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The magnitude of the "persuasion effect" depends on the degree of accordance between the view promoted by the media and the public's view. If the view promoted by the media is substantially different from the public's view initially in place, then more media coverage would mitigate the influence of the initial public view on outcomes. Media Influence on Courts & POLITICS:
This paper quantitatively assesses media influence on civil case adjudication in U.S state courts. It shows that media influence substantially mitigates disparity in damage awards acrosspolitical orientation of districts. That is, in areas with frequent newspaper coverage of courts, there is little difference in damage awards between conservative and liberal districts. In contrast, in areas with little newspaper coverage, liberal districts tend to grant substantially larger damage awards than do conservative ones. This result suggests that the presence of active media coverage may enhance consistency in the civil justice system. Keywords: media, courts, judges, civil case, damage awards JEL Classification Code: K13, K41, P4 Lim: Department of Economics, Cornell University, 404 Uris Hall, Ithaca, NY 14853 (e-mail:clairelim@ cor-nell.edu). I thank Josh Loud and Greg Martin for their excellent research assistance. Published in the American Law and Economics Review, 2015, 17(1), pp.87-1261 Introduction Courts play an important role in maintaining economic stability by enforcing contracts and protecting property. Understanding the influence of political environments on the functioning of courts has long been an important issue in law and economics (see, for example, Landes and Posner (1975), Glaeser and Schleifer (2002), and Hanssen (2004)). This study analyzes the influence of the press, an important component of the political environment, on civil case adjudication in U.S. state courts. The civil justice system in the U.S. has long been criticized for frivolous lawsuits, pro-plaintiff bias, and excessive punishment of corporate defendants, which may easily undermine the efficiency of the economy. Among all civil cases in the U.S., approximately 90 percent are handled by state courts (Court Statistics Project (2012)). Thus, analyzing state courts is a key step to understanding the operation of the civil justice system. Newspaper coverage can influence civil adjudication through the following channels. First, it may change the views or preferences of the public on the civil justice system. Specifically, jurors and judges frequently exposed to newspaper coverage which criticizes frivolous lawsuits and large damage awards may hold views on appropriate punishment of defendants that are different from the views of those not exposed to such coverage. Second, this may in turn interact with the influence of political orientation of jurors and judges. In conservative districts, where jurors and judges are not favorable to plainti s in the rst place, newspaper coverage criticizing the pro-plainti bias of the system may not have much in uence. In contrast, in liberal districts, where jurors and judges tend to adjudicate large damage awards in the absence of media in uence, newspaper coverage criticizing the pro-plaintiff bias of the system may change the views of jurors and judges significantly. Overall, newspaper coverage may reduce the in uence of political orientation on civil case adjudication. Media in uence on civil justice may be distinct from that in other areas of law such as criminal justice, as demonstrated by Lim, Snyder, and Str omberg (2014). In criminal justice, survey evidence suggests that the public generally prefers harsh sentences. That is, they regard the criminal justice system as being too lenient. Media coverage also tends to be focused on under-punishment of For example, medical malpractice lawsuits have often been regarded to increase medical expenditures by inducing defensive medicine. See, for example, Kessler and McClellan (1996). For example, in the National Annenberg Election Survey conducted during the 2000 presidential election, 81 percent of interviewees responded that criminals not being punished enough was a serious problem. criminals, which would increase punishment of criminals. In contrast, the civil justice system has often been perceived to be \broken" with unprincipled juries and skyrocketing damage awards. That is, it has often been regarded as being too harsh on defendants. Thus, the direction of media influence on civil cases may differ from that on criminal cases. Moreover, the mechanism of the media influence also differs. While judges usually decide sentence lengths for convicted defendants in criminal trials, jurors decide damage awards in a vast majority of civil trials. And, judges are legal professionals, who also have career concerns, while jurors are laymen who face no retribution for their decisions. This di erence may lead to different channels of media in uence in civil and criminal cases. Despite the importance of potential media influence on civil case adjudication, it has not been widely studied. This seems to be due to the di culties in identifying the causal effect of media coverage. Speci cally, a main concern in identifying the causal e ect is that both the amount of media coverage and adjudication outcomes can be driven by case characteristics not observed in the data. For example, a civil case that involves a large corporation with a bad reputation may lead to both a large amount of media coverage and a large damage award. In such a case, the correlation between media coverage and damage awards, driven by the reputation of a corporate defendant, can be misinterpreted as a causal e ect of media coverage. To address this issue, I use the degree of congruence between judicial districts and newspaper markets as a proxy measure of the amount of newspaper coverage about courts, following the approach by Lim, Snyder, and Str omberg (2014). The rationale is that newspapers tend to cover a judicial district more actively when it has a larger share of readers. For example, in an extreme scenario in which the boundary of judicial districts perfectly coincides with that of newspaper markets, a newspaper has 100 percent of its readers in the judicial district where it circulates. Such a situation leads to the newspaper actively covering events in its judicial district. In contrast, if A meta-analysis by Steblay et al. (1999) shows that jurors exposed to negative pretrial publicity of criminal cases are more likely to judge the defendant guilty. One of the most commonly used examples of \frivolous" lawsuits with large damage awards is Liebeck vs. Mc-Donald's Restaurants, a product liability lawsuit in 1994, also known as the McDonald's Co ee Case. Plaintiff Stella Liebeck accidentally spilled co ee in her lap after purchasing it from a McDonald's restaurant. She suffered from third-degree burns, and a New Mexico jury awarded 2.86 million dollars, out of which 2.7 million dollars was punitive damages. Jury typically plays an important role in the conviction of defendants in criminal procedures. However, even in cases in which the jury convicts the defendants, judges have sole discretion on determining jail time, with the exception of capital murder. there is no relationship between the two boundaries, then the readers of a newspaper will be spread out over many judicial districts, which makes the newspaper's share of readership in each judicial district relatively small. In this situation, the newspaper may not actively cover any of the judicial districts where it circulates. This is because events in a judicial district interest only a small share of the paper's readers. Thus, a high degree of congruence between newspaper markets and judicial districts will increase coverage of courts by the newspaper. The results show that active newspaper coverage signi cantly mitigates variation in damage awards across political orientation of districts. That is, in areas with active newspaper coverage of courts, there is little di erence in the overall amount of damage awards between conservative and liberal districts. In contrast, in areas without active newspaper coverage, courts in liberal districts tend to give substantially larger damage awards than do courts in conservative districts. The results also show that such influence of newspaper coverage occurs primarily in areas with elected judges rather than appointed judges. Political orientation of districts is significantly correlated with damage awards only in districts with elected judges. This is an intuitive pattern, given that elected judges are selected by the voters in a district, while appointed judges are selected by state-wide officials such as governors or state legislatures. Since significant influence of political orientation is found only in districts with elected judges, the media influence that mitigates the influence of political orientation is also found in those same districts. This influence of newspaper coverage also occurs primarily in jury trials rather than in bench trials. This result can be explained by differences between jurors and judges in their professionalbackgrounds and incentives. Since jurors lack professional legal training and face no retributions for their decisions, they are more likely to re ect their political views in their decisions than are judges. This, in turn, can make the media effect, mitigating the influence of political orientation, stronger in jury trials. Alternatively, this result can also be explained by differences in reelection incentives between elected and appointed judges. Elected judges typically have to face competitive reelection by the voters, while appointed judges are life-tenured, re-appointed by state-wide officials, or face non-competitive \retention elections", which essentially function as a rubber-stamp for retaining incumbent judges. This difference renders stronger incentives for electedjudges to appeal to the voters in their district. The role of selection and reelection incentives in the difference between appointed and elected judges has been decomposed in related studies. For example, Lim (2013) founds that politicalorientation of districts is strongly related to criminal sentencing decisions only in areas with elected judges, and not in areas with appointed judges. She specifies a structural econometric framework for decomposing the channels of influence through selection and reelection incentives. Gordon and Huber (2007) also analyze roles of selection and reelection incentives in criminal sentencing. This study contributes to the literature on how the media in uence public policy. The existing study most closely related is the aforementioned study by Lim, Snyder, and Stromberg (2014). They analyze the influence of newspaper coverage on criminal sentencing decisions in U.S. state courts, using the degree of congruence between judicial districts and newspaper markets as a proxy measure for the amount of newspaper coverage. They compare media influence across three different selection systems for judges { appointment, partisan election, and nonpartisan election { and found that newspaper coverage induces only nonpartisan elected judges to give significantly harsher sentences. There also exist studies on the influence of newspaper coverage on other branches of the government. For example, Snyder and Stromberg (2010) use variation in the congruence between congressional districts and newspaper markets to analyze the influence of newspaper coverage on the accountability of U.S. House representatives. They found that more newspaper coverage increases voter knowledge about their representatives and induces representatives to bring more federal funds to their districts. Dyck, Moss, and Zingales (2013) study muckraking magazines in the early twentieth century and found that they influenced the voting behavior of U.S. House representatives, with representatives being more pro-consumer when the circulation of such magazines was greater. Besley and Burgess (2002) and Str omberg (2004) nd that voters' access to media influences government expenditures. This study also contributes to the literature on the in uence of politico-economic environments on civil case adjudication. Helland and Tabarrok (1999, 2002) argue that partisan elected judgeshave an incentive to redistribute wealth from out-of-state defendants to in-state plainti s in tort cases. Other studies analyze the relationship between tort awards and communities' political orientation (Wentland (2012)), poverty rates (Helland and Tabarrok (2003)), and income inequality (Kohler-Hausmann (2011)). Although these studies enriched our understanding of the civil justice system, there have not been systematic studies on the interaction between these factors and media environment to my knowledge, a de ciency that this study addresses. The rest of the paper is organized as follows. The next section provides a conceptual background of the media in uence on civil case adjudication. Section 3 describes data sources. Section 4 speci es the empirical strategy. Section 5 presents results. Section 6 concludes. 7 This is a part of a broader literature on political economy of mass media. For an overview, see Prat and Str omberg (2013). 5 2 Conceptual Background In this section, I lay out mechanisms through which media coverage may a ect civil case adjudica- tion. To theorize how media coverage would in uence case outcomes such as damage awards, we need to consider two factors: (1) media in uence on views or preferences of potential jurors and judges and (2) the structure of incentives for jurors and judges. First, media coverage may influence the views or preferences of the public from which jurors are judges are selected. If the media cover a biased set of cases and promote a strong view on the civil justice system, then more media coverage would induce the public to have the view promoted by the media. That is, media coverage may have a \persuasion effect " through biased coverage. The magnitude of the persuasion effect depends on the degree of accordance between the view promoted by the media and the public's view. If the view promoted by the media is substantially different from the public's view initially in place, then more media coverage would mitigate the influence of the initial public view on case outcomes. For example, if the media promote a negative view on the civil justice system, criticizing frivolous lawsuits and excessive damage awards, it would alter the view of the public in a community where the public is inclined to adjudicate large damage awards in the absence of media coverage while it would have little in uence in a community where the public is not inclined to adjudicate large damage awards in the first place. To make this mechanism more concrete, now I discuss the following factors in detail: (1) patterns of media coverage on the civil justice system; (2) the influence of media coverage on views about the civil justice system; (3) consequence of changes in the public's views on the distribution of damage awards; and (4) interaction of persuasion effect with incentives and backgrounds of decision makers. Patterns of Media Coverage on the Civil Justice System Studies about media reporting on civil litigation consistently and that coverage tends to exaggerate juries' pro-plaintiff bias and the amount of damage awards. That is, the media often characterize the civil justice system in the U.S. as likely to give extremely large damage awards with out-of-control juries biased towards Persuasion effect of biased media coverage has been well documented in the media literature. See, for example, DellaVigna and Kaplan (2007), Chiang and Knight (2011), and Martin and Yurukoglu (2014). This statement can easily be derived using a simple model of a media consumer updating his belief in a Bayesian manner. It is also useful to note that there exists an opposite force in that consumers tend to read news stories that are close to their initial views, which is a sort of self-selection. The media influence discussed in this section, as well as the estimate reported in Section 5, is about a pure persuasion effect that excludes the influence of self-selection in news consumption. punishing \big pockets"; the media further characterize it as causing a rise in insurance premiums and undermining the economy's productivity. For example, Bailis and MacCoun (1996) conduct a content analysis of 249 news magazine articles covering tort litigation during the 1980-1990 period. They and that the coverage considerably over-represents controversial categories such as product liability and medical malpractice, trials in which plaintiff's prevailed, and trials that resulted in large damage awards. Garber (1998) obtains a similar result in an analysis of 351 personal injury and product liability cases against automobile manufacturers between 1983 and 1996. He adds that while only 3 percent of defendant wins received any coverage, 41 percent of plaintiff’s wins and 63 percent of punitive damage awards were covered in the media. Why would the media misrepresent the overall picture of the civil justice system? An important objective in media reporting is to produce \newsworthy" information that can attract the attention of the public. Events that are not extreme are hardly \newsworthy", that is, non-extreme events rarely attract public attention. Therefore, cases that result in extreme outcomes are more likely to be covered. The Influence of Media Coverage on Views about the Civil Justice System Biased media coverage can cause misperceptions about the civil justice system. Studies show that even those who have legal training may have biased perceptions about the functioning of the civil justice system. It is because a high-quality, large data set for civil cases is did cult to acquire. (See Helland, Klick, and Tabarrok (2005) for the limitations of various data sets for civil cases.) In the absence of easily accessible, high-quality data sets, even experts can evaluate the probability of uncertain events based on the ease of needing relevant examples, as discussed in Tversky and Kahneman (1973). Saks (1998) documents that law students substantially overestimate the amount of money recovered by victims of nonfatal injuries in tort litigation. Clermont and Eisenberg (1992) and that both law professors and law students substantially over-predict plaintiff’s win rates in jury trials for product liability and medical malpractice cases. If cases that result in extreme outcomes in favor of plaintiff’s are more frequently covered by the media, their heuristic estimates of the distribution of damage awards can be biased towards extreme outcomes. For more studies that make similar arguments, see a survey paper by Robbennolt and Studebaker (2003). In their study, law professors' prediction of plaintiffs trial win rates is 62-63 percent in product liability and medical malpractice’s while the empirical rate for equivalent data is less than 30 percent. |
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