In this day and age of the Supreme Court’s enforcement of contractually imposed arbitration clauses, it is essential to remember that the right to a jury trial was the magnificent vision of the Founders. “The Seventh Amendment promised to ‘preserve[]’ the right of ‘trial by jury’ in virtually all civil suits ‘at common law’ and limit the power of federal judges to overturn any fact properly found by a civil jury.” Akhil Reed Amar, America’s Unwritten Constitution 435 (Basic Books 2012).
In December 2018, U.S. District Judge William G. Young passionately argued for the sacred right to a jury trial, even in complex commercial disputes. Marchan v. John Miller Farms, Inc., 2018 U.S. Dist. LEXIS 210503 (N.D. 2018). (click to read).[1]
Marchan is a complex products liability case. The manufacturer was defunct, so the plaintiff would need to pierce the corporate veil in order to obtain a recovery from the manufacturer’s parent company. Piercing the corporate veil involves a fact-intensive inquiry into whether a shareholder, in this case the parent company, can be held liable for corporate obligations. Thus, the question arose whether the judge or the jury should decide whether to pierce the corporate veil. Judge Young determined that the jury must decide this issue.
The Jury Trial Clause of the Seventh Amendment provides that "[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved." U.S. Const. amend. VII (emphasis supplied). The phrase "suits at common law" refers not only to causes of action that existed in 1791, when the Seventh Amendment was adopted, but also to new causes of action created by statute, as long as those statutes "create[] legal rights and remedies, enforceable in an action for damages in the ordinary courts of law."
Citing Wm. Passalacqua Builders v. Resnick Developers, 933 F.2d 131, 135-37 (2d Cir. 1991), Judge Young determined that an action to pierce the corporate veil is a suit at common law. He concluded that “historical ‘sources support the proposition that the nature of the ancient action disregarding the corporate form had equitable and legal components.’” Passalacqua, 933 F.2d at 136. The Passalacqua court reasoned that since the nature of the relief sought in a piercing case is ultimately money damages, it is more like an action in law than in equity, and that the intense factual nature of the inquiry is more appropriate for a jury.
Judge Young dismissed out of hand criticisms that juries are not capable of handling complex issues such as piercing the corporate veil. “It is appropriate to point out that most of these unsupported conclusions are nothing but elitism, pure and simple. They are an unabashed retreat from the magnificent vision of the founders.” Marchan, at 14. “I have been trial judge for over forty years. In the fact-finding line, anything a judge can do, a jury can do better.” Marchan, at 16.
“It takes a special kind of arrogance to conclude that American jurors cannot handle the veil-piercing issues presented here.
“Quite simply, jurors are the life’s blood of our third branch of government.
“It is not too much to say that a courthouse without jurors is a building without purpose.’
Marchan, at 17.
Judge Young notes hopefully that: “Americans themselves may yet rescue their right to a jury. Workers at Uber, Lyft, Microsoft, Google, and Facebook have caused those corporations to abjure forced arbitration of claims of sexual harassment and assault.” Marchan, at 20.
But he asks:
“Do you care about any of this?
“You should.
“Your rights depend on it.”
Marchan at 21.
[1] Judge Young is from the District of Massachusetts and sat by designation for this case in the District of North Dakota.