Saturday, July 14, 2007

Jury Duty: the end of the story

For months now, I've intended to write one last piece about jury duty. You know, there are a lot of things I intend to do writing-wise that never happen. Those promises you make to yourself are the hardest to keep.

Yesterday, I got a letter from the judge formally thanking me for my service. An excerpt:
I would like to express my formal appreciation to you for your service to our court in this case. You have contributed to the fair and impartial administration of justice…. I know that jury duty imposes at least some sacrifice for each person whose routine schedule is disrupted. In this case, you had to put your normal life on hold for an unusually long period of time.
Nice, right? There was more, but I'll spare you. It was clearly a form letter but a good one as such things go. My favorite bit, though, was the handwritten note at the bottom of the page. It was in the same hand as the signature, so maybe the judge actually wrote it, "Thanks for your special service as foreperson!" Right on!

I'm going to finally keep that promise to myself, and you, and write the last post about the case.

You may want to skim my first post on the topic, then come back for the end of the story.

The main issue in the case was whether there was a conspiracy to rig three separate bids for contract work in a far away country. The main fact germane to the conspiracy was whether the competitors met prior to submitting bids. Other relevant issues were whether, prior to the bid, the men (all men) who developed the bid estimates were influenced to inflate the bids. Post-bid issues were whether profits were hidden and how the payoffs were made--via phony invoices.

The defense spent a lot of time explaining how the actual work of the contracts was done. They showed us pictures of big and small holes in the ground. Sewer pipes, construction workers, open sewer, pipe jacking machines, tunnel boring machines, dewatering, etc., etc., etc. All of that, while interesting, had almost zero relevance to the case. No one argued that the job wasn't done. In fact, all agreed that the job was done well. The issue was, did the government pay too much for the job? Did they conspire to rig the bid and artificially raise the price of the contract by creating a non-competitive atmosphere? The defense tried to argue that they discovered innovative technology that drastically lowered the cost of the job and, thus, huge profits were earned properly.

A summary of the three contracts:
  1. Contract 20A was the big money contract and it had three bids. The allegation was that the "Smith group" (the defendants) offered to pay one competitor, a Greek firm, not to bid. They met with the second competitor, a German firm, and offered to pay them to bid high. That allowed the Smith Group to bid higher than they would have otherwise.
  2. In the second contract, the allegation is that Smith received a "loser's fee" from the winning firm. Smith & Co. asked the other firm to bid high, but they refused. They did agree to a loser's fee. In this case, the Smith Group did not win the bid, but they did get the fee.
  3. In the third case, the Smith Group paid one competitor not to bid, but a third firm submitted a bid and was not involved in the conspiracy. However, Smith won the contract and subsequently paid off the firm that withdrew from the bidding.
To complicate things, in all of these contracts there was some post-bid negotiation. With construction contracts, the "owner," (the person, company, government that is buying the job), pays for an "engineer's estimate of construction costs." This estimate is not disclosed to the bidding firms, but the specs are. When the bids come in, they are expected to be within 10-25% of the engineer's estimate. The bidding firms employ estimators who help develop their bids and several people work up the bid. However, is it is the upper management who gives the final okay on the bid. When the engineers' estimate is much higher or lower than the bids, the government can go into "competitive negotiations." In fact, they must either do that or re-advertise the job. There was a long complicated history of Contract 20A that put some time-pressure to award the, so, rather than re-advertise, the US government decided to go into competitive negotiations.

When we went back to the jury room, we got a copy of the judge's instructions, a list of fourteen questions (with sub-questions), and several boxes of evidence.

We first addressed the questions that just asked, "Did they do it?" We said "yes" to every single one. We agreed they did it. The question was then, how much money should we award?

We fairly easily decided on the two relatively minor contracts. We awarded the amount of the loser's fee, about a million dollars for the second contract. Honestly, I can't remember how we decided for the third contract, but I know we gave an award. The reason I can't remember is that we spent most of our time arguing about Contract 20A.

The range of reasonable damages for 20A was $25 to $45 million. Eight out of ten of us were inclined towards the high end. The damages represented the difference between what the government paid and what the government would have paid in the absence of a conspiracy.

It would appear that at least one juror, who I started calling the "hold out lady" didn't actually agree that they did it. She didn't want to award anything under 20A. She quickly move up to about $4.5 million, which was just the amount that the Smith Group paid to the two other firms involved in the conspiracy.

That was not acceptable to anyone, including the other "Jamy," who was inclined to award in the low end of the damages range. She agreed there was a conspiracy, but wasn't as certain as the rest of us and didn't think the evidence of the bid inflation was strong. Her starting point for calculating the damages was higher--she thought the original bid was inflated, but not by as much as the rest of us thought--so her ideal award was lower. But it was still in the tens of millions of dollars range.

Most of the time was spent in our last two days of deliberations "working" on the hold out lady and getting her to raise the amount she was willing to award. By the last day, she was at $25 million and the rest of us were at $30 million. Thirty was a bitter pill for seven of the jurors and they would not budge. The other Jamy didn't care. I was willing to go to 25, because I thought it still sent a strong symbolic message. Ideally, I would have awarded closer to $35 million.

So, why didn't the hold out lady buy that there was a conspiracy?

On Contract 20A, there were six pre-qualified bidders, three of whom announced their intention to bid. According to testimony, the potential low-bidder, a Greek company, was unable to bid because they could not get bonding. You can't bid without a bond, because without a bond, you can't do the job. (A bond is like an insurance policy. The bond must be at least equal to the bid.)

The other company, according to testimony, did not want the job. They were overextended and having problems with similar jobs in the same region. They intended to bid high. They wanted to bid as a "good faith" gesture, so they would be included in future competitions, but they didn't actually want to win.

These two facts seem to indicate that there was already a noncompetitive atmosphere for Contract 20A.

That would be true if the third company, the Smith Group, knew the intentions of the other two contractors. But they didn't. They paid for the information. The testimony was that neither of the two other bidders disclosed their intentions to the Smith Group. They happily agreed to take money for things they would have done anyway. What matters, though, is that by offering payments, they engaged in a conspiracy. If the Smith Group hadn't held those conspiratorial meetings, they would have believed that they had two competitors and their bidding strategy would have changed. They almost certainly would have bid lower.

The hold-out lady would say, "The Greek firm wasn't going to bid anyway, and two firms isn't much competition, so how could there be a conspiracy?"

She would also say, "After the bid, they negotiated with the government and lowered the price, so the chain of causation was broken."

That made me crazy because it was exactly the (specious) argument that one of the defense attorneys made. It was the most extraordinary closing statement--tv-worthy, even. He spoke without notes, he paced in front of the jury box and made eye contact with us, he quoted Shakespeare, and he used props. When he got to the part of his speech where he said, "the chain of causation was broken" he pulled a chain out of his coat pocket! It was fantastic. Remember all those problems I had staying away during the trial? He kept me on the edge of my seat.

Yet his arguments were not convincing. In fact, he completely misrepresented some of the expert witness testimony. I thought, "He's out and out lying to us, and, yet…I don't hate him." The most remarkable thing about this attorney is that he remained completely likeable while telling lies. Apparently, that is what makes a good litigator. And while I think I could construct excellent arguments and talk like crazy, I wouldn't be able to stomach all the lying.

The hold-out lady's attitude caused some strange behavior on the part of the other jurors. Remember CJ, the confused juror? She was the most upset by the hold-out lady's position. Other jurors got into heated discussion with her but no one, except CJ, made personal attacks. Even CJ stopped at calling her "stubborn," which was certainly true.

After the first full day spent discussing Contract 20A, we were exhausted. The next day, before we got to it again, CJ asked for the floor. She pulled out a few loose pages from her bag and started to read. She'd spent the night before preparing an impassioned statement and connected our case to our part in ending world poverty. Oh, how I wish I were kidding. Unfortunately, CJ's speech only made the hold-out lady more firm in her convictions.

We spent another day hammering out the issues and didn't get to the end. I thought I'd negotiated a compromise with hold-out over lunch. I told her I thought I could get the group to go to 30 if she could meet us there. She indicated she would. But she didn't.

We left for a three-day weekend and I spent some time reading up on conflict resolution. When we got back on Monday, as soon as we got started, the hold-out lady announced that she could live with $29.7 million. And that was that. We reviewed the questions one last time. I signed the official copy and sent a note to the judge saying we were done.

We were taken to the courtroom a couple of hours later. I stood up and said, "yes" when the judge asked if we'd reached a unanimous verdict. I sat back down and the court officer read the full verdict. During that time, it all became real in a way it hadn't back in the jury room.

We were taken back to the jury room and the judge came in to "debrief" us. He explained that all the co-conspirators had settled and that the Smith Group would almost certainly appeal. He also told us that our award would be tripled. Heh, you should have seen the hold-out lady's face when he said that! The rest of us were delighted. Afterwards, the judge gave us a tour of his new chambers. Very cool.

Back in the jury room, lunch was waiting for us. During deliberations, we weren't allowed to leave the building and lunch was brought in for us. Most of us sat down to eat a sandwich. The hold-out lady took off in a flash, barely pausing to say goodbye. The other Jamy changed her shoes and left. I sat with a few others and had half a sandwich.

The best part of jury duty was getting a chance to meet the other jurors. I loved being the foreperson, though it was exhausting. It gave me a lot of confidence in my leadership abilities, but I wasn't in it alone. The other jurors were interesting, friendly, quirky and supportive. Most of them were people I never would have met otherwise. It was great experience, on every level.

Grateful for: jury duty.

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