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Suing a Corporation Is No Simple Matter : Courts: It may seem like more individuals are winning cases, but the reality is more complex.

October 12, 1994|From Associated Press

NEW YORK — Sometimes it seems like suing a company is guaranteed to make a plaintiff a millionaire.

A secretary is awarded $7.1 million in a sexual harassment lawsuit against the Chicago law firm Baker & McKenzie, although she worked at the firm for just three months.

An 81-year-old woman receives a $2.9-million jury award against McDonald's after suffering third-degree burns from the fast-food chain's hot coffee.

Big awards like these grab big headlines. But the public often hears little about the aftermath--a judge cut the award against McDonald's to $480,000, and the Baker & McKenzie decision is likely to be appealed.

The sense from media reports is that the number of individuals suing companies and winning is increasing and that jury awards--especially in the emotionally charged areas of employment law and product liability--are climbing into the stratosphere.

The reality, however, is more complex.

Yes, juries are sending messages to employers that discrimination and harassment at work are not acceptable. The number of awards is growing. But that's because jury trials and punitive damages in such cases weren't allowed before 1991 amendments to the Civil Rights Act.

"It took time for those cases to make their way through the pipeline," said Christine Carty, a litigator with Schnader, Harrison, Segal & Lewis who works in employment law.

In product liability law, despite some large, well-publicized awards, the number of suits has actually declined since the mid-1980s and consumers are finding juries less sympathetic to their causes, legal experts say.

Furthermore, one in two awards is either reversed or reduced by juries or judges, said Michael Rustad, a professor at Suffolk Law School in Boston.

State courts, which handle about 100 times the case load of federal courts, say that while 18 million new lawsuits are filed each year, less than 2% are tort cases--those involving wrongful acts, injury, negligence or damage.

In federal court, of the more than 200,000 civil suits filed, only about 6% are product liability cases.

And product liability filings in federal courts, with the exception of asbestos cases, declined by about 36% between 1985 and 1991, according to the American Bar Assn. All tort filings fell by about 20%, also excluding asbestos cases, over the same period.

But in discrimination and harassment cases, the changes in the Civil Rights Act have prompted individuals and lawyers to file more suits, said Ronald Green, a partner at Epstein Becker & Green, a firm that represents many companies.

In addition, Anita Hill's accusations against Clarence Thomas during his 1991 Supreme Court confirmation hearing have helped make the public more aware of sexual harassment, he said.

In 1989, the Equal Employment Opportunity Commission and local Fair Employment Practices Agencies received 5,623 charges of sexual harassment, while projections for this year are running at almost 14,000.

Meanwhile, through the third quarter, the EEOC received 66,000 charges of employment discrimination based on race, sex, age, disability, national origin and other grounds.

Few of those charges actually make it to trial, with most being settled before lawyers are even contacted and others settled before a trial date is set.

Still, once a case makes it to court, the stakes are high, Green said. Companies are often unwilling to settle in the hopes of discouraging other such actions, while plaintiffs who prevail can receive awards running into six figures, he said.

Although some observers have charged that many cases are often frivolous, with employees lured by dollar signs, Green said that is not usually the case.

Lawyers, whose compensation is often based on whether they succeed, will usually bring only the cases they think they can win.

Moreover, for plaintiffs, litigation is often lengthy and costly. And it's increasingly intrusive--a plaintiff's sex life can become part of public record, a considerable deterrent to frivolous suits.

"Anyone bringing a harassment or discrimination suit should be prepared for possible character assassination," said Philip Kay, a San Francisco lawyer who won the California state court jury decision against Baker & McKenzie.

Filing suit against a company can also do serious damage to a person's future chances of employment if the case is lost, Green said. Lawyers for the defendant may try to prove a plaintiff is mentally incompetent, for example.

But juries have a greater understanding than they used to of the issues involved, said Gordon Griller, court administrator in Phoenix.

In particular, "women are more aware of their rights than ever before," said Denise Hummel, a Boulder, Colo., lawyer who specializes in employment law.

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