Host Sean Harris talks with OAJ member, Jim Murray, about curative damages and restorative justice. Jim provides insight and tips on how to incorporate these philanthropic initiatives into your practice.
Sean: Hello and welcome to Civilly Speaking, OAJ’s monthly podcast on practical and timely legal issues, I’m your host Sean Harris. Our guest today is Jim Murray with the firm of Thomas J. Murray and Associates in Huron, Ohio. Jim thanks very much for joining us here on Civilly Speaking.
Jim: Thank you Sean. I appreciate the opportunity and I want to thank OAJ for this chance to speak with you and your members today.
Sean: Are topic today is one that a lot of lawyers may not be familiar with and that is the concept of restorative justice and curative damages. Let’s start right from the beginning Jim, what are curative damages?
Jim: So the concept of curative damages is a paradigm shift. It’s looking at it in a more holistic and positive sense. The idea that the discussion and result if you will of whatever the process is, whether it’s a civil litigation process or as we’ll be discussing today, something more proactive earlier on before the expense and duration and to some extent the pain if you will of going through long and arduous litigation, but the idea of curative damages is that is actually to cure and ideally prevent that same behavior in a way that allows those resources that could be better invested than traditional litigation, but could be better invested in something that could reduce or even completely remove the type of action that caused the harm and from a plaintiff’s attorney stand point also provide a curative response for the individual, the family the society that has been impacted by that action or that harm and that gets to the idea the concept of restorative justice and restorative justice is looking at a way that restores the relationships, it restores the community, it might restore the resources that were either removed, damaged or taken away from the individual and the ideas not just to get things kind of back to the status quo, but ideally build better cross sector relationships. In an ideal and perfect world to actually have the parties have some sort of peace of mind. Often times in these cases somebody has been severely injured. In some cases people have died as a result of these actions or behavior and when that occurs there’s obviously an enormous amount of pain, bitterness and to some extent people even want a sense of revenge and the idea of doing something curative or restorative is to again, look in a very deep psychological and emotional way of what’s going to be the best way to overcome what likely has been again a very damaging and destructive process and ideally seek some social good and I think there is so many reasons to do that, there are so many reasons to have the amount of resources and the amount of energy go into something very positive and I can give a few examples today of where that has happened, in particularly where the Ohio Supreme Court has actually supported those types of mindsets where curative damages may be an opportunity for some of the attorneys listening to this podcast to think of a case a little bit differently and maybe approach this in a proactive way that gets a better result for your client, their family, and their community.
Sean: And I am curious about the kind of legal bases as you mention when we think traditionally of compensatory damages we think of what is the measure, how do we come up with the figure. How do you come up with a figure it a curative damages situation?
Jim: It goes back to some of the discussion from our esteemed justices on the Ohio Supreme Court and in a number of cases like Moore v. Consolidated Rail Company, Dwightmen Weber Case, which we can talk a little more about today, and the Dardinger v. Anthem Blue Cross Case back in 2002. The Ohio Supreme Court has been pretty clear that they believe in the necessity proportionate awards and penalties to unlawful behavior so there’s obviously a lot of examples where a large corporate defendant, due to their behaviors, their action or inaction causes harm to an individual. However, if, let’s just say the case has compensatory damages of one million dollars and they through whatever, a settlement or through a civil trial and verdict, there given a one million dollar penalty. Is that enough of a proportionate “penalty” to compel that lawful behavior and it’s probably pretty clear that they’re going to look at that level of risk, both from a monetary standpoint, but also, there kind of public perception, there brand if you will, they are going to evaluate that level of risk and what curative damages would do is look at something again kind of in the paradigm of punitive damages, but it would look at an appropriate amount to really balance those scales of justice so that the award and the amount again is more proportionate to really compel, not just lawful, but ideally much more positive behavior. So it is a very difficult thing to measure, but I think we’ve looked at punitive damages awards. They’re certainly punitive damages awards that are in the hundreds of dollars or even billions of dollars. The Volkswagen case recently is a good example of that. Again, in kind of the popular media, they’ve encountered for all the different types of damages and expenses that Volkswagen are going to incur based on what they’ve turned the defeat device in those product cases and the expense that this company will incur is almost twenty billion dollars so imagine what that amount of money could have been invested in to go towards things like cleaner technology, to improve gas mileage in vehicles, to improve those safety in vehicles rather than litigation, the penalties, the recalls, the loss of public trust in a very long term and well respected brand until this point so how do we go backwards in time if we could and look at a large corporate institution and look at an opportunity to instead of having what was likely not a very positive result, how could you go back in time to better balance those things and create, for instance, they could have created a foundation, they could have come out and said we made a mistake or we even took affirmative steps in the wrong direction, we want to cure this, we want to deal with this upfront and we want to put it toward a social good that specifically addresses the challenges that arose because of our action. In this case it was trying to basically undermine the emissions in gas mileage standards and they weren’t the only automobile manufacturer that did this so it’s not just one company, but how do we create the right sort of balance that creates the social good. So coming up with that magic number is challenging, but I think it should be something that is well thought out, that is measureable. I certainly think there are ways to do this and I think there are folks within corporate leadership that would like to find ways to do things through a corporate social responsibility mindset and ideally avoid both litigation, the expensive litigation, but also the enormous hit it can take to the corporation, the brand, and even the mindset of its employees and investors.
Sean: Well and that’s a good point, the fact that it’s difficult or challenging to calculate it doesn’t mean that it has no value.
Jim: Correct and sadly I would look at it from a proactive stance. I think to be realistic, I think it’s probably good to give examples of where companies have failed to take some of these appropriate steps and look at it through the lens of risk, which is probably again more realistic when approaching for instance a large corporate defendant. You don’t want to threaten them with the possibility of what could be bad as the only tactic, but certainly could give examples of this is where you could the next Enron, you could be the next Volkswagen, you could be the next Toyota that goes through a large corporate scandal and the downsides of all that or you can step up, take responsibility, be innovative, and try to do something positive and avoid some of that damage because when you have these sort of damages and lawsuits you already have parties that have suffered enormous losses as individuals and plaintiffs and now you are likely going to have a process that will cause kind of reciprocal damage to a defendant. So that’s a lose lose situation and what curative damages is really trying to do is create a win win situation. A win for the plaintiff, a win for the defendants, and ideally a win for the greater public good and society.
Sean: I was going to ask that before we get to some of the examples. Is it fair to say at least one of the differences between a traditional punitive damages award and a curative damages award would be that punitives are awarded to the individual litigant in the case, whereas curative damages are really designed to compensate or an award to society at large?
Jim: Precisely, that’s right Sean. So in a formula you would have some sort of compensatory damages that would go toward the individual or their family or a group of individuals, like a traditional lawsuit. The curative damages would go more to a traditional non-profit or foundation and ideally the focus of that entity, whether it’s an existing entity or a new entity that’s created by the curative damages fund would be closely focused on the specific issue at hand. For example, if you had an incident with a self-driving autonomous car and the car had a defect that hurt or killed an individual and there’s the potential of having a large punitive award because the company could have done something different with the technology, the curative damages contribution, and even the curative damages could be a curative donation, a curative award, might be a better way to frame it. That amount of philanthropic donation would go directly towards, for instance, helping families that have been injured by such technology. It could go toward research for making this type of technology safer. It could go towards grants for research and development by Universities and other entities doing social good. They could help not just that company, but perhaps other companies have safer or better technology around that type of system. So the ideas to avoid millions and millions of dollars in what I would term, in some ways, waste, in fighting in the adversarial nature of traditional litigation and instead proactively invest that money upfront, which I think a lot of plaintiffs would really like to see and I certainly think for people that have gone through this process would love to go back in time and see that happen. There’s a lot of challenges, as most of the attorneys that listen to this podcast will know, there’s a lot of protective orders, confidentiality agreements, because what you’re talking about when you get into some of these corporate systems, whether its technology or otherwise, you’re getting into an area that the corporate defendants would rather you not get into. So they have another incentive to proactively look at curative damages as an upfront option for settlement rather than going through a challenging litigation process that can expose all sorts of challenges for their company.
Sean: I know you’ve talked about this ideally being an upfront, voluntary process, call me cynical but I suspect that the corporate defendants don’t always like to agree to hand over large sums of money. Assuming that this does go to trial, I’m just trying to think of how this works. I mean, would there literally be a line on the verdict form for the jury to fill in for a curative award?
Jim: The nice philosophy around curative damages is it could happen at any stage. Either before litigation, during litigation or even at that trial phase. It has only been provided, kind of a jury form, in a handful of cases that I’m aware of for all sorts of reasons. A defendant would have obvious objections to having a line like that provided to a jury because it may be seen as something that would propound a jury to award a higher level of damages knowing it’s going to go to a broader social good. I think it’s a very fair discussion and again going back to some of the language the of Ohio Supreme Court, I think it is a very fair manner to look at what’s the possibility of the total recovery and also that the jury should be informed where and how that money is going to be used. That would obviously be something that would be challenged and debated in a specific case, but I think OAJ’s as an optimum organization to discuss what is the appropriate balance with these sorts of discussions. If a plaintiff has proactively stated to the court that this is something that we’re choosing to do with this I think that it should be part of the discussion, it should be for instance apart of a closing argument and perhaps it should be something that the jury when they go back to deliberate should be informed about and should be able to hear because it’s clearly the opposite is something that goes through jurors mind and that a lot of voices including kind of the corporate organizations, the defense bar and others have very strategically used tort reform to plant the seeds in Americans minds that there are frivolous lawsuits, that there’s all sorts of distribution wealth mindsets around legislation otherwise. So why shouldn’t there be equal opportunity for the general public to better understand the concept of curative damages and how philanthropy and these sorts of awards are a better, more equal, and fair way to look at the traditional punitive damages mind set and ideally do what most people would agree, how do you create that appropriate balance where whether it’s a corporation or other entity behaves in a way that appropriately measures the amount of risk and measures the idea of public safety and consumer protections in a way that I think all of us would agree.
Sean: Tell us about some examples of maybe where a corporate defendant has gone along with this mind set and it’s worked out well and some where they’ve taken the maybe traditional deny, defend, deflect type approach and maybe it didn’t work out so well.
Jim: There’s obviously hundreds and hundreds cases, we won’t into them today where corporations, corporate defendants, have been accused of some sort of major wrong doing. An example that’s probably closest related to the work we do here at Thomas J. Murray and Associates, was around the Toyota sudden unattended acceleration incidents. About a decade long verse of litigation that has really exposed not just flaws in technology, I mean Toyota clearly has been a leader in the last decade in creating cars that are relatively affordable, that reduce gas mileage. The introduction of the Toyota Prius in a lot of ways was a pre introduction to the idea of electric cars and to some extent self-driving cars. That’s the positive side of an innovative company like Toyota. The other side is that there were problems as they introduced new technology around electronic throttle control. There were clear glitches and the company understood these glitches. These problems with the technology led to quite a few accidents and sadly a number of deaths and when this information was brought by not only consumers, non-profits, consumer protection attorneys and other organizations as you stated the company took a more traditional stance of deflect, deny, defend and this went on for a number of years. It wasn’t until the numbers piled up and it wasn’t until there were congressional hearings, the Department of Justice was involved, quite frankly at least tens of millions, likely hundreds of millions of dollars was invested by all of the different parties looking at this challenge of Toyota’s sudden unattended acceleration defects. The result was the largest punitive award of over one billion dollars against Toyota. There was forced recalls, they took all sorts of different measures and there was a deferred prosecution agreement with the department of justice over this. So imagine if all of those resources, the time, the energy, the money went into solving that same challenge, looking at the technology and proactively trying to figure out what was going on, not just within Toyota vehicles, but other vehicles that were adding this new technology of electronic throttle control. At looking forward into the future of self-driving cars and adding these different technologies that at least hypothetically and I think somewhat truthfully, would create better public safety. So Toyota went through all of that. It certainly at least for at least some period of time hurt their brand value. If people are familiar with the sudden unattended acceleration problem they generally know that Toyota had a problem, went through a process and that some of the issues were appropriately addressed. The flip side approach is to look at what other institutions have done around corporate social responsibility and really their responsibility from a philanthropic standpoint, but also responsibility for protecting consumers and their customers. One of the companies that a lot of folks look at as kind of a different breed within the automotive world is Tesla. Tesla was one of the first to look at truly, fully electric cars. They’re looking at a lot of issues around autonomous cars, self-driving-cars and when they had a high profile incident, a death incident to a forty year old, military veteran down in Florida, their response was quite different. My understanding is the case was resolved relatively quickly. It was looked at through a curative approach that focused on the individual, the family, but more importantly, finding out what happened, what happened from the drivers perspective, what was Tesla’s responsibility with their software and some of the things that they were introducing in these new vehicles and my understanding is Elon Musk, the CEO of Tesla took a personal interest for obvious reasons in this case, but helped reach out to this family and to really look at what’s the appropriate way to resolve this, not just financially. Tesla and these sort of companies have the financial resources to do what’s right up front, but to really discuss these issues and to try to find a way appropriately addresses the issue, ideally reduces the potential for this type of harm in the future and I think to do that in a proactive way was the right approach. Again, somebody like Elon Musk is a very innovative entrepreneur. I think there is a lot of risk he takes as an entrepreneur and I think in some ways he took a lot of risks to try to push society to look at options around mobility and I think he took a similar approach around curative damages with this case. This type of case could have derailed a lot of potential safety innovations that can happen in this industry, but instead there was a way to really try to address is and I think if you look at their public communications they really tried to both balance the fact that there was a driver involved and maybe some of the technology wasn’t appropriately, there wasn’t appropriate warnings and/or appropriate instruction, but that the technology likely performed as designed, but since there was an accident then perhaps the design needs to be modified and that the human factors and the human technology divide needs to be appropriately bridged in a way that will ideally prevent these types of accidents from happening in the future.
Sean: Are you able to boil down any kind of practical nuts and bolts types of tips for somebody in their practice if they think they have a case that might warrant discussions around curative damages?
Jim: Certainty want to have the OAJ members and others listening to this podcast understand there are some practical steps you can take. One of the first steps you can take is to inventory what other organizations are working on that subject. There’s some wonderful organizations like the Center for Auto Safety in Washington DC that are working on automotive safety and consumer protection. If you have a case involving environmental damage there’s obviously a whole slew of wonderful organizations working on those issues. So identifying what organizations are out there could give you both great information for your case, there’s like others that have had those same issues. You can connect with other individuals and perhaps other parties that have also been damaged by that, but more importantly with the theme of curative damages you can start to think of who might be a potential beneficiary or partner around that curative damages philosophy. So you might find a thought partner and a strategic partner that might approach and might valuable with this. The other thing is at what point is the appropriate point to bring up an opportunity like this to defense council and I would actually encourage folks listening to this podcast today to do that early in the process. There first reaction may not be positive, but if they’re doing their job they’re sharing that with some of their clients and somebody who is a decision maker within that organization and it may plant a seed, it might plant an opportunity. Another practical step is you can start to weave some of this information into deposition questions. You can ask, when appropriate, corporate defendants or ask some of their representatives some of the questions during depositions and or within motions to the court. I think you can start to weave some of these issues particularly when you authentically have a topic that is of public safety importance, which I think a lot of the issues we were discussing today and frankly I think a lot of the issues OAJ members come across with cases have enormous public importance and not just in the context of their client or clients, but that the safety issues that are brought up in the consumer protection issues are much broader than just the instant case and the instant harm and so bring that up in these cases and looking for opportunities to educate the judiciary to educate other lawyers that this is a possibility and I certainly would encourage blending in some of the terminology from some the cases that I mentioned. The Moore case, the Dardinger case before the Ohio Supreme Court where the court said that a portion remaining of the after prescribed payments should go to a place that will achieve societal good, a good that can rationally offset the harm done by the defendants in this case and so I think following that rational whether you’re looking at it from a plaintiff’s perspective or a defendants perspective everybody wants to achieve the appropriate amount of societal good in a fair and balanced manner and curative damages is a potential way of approaching that and it’s one more tool in your tool box to ideally best serve your clients as well as get a result that again is best for society.
Sean: This has been fascinating Jim and I hope that our listeners are able to take that and run with it like you said and be creative. Jim Murray thanks very much for joining us here on Civilly Speaking.
Jim: Well thank you Sean and thank you again to OAJ. I appreciate the opportunity and I certainly welcome any questions or comments from anyone listening to the podcast. I’d be glad to collaborate and connect with anyone.