The clever manipulation of the jury system by a highly selective screening of jurors is increasingly a matter of concern for those who seek justice. The careful exclusion of churchgoers, property owners, housewives, etc., in the Morgentaler trial in Toronto was effective in obtaining an acquittal. Though a new trial has been ordered, it was not on the grounds of jury selection.
A recent court case in Texas has demonstrated to the financial world that it, too, is at the mercy of a specially-selected jury. Such a jury has brought Texaco, the third largest oil company in the U.S.A. to the brink of bankruptcy.
Three major oil companies are involved: Texaco, Getty and Pennzoil which is based in Houston, Texas. In January 1984, Getty made a verbal agreement to sell 40 per cent of its stock to Pennzoil. Two days later Getty accepted a better offer for a complete take-over from Texaco. As a consequence Pennzoil sued, not Getty for breaking the agreement, but Texaco for “wantonly and maliciously” inducing Getty to break the agreement. The key issue was whether there was any binding agreement between Pennzoil and Getty prior to Texaco’s involvement.
The case, which took four and a half months, came before the court in the latter half of 1985. The Pennzoil lawyer admitted to reporters that he deliberately sought jurors who had no expertise in corporate law. Instead, he chose people who regularly attended church, and would be more receptive to his arguments that in Texas it was a tradition to close a business deal with a handshake. His arguments also played on the loyalty of the Houston hometown jury in setting a local Houston company against giant New York corporations.
The jury retired, and it was expected that if Texaco were found liable the damages would be around $500 million, and at the very most $1 billion, which was the amount that business analysts calculated Pennzoil might have lost. It is a principle of American contract law that a plaintiff should “emerge ‘whole’ from a breach of contract, but should not be enriched by it”.
When the jury returned they completely stunned the legal experts, investment bankers and the U.S. business world by awarding $10.53 billion in actual and punitive damages. Texaco’s net worth is estimated at only $13.5 billion, and therefore, the company faces bankruptcy. The foreman of the jury said “we learned quite a lot about the oil industry” and added that they wanted to send a message to corporate America. Juries seem fond of sending messages. The Morgentaler jury was asked to send a message to Parliament. The message sent about Texaco may well have bankrupted a major company, and harmed its 300,000 stockholders and 55,000 employees.
In December 1985, a Texas judge refused to overturn the verdict. Naturally Texaco can appeal to the Supreme Court but the process could take up to two years. Meanwhile, according to Texas law, a defendant must post a bond covering not only damages but the interest which will accrue, and for Texaco that meant a bond of almost $12 billion. Meanwhile, a further appeal was made and on January 11th, 1986, a U.S. federal judge ruled that Texaco should not have to put up more than $1 billion. Judge Brieant said that Pennzoil should not have been awarded any more than $800 million in damages. He added in his written opinion “The concept of posting a bond of more than $12 billion is just so absurd, so impractical and so expensive that it hardly bears discussion.
Texaco is petitioning for a new trial, arguing that there were over 300 errors in the first.
The jury system was intended to be one in which a man (or company) was judged by a group of his peers selected at random. Under adept manipulation of a jury-selection system, a jury deliberately chosen to be non-experts in the subtleties of corporate law sent a costly ($10.53 billion) message to American corporations. By the use of highly-sophisticated screening methods a jury was chosen, as in the Morgentaler case, which would respond to the defence counsel’s arguing to ignore the law, and send a message to Parliament.
