U.S. Department of Justice Office of Justice Programs Bureau of Justice Statistics Bulletin April 2000, NCJ 179451 Contract Trials and Verdicts in Large Counties, 1996 ------------------------------------------------------------------- This report updates Contract Cases in Large Counties: Civil Justice Survey of State Courts, 1992. This file is text only without graphics and many of the tables. A Zip archive of the tables in this report in spreadsheet format (.wk1) and the full report including tables and graphics in .pdf format are available from: http://www.ojp.usdoj.gov/bjs/abstract/ctvlc96.htm. This report is one in a series. More recent editions may be available. To view a list of all in the series go to http://www.ojp.usdoj.gov/bjs/pubalp2.htm#ctvlc ------------------------------------------------------------------- By Lea S. Gifford Carol J. DeFrances, Ph.D., and Marika F. X. Litras, Ph.D. BJS Statisticians ---------------------------------------------------------------- Highlights * In 1996 an estimated 4,850 contract cases were disposed of by trial in State courts in the Nation's 75 largest counties. Sixty-one percent of contract cases were decided by a judge and 36% by a jury. * The most common type of contract trial case involved an individual suing a business (34%), followed by a nonindividual (an organization) suing a business (26%). In 18% of the contract cases an individual sued another individual. * Plaintiffs were seeking payment owed to them (seller plaintiff) in over half of the contract lawsuits brought by construction companies (71%), banks (68%), sellers of goods (58%), sellers of services (54%), and manufacturers (53%). * Plaintiffs won 62% of contract trial cases. They were more likely to win cases decided by a judge (68%) than by a jury (56%). * Jury trial awards: Juries awarded a median of $80,000 in final award amounts to plaintiff winners in contract cases. Plaintiffs won 48% of employment discrimination cases disposed of by jury trial and were awarded a median final award amount of $250,000. The median final award amount for seller plaintiff winners was $62,000. * Bench trial awards: Half of the plaintiff winners in contract cases disposed of by bench trial were awarded final amounts of $25,000 or more. The median final award for plaintiff winners in fraud cases disposed of by bench trial was $32,000, in rental/lease cases it was $28,000. ----------------------------------------------------------------- In 1996 State courts of general jurisdiction in the Nation's 75 largest counties disposed of approximately 15,638 tort, contract, and real property rights cases by jury or bench trial. Contract cases accounted for about a third of all trial cases disposed. This report provides an in-depth examination of contract cases decided by a jury or judge in the Nation's 75 largest counties. For purposes of this report, contract disputes involve fraud, employment discrimination or dispute, tortious interference, or allegations of unfulfilled agreements between buyers and sellers, lenders and borrowers, or landlords and tenants. ***Footnote 1: Tortious interference cases are tort claims arising out of contractual disputes.*** This report is the second in a series based on data collected from the Civil Justice Survey of State Courts, 1996. The first report of the series, Civil Trial Cases and Verdicts in Large Counties, 1996 (NCJ 173426), provided a general overview of tort, contract, and real property cases decided by jury or bench trial. The sample of civil cases excluded cases that did not go to trial, trials in Federal courts, trials in State courts of limited jurisdiction, and trials in counties outside the 75 largest. Types of cases and dispositions Cases involving contract disputes comprised 31% of all tort, contract, and real property rights trial cases disposed of in general jurisdiction courts in the Nation's 75 largest counties. The most frequent type of contract dispute involved a seller plaintiff seeking compensation from a buyer or borrower (34%), followed by buyer plaintiff (17%) and fraud (14%) (table 1). Of the approximately 4,850 contract cases tried in 1996, 61% were decided by a judge, 36% by a jury. The remaining 3% were disposed of by directed verdict, judgment notwithstanding, or jury verdicts for defaulted defendants. (See page 13 for definitions.) Types of litigants The approximately 4,850 contract trial cases in the Nation's 75 largest counties involved over 15,800 litigants about 6,300 plaintiffs and 9,500 defendants). About 22% of all contract trial cases involved multiple plaintiffs, making an overall average of 1.3 plaintiffs per case. About half of the contract trial cases involved more than one defendant. There were on average two defendants per case (not shown in table). General jurisdiction courts decided slightly more than 5 contract trial cases per 100,000 residents of the 75 counties (not shown in table). In more than half of the contract trial cases disposed of, the primary plaintiff was an individual (not shown in a table). A business was the plaintiff 43% of the time. About two percent of the contract trial cases involved a hospital or government as plaintiff. A business was the defendant in 63% of contract trial cases, an individual in 32%, a government in nearly 4%, and a hospital in about 1%. ***Footnote 2: Litigant type for each case is whichever type appears first in this list: (1) hospital medical organization, (2) business, (3) government agency, (4) individual. For example, a case involving a hospital plain- tiff is categorized as a hospital plaintiff case even if there were also business, individual, or government plaintiffs.*** Individuals were buyer plaintiffs (23%) more often than were businesses (10%). Individuals also were more often the plaintiffs in fraud cases (17%) than were businesses (10%). Businesses were seller plaintiffs (51%) more often than were governments (15%) or individuals (20%) (table 2). Individuals were the most likely defendants in seller plaintiff contract trials (46%). Businesses were the most likely defendants in buyer plaintiff trials (23%). Governments were more likely than individuals, businesses, or hospitals to be the defendant in employment discrimination contract trials. Business plaintiffs and defendants In 1996 businesses were plaintiffs in 2,091 contract trial cases in the Nation's 75 largest counties. Over half of the contract lawsuits brought by construction companies (71%), banks (68%), sellers of goods (58%), sellers of services (54%), and manufacturers (53%), were those in which a business was seeking payment from a buyer or borrower (seller plaintiff) (table 3). Fifty-six percent of the contract cases brought by real estate development companies involved rental/lease agreement cases. About a quarter of the contract lawsuits initiated by insurance companies involved fraud and an additional third involved seller plaintiff cases. Businesses were named as defendants in 3,051 contract cases in 1996. Fifty-seven percent of the cases that involved an insurance company as defendant were buyer plaintiff cases, in which a purchaser of goods or services, seeks return of their money, recision of the contract or delivery of the specified goods. About a third of the contract lawsuits brought against construction companies (37%), sellers of goods (37%), and real estate development companies (33%) were seller plaintiff cases. More than half of the cases in which manufacturers were named as defendants were seller plaintiff (28%) or employment discrimination (28%) cases. Primary litigant pairings Individuals sued businesses in 34% of all contract cases, including 44% of fraud cases, 58% of buyer plaintiff cases (table 4), and 64% of employment discrimination cases (not shown in a table). Individuals sued other individuals in 18% of all contract cases, including 23% of fraud cases and 30% of rental/lease agreement cases (not shown in a table). Nonindividuals (businesses, governments, or hospitals) sued individuals in 13% of all contract cases, including 24% of seller plaintiff cases. Nonindividuals sued businesses in 26% of all contract cases. Plaintiff winners and awards Plaintiffs won about 62% of contract cases disposed of by trial in the Nation's 75 largest counties during 1996 (table 5). Overall, plaintiffs won more often in contract cases decided by a bench trial (68%) than a jury trial (56%). Plaintiffs were more likely to win in seller plaintiff, rental lease, and buyer plaintiff cases decided by a judge. In employment discrimination cases, however, plaintiffs won more jury trials (48%) than they did bench trials (26%). Approximately 3,000 plaintiff winners received a total of $919 million in final awards. Half of the plaintiff winners received final awards of $37,000 or more. Six percent (189 cases) of the plaintiff winners were awarded punitive damages totalling about $174 million. Half of these plaintiff winners received $40,000 or more. Although plaintiffs won more often in bench trials, plaintiffs won larger award amounts in jury trials. Plaintiff winners in jury trials received median final awards of $80,000 compared with median awards of $25,000 in bench trials. Plaintiffs who won employment discrimination cases were awarded total final award amounts of $52.5 million by juries compared to $1.5 million by judges in bench trials. Trial awards by litigant pairings Nonindividuals (businesses, governments, or hospitals) who sued individuals won 73% of contract trials during 1996 (table 6). They won 69% of contract trials against businesses. Individuals won 64% of contract trials brought against other individuals, compared to 55% of contract trials brought against businesses. The median final award to nonindividual plaintiff winners who won suits against businesses was $47,000. Punitive damages were awarded in an estimated 21 out of 1,245 cases in which a nonindividual sued a business. The median punitive damage award was $61,000. In the 75 largest counties in 1996, juries and judges awarded an estimated $211 million to individual plaintiff winners who successfully sued businesses. Half of these individual plaintiff winners were awarded $41,000 or more. Punitive damages were awarded in an estimated 104 cases in which an individual sued a business. The median punitive damage award was $49,000. Among specific types of cases in which an individual sued a business, the individual won in two-thirds of seller plaintiff (66%) and rental/lease cases (66%) (table 7). Half of the individual plaintiff winners who brought employment discrimination cases against businesses were awarded $272,000 or more. In 52% of these employment discrimination cases, the final award was over $250,000 and in 16% of the cases, it was $1 million or more. Nonindividuals suing businesses won in 77% of both fraud and seller plaintiff cases. The median final award to nonindividual plaintiff winners in fraud cases was $64,000 and in seller plaintiff cases $40,000. Thirty-six percent of the nonindividual plaintiff winners in tortious interference cases won final awards over $250,000, and 19% won final awards of $1 million or more. Case processing time Half of contract cases decided by a jury took 23 months or less to go from filing of the complaint to final verdict or judgment, compared to about 17 months or less for bench trials (table 8). Juries disposed of 54% of the contract cases in less than two years, and judges about 72%. The longest processing time for a contract case recorded in the sample was 145 months (table 9); in that case an individual sued another individual. Among cases in which an individual sued a business, the case with the longest processing time from filing of the complaint to final verdict or judgment was about 100 months. Jury trials for contract cases lasted about 6 days on average compared to about 2 days for bench trials. Among jury trials, employment discrimination trials were the longest, averaging about 9 days, while mortgage foreclosures were the shortest, averaging about 3 days (not shown in a table). Contract cases tried in Federal courts, 1996 * Contract cases can be filed in U.S. district court when (1) the U.S. government is a plaintiff, (2) the U.S. government is a defendant, (3) the case constitutes a Federal question, or (4) the citizenship or state residency of the litigants differ. * During 1996 about 33,000 contract cases were terminated in U.S. district courts. About 3% of these were terminated by a jury or bench trial. * Contract cases related to insurance issues accounted for about 29% of contract trial cases disposed of in U.S. district courts during 1996. * More than 9 in 10 contract cases disposed of by trial in U.S. district courts were between private parties. The U.S. Government (as either plaintiff or defendant) was involved in about 5% of cases. * A jury decided 47% of contract trial cases disposed of in U.S. district courts during 1996. Insurance related contract cases were more likely to be decided by a jury (59%) relative to other types of contract cases. * Plaintiffs won about 56% of contract cases disposed of by trial in U.S. district courts during 1996. Plaintiffs were successful in 48% of insurance related trials. Plaintiff winners were awarded monetary damages in 78% of contract cases disposed of by trial in U.S. district courts, with monetary damages totaling $459 million. The median award was $143,000. Contract cases terminated in U.S. district courts, 1996 Federal contract cases terminated 33,094 Jury or bench trials 849 (3% of 33,094) Non-trial cases 33,253 (98% of 33,094) Plaintiff winner 417 (56% of 750 known cases) Monetary awards 326 (78% of 416 known cases) Contract trials with final awards of $1 million or more * Plaintiffs won $1 million or more in 138 contract trial cases in the Nation's 75 largest counties during 1996. A jury decided 76% of these cases. * A business was the plaintiff winner in 56% of the $1 million or more cases, and an individual was the plaintiff winner in 43%. About 39% of these cases involved more than one plaintiff winner. * Punitive damages were not awarded in the majority (81%) of the cases in which a plaintiff was awarded $1 million or more in total damages. * Plaintiff winners were awarded $1 million or more in 20% of fraud cases and 19% of seller plaintiff cases. Contract trials in which a defendant won * In cases with claims and counterclaims, the distinction between plaintiff and defendant becomes less clear. It is possible that one party originally named as a defendant counter sues the plaintiff and actually wins damages. * In 5% of the 4,850 contract trial cases, the defendant won on a counterclaim. Neither the plaintiff nor the defendant won in 33% of the cases, while plaintiffs won 62% of the contract cases. * Fifteen percent of the defendant winner cases involved a buyer plaintiff countersuit, and 14% involved a rental/lease agreement countersuit. * Defendants in contract cases won an estimated $83 million in compensatory and punitive damages. The median award amount was $20,000. About 12% of the defendants winning damages in a countersuit won more than $250,000. Punitive damages totalling $2.5 million were awarded to 14 defendant winners in contract trials. Thirteen of these were decided by a jury. Comparison of 1992 and 1996 jury trial contract cases * In 1992 jury trials in the Nation's 75 largest counties disposed of almost 2,200 contract cases compared to about 1,700 in 1996. This decrease in the overall number of jury contract cases, however, was not statistically significant. * Overall, plaintiffs were more likely to win in contract cases in 1992 (63%) than in 1996 (56%). Among specific types of contract cases, plaintiffs were more successful in buyer plain-tiff and rental/lease cases in 1992 compared to 1996 (not shown in table).(*For a complete listing of final award and punitive damage amounts by county, see Civil Trial Cases and Verdicts in Large Counties, 1996, NCJ 173426.) * Individuals suing other individuals in contract disputes were more likely to win in 1992 (69%) compared to 1996 (57%). The median final awards for these individual plaintiff winners, however, were similar for the two time periods ($42,000 in 1992 and $47,000 in 1996). * In 1996 nonindividual plaintiffs were just as successful whether they sued an individual (58%) or a business (57%). In 1992 nonindividual plaintiffs were more likely to win in contract disputes involving individuals (82%) compared to businesses (66%). * In 1996 juries in the 75 largest counties awarded over $570 million to plaintiff winners in contract cases compared to $915 million in 1992. Methodology Disposition type definitions: Jury trial: A trial held before and decided by a jury of laypersons and presided over by a judge culminating in a verdict for the plaintiff(s) or defendant(s). Bench trial (non-jury trial): A trial held in the absence of a jury and decided by a judge culminating in a judgment for the plaintiff(s) or defendant(s). Directed verdict: In a case in which the party with the burden of proof has failed to present a prima facie case for jury consideration, a trial judge may order the entry of a verdict without allowing the jury to consider it, because, as a matter of law, there can be only one such verdict. Judgment notwithstanding the verdict: ("JNOV" Judgment non obstante veredicto) A judgment rendered in favor of one party notwithstanding the finding of a verdict in favor of the other party. Jury trials for defaulted defendants: Some states make provisions for a jury to be empaneled even if the defendants in a case fail to appear and enter a defense. The purpose of a trial is to decide issues such as amount of damages. See Florida Rules of Civil Procedure, Rule 1.500, section (e). Contract case type definition: Contracts: Cases which include all allegations of breach of contract. Specific case types include seller plaintiff (sellers of goods or services, including lenders, seek payment of money owed to them by a buyer, including borrowers); buyer plaintiff (purchaser of goods or services seeks return of their money, recision of the contract, or delivery of the specified goods); mortgage contract/foreclosure (foreclosures on real property, commercial, or residential; because the title to real property is transferred to the lender if the claim is successful it could be included under real property cases); fraud (financial damages incurred due to intentional or negligent misrepresentation regarding a product or company; also considered a type of tort claim, but because it arises out of commercial transactions, it was included under contracts); employment discrimination (claim against an employer for unfair treatment or denial of normal privileges due to race, gender, religion, age, handicap and/or nationality); other employment dispute (claim against an employer for wrongful termination not based on discrimination or by the employer or the employee claiming contractual failure of the other party); rental/lease agreement; tortious interference with a commercial or contractual relationship (this tort consists of four elements: existence of a valid contract, defendant's knowledge of that contract, defendant's intentional procuring of breach of that contract and damages); and other contract claims (any contractual dispute other than the case categories used in this study such as partnership claims, stockholder claims, and subrogation issues). Source: Definitions were developed by the National Center for State Courts through consultation with NCSC Staff Attorneys, law professors, and from Black's Law Dictionary. Sample The sample design for the 1996 civil trial study was the same one used for the 1992 civil jury study. The sample is a 2-stage stratified sample with 45 of the 75 most populous counties selected at the first stage. The 75 counties were divided into 4 strata based on civil disposition data for 1990 obtained through telephone interview with court staff in the general jurisdiction trial courts. Stratum 1 consisted of the 14 counties with the largest number of civil case dispositions. Every county in stratum 1 was selected for the sample. Stratum 2 consisted of 15 counties with 12 chosen for the sample. From strata 3, 10 of the 20 counties were selected. Nine of the 26 counties in stratum 4 were included in the sample. The second stage of the sample design involved generating lists of cases that would be subsequently coded. Prior to drawing the 1996 case sample, each participating jurisdiction was asked to identify a list of cases that had been disposed by jury trial or bench trial between January 1, 1996 and December 31,1996. Trial cases were to meet the definitional criteria for jury and bench trials as defined in Black's Law Dictionary: (1) A jury trial was defined as "a trial held before and decided by a jury of laypersons and presided over by a judge culminating in a verdict for the plaintiff(s) or defendant(s)," and (2) A bench trial was defined as "a trial held in the absence of a jury and decided by a judge culminating in a judgment for the plaintiff(s) or defendant(s)." Cases that did not meet these definitional criteria were not to be included in the jury and bench lists. The study plan was to obtain approximately 300 jury and 300 bench cases from the court of general jurisdiction in each of the counties selected for the study. In courts that reported approximately 300 or less jury or bench trials, all trials were to be coded. In courts that reported more than 300 jury or 300 bench trials, a list of cases was to be provided to project staff and a random sample of 275 drawn from the jury and bench trial case list. For jury and bench case lists in which the case type was known, any remaining medical malpractice, professional malpractice and product liability cases not initially selected were to be included in the sample in order to oversample these case types. At the second stage of sampling for jury cases, all tort, contract, and real property rights cases disposed by jury verdict between January 1, 1996 and December 31, 1996 were selected in 39 jurisdictions. In the 3 jurisdictions where the total number of jury cases disposed exceeded 300 and where case type could be identified, a random sample of about 275 cases was drawn from a list of tort, contract and real property jury trials provided by the court. Any remaining medical malpractice, professional malpractice and product liability cases not initially chosen in the initial sample also were included. In the 3 jurisdictions where the total number of jury cases disposed exceeded 300 and case type could not be identified, a random sample of about 275 cases was selected from the list of jury trials. At the second stage of sampling for bench cases, all tort, contract, and real property rights cases disposed by bench verdict between January 1, 1996 and December 31, 1996 were selected in 41 jurisdictions. In the 1 jurisdiction where the total number of bench cases disposed exceeded 300 and the case type could be identified, a random sample of about 275 cases was drawn from a list of tort, contract and real property bench trials. Any remaining medical malpractice, professional malpractice and product liability cases not initially chosen in the random sample also were included. In the 3 jurisdictions where the total number of bench cases disposed exceeded 300 and case type could not be identified, a random sample of about 275 tort, contract and real property rights cases were selected from the list of bench trials. During the coding process in all sites, it was discovered that some courts included in their list some jury and bench trials that did not meet the study definitional criteria of a trial. These cases that did not meet the study criteria were excluded from the data base. By excluding cases that did not meet the study criteria, some jurisdictions in which sampling was utilized have final sample sizes of less than 275 cases. Data on 6,713 civil jury trial cases and 2,312 civil trial bench cases that met the study criteria were collected in the 45 courts. The final sample consisted of 9,025 tort, contract and real property rights case disposed of by jury or bench verdict. Populations of jury and bench trials In jurisdictions where second stage case sampling was not used, the populations of jury and bench trials reported were based on applying the study criteria in each site and excluding cases that did not meet the study definitions. In the jurisdictions where second stage sampling was used, the true population of trial verdicts according to the study definitions could not be known. It was impossible to know the number of cases that failed to meet the definitional criteria of a trial among the cases that did not make it into the sample. The true population within each of these jurisdictions, therefore, was estimated by applying the same rejection rate generated from the selected sample after it was coded. For example, Orange County reported 340 jury trials in 1996. A random sample of 275 cases was chosen and when coded according to study criteria produced 221 jury trial verdicts. This translates into a rejection rate of 20% of the cases since 20% did not meet the definitional criteria of a jury trial. Applying this rejection rate to the original list of 374 jury trial cases provided by the jurisdiction resulted in an estimated population of 301 jury trials. Sampling error Since the data in this report came from a sample, a sampling error (standard error) is associated with each reported number. In general, if the difference between 2 numbers is greater than twice the standard error for that difference, there is confidence that for 95 out of 100 possible samples a real difference exists and that the apparent difference is not simply the result of using a sample rather than the entire population. All differences discussed in the text of this report were statistically significant at or above the 95 percent confidence level. Data recoding and unobtainable information For each sampled case, a standard coding form was manually completed by on-site court staff to record information about the litigants, case type, processing time and award amounts. Information for which data were not available or collected included the cost of litigation for the parties involved, as well as for others; the actual disbursement of awards; and the number of cases appealed. The Bureau of Justice Statistics is the statistical agency of the U.S. Department of Justice. Jan M. Chaiken, Ph.D., is director. This BJS Bulletin presents the second release of findings in a series of reports from the Civil Justice Survey of State Courts, 1996. Lea S. Gifford, Carol J. DeFrances, and Marika F.X. Litras wrote this report. Kevin J. Strom provided statistical review. Data collection was supervised by the National Center for State Courts (NCSC); David B. Rottman and Brian J. Ostrom were the project co-directors. John Goerdt, formerly with the NCSC, was the initial project director. David B. Rottman and Neil LaFountain of the NCSC provided comments. Neil LaFountain also provided data assistance. Tom Hester produced and edited it. Jayne Robinson administered final production. April 2000, NCJ 179451 This report and others from the Bureau of Justice Statistics, as well as graphical figures and spreadsheets, are available through the Internet http://www.ojp.usdoj.gov/bjs/ --------------------------------------------------------------- Data from the Civil Justice Survey of State Courts, 1996 (ICPSR 2883) can be obtained from the National Archive of Criminal Justice Data at the University of Michigan, 1-800-999-0960. The archive can also be accessed through the BJS website. End of file 3/27/00 ih