DAMAGES
Part II
In re Estate of Ferdinand E.
Marcos Human Rights Litigation
U.S. District Court, Hawaii (1995)
Background
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Marcos was President of Philippines beginning in 1965
Philippines Constitution contained a two-term limit like
the U.S. Constitution
About a year before he would have to leave office, he
suspended the Constitution and declared martial law
through Proclamation 1081, with the official purpose
stated as:
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“To maintain law and order throughout the Philippines, prevent
or suppress all forms of lawless violence as well as any act of
insurrection or rebellion and to enforce obedience to all the laws
and decrees, orders and regulations promulgated by [Marcos]
personally or upon [his] direction”
Background
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Proclamation 1081 set the stage for the dictatorship that
developed thereafter, and resulted in “acts of torture,
summary execution, disappearance, arbitrary detention,
and numerous other atrocities”
Jury found defendants (Marcos’ estate) liable to 10,059
plaintiffs, awarding them $1.2 billion in exemplary
damages
Compensatory Damages
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Plaintiffs wanted to use random sample of
plaintiffs to represent the damages
suffered by the class
Defendants claimed this deprived them of
due process and the 7th Amendment right
to trial by jury
Dannemiller’s Plan (Kish Formula)
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Universe: 9,541 valid claims, separated into 3
categories:
1) torture victims
2) summary execution victims
3) disappearance victims
Sample: 137 randomly selected claims
Confidence level: 95%
Each sample plaintiff would receive the individual
amount calculated, while those in the remaining
population would each receive the average amount for
their category, as calculated from the sample
Method
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Special Master was appointed to:
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Supervise depositions of sample plaintiffs
Serve as expert on damages, reviewing
deposition transcripts and claim forms
Make recommendations on compensatory
damages for the 137 claimants as well as
remaining class members to the jury
Method
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Special Master reviewed the depositions for:
1) whether the abuse claimed fell under the
definitions which the jury used at the liability phase
(torture, summary execution, and
disappearance)
2) whether the Philippine military or paramilitary
was involved in such abuse
3) whether the abuse occurred between September
1972 and February 1986
Results
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137 randomly selected plaintiffs
 67 torture victims
 52 execution victims
 18 disappearance victims
Special master recommended an amount of damages for
each category, but jury didn’t have to accept it
Jury returned verdict for total of over $766 million (about
$1 million less than Special Master recommended)
Damages for Torture
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Ranked each claim from 1-5, with 5 being the worse in terms of abuse and
suffering
Special Master found the claims were similar enough within each of these
categories that he could recommend a standard damage amount to each
victim within that grouping
Evaluations included considerations of:
1) physical torture
2) mental abuse
3) amount of time torture lasted
4) length of detention if applicable
5) physical and/or mental injuries
6) victim’s age
7) actual losses (i.e. medical bills)
Damages for Summary Execution
and Disappearance
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Factors in determining damages included:
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Whether there was any torture first
The actual killing or disappearance (wrongful death)
Family’s mental anguish
Loss of earnings
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Cap of $120k maximum
None for victims who didn’t work
When witness didn’t provide an amount, the average for the
victim’s occupation was used
Due Process Issue
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Right of defendant to try every single claim
versus efficiency and practicality
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Trying each of the plaintiffs in this case would take
decades
Due process goes both ways
Court concludes that “inferential statistics with
random sampling produces an acceptable due
process solution to the troublesome area of
mass tort litigation”
Due Process Issue
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Court uses the balancing test used in Mathews v.
Eldridge to help decide this issue:
1) Private interest affected
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Liability has already been determined, so it’s really just the amount
of damages paid out
Each plaintiff still has to prove their claim
2) Risk of erroneous deprivation of that interest through the
procedures used
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Weighs in favor of the statistical method because the verdict would
probably have been MORE in a one-on-one trial
3) Government’s interest
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One-on-one trials would be much more burdensome on the Court in
terms of time and cost; maybe some claims would never even get
determined
Due Process Issue
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One of the primary purposes of due
process is to maximize accuracy
Common assumption that awarding
nonsample plaintiffs the mean damages
award from the sample will under- or
overcompensate many people with respect
to the “right” amount they would get in an
individual trial
Due Process Issue
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What is the “right” damages award?
Saks and Blanck suggest the concept of the correct damages
amount is an illusion
“Every verdict is itself merely a sample from the larger population of
potential verdicts”
In traditional cases by accepting only one verdict, we’re therefore
accepting some likelihood of error
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So individualized trials substitute one type of error for another
By conducting “mini-trials” and awarding the average to the rest of
the class by subgroup, we may be ensuring better accuracy than we
could by conducting all individual trials
Note: the more different the individual cases, the less accuracy
benefits
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This can be countered to some extent by choosing larger samples, or by
increasing stratifications
Seventh Amendment Issue
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Seventh Amendment “was designed to preserve the
basic institution of jury trial in only its most fundamental
elements, not the great mass of procedural forms and
details…”
Jury determined all the facts during the liability phase;
no need to repeat them in the claims phase
The rules of evidence and procedure were followed
The Tort Victim Protection Act which this case arises
under doesn’t discuss the determination of damages, so
the court is left with the discretion to create federal
common law to deal with the issue
In re Chevron U.S.A., Inc.
U.S. Court of Appeals, 5th Circuit (1997)
Background
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Chevron used the land in question during the
1920s for a crude oil storage waste pit
Plaintiffs allege Chevron didn’t secure the land
after they stopped using it, allowing waste to be
deposited there
Chevron then allegedly sold the land for
residential purposes knowing it was
contaminated
Plaintiffs sued for personal injury and property
damages resulting from the hazardous materials
“migrating into the environment”
Trial Plan
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“Bellwether” trial
30 plaintiffs
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15 chosen by plaintiffs
15 chosen by defendants
All adults (unless part of a household represented by an
adult)
Each chosen individual counts as a single plaintiff
Focus on the individual claims of the selected plaintiffs
and the issue of liability of defendant for pollutants
giving rise to all of the plaintiffs’ claims
Bellwether verdicts would be matched to the remaining
claims for settlement purposes
Weaknesses
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How does resolving the claims of these 30 plaintiffs
resolve the claims of the other 2970?
What variables exist that impact the claims?
Chevron believed the majority of plaintiffs sustained no
injuries and developed no serious health problems
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Also believed that the class was extremely heterogeneous
Contrast to plaintiff’s bellwether selections, which suggested that
at least half of all plaintiffs were seriously ill
Court decides this is not a legitimate “bellwether trial”
because the 30 people chosen are not representative of
the 3000 member group of people
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Misses all but the most extreme cases
Dr. Frankiewicz’s Findings
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This self-selected sample is not representative of
population of plaintiffs
The average number of medical complaints per
plaintiffs chosen by plaintiffs’ counsel is nine,
exceeding the average number within the entire
plaintiff population by 333%
The medical complaints of plaintiffs chosen by
plaintiffs’ counsel exaggerate the average
severity of the entire class by at least 500%
How to Correct the Method
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To be valid, the sample must be:
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Randomly selected
Of sufficient size
To achieve statistical significance
To the desired level of confidence
Stratified random sample, as used in In re
Marcos, would have been preferable
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Assuming that the universe is sufficiently
homogenous to be able to create effective
stratifications
Holding
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While this trial plan was invalid, a trial court can
potentially use a bellwether trial of legitimately
selected, representative plaintiffs and apply
those results to the issues relating to the rest of
the class of plaintiffs
The verdicts for the selected plaintiffs are valid,
but under this structure those verdicts can’t be
used to make any inferences with respect to the
nonselected plaintiffs
Holding
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Before a court can apply results from a
bellwether trial to a use outside of those
particular cases, it has to find that the
bellwether cases are representative of the larger
population of cases
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Such finding must be based on solid statistical
evidence identifying the variables involved
Must have large enough sample to provide a high
enough level of confidence in the accuracy of the
results
Open Questions (Jones’ Dissent)
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Even if a proper bellwether trial does
increase accuracy, could it still be
unconstitutional?
What about due process for the nonbellwether plaintiffs?
What effects do these nontraditional
methods have in the future, when the
findings may be reassessed?