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Dunn and Dusted

This Op- Ed, appears in the  Wall Street Journal  at A14, Tuesday, September 26, 2006

By Viet Dinh

Justice Felix Frankfurter once wrote, "Wisdom too often never comes, and so one ought not to reject it merely because it comes late." So it is with Hewlett-Packard's decision on Friday to come clean with the available facts about Chairman Patricia Dunn's ill-advised investigation into board members and journalists, as well as to replace her with CEO Mark Hurd and appoint respected prosecutor Bart Schwartz to mop up the mess. Belated but welcome, these actions show that Mr. Hurd's steady hand will guide H-P out of the scandal and back to its rightful place as the icon of Silicon Valley.

For me the whole saga started in June with dinner at a London restaurant. The News Corporation was welcoming Spanish President José María Aznar to its board, on which venture capitalist Tom Perkins and I also serve as independent directors. Between drinks and glimpses at a World Cup match, as this paper has reported, Mr. Perkins asked me for advice on a confidential matter. He had resigned several weeks earlier from the H-P board, where he chaired the Nominations and Governance Committee, to protest an investigation into disclosures of board information and the decision to ask a fellow director, George "Jay" Keyworth, to resign.

H-P Sauce

 That night and on the plane the next day, Mr. Perkins described a four-month operation instigated by Ms. Dunn, which we now know as Kona, to uncover contacts between members of her board and reporters covering H-P. That investigation, according to Mr. Perkins, pointed to Mr. Keyworth as the unnamed source for a January article on the trade Web site CNET.com.

My immediate reaction was that it was unconscionable for a chairman to spy on her own directors. Having participated in and observed a number of leak investigations as a Justice Department official, I also thought it nearly impossible to uncover a confidential source without using government subpoenas, which H-P did not have, or resorting to likely illegal methods, which at the time was unthinkable. Mr. Perkins asked me to serve as his counsel, and I agreed.

Most perplexing was the supposed trigger for this unfortunate foray into corporate intrigue. The CNET article, if anything, burnished the image of H-P and its management. There was no disclosure of material nonpublic financial information to trigger regulatory or legal issues. Amid banal details about how long the days were and how hard the directors worked were glimpses into the company's general strategic and competitive vision. Mr. Hurd was engineering an impressive turnaround, and the article showed that H-P was not simply cutting costs and laying off workers but rather executing a shrewd strategic plan to best its competitors.

It is difficult to see how a puff piece with nuggets already publicized by H-P could be viewed as harmful. The board has since acknowledged that "at H-P's request, Dr. Keyworth often had contacts with the press to explain H-P's interests. The board does not believe that Dr. Keyworth's contact with CNET in January 2006 was vetted through appropriate channels, but also recognizes that his discussion with the CNET reporter was undertaken in an attempt to further H-P's interests." And there is no general duty of confidentiality for directors, only a duty of loyalty to act in the best interests of the corporation and its shareholders.

So the whole thing boils down to Mr. Keyworth deciding to speak favorably to a reporter without asking for permission. The answer to this question of authority is not self-evident as a legal matter. The chairman of the board is first among equals -- entrusted with the responsibility to set agendas, conduct meetings and interact with management. But each board member individually owes a legal duty to act in the best interests of the corporation, a personal duty that cannot and should not be delegated or transferred to anyone else.

It is true that unauthorized disclosures of board information would violate a mutual commitment of confidentiality that H-P directors made to prevent such disclosures following the ouster of Carly Fiorina as chairman and CEO. This is a serious matter, but one that could and should be handled, as Mr. Perkins suggested to Ms. Dunn early on, by a direct personal conversation with the directors. It is therefore understandable for Mr. Keyworth to reportedly exclaim, when confronted with the CNET investigation results, "I would have told you all about this. Why didn't you just ask?" * * *

Overlaying these minutiae is a broader morality tale for the modern era of corporate governance. Enron and WorldCom prompted Sarbanes-Oxley, SEC regulations and a host of corporate "best practices." These requirements emphasized internal controls, divided corporate authority and instituted checks and balances. Essential as these requirements may be to ensure technical compliance with the new rules, they cannot substitute for the guiding light of director conduct: business judgment.

Patricia Dunn reportedly is a "governance perfectionist." When Mr. Perkins's objections to Ms. Dunn's investigation surfaced publicly, she called the conflict "part of the board's progression from one that was more personality driven to one that is process driven and capable of upholding today's highest governance standards." Her supporters whispered that Mr. Perkins had challenged her proposal for a mandatory director education program on corporate compliance. And in resigning last week she emphasized, "I followed the proper processes by seeking the assistance of H-P security personnel." Left unanswered was whether the sub rosa investigation was a good idea or whether the reaction was reasonable to the infraction.

Meanwhile, in June, Tom Perkins wrote to Larry Sonsini, outside counsel to the H-P board, and passed on my view that the investigation was unconscionable and likely illegal. After conversations with staff, Mr. Sonsini confirmed that Ms. Dunn's Kona investigation "did obtain information regarding phone calls made and received by the cell or home phones of directors" and that it was "done through a third party that made pretext calls to phone service providers." Questions have been raised about Mr. Sonsini's role, but Mr. Perkins's and my impression is that Mr. Sonsini was simply a good, honest lawyer doing his best to represent his client in very difficult situations.

It was Mr. Sonsini's candid acknowledgment of pretexting that prompted Mr. Perkins to contact telephone companies and obtain evidence that his records had been accessed. Wherever responsibility for such actions lie are for prosecutors to determine, but one thing is clear: Using false pretenses to obtain telephone records without the subscriber's consent is illegal under state and federal law.

The Department of Justice wrote to Congress in March that pretexting of telephone records is, under current law, a violation of the Computer Fraud and Abuse Act, the wire fraud statute and the identity theft statute. The Bush administration nevertheless advocated passage of H.R. 4709, the "Law Enforcement and Phone Privacy Protection Act of 2006," because it "would impose sanctions for certain sales of phone records, would criminalize some conduct that is harmful to consumers but that is not addressed by current criminal law." The House heeded the call and unanimously passed the bill, which is currently pending in the Senate.

What happened to Tom Perkins is unique only because of the players involved. Thousands have had their phone records illegally accessed. Ironically, the pervasiveness of the trade in illegally obtained phone records has led many buyers of illicit records to believe that they were not dealing in stolen goods. Perhaps that is one silver lining to this episode: Henceforth, no one, least of all corporate America, should be able to claim that they didn't know that obtaining telephone records without consent is improper and illegal. * * *

H-P is now charting the right course, with Mark Hurd firmly at the helm. There is no better indication of his commitment to doing the right thing than the appointment of Bart Schwartz as counsel to review and revamp H-P's security processes. "Bart is an outstanding lawyer and investigator with excellent judgment and immense integrity," former FBI director Louie Freeh told me. "He will act independently and provide to H-P a 'best practices' architecture for investigations and procedures which is thorough, fair and sensitive to privacy requirements."

Mr. Hurd himself has frankly acknowledged his specific interactions with Ms. Dunn's investigation. Like any good scandal, Kona has sucked everything and everyone, however peripheral, into its vortex. But based on all available information, I believe that his knowledge was tangential and his involvement indirect. It would be surprising -- and much more disturbing -- if Mr. Hurd had zero knowledge of, or involvement in, actions of H-P employees and contractors under the direction of the board chairman.

One may well ask whether Mr. Hurd should have done less to help or could have done more to stop the investigation. But here, too, I think he should get the benefit of any doubt. As CEO, Mr. Hurd was charged with the management and operations of H-P, in the process engineering one of the most remarkable turnarounds in recent corporate history. Even if he had the will, he did not have the unilateral authority to challenge Ms. Dunn's management of the board. Mr. Hurd was, and should have been, doing his job to increase shareholder value; and the machinations of an increasingly dysfunctional board were a distraction.

Hopefully, those distractions are now over. By stepping aside, Ms. Dunn proved her personal commitment to H-P and its shareholders. It is never easy to let go under pressure, and her decision speaks volumes about her courage, her grace and, in Mr. Hurd's words, "her ability to put the interests of H-P before her personal interests."

In the final analysis, the best thing that the H-P board did was to appoint Mark Hurd as CEO. But then it failed him. Ironically, the three persons most instrumental in recruiting Mr. Hurd -- Patricia Dunn, Jay Keyworth and Tom Perkins -- have all resigned, and he is now in charge of both the company and the board. The task may be more challenging, but the odds are good that he will succeed in leading the board as he did in leading the company.

'Dear Mark'

On July 18, the same day that Tom Perkins formally confirmed his protest to the entire board, he wrote Mr. Hurd a personal email that bears quoting in its entirety:

"Dear Mark: A while back I promised you that we directors would clean up our act, and free you from worries about the H-P board. I am really sorry that I didn't deliver on this, and I apologize for the necessity of raising the issue of illegal activity by the board chairman in today's email to the board. But, it's an extremely serious matter, and I have legal obligations.

"Aside from this, I worry that Pattie, as new chair of N&G, will 'pack' the board with the kind of directors she so admires -- ciphers from high cap companies, with no fast-cycle technology background, and certainly no Valley entrepreneurial genes.

"I worry that you will wind up with a 'blue ribbon' board that will be of zero, or even negative, value to you when the going gets tough. I don't wish you bad luck -- but life eventually delivers tough scenarios to CEOs of big companies -- and I doubt if H-P will prove to be the exception.

"Anyway, I am rooting for you still, and I hope everything works out as you wish best.

"Sincerely, -- Tom."

As Mr. Perkins has said, "This, too, shall pass."Hopefully, soon.

Mr. Dinh, a Georgetown law professor and principal of Bancroft Associates PLLC, is the attorney for Tom Perkins. He was assistant attorney general for legal policy in the U.S. Department of Justice from 2001 to 2003.

Common Article 3, Torture, and Specific Intent

Over at Balkinization, Marty Lederman and David Luban have published trenchant criticisms of the new war crimes bill currently before Congress.  Marty and David analyze numerous problems with the main provisions relating to Common Article 3, including: (1) Section 6’s court-stripping provisions, (2) Section 7’s prohibition on invoking the Geneva Conventions or its protocols as a source of rights in any federal habeas or civil proceeding in which the U.S. government or its agents is a party, (3) Section 8's "full satisfaction" provision for grave breaches of Common Article 3, and (4) Section 8’s definition of “cruel or inhuman treatment.”  In this post, I wish to call attention to a further issue: Section 8’s “specific intent” requirement on what constitutes torture for purposes of the War Crimes Act.

Section 8 defines torture as:

The act of a person who commits, or conspires or attempts to commit, an act specifically intended to inflict severe physical or mental pain or suffering...upon another person within his custody or physical control for the purpose of obtaining information or a confession... (emphasis added).

This definition is a departure from Common Article 3, which simply lists torture without qualification among those acts which “are and shall remain prohibited at any time and in any place whatsoever…” That is, while Common Article 3 does not restrict torture to harms associated with a particular mental state, Section 8 does do so; furthermore, it defines that mental state narrowly, as one of “specific intent.”

Why is this noteworthy?  Recall the Bybee memo's analysis of the same mens rea element in the federal torture statute:

[B]ecause Section 2340 [i.e., 18 USC § 2340] requires that a defendant act with the specific intent to inflict severe pain, the infliction of such pain must be the defendant’s precise objective. If the statute had required only general intent, it would be sufficient to establish guilt by showing that the defendant “possessed knowledge with respect to the actus reus of the crime.” If the defendant acted knowing that severe pain or suffering was reasonably likely to result from his actions, but no more, he would have acted only with general intent…. As a theoretical matter, therefore, knowledge alone that a particular result is certain to occur does not constitute specific intent. As the Supreme Court explained in the context of murder, “the . . . common law of homicide distinguishes . . . between a person who knows that another person will be killed as a result of his conduct and a person who acts with a specific purpose of taking another’s life.” Put differently, the law distinguishes actions taken ‘because of’ a given end from actions taken ‘in spite of their unintended but foreseen consequences.’” Thus, even if the defendant knows that severe pain will result from his actions, if causing such harm is not his objective, he lacks the requisite specific intent even though the defendant did not act in good faith. Instead, a defendant is guilty of torture only if he acts with the express purpose of inflicting severe pain or suffering on a person within his custody or physical control (p. 3-4, emphasis added).

Furthermore:

[A] showing that an individual acted with a good faith belief that his conduct would not produce the result that the law prohibits negates specific intent. Where a defendant acts in good faith, he acts with an honest belief that he has not engaged in the proscribed conduct….A good faith belief need not be a reasonable one….(p. 4-5, emphasis added).

In December 2004, the Justice Department published a second memorandum (the “Levin memo”) meant to supersede the Bybee memo in its entirety. However, the Levin memo’s treatment of the specific intent issue is evasive and unconvincing. Here is the key passage which reveals the question-begging character of the exercise: “We do not believe it is useful to try to define the precise meaning of ‘specific intent’ in section 2340. In light of the President’s directive that the  United States does not engage in torture, it would not be appropriate to rely on parsing the specific intent element of the statute to approve as lawful conduct that might otherwise amount to torture.”

What does all this imply for the torture provision now before Congress? First, it is simply not true that the proposed legislation prohibits U.S. agents from “inflicting severe physical or mental pain or suffering for the purpose of obtaining information or a confession,” as the flow chart published in the September 22 New York Times implies. Plainly, the proposed law does not prohibit this. Indeed, by its very terms it does not even prohibit U.S. agents from knowingly inflicting severe physical or mental pain or suffering for the purpose of obtaining information or a confession. Rather, the bill merely prohibits U.S. agents from specifically intending to inflict these harms.

And what exactly does "specifically intending" mean? The Levin memo’s reply is that it is not “useful” for the government to answer that question.  By contrast, the more candid and informative Bybee memo—surely probative evidence of how the Bush administration is likely to interpret and apply the provision under the “virtually unreviewable” authority given to it by the proposed legislation—does provide some fairly clear answers.  According to the Bybee memo, specific intent means what it has typically meant in Anglo-American law: purpose or conscious objective, as distinct from knowledge, substantial certainty, foreseeability, and related concepts.  Hence—to recall a familiar example—a U.S. agent who knows or foresees with substantial certainty that his coercive interrogation technique will result in “death, organ failure, or permanent impairment of a significant bodily function” is not necessarily guilty of torture under the proposed legislation, even without recourse to defenses like necessity--at least not according to the Bybee memo.

Second, in light of the foregoing it seems patently false to assert that the proposed legislation merely clarifies Common Article 3’s prohibition on torture. Common Article 3 does not explicitly limit torture to cases of specifically intended harms, nor should it be read to do so implicitly. This is a debatable proposition, but it appears to be supported by ample evidence, including common usage and the Official Commentary on the Geneva Conventions, as well as the general intent language found in the 1984 U.N. Convention Against Torture (CAT):

For the purposes of this Convention, the term “torture” means any act by which severe pain or suffering, whether physical or mental, is intentionally inflicted on a person for such purposes as obtaining from him or a third person information or a confession...(CAT, Article 1(1), emphasis added).

As the Bybee memo recounts, when the Reagan Administration submitted the CAT to the Senate, it sought to narrow the general intent language of the CAT to ensure it would be understood as requiring specific intent: 

The United States understands that, in order to constitute torture, an act must be a deliberate and calculated act of an extremely cruel and inhuman nature, specifically intended to inflict excruciating and agonizing physical or mental pain or suffering (p. 16, emphasis added). 

Likewise, in order to “ensure that the Convention’s reach remain limited,” the first Bush Administration submitted the following understanding to the Senate in 1990:

The United States understands that, in order to constitute torture, an act must be specifically intended to inflict severe physical or mental pain or suffering…(p. 18, emphasis added).

This is the understanding with which the US ratified the CAT in 1994 and which underlies 18 USC §§ 2340-2340A, the federal torture statute. 

But Common Article 3's ban on torture--ratified decades earlier--is not so limited.  It does not require proof of "specific intent" in the sense implied by the language of the proposed bill.  And since 1997, the War Crimes Act has criminalized all of CA3's prohibition on torture.  Under the proposed bill, that would no longer be the case.

Is the specific intent rule nonetheless justifiable?  Arguably not, for at least the following reasons. First, the rule is simply too lenient, in just those ways the Bybee memo exposed--and there is no good reason why the U.S. should not criminalize all instances of torture made unlawful by Common Article 3.  Second, the rule is artificial in just the manner the Bush Administration has publicly disavowed: “the President has been very clear on the issue of torture, which is we are against it—and torture by anyone's common-sense definition of it, not some fancy definition.”  Third, there is the question of consistency: the Torture Victims Protection Act, 28 USC § 1350 note (3)(b), which supplies a tort remedy for victims of torture, proceeds under a general intent rule, as do many war crimes tribunals to which the United States has lent political and diplomatic support.

Finally, there is the issue of whether “the world is beginning to doubt the moral basis of our fight against terrorism.”  What is the world to make of the fact that the United States relies on artifice and technicality to avoid the plain meaning and import of the Geneva Conventions, and therefore appears willing to countenance situations like this one?

 Prosecutor:  Did you know that what you were doing to the detainee would cause him severe physical pain?

Defendant:  Yes sir.

Prosecutor: Did you know it would permanently disfigure him?

Defendant:  Yes.

Prosecutor: Did you know it would prevent him from being able to walk?

Defendant:  Yes.

Prosecutor: And were you doing it for the purpose of obtaining information or a confession?

Defendant: Yes.

Prosecutor: Isn’t that torture?

Defendant: No sir. Read the statute. I knew those harms would occur, but I did not specifically intend any of them.  Causing those harms was not my conscious objective.

Perhaps I am wrong to assume that Common Article 3 would condemn this behavior but that the proposed amendment to the War Crimes Act defining torture would not.  The Levin memo carefully avoids clarifying the issue, and Senators McCain and Graham have refused to comment.  Yet the issue goes to the heart of our commitment to ban torture, and to do so in a manner that comports with common sense.  Congress should replace the specific intent rule in both the WCA and section 2340 with language which tracks the general intent standard of the Convention Against Torture.  At a minimum, it should hold hearings on the issue to determine whether the proposed legislation represents a significant failure to live up to our obligations under the Geneva Conventions.

 

Wendy Purdue on Trial by Jury

This is a version of comments Wendy Purdue delivered at our celebration of James Oldham's Trial by Jury:

My interest Jim’s book stems from the fact that as part of teaching Civil Procedure, I teach the 7^th Amendment and have always found it a peculiar area of law.  The Court has held that “preserved” as it is used in the 7^th Amendment means that in order to determine whether you have a right to a jury to day, you must look to history.

Interestingly, the history that the Court purports to be interested in is English practice as opposed to the purposes of the 7^th Amendment as a matter of U.S. history.

A focus on historical purposes rather than English practice would significantly alter the Court’s approach and could change the result in some cases. For example, Paul Carrington has argued that at least one purpose of the 7^th Amendment was to constrain life tenured federal judges. See Paul Carrington, The Seventh Amendment: Some Bicentential Reflections, 1990 U. Chi. Legal Forum 33. If one accepted this as a core purpose then the Court’s analysis in Cooper Indus. v. Leatherman Tool Group, 532 U.S. 424 (2001) might have been different. In that case, the Court had to decide whether it violated the reexamination clause for a court to override a jury determination on punitive damages. The Court’s analysis seems to divide the world into questions of fact that are for juries and questions of law that are for judges. According to the Court, punitive damages are “an expression of . . . moral condemnation” rather than a determination of fact and therefore belong with judges. Of course, one might also just have well have said that “moral condemnations” are not matters of law either. If the Court’s core understanding were that the purpose of juries is to constrain elite life tenured judges then “moral condemnations” might be just the sort of thing that belong with juries and not with elite judges.

The Court has, of course, rejected a purpose based approach and has instead adopted an historical test which focuses on 18^th century English practice. (As an aside, it is interesting that with all the controversy about whether it is proper even to cite foreign law, in the area of the 7^th Amendment, the Court is comfortable not only citing foreign law (from England) but purporting to be absolutely bound by it.)

The historical test presents major complications where the cause of action is one that did not exist in 18^th century England. Here the Court looks for historical “analogies.” So, in a suit against a union for breach of its duty of fair representation, a lot of ink was spilled trying to determine whether such a suit is more like a suit to set aside an arbitration award (since the underlying complaint had to do with the handling of a grievance procedure), or like a suit against a trustee for breach of a fiduciary obligation (also an action in equity), or like a claim for professional malpractice which was an action at law. See Chauffeurs Local, 391 v. Terry, 494 U.S. 558 (1990). None of the analogies is very convincing and the whole exercise is rather like trying to decide in which room of Monticello Thomas Jefferson would have put his TV.

Historical analogies present almost insurmountable problems. However, even where the clause of action did exist in 18^th century England the historical test presents challenges, complicated by the fact that we now have a unified system (rather than separate courts of law and equity) as well as a number of new different procedural mechanisms. This is where Jim’s book comes in. He takes the Court at its word that it is interested in knowing the truth about 18^th century English practice and sets about to determine what that was.

The result is a book that is quite a fascinating exploration of English jury trial practice. I am not a historian, but it seems to me that Jim demonstrates pretty convincingly that when the ct tries to figure out 18^th century English practice, it frequently gets it wrong.

For example, in Markman, 517 U.S. 370 (1996), the issue was whether the interpretation of a word in a patent claim (the meaning of “inventory”) is a question for the judge or the jury. Jim argues that contrary to Souter’s assertion, that this type of case was not rare and that interpretation of disputed patent instruments was an issue for the jury. I think he makes a pretty persuasive case that the ct gets the history wrong.

In addition to examining the question of when there is a right to a jury in the first instance, Jim’s book also examines historical practice with respect to the reexamination of jury verdicts, which relates to the second clause of the 7^th Amendment. The book highlights some important features about English practice concerning reexamination of jury verdicts. For example, the modern practice of judgment as a matter of law was not well established, directed verdicts functioned quite differently than they do today, and issues concerning damages, including punitive damages, were sent to juries and the mechanism to respond to excessive awards was to grant a new trial.

As Jim’s book notes, the Court has been far less wedded to a strict historic approach with respect to the reexamination clause. The result is that on the one hand, the Court has been quite expansive in finding a right to a jury as an initial matter, but also more expansive in supplementing juries through directed verdict and in over riding jury verdicts.

The final point concerns the composition of juries. Jim’s book details the very interesting history concerning the use of specialized juries, including juries of matrons and other special juries. The composition of juries is not something the Court has pegged to historical practice. Modern requirements that juries reflect a reasonable cross-section and be selected in a non-discriminatory way, reflect values outside the 7^th Amendment and indeed may reflect values that go beyond the fairness of the trial and instead may reflect concerns about inclusiveness in civil society. But Jim makes the point that to the extent there is interest in experimenting with special juries composed of particular types of experts or even people with particular education levels – that would not appear to violate the 7^th Amendment (at least to the extent it is understood as historically based).

Let me just say a word about the complexity exception. Jim explains that in many complex cases, the matter was referred to special masters or to commercial arbitration. It strikes me that there are two ways to look at this history. On the one had, it seems to support the proposition that frequently complex cases were not decided by common juries. But, if I understand the history, one could also say that complex cases were frequently not decided by judges.

When people talk about a complexity exception, they frequently mean that in complex cases, the case might not be decided by a jury but instead by a judge. But I am no sure that the history supports that so much as the idea that complex cases might be decided by special juries.

A final thought: in Chauffeurs Local v. Terry, the Court considered the question of whether there was a right to a jury trial in a suit against a union for breach of its duty of fair representation. The opinion produced long opinions examining 18^th century practice concerning suits against a trust fiduciary and suits for malpractice. Justice Brennan filed in concurrence in which he wrote: “to be sure, it is neither unusual nor embarrassing for members of the Court to disagree and disagree vehemently. But it better behooves judges to disagree within the province of judicial expertise.” He suggested cutting back somewhat on the historical test. Justice Brennan was metaphorically hooted down by the rest of the Court in this suggestion.

It is clear to me after reading this book that if the Court is going to continue to do this historical test, that they really have no choice but to officially appoint Jim as the federal court special master on 18^th century English practice and refer to him these historical questions.

Trial by Jury

James Oldham    Comments on Trial by Jury: The Seventh Amendment and Anglo-American Special Juries (NYU Press 2006)

    Here are a few paragraphs about my recently-published book:

Trial by jury in the United States, however controversial in application, remains a treasured part of most citizens’ concept of liberty. Everyone is familiar with the safeguards that trial by jury supplies to criminal defendants. Nearly everyone knows that the right to a jury trial also applies to civil cases, although it can be waived. The source of the right in civil cases in federal courts is the Seventh Amendment, and in state courts the right is preserved by comparable provisions of state constitutions.
    The Seventh Amendment provides that in suits at common law involving more than twenty dollars, the right to jury trial shall be preserved. This seems simple and straightforward, but what does it mean?  What right to jury trial?  What did the framers have in mind by their simple formulation?
    Unavoidably, it fell to the Supreme Court to fashion a test that could be used to measure the scope of the protection embodied in the Seventh Amendment, or in state imitations. The Court did so in 1812 in the case of United States v. Wonson, in which Justice Story wrote:  “Beyond all question, the common law here alluded to [in the Seventh Amendment] is not the common law of any individual state, (for it probably differs in all), but it is the common law of England, the grand reservoir of all our jurisprudence.”
    The rule thus fashioned by the Supreme Court came to be called “the historical test.”  A commonly-quoted, succinct version of the test is the following 1935 formulation in the case of Dimick v. Scheidt: “In order to ascertain the scope and meaning of the Seventh Amendment, resort must be had to the appropriate rules of the common law established at the time of the adoption of that constitutional provision in 1791.”  This test survives to the present day, despite unrelenting criticism, mainly from legal academics.
    In the past decade, the Supreme Court had several opportunities to revisit the historical test for the scope of the Seventh Amendment right to jury trial.  In 1996 in Markman v. Westview Instruments, Inc., the Court emphatically declined the opportunity, unanimously reaffirming the historical test.  In Trial by Jury, I do not try to revisit the argument that the Court should discard the historical test; rather, I take that test as a given and then measure its scope by examining actual trial practices in England in the late 18th century, especially as revealed by archival sources.  This leads me to conclude that the Court in Markman improperly withdrew the construction of patent claims from the jury.  Yet at the same time, I claim that a complexity exception to the Seventh Amendment guarantee would be legitimate under the historical test.
    Other matters addressed in Trial by Jury include the question of law versus fact, jury nullification, and the jury’s role in determining damages, both compensatory and punitive.  Also, I explore how substantially jury trial in the United States has been influenced by a 20th-century development, the “reasonable cross-section” rule.  Whenever this rule applies (and its applications are by now sweeping), the jury pool is required to reflect a reasonable cross-section of the community from which the jurors are drawn.  This development is ahistorical, since historically juries were frequently made up of jurors with special qualifications.  One prominent example was the jury of merchants, used extensively in commercial cases in the late 18th and 19th centuries.  (A variation of this type of jury is still possible in Delaware in complex civil cases.)
    Another example was the all-woman jury (jury of matrons) that was relied upon for  centuries to determine whether or not a female litigant was pregnant, or more precisely, whether she was “with quick child.”  Usually this happened when a female defendant had been convicted of a capital offense, and she “pleaded her belly” to escape the noose.  In the English experience, if a jury of matrons found such a female defendant to be pregnant, it was often possible for the woman to obtain a pardon, conditional on transportation for life to the colonies.  Thus in Daniel Dedfoe’s famous novel, Moll Flanders (1722), this is how it came about that Moll was born in Virginia.  The jury of matrons can be viewed as a true example of a “jury of peers.”
    The “jury of peers” notion has an ancient lineage that still reverberates as a supposedly important part of every American’s heritage. An opinion in 1996 of the United States District Court for the Eastern District of Pennsylvania (In re. Tiffany Green) illustrates the modern, nostalgic perception of this heritage. Judge Hutton wrote that, “The right to a trial by a jury of one’s peers is one of the cornerstones of the American judicial system. It is a birthright cherished by generations of American citizens.” Similarly, the Supreme Court in Duncan v. Louisiana (1968) observed that, “Providing an accused with the right to be tried by a jury of his peers gave him an inestimable safeguard against the corrupt, or overzealous prosecutor and against the compliant, biased, or eccentric judge.”
    Who were the “peers” in the so-called “jury of peers”? According to Henry Toulmin, United States Judge for the Mississippi Territory and author of an 1807 book called The Magistrate’s Assistant, “The fundamental principle of this institution [trial by jury] is, that a man should be tried by his peers or equals, a commoner by commoners and a nobleman by nobles.” This proposition, however, is, and for the most part always has been, a fairy tale. Historically, we boasted about juries of our peers while excluding half the population--women--from any jury service other than the rare, single-purpose jury of matrons. We also followed practices that kept racial and other minorities off juries or that left them drastically under represented. In the not so distant past, the United States also maintained requirements of property ownership that excluded the poorest segments of the economic spectrum of society.
    Both the jury of peers concept and the reasonable cross-section requirement relate to jury composition procedures. They do so, however, with sharply different objectives. As Judge Toulmin suggested, the jury of peers notion is aimed at giving the defendant a fair trial by placing on his jury at least a representative number of people that share the defendant’s cultural, linguistic, ethnic, or possibly socioeconomic circumstances.  The reasonable cross-section requirement, by contrast, is designed to ensure that members of all significant, or “cognizable,” segments of the community have the opportunity to be jurors.  This egalitarian requirement pulls strongly against any procedure or tradition that would permit the formation of juries from lists of persons with special qualifications.
    The idea of drawing exclusive special juries from specialized lists seems to be anachronistic today. Elite special juries surely are antithetical to the hard-fought, long-delayed goal of opening up jury service to everyone. Having eliminated the unsavory exclusions of the past, how can there remain a place in modern American society for an exclusive special jury?
    I argue that there is still such a place--that our history justifies continued experimentation with jury composition, including the special jury. However desirable the reasonable cross-section requirement is as a means of keeping an increasingly stratified people personally involved in the business of democracy, the requirement contributes little or nothing to other goals, such as coping effectively with jury trial of complex cases, or striving for fairness to litigating parties.

Steve Goldberg on Trial by Jury

At our Sept. 12 discussion, Steve Goldberg delivered a version of the following remarks:

Jim Oldham, the preeminent authority on Lord Mansfield, is fast becoming the preeminent authority on the history of the civil jury. His new book, Trial By Jury, is an indispensable contribution to that important field. 

I wanted to say a few words about Jim’s chapter on the Complexity Exception to the right to a jury trial. The Supreme Court has never ruled on whether such an exception exists, and apart from a Third Circuit decision in 1980, it has rarely been successfully invoked in the federal courts. As a result, juries today hear cases of enormous economic and scientific complexity in areas ranging from antitrust to toxic torts. Because the Supreme Court has adhered to the historical test for the scope of the Seventh Amendment, many observers see us stuck with an outdated system that uses overburdened juries.

Jim dismantles this argument. Writing with characteristic elegance and insight, he goes beyond Lord Devlin’s well known arguments, and demonstrates more strongly than Devlin ever did that if we look at the actual practice in England in 1791 the complexity exception can be justified. Jim points out that in the late eighteenth century numerous cases in England were decided by arbitrators with specialized knowledge, not by juries. Jim couples this with the undisputed fact that the English at this time also used special merchant juries as well as other special juries for many complex cases, a practice that has faded away in this country. In sum, if we actually adhered to the historical practice approach, juries would be relieved of many complex cases today.

Jim’s book got me thinking about an analogous issue that is much-discussed today. If you ask a modern lawyer about the problem of juries grappling with complex matters, he is likely to say that at least the Daubert decision removes some of those problems. Daubert, as you know, gave the trial judge a gatekeeper function so that he could keep from the jury expert witnesses who were too far out of the mainstream, that is, who were not using reliable scientific methodologies. But Jim’s insights lead us to look more closely at that assertion. Think about it. If a judge finds that an expert, offering (for example) a novel theory about whether a product is toxic, is indeed reliable, the case goes to the jury where it will be confronted with a true nightmare of complexity: the much-feared battle of the experts, which the jury will have to somehow sort out.

And what is a judge doing when he keeps an expert off the stand? The judge is either deciding that the testimony is not reliable, a question that is supposed to involve looking at the presence or absence of peer reviewed publications and other factors that are not themselves necessarily complex. Moreover, as Mike Gottesman has argued in an important article, in some cases the judge in a Daubert hearing may not be able to penetrate the expert’s work, but he keeps the expert off the stand because the judge has decided that the expert is a charlatan, the very sort of classic demeanor-style question that juries are supposed to resolve.

So I’m indebted to Jim for sharpening my thinking in this field, and we are all indebted to him for his outstanding work in this book.

James Oldham, Trial by Jury

Last week, Professor James Oldham participated in a discussion of his new book, Trial by Jury.  This is his explanation of the striking cover image:

This all-woman jury sat on November 2, 1911 to try A.A. King, editor of the Watts News, for having published indecent and obscene language in an issue of his newspaper. According to an article in the Los Angeles Times on November 3, King had printed, verbatim, “hard epithets” used about him by a City Councilman. King testified that he wanted the people of Los Angeles to know what kind of a man the councilman was. The jury clearly approved, deliberating only twenty minutes before returning an acquittal.

Women’s suffrage was granted in California by constitutional amendment in October 1911, and in the month following over 80,000 women in Los Angeles registered to vote. See Rebecca J. Mead, How the Vote Was Won: Women Suffrage in the Western United States, 1868-1914 (New York and London: New York University Press, 2004): 148. Court officials responsible for impaneling juries evidently assumed that eligibility for jury service accompanied the right to vote. For A.A. King’s trial, the Deputy Constable summoned 36 women for jury duty. All 36 appeared, and 12 were chosen (their names appear in the Los Angeles Times article, as does a description of the voir dire). On April 25, 1912, however, the District Attorney of Sacramento County issued an opinion letter pointing out that all references in the California Code to jurors were to men, and that since “the constitutional guaranty of the right to trial by jury is everywhere recognized as only the right to a jury as it existed at common law; that the legislature would have to change the law expressly if it were intended that women be eligible for jury duty.” In 1917, the California legislature amended the law to make women’s jury eligibility official. See Leland Stanford, “Early Women Jurors in San Diego,” The Journal of San Diego History 11 (April 1965): 16.

 

Human Subject Research on Prisoners

Recently, the Institute of Medicine (IOM) published a report, Ethical Considerations for Revisions to the DHHS Regulations for Protection of Prisoners Involved in Research. The Press portrayed the report as a relaxation of the regulatory requirements for conducting biomedical research on prisoners-- which is inflamatory and controversial. The Sunday NY Times published a story implying, although not explicitly stating, that the IOM report could allow grave abuses of prisoners of the kind that routinely occurred before the enactment of federal regulations governing human subject research. The NY Times followed that front page story with an editorial expressing concern with the IOM report. (USA Today had a more favorable editorial). Yet, in most respects, the IOM report tightened, not relaxed, safeguards for prisoner research. I chaired the IOM Committee and to set the record straight, it will be helpful to explain the Committee's charge, as well as provide an accurate account of what the IOM recommended.

The Committee’s task—to review the ethics regarding research involving prisoners—was as challenging as it was important. Research is critically important in providing knowledge needed for informed and enlightened prison policy, as well as for affording health benefits to prisoners. At the same time, research could impose unacceptable risks on prisoners, complicated by serious concerns about the potential for coercion in the prison environment. The history of prisoner research is plagued with illustrations of unconscionable abuses. Getting the balance right between scientifically rigorous research and ethically appropriate treatment of prisoners is vital in a decent, humane society. It was a difficult task in which the Committee had to take account of history, demography, vulnerability, and the realities of prisoner life.

The charge of our Committee, the Institute of Medicine Committee on Ethical Considerations for Revisions to the Department of Health and Human Services Regulations for Protection of Prisoners Involved in Research, was to explore whether the conclusions reached in 1979 by the National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research remain appropriate today. The Commission’s path-breaking report on the ethical values of human subject research resulted in regulation of all human subject research funded by the U.S. Department of Health and Human Services (DHHS). The provisions regarding research on prisoners are contained in Subpart C of the regulations.

Specifically, the Committee was asked to: (1) consider whether the ethical bases for research with prisoners differ from those for research with non-prisoners, (2) develop an ethical framework for the conduct of research with prisoners, (3) based on the ethical framework developed, identify considerations or safeguards necessary to ensure that research with prisoners is conducted ethically, and (4) identify issues and needs for future consideration and study.

Past abuse in biomedical research in prisons has engendered deep distrust among prisoners and their advocates. It is impossible to ignore the historical exploitation of prisoners and their current misgivings about the biomedical research enterprise. The prison population, moreover, has markedly changed since 1979. It is vastly larger in number with disproportionate representation of African Americans, Latinos, persons with mental illness, and other historically disenfranchised populations. Many women and children are also incarcerated in American prisons today. Prisoners are particularly vulnerable to exploitation not only because of their low socioeconomic status, but also due to the realties of prison life. Although conditions are widely variable, overall prisoners are subjected to high levels of coercion (explicit and implicit). The prison environment makes it difficult to assure even minimal standards for ethical research such as informed consent and privacy.   

Given these realities, the easiest thing would have been to recommend a virtual ban on human subject research involving prisoners. Yet, the Committee felt that this would be a mistake. Research affords the potential of great benefit as well as burden. It can help policymakers to make correctional settings more humane and effective in achieving legitimate social goals such as deterrence and rehabilitation. Research can also help policy makers better understand and respond to the myriad health problems faced by prisoners such as HIV/AIDS, tuberculosis, hepatitis C, mental illness, and substance abuse. Respect for prisoners also requires recognition of their autonomy. If a prisoner wants to participate in research, his or her views should be taken into account. The overall goal, then, is to permit scientifically rigorous research to the extent that it confers significant benefit without undue risk and in accordance with the prisoner’s wishes.

The critical question facing the Committee was whether, given all these factors, current federal regulation is ethically sound and has achieved an appropriate balance between scientific knowledge and prisoner vulnerability. Our answer, after an exhaustive study, was an emphatic “no.” Although the ethical principles articulated by the National Commission are still largely apt, the Committee found that the federal system of human subject protection is deficient.

The Committee was surprised and disappointed to find that there were no systematic data sources on the quantity and quality of prisoner research in the United States. Committee members searched the literature and determined there is a great deal of research involving prisoners taking place that appears to be largely unregulated. The most glaring problem is that the federal rules cover only a small fraction of the research being undertaken in prisons. This is because the regulations (45 C.F.R. § 46) do not cover human subject research unless it is funded by a few federal agencies, or the sponsoring institution has voluntarily adopted Subpart C. All of the research supported through other sources (e.g., federal, state, or private) is outside the scope of regulatory protection. Subpart C also only applies to narrowly defined “prisoners,” not including individuals who are under state imposed limitations of liberty but not in traditional prison settings. There appears to be no morally defensible reason for excluding a large number of prisoners from human subject protection, as is currently the case.

The Committee boldly recommends five paradigmatic changes in the system of ethical protections for prisoner research. First, expand the definition of “prisoner” to include a much larger population of persons whose liberty is restricted by virtue of sentence, probation, parole, or community placement. Second, ensure universal, consistent standards of protection so that safeguards based on sound ethical values apply to prisoner research irrespective of the source of funding. Third, shift from a category-based to a risk-benefit approach to defining ethically acceptable research so that prisoners are never exposed to research risks unless there is a distinctly favorable benefit-to-risk ratio. Fourth, update the ethical framework established by the National Commission to include collaborative responsibility—the concept that research should be conducted in meaningful collaboration with the key stakeholders notably prisoners and prison staff. Finally, enhance systematic oversight of research involving prisoners so that human subject protections are more rigorous and more reliable than those that exist under the existing Institutional Review Board (IRB) mechanism.

The treatment of prisoners (both respect for their rights and concern for their health and wellbeing) is a principal measure of a decent and civilized society. It is, therefore, imperative that the executive and legislative branches give due consideration to the proposals in this report.

Women CEO's and Corporate Gender Warfare

by Emma Coleman Jordan

The metaphor of the "glass ceiling" expresses the negative experiences of women seeking the highest leadership positions in the largest corporations in American business today. In my view, a fierce dispute, now in the headlines, within the Hewlett Packard corporation board of directors contains many elements suggestive of corporate gender warfare in Silicon Valley and beyond.

Business as usual or Corporate Gender Warfare?

Today, the Hewlett Packard Corporation finds itself embroiled in a bitter dispute surrounding the firing of one board member and the resignation of another.  In the last few days, a ferocious board fight at HP has spilled into the reports of several national news organizations.  The NYT has this report  and this about the escalating board intrigue at HP.    Board chair, Patrica Dunn has been accused of making use of a variety of private investigative techniques to trace the source of leaks that led to the resignation of former Hewlett Packard CEO,Carly Fiorina in early 2005.    

The NYT reports that the phone records of both board members and reporters were obtained by "pretext".  Pretexting is an investigative technique in which the investigator pretends to be the subject of the investigation in order to obtain the release of private information that would only be available to the subject. 

The two board members who either resigned or were fired are both males.  The primary executives involved in this corporate drama are both women: Carly Fiorina former CEO and Patricia Dunn, Chair of the Board. The California Attorney General has announced an investigation into the charges that Dunn improperly used private investigators to track down leaks from the HP Board.  The AG declared that "a crime" has been committed.  CNN reported that Hewlett Packard stock slid on the news of the  Attorney General 's investigation.  Newsweek has this report on the underlying dispute within the company.

The HP dispute should be viewed in light of the following research findings about the progress of women, including women of color, in roles of corporate leadership. 

In July, Catalyst, a non profit research and advocacy organization devoted to expanding the opportunity for women to achieve positions of corporate leadership issued a report  which tracked women executives in the Fortune 500, and found that most large U.S. companies have made minimal progress in advancing women—and especially women of color—to leadership and top-paying positions over the past decade. Catalyst found that "If this rate of progress continues, it could take 40 years for women to achieve parity with men in corporate officer positions."

The 2005 Catalyst Census of Women Corporate Officers and Top Earners of the Fortune 500 found that in the last three years, average growth in the percentage of corporate officer positions held by women fell dramatically to 0.23 percentage points per year, the lowest yearly gain in the past ten years. Between 2002 and 2005, the total number of women corporate officers increased by a mere 0.7 percentage points to 16.4 percent.  the average Fortune 500 company had 21.8 corporate officers in 2005; on average, women held only 3.6 of these positions. Women occupied only 9.4 percent of clout titles (those higher than vice president), up from 7.9 percent in 2002.

More than one-half of the Fortune 500 had fewer than three women corporate officers. Only eight companies in the Fortune 500 were led by a woman CEO in 2005, and none of those companies were among the Fortune 100. Women held only 6.4 percent of top earner positions, up just 1.2 percentage points from 2002. And fully 75 percent of Fortune 500 companies reported no women as top earners. 
Hewlett Packard, with more than 86 billion in revenues, ranks 11th on the list of Fortune 500 companies. Before her highly contentious resignation in 2005, Carly Fiorina was the only woman CEO in the top 20 of the Fortune 500.

The HP drama unfolding in criminal investigations, search warrants, director firings and resignations offers a fertile field for thinking about the state of gender relations in modern corporate governance.   Do gender conflicts fuel the intensity of the fighting about corporate governance in the highest reaches of American corporate leadership ?

Is the Hewlett Packard controversy an idiosyncratic corporate power struggle, unique to that company?  Or, does the HP board conflict reflect pervasive barriers that women face at the highest levels of corporate decisionmaking? Is it too simple to assume that both women in this dispute were aligned with each other?  Would your analysis change if the two women at the heart of the dispute were in fact corporate antagonists? Does the escalation of conflict within the HP board have anything to do with the power struggles of women seeking to play "hardball" with the boys?  Is this corporate "Thatcherism", in which women executives have to invade the corporate equivalent of the Falklands to show their skill at bare-knuckled corporate infighting?  Was the male accused of leaking playing a male "gender card" by taking corporate confidences public to bring down a woman executive with whom he was engaged in a corporate power struggle that would have ended quietly, but no less bitterly, had she been a man?

Emailed "Lesson Plans" as a Marketing Technique for Business Periodicals

Next, I want to use this occasion to have a relentlessly Socratic conversation about potential ethical conflicts that can arise from the use of emailed "lesson plans" to professors who teach business courses.  Serendipity delivered an emailed "lesson plan" on women in corporate leadership to my inbox just as the HP scandal hit the headlines.  So, I can discuss both issues in a single post

As a faculty member who teaches in the business curriculum (Commercial law: Payments and Secured Transactions; Regulation of Financial Institutions), I frequently receive promotional "lesson plans" from The Wall Street Journal Finance Weekly, and Barron's Weekly. 

In this post, I pass along the following lesson plan and summary of a Barron's Weekly online article "Women Leaders Boast [sic] Profit" for your reflection in light of the prominence of women corporate leaders in the HP board fight.

I want to  raise a question about the nature of faculty relationships with business publications.  The Barron's weekly email "lesson plan" that I received turned out to be a teaser for a paid subscription to the magazine's online edition.  The "lesson plans" that I receive from both The WSJ and Barrons are prepared for what appears to be high school or college level courses by college faculty members, who write the emailed "lesson plans" focused on a single article in the magazine, to illustrate how the publications could be used to teach various hot topic business issues.

  My questions for you are: do you think the dissemination of ready made "lesson plans", built around a single article are an effective marketing strategy to get college faculty to integrate either of these periodicals into their teaching?  What is the obligation of the faculty member using the material offered?  Would it be a violation of academic integrity to fail to disclose to students that the assigned material requires access to a copy of the designated periodical from the library or through a paid student subscription that then becomes the basis for the faculty member to receive a free or reduced rate subscription to the same periodical, if students subscribe as a part of the course.  The Wall Street Journal emails that I receive contain this statement:

"Did you know that we've made it more affordable for your students to subscribe to The Wall Street Journal? For a limited time, students save 80% off regular print and online rates. Plus, you will receive a complimentary one-year subscription when 10 or more students sign up."

In light of the HP controversy, I will use the Barron's lesson plan, with full disclosure of its source, in this blog entry.  Here are the questions, let me know what your answers would be if you were discussing the HP controversy with me in a virtual seminar on the challenges to women in corporate leadership.

Source: email from weeklyreview@barrons.com

"Women Leaders Boast Profit"

"SUMMARY: This article is a positive appraisal of the role of women in corporate leadership roles. It cites several studies which it states correlates female leadership with corporate success. The article identifies and discusses some female-friendly companies as it argues for an increased role for women in leadership spots. The co-authors (two females) believe that organizations that do not use women as their leaders are bound to lose their competitive edge.

QUESTIONS: 1.) What is a competitive edge? How do you gain a competitive edge? How do you lose it?

2.) What is diversity? Should a company incorporate diversity into its organization? Why? Why not? How does one judge if a company is adequately diverse?

3.) What is the "glass ceiling"? Are women still disproportionately absent from top corporate-leadership positions? If so, what are some of the primary reasons?

4.) Are there any examples of foiled female corporate leaders? Are there any examples of successful female corporate leaders? How is failure and success assessed? By whom?

5.) Do male executives lead and manage differently than female executives? How so?

6.) Is there a correlation between boosting the number of female executives and an increased bottom line? If so, what are some reasons for this?

7.) What is Catalyst? What does Catalyst believe about the number and role of women in leadership positions?

SMALL GROUP ASSIGNMENT: How many Fortune 500 companies are headed by women? Who are they and what are the companies? What do you think should be the number of Fortune 500 companies headed by women? What is your rationale? What recommendations do you have for increasing the number of women in leadership positions? Besides gender diversity, what other areas of diversity are there? Who establishes what areas need to be addressed? Should there be a quota system for addressing diversity? Why? Why not?
Reviewed By: Dennis Palkon, Ph.D., MPH, MSW, Florida Atlantic University"

Source: email from weeklyreview@barrons.com

The floor is now open for discussion.

Inequality Debate between NYT Columnists

By Emma Coleman Jordan

In the last two days, economic inequality has been the focus of a heated debate in the New York Times editorial pages.  David Brooks, a thoughtful, but often factually wrong, columnist and Paul Krugman, a Princeton economics professor, and thoughtful progressive columnist, have directly joined issue about the facts and political meaning of  economic and social inequality in America.  Both writers agree, that popular discontent with the economy promises to elevate these issues to general public attention in the coming elections in 2006 and 2008. This spotlight on inequality was completely absent from the 2004 Presidential election debates.

Here are the energetically opposed columns. Brooks, The Populist Myths on Income Inequality. and  Krugman, Whining over Discontent.  I must warn you that you may not be able to access the links, although I saved these in my public access file, if you do not subscribe to the NYT premium content feature, TimesSelect.   Interestingly, neither Brooks, nor Krugman mentions  the other by name.

I am delighted with this increase in the national attention devoted to economic and social inequality because my own work has focused on the issue in recent years, Jordan and Harris, Economic Justice, Race, Gender, Identity and Economics (2005) and a forthcoming book for Russell Sage Foundation, "The Role of Race in Law, Markets and Social Structures", Jordan and Ogletree, Editors, arising from the March 2006 Georgetown-Harvard Conference on Economic and Social Inequality.

The American Prospect, led by Editor Robert Kuttner, is also featuring a pointed debate this month about economic inequality: "Debating The Middle"