A Movement, a Lawsuit, and the Integrity of Sponsored Law and Economics Research
McGarity, Thomas O., Stanford Law & Policy Review
Of the thousands of footnotes in the thousands of opinions that the Supreme Court of the United States has published over the years, (1) very few capture the attention of the national media. (2) Footnote 17 of Justice Souter's majority opinion in Exxon Shipping Co. v. Baker, (3) decided in June 2008, may turn out to be one of those rarities. (4) In that case, which involved Exxon Shipping Company's challenge to a $4.5 billion punitive damages award in the notorious Exxon Valdez litigation, the Court had to decide the limits that federal maritime law placed on punitive damage awards. After examining punitive damages in historical perspective, the Court penned a brief summary of recent critiques and defenses of punitive damage awards in civil litigation, most of which it drew from the academic literature. At the end of this discussion, the Court dropped footnote 17.
The footnote noted the Court's awareness of "a body of literature running parallel to anecdotal reports, examining the predictability of punitive awards by conducting numerous 'mock juries,' where different 'jurors' are confronted with the same hypothetical case." (5) After providing numerous citations to the mock jury research, the Court added the following: "Because this research was funded in part by Exxon, we decline to rely on it." (6) One could read the footnote as a veiled endorsement of the research, which does support the Court's conclusion that the $4.5 billion award was far too high, with an associated caveat that the Court was not relying on it because of its provenance. Alternatively, one could interpret the footnote as an expression of concern about the integrity of the appellate process and a warning to future Supreme Court litigants that efforts to affect the outcomes of their appeals by funding citable research are likely to fail. I take the latter view, and I commend Justice Souter for issuing the warning. The extent to which the Court, in Justice Souter's absence, will continue to avert its eyes from sponsored research remains to be seen.
As the Court observed (and as discussed in more detail in this Article), the research was supported by the parent company of the defendant in the litigation, and it was supported for the particular purpose of giving the company and its allies empirical ammunition for their argument that punitive damage awards by juries were inherently arbitrary. The company got what it paid for. The research did support its position, and it was able to bring it to the Court's attention through several amicus briefs. (7) One of the Exxon employees who approached the law professors and psychologists who undertook the research noted that, despite the disclaimer, "the arguments the justices used in part reflected the conclusions of the studies." (8)
Exxon's attempt to affect the outcome of a particular legal proceeding by sponsoring academic research relevant to the judicial resolution of the claims in that proceeding raises profound questions about the integrity of policy-relevant research that is directly sponsored by entities with an economic or ideological stake in the policy or legal implications of that research. Many of the same questions are raised by the broader attempt by the Olin Foundation, several other conservative foundations, and the business community to advance their minimalist view of the role of government in society by supporting the fledgling law and economics movement in legal academia during the early 1980s. Like the Exxon-sponsored research, the sponsored law and economics research was for the most part undertaken by academics at academic institutions. Although academic institutions gratefully accept funding from private foundations and corporations to support their ongoing research programs, they are not in the business of providing research for hire to entities shopping for research that advances their economic or ideological agendas. Academic researchers and academic institutions abide by certain scholarly norms that are designed to ensure the integrity of their research and thereby protect their reputations among their peers and peer institutions.
Relying on the Exxon-sponsored research and Olin-sponsored law and economics research as case studies, this Article will examine questions of academic integrity that arise in the context of privately sponsored academic research. Professor Wendy Wagner and I have recently taken up this issue in the context of sponsored scientific research, (9) but I undertake this broader inquiry into sponsored academic research only tentatively and with the caveat that other sociologists and philosophers of science may well have different ideas. As a starting point, I begin with the proposition that sponsorship will corrupt academic research if the sponsor has the power to determine the outcome of that research and exercises that power. Furthermore, sponsorship can undermine the academic integrity of research to the extent that it interferes with the process of scholarly evaluation of the quality of that research by peers in the relevant academic discipline. Beyond that, the inquiry becomes context-dependent. Since it is normally impossible to know whether a sponsor has in fact determined the outcome of research, I suggest that it may be appropriate to conclude that sponsorship undermines the integrity of sponsored research when the researchers behave as if the sponsor controlled the research. The integrity of sponsored research may also be open to question if the implicit threat of termination of the sponsorship influences the outcome of that research.
Finally, I suggest that academics might legitimately be cautious about accepting funding from entities motivated by a desire to shape a body of scholarship out of an institutional concern for the integrity of their academic discipline. Concluding that Justice Souter's primary motivation in declining to rely on the Exxon-sponsored research may have been his concern for the integrity of the appellate process, I argue that academic institutions might have similar concerns about attempts by well-endowed foundations and corporations to shape any academic discipline.
I. THE EXXON STUDIES
After a jury in Alaska awarded fishermen damaged by the Exxon Valdez disaster $5.3 billion in punitive damages, the Exxon Corporation (now Exxon/Mobil) contracted with several prominent law professors, psychologists, sociologists, and economists to conduct a series of studies probing the potential arbitrariness of juries in awarding punitive damage awards. (10) According to Professor Theodore Eisenberg, Exxon understood that "[t]o undermine the award against it," it had to "attack and discredit" the "everyday world of punitive damages." (11) The sponsored scholarship did just that "with hardly a nod to actual cases" that Exxon sought "to undermine." (12) Exxon refused to disclose how much it spent on this research, calling it a "confidential matter," but some academics estimated that the sum exceeded $1 million. (13)
Exxon's all-star roster included prominent law and economics professors A. Mitchell Polinsky (Stanford), Steven Shavell (Harvard), and W. Kip Viscusi (Harvard/Vanderbilt); Nobel Prize winning psychologist Daniel Kahneman (Princeton); social psychologist Reid Hastie (University of Chicago); political scientist David Schkade (University of Texas/University of California at San Diego); and law professor Cass Sunstein (University of Chicago/Harvard). (14) Although Sunstein related that he billed Exxon only for his travel expenses, the others declined to say how much they were compensated for their work. (15) The authors insisted that Exxon give them full control over the content of the research, but Exxon attorneys stayed actively involved by keeping tabs on the progress of the studies, holding numerous meetings, and commenting on research designs and rough drafts of the papers. (16)
Professor William Freudenberg, a sociology professor at the University of Wisconsin (now at the University of California at Santa Barbara), prepared elaborate "field notes" on all of his conversations and meetings with Exxon representatives and later published an article on the experience in Sociological Forum. (17) Freudenberg related that Exxon employees made it clear from the outset that the purpose of the research was to aid Exxon in its Valdez appeal. (18) An attorney for Exxon told him that the Supreme Court was "thinking hard about general guidelines for punitive damage cases," and Exxon had "good reason to feel" that its appeal would "give the justices the very opportunity they've actually been looking for, to spell out those guidelines." (19)
The attorney explained to Freudenberg that Exxon had lined up a number of economists who "feel that punitive damage awards are very inefficient.... and naturally, that's a perspective we're quite comfortable in supporting." (20) But the company also wanted "to work with professors in publishing things from a few other perspectives, too." (21) They were exploring "whether it's feasible to get something published in a respectable academic journal, talking about what punitive damage awards do to society, or how they're not really a very good approach." (22) If this was feasible, "[t]hen, in our appeal, we can cite the article, and note that professor so-and-so has said in this academic journal, preferably a quite prestigious one, that punitive awards don't make much sense." (23) The attorney acknowledged that "[t]he judges themselves don't usually read [academic articles], but often their clerks will read them ... and quite a few of the clerks, nowadays, are pretty open to these kinds of arguments," because they "now come out of a law and economics program or something like that." (24)
Professor Freudenberg submitted a discussion draft of a paper arguing that adversarial processes ran contrary to academic "prescriptions for sensible management." (25) The paper concluded by advocating less litigation but greater transparency in corporate risk management. After that, "reactions from the company slowed considerably." (26) Concerned that "openness" could lead to more lawsuits against companies, the attorneys decided to cut off support for the project. An attorney explained that the article "would be a 'nice' one," but it "wouldn't be sufficiently helpful" in the litigation to be "worth spending the additional dollars that would be required ... to turn it ... into a published article." (27) They parted "on quite friendly terms," but Freudenberg did not publish the piece. (28) Throughout the process, Freudenberg never felt like he was "being subjected to an evil form of pressure." (29) To the contrary, he "greatly enjoyed the process and the interpersonal interactions," and "found the entire experience to be educational." (30)
The other scholars in the project published at least thirteen articles, all of which identified what the authors considered to be serious flaws with punitive damage awards, in prominent law reviews and psychology journals. (31) They also turned the articles into a book published by the University of Chicago Press. (32) The primary underlying message of the book was that the decision of whether and how to use punitive damages should be made by experts, rather than ordinary citizens who too often behaved irrationally. (33) Professor Viscusi went even further to urge Congress or the courts to abolish punitive damages altogether because they were ineffective in deterring risky conduct and it was bad social policy to deter such conduct too much in any event. (34)
The provenance of the studies rendered them suspect to many observers--the Los Angeles Times characterized the scholars as "hired guns for industry." (35) A comparison of industry-funded law review articles on punitive damages and university-supported articles found that the former were uniformly critical of punitive damages and jury awards, while the latter "overwhelmingly defended" them. (36) The study also found that courts cited industry-funded articles on punitive damages far more often than university-sponsored studies, no doubt because industry-funded articles are far more frequently cited in appellate briefs for defendants and supporting amicus briefs. (37)
Several highly regarded empirical scholars mounted serious challenges to the studies on the merits. (38) Among other things, the critics found serious flaws in the methodologies employed in the mock jury studies. (39) For example, Professor Richard Lempert noted that the script for the mock trial upon which one of the studies was based consisted of only 3000 words, and the "trial" itself lasted only fifteen minutes. He concluded that "[t]he study's mock jurors received so much less information than jurors receive in actual trials that there is no scientific basis for assuming that the magnitude of the effects found in this study resemble those found in actual trials." (40) Similarly, Professor Neal Vidmar concluded that the "imbalance of information provided to the simulating jurors ... undermined the various experiments' ability to allow scientifically appropriate causal inferences." (41) Professor Catherine Sharkey argued that the articles had not sufficiently considered the real world impact of punitive …
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Publication information: Article title: A Movement, a Lawsuit, and the Integrity of Sponsored Law and Economics Research. Contributors: McGarity, Thomas O. - Author. Journal title: Stanford Law & Policy Review. Volume: 21. Issue: 1 Publication date: Winter 2010. Page number: 51+. © 2009 Stanford Law School. COPYRIGHT 2010 Gale Group.
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