Equity and the Seventh Amendment

The scope of the civil jury trial right

|The Volokh Conspiracy |

The Seventh Amendment preserves the jury trial right in suits at common law. But what does that mean? It's a famously difficult question. One reason is that the amendment compels us to use a historical category like "Suits at common law" even though the Federal Rules merged the procedures of law and equity. What is a "Suit at common law" today?

I have a new draft article on this problem, "Equity and the Seventh Amendment." I argue for a somewhat different test than the Supreme Court currently uses, one that is more historically grounded and more judicially administrable. The short version is that there should be a presumption in favor of the jury trial right, with three categorical exceptions: (1) suits in the exclusive jurisdiction of equity (e.g., fidicuary law); (2) suits for an equitable remedy (e.g., injunction); and (3) suits that use one of equity's case-aggregating devices (e.g., the class action). Each categorical exception stands on its own. Thus there is no jury trial right in a suit seeking damages for a trustee's breach of the duty of loyalty, and no jury trial right in a class action even if the only remedy sought is damages.

Here's how the paper concludes:

The Supreme Court's approach to the Seventh Amendment has been the subject of scholarly scorn, and it has sometimes vexed the lower courts. This Article offers measured criticism of the status quo. It also proposes a test that is more historically sound, as well as more judicially administrable.

One distinctive feature of this analysis is the attention to equity's exclusive and concurrent jurisdictions. This analysis does not suggest that every ancient doctrine of equity needs to be dusted off, polished up, and pulled out for daily use. It offers no presumption that equitable doctrines of the past will make sense in our world. But it does suggest the folly of a presumption the other way. The distinction between equity inside and outside the exclusive jurisdiction seems antiquated. Indeed, in previous work I have myself dismissed it. But it is surprisingly helpful for the Seventh Amendment. You don't need many old equity doctrines, if you choose carefully.

If courts do give renewed recognition to equity's exclusive jurisdiction, the implications will run further than just the jury trial right. Other questions will arise: Are punitive damages available in the exclusive jurisdiction? Must a plaintiff show "no adequate remedy at law" in order to obtain a remedy in the exclusive jurisdiction? Should the clean-up doctrine operate differently inside and outside the exclusive jurisdiction? Should loss-based monetary relief in equity's exclusive jurisdiction be considered "damages," and thus a legal remedy?

The harder questions this Article raises are about the scope and character of equity in contemporary American law. Existing legal rules point judges toward equity, making its doctrines still formally binding in the present. Yet judges have lost familiarity with those doctrines. For most of the last century, scholars have not had confidence that there is any value and vitality in equity's separate identity. Now the scholarly trend has started to reverse, not only in the United States but also in other common law countries. But what has not yet returned is judges' instinctive familiarity with equitable doctrines.

There is thus a paradox: widespread ignorance about equity in the United States, yet as a matter of formal authority widespread incorporation of equity into our legal system, not as a principle of discretionary justice but as a set of doctrines and remedies. This is not some kind of deep truth or paradox we can talk about now and go on talking about for a hundred years. It is unstable. One of two outcomes is likely. Equity could be revived—the lack-of-knowledge side of the paradox could be altered. Or the distinctiveness of equity could be further diminished and perhaps even erased—the presence-of-authority side of the paradox could be altered.

The Seventh Amendment does not require us to have a theory of why a distinct equity is valuable, but it does require us to draw equity's boundary line. In drawing that line, we should translate the historical practice with sensitivity to judicial competence, and we should give reasons rooted in the present for our reconstructions of the past. A start would be to notice the contours of the exclusive jurisdiction and equity's domain of case-aggregating devices, and reform our Seventh Amendment test to take them into account. It is only a start.

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  1. Wait – no jury trials for class actions?

  2. I would like to see an explanation of how the class action is a creature purely of equity, or at least not one of law. The class action seems like it is merely an expedient for both the parties and the court. Some underlying action is required for the class to exist at all and I fail to see why that underlying action should not determine whether it is a legal or equity suit.

    Also, even assuming the constitution only requires that class actions be available for equity suits I don’t see why Congress would not be free to create such an action in the courts of law. The seventh amendment creates a floor, I don’t see it establishing any sort of ceiling.

    1. Yes, I’d like to see an explanation for how Smith v. Acme Corp. would be a jury trial under the 7th Amendment, but Smith filing as a class action against Acme would be tried by a judge alone.

      1. The way I’m interpreting it, either both “Smith v. Acme Corp” and “Smith filing as a class action against Acme” would be a jury trial or neither would be. My interpretation of (3) above is it is a multi-party extension of (1). The intent being if (1) is a judge trial, then you can’t get a jury trial by grouping them together and changing it to (3).

        What I think would help would be a few examples of both equity trials and non-equity trials. This would include examples where the plaintiff and defendant are both individuals and not a government/prosecutor.

        1. There are some footnotes in the paper, available for download, that might lead to an full explanation. Apparently the Supreme Court recognized the equitable origins of class actions in Hansberry v. Lee.

          I can see a good reason to treat class actions as equitable. While you have a right to press your own claims against Acme Corp, you do not have a similar right to press my claims against Acme Corp. By filing a class action, you (or your lawyer) are pretending that you do have that right. Rather than an ordinary remedy, you (or your lawyer) are seeking extraordinary relief that goes beyond your legal rights.

    2. The issue with class actions, as I see it (and I may well be wrong, this is just an initial reaction, I haven’t really studied it), lies not with the nature of the action, but with the remedy. While everyone within the class of plaintiffs in Smith et al. v. Acme, Inc. might have exactly the same cause of action against Acme, there will almost certainly be wide variations in the amount of damages which the individual plaintiffs might have suffered. If the named plaintiff, Smith, was among the unlucky few who suffered disproportionately large damages, then judging the recovery of the entire class based upon Smith’s damages will overcompensate the victims and impose excessive liability on Acme. The only way to completely avoid that issue is to require individualized damage trials for all members of the class, which pretty much eliminates any judicial efficiency justification for class actions. Allowing a jury to quantify total class action damages looking only at a selected subset of class action plaintiffs (a subset selected by the class action plaintiff’s lawyer) is a recipe for making class actions punitive to defendants.

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