lorillard v. Pons, 434 U.S. 575, 98 S. Ct. 866, 55 L. Ed. 2d 40 (1978).
Moreover, in Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 99 S. Ct. 645, 58 L. Ed. 2d 552 (1979), the Court has once again decided a Seventh Amendment issue by applying a historical test, without any mention of the abilities of jurors or the Ross dicta.
Thus, instead of using the Ross dicta as a test for Seventh Amendment questions, the Court's opinions during this decade have consistently reaffirmed the continuing validity of the historical test.
b. Explanations of the Ross Footnote
Because the Court's mention of the "practical abilities and limitations of juries" in Ross was without any citation of authority and unrelated to anything else in the opinion of the Court, there has been no small measure of speculation about its source. In Bernstein v. Universal Pictures, Inc., 79 F.R.D. 59 (S.D.N.Y.1978), the court explained the "third prong" of the Ross test by relating it to the traditional availability of equity when the remedy at law is inadequate, since
where the "remedy sought" necessarily involves determination of complexities that "only a court of equity can satisfactorily unravel," the "practical abilities and limitations of juries" are also necessarily involved and must be considered in evaluating the right to a jury trial. The adequacy of the legal remedy necessarily involves the jury and its competency to find the facts.
Id. at 66. And in In re Boise Cascade Securities Litigation, 420 F. Supp. 99, 104 (W.D.Wash.1976), the court related the third part of the Ross dictum to concepts of fundamental fairness and due process. Scholars, too, have joined the debate. Compare Wolfram, Supra note 25, at 644-45 (a "fleeting expression . . . of infidelity to the centrality of the traditional historical test . . . (which) would suggest, for the first time, . . . an explicitly functional approach. . . .") With Note, Congressional Provision for Nonjury Trial Under the Seventh Amendment, 83 Yale L.J. 401, 411-12 (1973) (finding a "long and distinguished" lineage for the third part of the Ross test in the traditional resort to equity because of "procedural inadequacies" such as "rules against multifarious actions . . . or limited provisions for discovery. . . . One such failing (jury trial) has not been mitigated by merger.").
Our own research discloses two very limited circumstances in which functional aspects of jury trials have been considered by the Supreme Court in Seventh Amendment contexts and to which, therefore, the Ross dictum might refer, but neither supports the position of the defendants. One of these is the traditional availability of equity jurisdiction in complex accounting cases which was discussed in dicta in Kirby and Dairy Queen in terms of the difficulty of such matters for juries, See pp. 913-914 & n. 40, Supra, even though the available evidence suggests that this consideration had little or no relation to the existence of that part of equity jurisdiction. See pp. 918-921, Supra. As we have already noted, this argument was so fully presented to the Court in Ross that the mention of the limitations of juries in the footnote may be a reference to it, but could hardly be an endorsement. Supra, at 927-928.
The second circumstance, and the only one in which functional considerations have actually contributed to a Holding that there is no jury trial right in certain cases, involves actions committed by Congress to special adjudicatory bodies as part of a statutory scheme. The rationale of NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S. Ct. 615, 81 L. Ed. 893 (1937) and Katchen v. Landy, 382 U.S. 323, 86 S. Ct. 467, 15 L. Ed. 2d 391 (1966) was explained by the Court in Curtis v. Loether, 415 U.S. 189, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974):
Jones & Laughlin . . . stands for the proposition that the Seventh Amendment is generally inapplicable in administrative proceedings, where jury trials would be incompatible with the whole concept of administrative adjudication 8 and would substantially interfere with the NLRB's role in the statutory scheme. Katchen v. Landy, 382 U.S. 323, (86 S. Ct. 467, 15 L. Ed. 2d 391), . . . is to like effect. There the Court upheld, over a Seventh Amendment challenge, the Bankruptcy Act's grant of summary jurisdiction to the bankruptcy court over the trustee's action to compel a claimant to surrender a voidable preference; the Court recognized that a bankruptcy court has been traditionally viewed as a court of equity, and that jury trials would "dismember" the statutory scheme of the Bankruptcy Act. Id., at 339, 86 S. Ct., at 478. See also Guthrie National Bank v. Guthrie, 173 U.S. 528, 19 S. Ct. 513, 43 L. Ed. 796 (1899). These cases uphold congressional power to entrust enforcement of statutory rights to an administrative process or specialized court of equity free from the strictures of the Seventh Amendment. But when Congress provides for enforcement of statutory rights in an ordinary civil action in the district courts, where there is obviously no functional justification for denying the jury trial right, a jury trial must be available if the action involves rights and remedies of the sort typically enforced in an action at law.
Id., at 194-95, 94 S. Ct. at 1008. See Atlas Roofing Co. Inc. v. OSHRC, 430 U.S. 442, 97 S. Ct. 1261, 51 L. Ed. 2d 464 (1977); Pernell v. Southall Realty, 416 U.S. 363, 94 S. Ct. 1723, 40 L. Ed. 2d 198 (1974).
Significantly, Justice White, the author of the Ross opinion, had written for the Court in Katchen v. Landy just a few years earlier. It is therefore likely that the "practical abilities and limitations of juries" language of Ross refers to the established exception to the Seventh Amendment in administrative proceedings and specialized courts of equity. As Justice White has more recently written for the Court in another decision based on this principle: "History and our cases support the proposition that the right to a jury trial turns not solely on the nature of the issue to be resolved, but also on the forum in which it is to be resolved. . . . The Seventh Amendment prevents Congress from depriving a litigant of a jury trial in a "legal" action Before a tribunal customarily utilizing a jury as its fact-finding arm . . . ." Atlas Roofing Co., Inc. v. OSHRC, 430 U.S. 442, 460-61 & n. 16, 97 S. Ct. 1261, 51 L. Ed. 2d 464 (1977) (emphasis added). This exception to the Seventh Amendment is obviously inapplicable in any action in a United States District Court.
Whether the Ross footnote referred to one or the other (or both) of these two possible limitations to the Seventh Amendment, it clearly did not purport to expand either exception beyond its narrow limits into a general "test" for the right to jury trial. These interpretations would provide a meaning for the footnote that does not reduce it to mere surplusage, but are consistent with the Court's continued adherence to the historical test. See supra, at 926-929. We think it clear, therefore, that the Court has never intended that the Ross footnote change the historical test. This judgment is buttressed by the problems that would attend any attempt to articulate standards governing the Ross "test," and by our perception of the policies underlying the Seventh Amendment. It is to these problems and policies that we now turn.
3. Problems Inherent in the Ross "Test"
We believe that the Ross footnote is also unsuitable for use as a test for Seventh Amendment issues because there is no satisfactory method for the consistent application of such a test.
a. The Case-by-Case Approach
In each of the decisions in which the right to jury trial has been denied on the sole ground of the size and complexity of the case, the test was applied on an Ad hoc basis. The courts did not decide that all antitrust cases or class actions were beyond the ken of juries, but only that the particular actions before them were. See ILC Peripherals Leasing Corporation v. IBM, 458 F. Supp. 423, 448-49 (N.D.Cal.1978); Bernstein v. Universal Pictures, Inc., 79 F.R.D. 59, 70 (S.D.N.Y.1978); In re U. S. Financial Securities Litigation, 75 F.R.D. 702, 712-14 (S.D.Cal.1977); In re Boise Cascade Securities Litigation, 420 F. Supp. 99, 104-05 (W.D.Wash.1976).
Although none of these decisions considered the possibility of applying Ross on a "generic" basis, a case-by-case approach would seem to be required by the nature of the Ross "test."
However, a case-by-case approach would be a major departure from the settled method of Seventh Amendment analysis used by the Supreme Court in its own decisions, both before and after Ross. In these decisions, the Court has either indicated or clearly assumed that they apply to all cases or claims of the same class. See, e.g., Pernell v. Southall Realty, 416 U.S. 363, 94 S. Ct. 1723, 40 L. Ed. 2d 198 (1974) (jury required in actions to recover real property in courts of general jurisdiction); Curtis v. Loether, 415 U.S. 189, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974) (jury trial guaranteed in all damage suits under 42 U.S.C. § 3612); Ross v. Bernhard, 396 U.S. 531, 90 S. Ct. 733, 24 L. Ed. 2d 729 (1970) (damage actions against corporate directors for negligence and breach of contract); Dairy Queen, Inc. v. Wood, 369 U.S. 469, 477, 82 S. Ct. 894, 8 L. Ed. 2d 44 (1962) (actions on debts allegedly due under a contract or for damages for trademark infringement); Whitehead v. Shattuck, 138 U.S. 146, 11 S. Ct. 276, 34 L. Ed. 873 (1891) (suits to quiet title to real estate).
Second, the standard of complexity is an extraordinarily difficult one to apply, even on a case-by-case basis. The problems of speculation about the abilities of a hypothetical jury and the complexities of the issues in the case would be compounded by the need to speculate about the degree to which partial settlements or summary judgments may simplify matters before a trial actually begins or even in the midst of a trial.
And, because there is nothing in Ross to say How complex a case must be before a jury demand may be struck, it would likely be a long time before a consistent pattern of decision emerged.
A related problem is the absence of any guide to the relationship among the three factors identified in the Ross footnote.
We agree with Judge Marshall that "(t)he likely result (of a case-by-case application of Ross ) would be a dilution of the right to a jury trial," Radial Lip Machine, Inc., supra, 76 F.R.D. at 228, and with Wolfram's observation that the Ross footnote raises "the spectre of federal judges using a disturbingly broad discretion in their determination of whether a jury ought to be interposed in particular cases." Wolfram, supra, 57 Minn.L.Rev. at 644.
Third, recognition of the possible validity of motions to strike jury demands on the grounds of complexity would impose yet one more burden on courts managing "big" cases. There would doubtless be motions to dispense with juries in most or all of these cases, and the motion could serve as a dilatory tactic, with potential interlocutory appeals adding to the delay.
b. The Whole-case Approach
While the relationship between size and complexity has led courts to apply the Ross "test" to each case as a whole, See ILC Peripherals Leasing Corp. v. IBM, 458 F. Supp. 423, 448 (N.D.Cal.1978); Bernstein v. Universal Pictures, Inc., 79 F.R.D. 59, 70 (S.D.N.Y.1978); In re U. S. Financial Securities Litigation, 75 F.R.D. 702, 714 (S.D.Cal.1977); In re Boise Cascade Securities Litigation, 420 F. Supp. 99, 103-05 (W.D.Wash.1976),
Ross itself in the very sentence explained by footnote ten emphasizes that "(t)he Seventh Amendment question depends on The nature of the issue to be tried rather than the character of the overall action." 396 U.S. at 538, 90 S. Ct. at 738 (emphasis added). The "nature of the issue" test, as it developed in Beacon Theatres, Dairy Queen, and Ross, was a response to the jury trial problems created by the merger of law and equity,
and represents an expression of the "federal policy favoring jury trials . . . of historic and continuing strength." Simler v. Conner, 372 U.S. 221, 83 S. Ct. 609, 9 L. Ed. 2d 691 (1963). It now comprises at least two similar but distinct propositions.
First, the jury trial right may not be sacrificed merely because a "legal" issue comes into Court wearing the "equitable" procedural clothing of a class action, a derivative action, or an interpleader, even though jury trials were not available in such actions before a merger. Ross v. Bernhard, 396 U.S. at 540-42 & n. 15, 90 S. Ct. 733, 24 L. Ed. 2d 729 .
Second, because the federal rules permit and require the joinder of legal and equitable claims in a single civil action, the right to jury trial on the legal claims may not be compromised by characterizing the case as "basically equitable," by characterizing the legal claims as "incidental" to the equitable ones, or by trying factual issues common to both legal and equitable claims to the court. Beacon Theatres, supra, 359 U.S. at 507-511, 79 S. Ct. 948; Dairy Queen, supra, 369 U.S. at 471-473, 82 S. Ct. 894; Ross, supra, 396 U.S. at 537-38, 90 S. Ct. 733.
complex lawsuits with multiple claims and parties must be broken down into their constituent parts. If any legal cause is apparent, the right to a jury trial exists. The presence of a maze of other equitable claims in the litigation cannot obliterate defendants' right to a jury.
Radial Lip Machine, Inc. v. International Carbide Corp., 76 F.R.D. 224, 228 (N.D.Ill.1977). The use of the Ross footnote as a test would therefore place on the party seeking a non-jury trial the burden of showing that Each otherwise legal claim or issue in the case was too complex for a jury, with the right to jury trial, including the preclusive effect of the jury's findings on any common issues of fact, preserved for all issues as to which that burden is not met. The defendants here have made no attempt to meet such a burden.
4. Public Policy and the Seventh Amendment: The Role of the American Jury
The argument that the administration of justice would be improved by the elimination of juries in some or all civil litigation is hardly new, although it seems to have gained additional impetus in recent years.
However, this argument is based on a number of premises that should not be accepted without critical examination.
a. The Competence of the Jury as Finder of Fact
First, those who would dispense with juries in complex cases overlook the fact that the alternative to a lay jury is a lay judge.
We agree with Judge Patrick Higginbotham, who has written: "Apart from the occasional situation in which a judge possesses unique training . . . the assumption that a jury collectively has less ability to comprehend complex material than does a single judge is an unjustified conclusion." P. Higginbotham, Continuing the Dialogue: Civil Juries and the Allocation of Judicial Power, 56 Tex.L.Rev. 47, 53 (1977).
Trial lawyers and judges and we are no exception often ponder the question whether judges are superior to juries in arriving at the truth in complex or technical cases. After eight and a half years on the bench, we remain convinced that judges are not. Our view is that a jury, applying its collective wisdom, judgment and common sense to the facts of a case (in the light of proper instructions on the law) is brighter, more astute, and more perceptive than a single judge, even in a complex or technical case; at least it is not less so.
The foreperson of Judge Conti's jury in the ILC case, See n. 59, Supra, responded to the court's questioning with the view that "a jury that's both a computer technician, a lawyer, (and) an economist" would be qualified to try that case. But no judge is all of these, and one is more likely to find a computer technician or an economist on a jury than on the bench. Complex and technical cases, no less than other cases, require judgments on the credibility of witnesses and inferences to be drawn from facts. These are the tasks at which jurors, interacting with other jurors in the crucible of trial, particularly excel.
We also note our dissent from the proposition that a jury trial in a complex matter must necessarily yield an irrational verdict because of the cumbersomeness of presenting an enormous mass of evidence to a lay jury. A strong argument can be made that the presence of a jury actually disciplines and improves the fact-finding process by imposing on both court and counsel the obligation to streamline, clarify, and teach. Judge Patrick Higginbotham puts it well:
Both the "technical" case and the "big" case arguments overlook an enormously valuable contribution made by the presence of a jury. The process of distilling complex material into a comprehensible form operates less effectively in bench trials than in jury trials. Although the rules of evidence purport to discipline an advocate's presentation, they are generally only loosely followed in bench trials, on the assumption that the trial judge will consider only admissible evidence. I have found that as counsel drop their evidentiary antennae they also tend to lose their sensitivity to questions of relevance; correspondingly, the marshaling of proof so essential to clarity suffers. Trial to a jury imposes a fierce discipline on the advocates. The virtue of forcing counsel to organize a complex mass of information into a form understandable by the uninitiated is that counsel ultimately must understand the issues and evidence in the case well enough to teach. If counsel cannot comprehensibly present their case to lay persons, is it likely that counsel do, in fact, understand the case? One need only view how trials of complicated matters are conducted by able counsel to appreciate the powerful contribution that the presence of a jury makes to clarity of argumentation. The jury's presence not only encourages the clear presentation of facts during a trial, but the process of drafting the charge also contributes to the clarification of the controlling legal issues. When properly designed and freed of obscure "legalese," the charge enhances understanding by the court and counsel, as well as by the jury.
Higginbotham, Supra, at 54.
While not essential to our decision in view of our Seventh Amendment analysis, it is appropriate, we believe, to relate the foregoing general discussion to the trial of this case.
At the heart of both the plaintiffs' claims and the defendants' counterclaims are allegations of conspiracy and predatory intent. These allegations, if legally sufficient, will call for just the kind of judgments of fact that are traditionally within a jury's competence and for which a jury's unique abilities are especially valued.
Moreover, we believe that with proper and frequent judicial guidance (we contemplate a preliminary charge and periodic interim charges on the law) as well as thoughtful organization of evidentiary presentation by counsel, the jury will be able to understand and deal intelligently with all the facts and issues.
The foregoing observations demonstrate why we reject as plainly lacking in merit the defendants' suggestion that the extraordinary complexity of this matter would make a trial by jury fundamentally unfair, thereby denying them the due process of law guaranteed by the Fifth Amendment,
and the related argument that, in complex litigation, a right to trial by jury would carry with it the "right to an irrational verdict." Juries like judges may sometimes render irrational verdicts, but in such an event the court serves as a check on the power of the jury. It is well settled that the court may direct a verdict without infringing the constitutional right to trial by jury. See Galloway v. United States, 319 U.S. 372, 63 S. Ct. 1077, 87 L. Ed. 1458 (1943). The standard for directed verdicts in this circuit has been expressed as follows:
(W)e must examine the record in a light most favorable to the (party against whom the verdict is to be directed), and review the specific evidence in the record and all inferences reasonably capable of being drawn therefrom. We must determine whether, as a matter of law, the record is critically deficient of that minimum quantum of evidence from which a jury might reasonably afford relief. Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 82 S. Ct. 1404, 8 L. Ed. 2d 777 (1962); Lebrecht v. Bethlehem Steel Corp., 402 F.2d 585 (2 Cir. 1968); Schad v. Twentieth Century-Fox Film Corp., 136 F.2d 991 (3 Cir. 1943); Rawleigh, Moses & Co. v. Kornberg, 210 F.2d 176 (8 Cir. 1954); Denneny v. Siegel, 407 F.2d 433, 439 (3d Cir. 1969). "If the evidence is of such character that reasonable men, in the impartial exercise of their judgment may reach different conclusions, the case should be submitted to the jury." Silverii v. Kramer, 314 F.2d 407, 409 (3d Cir. 1963). See Rogers v. Exxon Research & Engineering Co., 404 F. Supp. 324, 335-36 (D.N.J.1975). Since a directed verdict motion deprives a party of jury fact-determination, it should be granted sparingly and circumspectly. "Nevertheless the federal courts do not follow the rule that a scintilla of evidence is enough. The question is not whether there is literally no evidence supporting the party against whom the motion is directed but whether there is evidence upon which the jury could properly find a verdict for that party." 9 Wright & Miller, Federal Practice and Procedure, § 2524, at 542-43 (1971) (footnotes omitted).
Patzig v. O'Neil, 577 F.2d 841, 846 (3d Cir. 1978).
Since issues are presented to the jury only when "reasonable" men and women "in the impartial exercise of their judgment may reach different conclusions," when a jury "may properly find a verdict" for either party, there is little or no no room for an "irrational" verdict. And if the court erroneously sends issues to a jury which thereafter decides them "irrationally," further safeguards are available in the power of either the trial court or the court of appeals to grant judgment notwithstanding the verdict. See Neely v. Martin K. Eby Construction Co., 386 U.S. 317, 87 S. Ct. 1072, 18 L. Ed. 2d 75 (1967); Rule 50(b), Fed.R.Civ.P.
b. Other Functions of the Jury
The foregoing discussion has addressed the relative skill of judges and juries at making accurate findings of fact. What is at issue here is more; it is the very nature or character of justice provided by our judicial system. In this respect, the Seventh Amendment reflects societal values deeply rooted in our notions of democracy values which require that factual decisions affecting the life, liberty, and property of litigants should, at least at their option, be made by a cross section of the community, I. e., a jury of their peers. Thus, even if judges were "better" than juries at finding facts accurately in complex litigation, no decision to exclude juries from participation in these cases should be made without weighing the other important values promoted by the use of juries.
One unique virtue of the jury is its "black-box" function; it gives results without reasons.
In contrast, the court in a bench trial must "find the facts specially."
The "black-box" jury allows our courts to deliver individualized justice to do "equity" without sacrificing our expressed devotion to the uniform rule of law. See Higginbotham, Supra, at 56-57; Wigmore, A Program for the Trial of a Jury Trial, 12 Judicature 166, 170 (1929). Thus, when "justice" requires, juries can reach results at variance with the law. Because these decisions are not explained, they remain exceptions; the same results from opinion-writing judges would be precedents.
The materials constituting the Seventh Amendment's "legislative history" demonstrate that this part of the jury's "practical abilities"
was of great importance to the antifederalists who are largely responsible for the constitutionalization of the civil jury:
There is, moreover, a generalized but weighty premise that underlies every one of the antifederalist arguments in favor of constitutional protection of the right of jury trial in civil cases. It is unquestionable, but nonetheless sometimes overlooked, that the general intention of antifederalist agitation for mandatory jury trial was to achieve results from jury-tried cases that would not be forthcoming from trials conducted by judges alone. Clearly the antifederalists were not arguing for jury trial on the ground that it was a more efficient form of trial or in some procedural way inherently superior to trial by the court. It is common today to oppose the institution of the civil jury and its preservation in the Seventh Amendment on the asserted ground that trials in which juries sit are long, expensive, prone to unseemly forensics, and sometimes productive of decisions that are probably at odds with the substantive rules that the judge instructs the jury to apply. But the antifederalists were not arguing for the institution of civil jury trial in the belief that jury trials were short, inexpensive, decorous and productive of the same decisions that judges sitting without juries would produce. The inconveniences of jury trial were accepted precisely because in important instances, through its ability to disregard substantive rules of law, the jury would reach a result that the judge either could not or would not reach. Those who favored the civil jury were not misguided tinkerers with procedural devices; they were, for the day, libertarians who avowed that important areas of protection for litigants in general, and for debtors in particular, would be placed in grave danger unless it were required that juries sit in civil cases.
Wolfram, The Constitutional History of the Seventh Amendment, 57 Minn.L.Rev. 639, 671-72 (1973) (footnotes omitted).
According to Wolfram, this is particularly evident in the antifederalists' concern with the protection of debtor-defendants,
the frustration of unpopular or unwise law through jury nullification,
and the protection of individuals in litigation with the federal government. See id., at 667-708.
"Black-box" juries are also important in borderline cases calling for decisions and distinctions that might otherwise seem arbitrary. Mr. Justice Holmes described this function as follows:
When he has discovered that a difference is a difference of degree, that distinguished extremes have between them a penumbra in which one gradually shades into the other, a tyro thinks to puzzle you by asking where you are going to draw the line, and an advocate of more experience will show the arbitrariness of the line proposed by putting cases very near to it on one side or the other. But the theory of the law is that such lines exist. . . . As that difference has no gradation about it, when applied to shades of conduct that are very near each other it has an arbitrary look. We like to disguise the arbitrariness, we like to save ourselves the trouble of nice and doubtful discriminations. . . . And so, as we get near the dividing point, we call in the jury.
Holmes, Law in Science and Science in Law, 12 Harv.L.Rev. 443, 457 (1899). Cf. Duncan v. Louisiana, 391 U.S. 145, 161, 88 S. Ct. 1444, 20 L. Ed. 2d 491 (1968) ("This (line-drawing) process, although essential, cannot be wholly satisfactory, for it requires attaching different consequences to events which, when they lie near the line, actually differ very little."). Holmes points out later in the same article that the question of negligence Vel non was originally a question of law for the court:
But about the middle of the last century, when the rule of conduct was complicated with practical details the court began to leave some of these questions to the jury. Nevertheless, Mr. Starkie, a man of intellect, who was not imposed upon by phrases, very nearly saw the ground upon which it was done, and puts it on the purely practical distinction that when the circumstances are too special and complicated for a general rule to be laid down the jury may be called in.
Id., at 459. There is thus a common-law tradition of calling in juries to decide certain questions only when there is enough complexity to require one. To impose a new rule taking very complex cases away from juries would imply a conception of the jury as a kind of Goldilocks, to be used only when the amount of complexity is "just right."
In all cases where our system needs a "black-box" decider, the use of a representative jury seeks to insure that the decisions will reflect contemporary community values in courts otherwise dominated by judges with life tenure. See id., at 460. Also, by enhancing the public's sense of participation, the use of representative juries contributes significantly to the legitimacy of our courts and of our entire system of government. See Higginbotham, Supra, at 52, 59-60; Kaufman, A Fair Jury The Essence of Justice, 51 Judicature 88, 91 (1967).
The jury also provides a needed check on judicial power. Although the allocation of the fact-finding role to the jury serves most obviously to limit the authority of the trial judge, the second clause of the Seventh Amendment
demonstrates the importance of the limit on appellate invasion of the province of the jury as well. Because judicial fact-finding is more closely reviewed than jury fact-finding, the elimination of juries from complex or protracted litigation would increase the power of both trial and appellate judges. See Higginbotham, Supra, at 57.
There is no reason to believe that any of the jury's functions are less important in complex and protracted litigation than in smaller and simpler cases. Indeed, as "big" cases proliferate and consume an increasing share of our judicial resources, the survival of the peculiar quality of justice traditionally delivered by juries in our courts of law may depend on the continued availability of juries in such cases.
This opinion has addressed a number of questions in order to determine whether the Seventh Amendment right to trial by jury applies even in a case so massive and so complex that serious questions of jury competence may be raised.
Because the historical test for the Seventh Amendment defines the parameters of the constitutional right to a jury trial by reference to English practice in 1791, we have explored the traditional boundaries of the jurisdictions of courts of law and courts of equity. Our survey demonstrated that some cases normally belonging to the courts of common law could, if sufficiently complex, be brought in equity. But this was possible only in actions seeking an "accounting," and only at the plaintiff's option. Because this is not an "accounting" case, and because here the plaintiffs actively seek a jury trial, the historical test requires that a jury be available. This conclusion is buttressed by other considerations as well. There is little evidence that the plaintiff's historical ability to bring complex accounting matters to a court of equity was attributable to considerations of jury competence and, in any event, it may not have survived the merger of law and equity. Moreover, the remedy of treble damages sought in the case before us is one which was traditionally available Only on the verdict of a jury in a court of common law.
We next examined the Supreme Court's recent decisions in order to determine whether questions of jury competence had been elevated to constitutional stature by the mention in Ross v. Bernhard of "the practical abilities and limitations of juries." We determined that to so read the Ross dictum would be inconsistent with the intentions of the Supreme Court, with settled principles of jurisprudence, and with the very policies expressed in the Seventh Amendment itself. We have concluded, therefore, that the complexity of the case before us is not a constitutionally permissible reason for striking the plaintiffs' jury demands.
The defendants' motion is denied. An appropriate order follows.