John Burritt McArthur

20 Questions with California Fellow John Burritt McArthur

 

1. Of all the accomplishments in your career, what do you consider your greatest achievement?

I don’t think my greatest achievements are from my legal career.

But, if I have to answer this question with a professional achievement, I think it is hard to top the $536,218,112.00 verdict for TransAmerican Natural Gas Company that a Texas state jury ordered El Paso Natural Gas Company to pay in 1988. I began working on the case after only a year of practice. For several years I had primary responsibility for pleading, motions, and discovery. I tried the case along with LCA Fellow Mark Wawro, who was lead counsel, and our partner Steve Susman. Mark and I split almost all witnesses, with Mark handling the liability case and I taking almost all of the damages case.

The lawsuit was a natural gas take-or-pay case that began as a small defense case over a $6 million claim about how to calculate “payout” on a series of gas wells. TransAmerican was the third largest gas producer in Texas but it was in bankruptcy. The company was owned by (sometimes) billionaire Jack Stanley.

It was a heady experience when in 1984, just a year after starting at Susman Godfrey, I drew the job of preparing this technical natural gas case. I had a free hand to craft our side of the case and began getting calls directly from Stanley. (Some would say that Stanley called me because Steve Susman always asked about unpaid bills whenever Stanley called him. Some might think that Stanley insightfully preferred to call me because I had such exquisite judgment. I am above commenting, of course, on which theory is correct.)

I initiated aggressive discovery over how to compute payout and a good fight was underway on that dispute when, about six months into the case, TransAmerican’s President, Craig Shephard, called me and casually mentioned that El Paso would owe TransAmerican about $25 million in take-or-pay payments the next month and that he predicted El Paso wouldn’t pay. I remembered requirements contracts from law school, but I am pretty sure that was the first time I had thought about take-or-pay contracts. Craig asked me to prepare a counterclaim to file if El Paso missed its payment. He was right; El Paso did not pay. We counterclaimed for the $25 million and were off to the races. The unpaid obligations would mushroom year after year.

We secured summary judgment on liability, based on a motion and argument that I still find persuasive (you can guess who drafted and argued it), but still had to build a very detailed case to prove that El Paso was repudiating the entire contract and to establish damages for the many years the contract had left to run. Much of the lost revenue on which damages were based would come from wells that had not even been drilled and that could not be drilled (because TransAmerican, a debtor in bankruptcy, didn’t have the money) until El Paso began buying the gas or making the obligatory prepayments.

The case went in at trial about as well as a case can. The judge agreed to realign TransAmerican as the true plaintiff. While Mark Wawro was beginning the jury selection process, I was in federal court defeating a motion El Paso filed that morning in an effort to persuade a federal judge to stay our case because TransAmerican’s contract claims allegedly were preempted by federal regulation. At trial, Mark got El Paso’s corporate representative to admit that he could not identify any particular time when El Paso would begin buying gas from TransAmerican. That was the beginning of the end of its defence on repudiation.

I experienced one of the great pleasures of my practice occur when, during my cross-examination of a recalcitrant El Paso damage witness who had come up with various implausible reasons why El Paso did not owe the damages, the judge, Sharolyn Wood, spontaneously cut in to admonish the witness that he had to tell the truth. Later in trial, we had to make emergency plans to secure attendance of a geologist from Texas A&M, our expert, who had scheduled a fishing trip in a remote jungle area in South America during what turned out to be our trial weeks and refused to abandon the trip. The only way he could get to the courthouse on time for rebuttal testimony was to fly through Nicaragua, a country then run by the Sandinista National Liberation Front and a country with which United States did not then have normal relations. We found a private jet registered in another country that could get him to Nicaragua and another way (I think by flying to Mexico) to get him to a carrier that could land in the United States. The expert showed up after a red-eye flight looking as if he had been fishing off the South American equivalent of the African Queen for about ten years and with no proper attire for trial.

I still remember a moment in the middle of the many-week trial when I was looking around the courtroom with a feeling of sadness at the thought that even in a long career, surely there would not be many experiences as good as what I was feeling right then. I had the same feeling after closing argument when Mark and I were waiting for the jury. Then came the magic moment. The foreman read “yes” to liability questions and began reading damages, 5 . . and we knew that we had recovered over half a billion dollars . . . 3 . . . 6 . . 2.. . 1. … 8. . . .1 . . . 1 . . .2. It was a great feeling. $536,218,112 here, $536,218,112 there, and pretty soon you are in the big leagues.

Why does this feel like my greatest professional accomplishment? I have handled cases with more at stake and been lead counsel in larger cases, but the TransAmerican case was my first case. It was a very large case and one in which I got to plan and structure much of the way the case development. It also was a case in which discovery unfolded in an atmosphere of great hostility. (I kept dunning lead counsel on the other side with discovery letters about failures to produce information. His responses grew increasingly intemperate until he wrote me saying that it was “improper” for me to write to him because I was not lead counsel and that he would report me to the bar if I continued. This was in the heyday of speaking objections in deposition and little judicial concern with warlike discovery tactics. Needless to say, I of course ignored the letter.) There were serious damage issues so that it was hard to predict what TransAmerican would win even if it prevailed on damages and liability. Yet the jury went with us to the penny. The case also was very memorable to me because Mark and I were best friends going back to high school. The case remains the only one I have tried with someone I knew from that other life before law school.

 

2. What book should every trial lawyer read?

Books, not a book. There’s no one book every trial lawyer should read. Different lawyers have different interests and different personalities. Different people learn in different ways and are curious about different things. What is compelling to one person is dull as dirt to another. “There’s no accounting for taste.”

All lawyers who do trial work should open their minds to books that add color to their language, infuse their minds with concrete metaphors, and arm them with experiences jurors are likely to share. Abe Lincoln built the greatest life in American law substantially out of his reading of Shakespeare, the Bible, and the Constitution. Anyone who reads those two books, that short document, or for that matter Lincoln’s collected speeches -- and all these can be read again and again with profit -- will emerge the richer, personally and in ways that help in trial after trial.

Other than that, read widely. You can read anything from the Loeb classics to Ed McBain to the Harry Potter books to Shades of Grey (that last is hearsay knowledge, of course), just keep reading to expand your mind. Law is an inward looking profession. It is not just a harsh mistress, but a narrowing one. Most lawyers spend too much time other lawyers and too automatically channel all of their thinking through the curt, rational compactor acquired in law school to turn information and experience into arguments. Reading can break you out of that narrow world and into larger experiences shared by jurors. Read early, read often, read widely.

 

3. How should a trial lawyer face his or her fears?
I’m so glad you included this question, Steve, because the practice of law can be, and should be, a joyful experience, but the structure of adversarial process creates enough pressure and tension that a full docket of cases can come to feel more like a battle for personal survival than an opportunity for achievement. I’m also glad you raised the question because it is my experience that traditionally, lawyers (Jerry Spence excluded) rarely talked about fear. Fear is a part of trial work and it should be discussed, not hidden.

When I think back on my more than three decades of practice, it strikes me that this question never would have been asked when I began practicing law. Certainly I don’t remember any lawyer talking about fear. The macho trial culture left everyone laboring under, but no one talking about, the pressure, doubts, stress, and uncertainty that are part and parcel of trial work.

Today, in contrast, it is the rare bar journal or lawyer magazine that does not publish multiple articles annually on, for the negative side, our profession’s catastrophic rates of alcoholism, depression, drug abuse and other psychological calamities, and, on the positive, guided meditation, peer group talk therapy, mentoring, and other solutions to the pressures of the job. This is a great step forward for the profession. I’d love to know whether this unprecedented public discussion of “feelings” has anything to do with the growing numbers of women entering the profession.

Fear, butterflies, and a sense of lack are natural feelings in the war-like moment when you first put a case to a judge you’ve never met or meet the next jury panel. Guided in the right way, fear can be a help, releasing adrenaline that helps make trial work a peak experience. Misused, repressed, or denied, it can rob you of your sleep, prevent you from taking a break from thoughts about upcoming trials, and generally make life miserable. I believe that one of the LCA’s greatest contributions should be to have our more experienced members help those newer to the profession deal constructively with the negative feelings.

I have seen several good ways to deal with this overflow of emotions. One of the best ways is to talk to other lawyers. Some more experienced lawyers are open to talking about their feelings while others are not, and some may view raising the topic as a sign of weakness in a young lawyer. So it pays to think hard about who to trust as a good mentor on this subject. But older, more experienced lawyers should reassure young lawyers that it is natural to feel afraid in the earliest steps in practice, explain that fear does not mean that the new lawyers are unsuited to trial work, and talk about how they themselves have coped with negative aspects of our job.

There are other practical ways to overcome nerves in the early years. A great way to overcome doubt is, of course, to try cases. Some “known unknowns” at the start of a trial are inherent in the process, but pulling a few verdicts from juries or a judge or two is a great way to gain basic confidence. New lawyers should seek out every opportunity to take depositions, argue motions, and try cases.

Preparation, detailed preparation, is another vital ingredient in trial confidence, all the more important the younger and less experienced the lawyer. A prepared lawyer taking depositions will encounter unprepared witnesses, see opposing lawyers miss questions in their depositions, watch opponents drop a point here and a point there in motion practice, and become more and more comfortable about their own mastery over the case. By the time trial arrives, they should be more focused on putting all they have learned into a single, compelling presentation than on their nerves. Being busy getting ready leaves less room for fear and self-doubt.

Lawyers who do find themselves overwhelmed by negative thoughts should be aggressive in seeking help from some of the many groups now easy to identify in bar journals or from bar help lines. The availability of information about these resources and very open public confessions by lawyers who let fear come to dominate their lives has been a big change, a wonderfully healthy change, since I started practicing law in 1983. If you find that fear of work is disrupting your life (in or out of the law), you need to pay attention. That kind of fear is more than ordinary, almost healthy butterflies. If you are unable to carry on your life the way you did before, it is time to get help. If you are drinking too much, try the bar’s counseling services and find a group of lawyers with a similar problem; the same if you find that drugs, sex addiction, or depression are disrupting your life. Even if you just find that you really dislike coming to work, are putting off answering calls from opposing counsel because of anxiety, or cannot sleep before each appearance in court, you should address this pain directly. This kind of fear can cut off the joy and fulfillment that should accompany a life lived deeply in the law.

By the way, there is work to be done in this area, a lot of work. Any of you who were privileged to hear David Paul’s extraordinarily moving talk about fear and trial work will remember just how unusual it still is, and how much courage it takes, for a lawyer to talk publicly about fear in real unvarnished, personal terms, not hiding behind clinical terms that help keep the reality at bay or at least depersonalize it.

To return to the beginning: If, overall, you get joy out of your practice of law, you are on the right road. If, instead, your feelings are mainly painful, you do not have to and should not accept suffering as an inextricable cost of trying cases and should seek help to change.

 

4. To what destination do you go to find your own version of solace?

I don’t have a particular geographic place where I go to get solace, although there are many that I enjoy and some places, like Point Reyes on the Northern California coast, that I view as personal special places. I like traveling too much (and DRIVING) to focus on just one destination.

I sometimes do try, with less success than I would like, to cultivate an internal space through meditation. Body meditation helps me stay in the present even in the middle of loud conflict with opposing counsel or a court. I’m no expert on meditation practice, but even my limited experience tells me that these are very powerful techniques and that they become much more effective with repetition. Suppose a lawyer is needling you in deposition or at trial, interrupting your questions and generally behaving like a jackass. Slow your breathing and your verbal response. I can almost promise you that the more grounded and deliberate you are when you do respond, the slower your speech, the angrier and more out of control the other lawyer will become. Not only is this deterioration of opposing counsel fun to watch (I know, so much for the meditation spirit), but the results will be good for you and your client.

 

5. What is your greatest extravagance?

Living in an area where a small house (say, 1500 square feet) can cost a million dollars. Nuff said.

A close second, and coming up fast, is my red 1987 turbo Volvo 740 wagon, with stick shift and a large turbocharged V4, that I bought with my first sizable year-end bonus as a lawyer. I have kept the car running for 29 years with very little repair, but this month I find myself dropping another engine into it. It is a wacky, indulgent thing to do.

 

6. If you could meet anyone from history, who would it be, and why?

Abe Lincoln or Franklin Roosevelt. I can’t decide between them. I can’t list Lincoln unqualifiedly because I suspect that he would might not be as open to really talking about himself as I’d hope. I can picture him talking through a battery of quaint, humble jokes but never really revealing himself. And I am sure that Roosevelt would do the same thing, albeit in a more showy way. He would be in absolute control of the conversation but never let it get very close to himself.

I am drawn to Lincoln because he is, in my judgment, the greatest legal mind the country has produced – re-read the Lincoln-Douglas debates if you doubt me and watch Lincoln brilliantly undercut every argument for slavery while striving to remain electable and to preserve the bonds that kept the country together. And, at the same time, he is the repository of our national conscience, and the best single example that a life in the law can be lived powerfully for good.

I would choose Franklin Roosevelt if not Lincoln because FDR rose above ideology and his own wealthy position to focus Americans on the real life condition of ordinary people. He was heroic in politics, not just in his fight with polio. Roosevelt took huge political risks to persuade Americans of the reasonableness and humanity of the dramatically new programs he proposed. He refused to let theory distract him from his concern for the lives of ordinary Americans.

As I write these comments, I am torn between these two Presidents and Shakespeare. It’s not that I want to ask, over a beer, “So, tell me the truth, Bard, did you really write all those books?” No, I am confident that he did. What I’d like to know is if he spoke in the same unending string of new phrases that materialize in his writing.

 

7. Litigators tend to travel a great deal. What are some of your favorite cities or places and what fascinates you about them?

I love traveling, but my peak travel was based on movement, not arrival, and occurred inside a tractor trailer when I was 26 years old, the year before I went to law school. Everything since then pales. Some folks peak in sports, some by winning elected office, some in a big jury trial, but me, I peaked with 18 wheels, a 42-foot trailer, 100,000 pounds of load, and a 21-speed transmission. It was heaven.

If I have to name cities, I would name, not in any particular order, Austin; San Francisco and environs; Denver; Northampton, MA; Anchorage; and Heidelberg, Germany.

 

8. I once practiced with a fantastic, though legendarily difficult trial lawyer named Olin Zeanah. One of my partners at that firm, beginning when we were associates, kept a list of "Zeanahisms." They were little gems of knowledge that Zeanah would occasionally impart. Did you have a trial icon or mentor in your early years of practice who shared with you the wisdom of years of practice? If so, please tell us about them.

I did not. I began my practice with some of the big names in trial law, for instance Steve Susman and Lee Godfrey, often in cases where other well-known lawyers were involved. I learned a lot from lawyers like these, but it was mainly by observation and mundane interactions as we talked about our cases. They did not generally talk about trial practice or the life of the trial lawyer in the abstract. If I could redo the experience, I would be more direct in asking leading questions about many aspects of trial work.

On the other hand, I have worked with a lot of very skilled lawyers in the no-longer-young days of my career, including lawyers whom I see at LCA meetings. I find it much easier to talk about trial work now than when I was a new lawyer. There are more Olin Zeanahs around than one might think, and it is never too late to hunt them down. So this old dog has learned, or at least is open to learning, new tricks.

 

9. What has been the biggest change in the way law is practiced between the time you first began until now?

I think this question may be guilty of “sizism.” In addition, I don’t think any single change, even a big change, captures how the practice has changed in the 33 years since I first entered a courtroom with a license to do some damage. Instead, there have been a cluster of changes that make today’s practice very, very different from what it was when I began.

Computers Probably first is the use of computers. When I began, most firms had their documents typed by secretaries, usually on an IBM Selectrix. Small changes involved the backspace key or Liquid Paper. Large changes required drawing boxes around sections of text to be moved and retyping the document, and had to be minimized as filing time drew near. The largest corporate law firms had a computer room where dedicated typists would receive tapes and some hours later produce a typed document. Often you’d leave your tape at night and the document would be on your desk, the tape clipped to it, in the morning. In my firm, Susman Godfrey, the senior partner banned lawyers from using typewriters because he believed – I think correctly – that lawyers can dictate much more quickly and usually more clearly than they can type. No firm that I knew had lawyers using personal computers.

Computers have changed so many things. They have made hard-copy legal research and the time spent in “the library,” once defining experiences for young lawyers, obsolete. They have vastly improved the ability to do legal research and pretty much put the ALR’s, Corpus Jurises, and other compendiums out of business. They have made Shephardizing, a dull and sometimes backbreaking physical chore, simple. And they have brought brief and motion preparation back into lawyers’ control.

Computers drove out faxes. When I began practicing, faxes were cutting edge technology. If you wanted to get a demand letter, a discovery response, or an important letter to an opposing lawyer or a party immediately, you’d fax it. There were a set of timing games about putting things in regular mail rather than faxing, and how to count the response date if your opponent both mailed and faxed a document. That aspect of the practice has entirely disappeared.

Electronic discovery: With computers has come electronic discovery. One of the first cases I worked on was a monopolization case involving the worldwide tennis ball market. Document production involved millions of pages of hard-copy documents, and most of them were forms, letters, brochures, financial plans, and internal memos. Our firm had a good part of one floor in a Houston skyscraper dedicated to the documents in that case. That is what a big document case meant in those days.

The first impact of computers on document discovery was negative, because computers multiplied the number of small communications. That produced a second era of document production (after the initial era of big hard-document production), and in it the problem of massive productions worsened. By the mid to late 1990s, even fairly simple and legitimately focused requests in small cases were churning up endless series of email chains, with document reviewers having to read copy after copy of identical emails or the last email with just one more response, even if the only new part of an email was only something as prosaic and immaterial as “Received, I’ll review later.” Small commercial cases became inordinately expensive, both for companies of any size to produce documents and for lawyers on both sides to review them.

I hope, and believe, that we now have entered a third age of production, in which digitalization has begun to make documents much easier to search and, for the first time in my career, new techniques will lower costs and quicken discovery. Electronic files were so laborious to produce that they created huge demand for better methods of document review. Document search programs sprang up in response to that demand as lawyers had a front-row seat to watch the magic of rapid technological utilization spawned by our open market. The burgeoning capacity to conduct highly targeted electronic searches is one of the best, and most important, discovery changes in decades. Digital searching has coincided with efforts to inject proportionality between discovery requests and the issues at stake, as in the Federal Rules. The prospect that you can review a sample of five or ten boxes, use that review to define a series of accurate search terms, and have a production of hundreds of thousands or even a million or more documents searched quickly, without huge pools of paralegals and young lawyers, is a revolutionary change.

ADR, Mediation and Arbitration: There has been a sea change with ADR that has substantially altered trial work. When I started practice in 1983, most cases of course ultimately settled, but there was no organized mediation I was aware of, and certainly no one had a full-time or even substantial mediation practice in Houston. Arbitration was common in certain specialized areas of the law, like labor law and construction, but it was not any part of my day to day practice or of any general commercial practice.

By the late 1980s, things were changing. Courts in Texas were requiring mediation in all commercial cases, though usually – unless the parties or their lawyers had someone they wanted to use – with a randomly appointed volunteer lawyer. The results were not particularly inspiring. Now, of course, most good lawyers understand that mediation is a powerful tool. It is both a discovery tool – you always learn more about your case even if you don’t settle – and a serious chance to bring cases to resolution sooner than the proverbial courthouse steps. Transaction lawyers should be giving arbitration serious consideration as they advise their clients; this process, too, has far outgrown its roots as a tool in certain specialized industries. It is now a real alternative for fair adjudication of ordinary commercial disputes.

I know that many lawyers, including many LCA members, believe arbitration is overrated and often less fair, or slower and more costly, than court cases. I disagree. In my experience, lawyers who claim arbitration is an out-of-control process usually have not exploited the many tools they receive to shape arbitration of their cases. They may also unjustifiably extrapolate from one bad outcome to the overall process.

Underfunded courtsI’m going to mention a few negatives, too. There has been a notable decline in society’s willingness to fund courts at the level needed. Resource shortages have damaged state and federal courts. We have seen congestion, tremendous pressure on judges to become managerial judges and erect pretrial processes that keep cases from trial, and lack of face time with judges (I am thinking particularly of the remoteness of many federal judges). When I began my practice, you could always get a discovery hearing quickly on calendar in Texas state court. You might have to sit through a morning of everyone else’s motions before you were reached, but heard you would be. Federal court took a little more time but you still could be sure that important cases would get attention.

Today, as a result of congestion, being able to persuade judges that your cases need more attention and resources, including trial time, has become an important part of the trial lawyer’s skill. It should not have to be, but it will be as long as we underfund our courts. The failure to give courts the staff and resources they need is one reason that arbitration will continue to grow in importance.

Vanishing trials: A product of dwindling judicial resources, pressures for judicial management, and the rise of ADR is the slow disappearance of trials. Tort reform has removed the pool of small bank and insurance cases on which big firm lawyers often took their baby trial steps. I agree that voluntary settlement usually improves party satisfaction, so I don’t lament high settlement percentages, but I am sure that some of those cases settle because waiting for trial has become too expensive. We cannot know what uncoerced settlement rates would be, when so many courts are pressured to dispose of cases and it is so hard to get trial time. I hope that trials stage a comeback during my lifetime, but I’m not holding my breath.

Juries, trials, and psychology: There is one last change that I expect will have a lasting impact, even though in my view it is only beginning to change trial culture. The view that trials are not just a matter of a skilled lawyer’s “feel,” but that there is a science to juror decision making, so that it is rational to hire jury consultants, study the characteristics of the jury pool, and observe the jury as the case proceeds, was only the beginning of this change. We are just now beginning to see the long-term impact of the work of Daniel Kahneman and Amos Tversky and like-minded psychologists, and of behavioral economists, on how individuals and groups (including juries) make decisions. Among a number of important effects is a new appreciation of how seemingly irrelevant factors, like the order in which questions are asked, can alter outcomes. I expect there will be a lot more change in the way lawyers think about jurors and how cases end up being tried.

 

10. What intrigues you about prior generations of trial lawyers?

I am drawn to the time, now long ago, when lawyers tried cases all the time and spent no appreciable time on discovery or, for that matter, on ADR. My guess is that the change is tied to the 1938 Federal Discovery Rules and its authorization of robust discovery. My image of the days before substantial discovery is of lawyers up and down in court all day. Many rode the circuit with a roving judge and opposing counsel as they followed trials around their state, as we know Abe Lincoln did. Cases unfolded as they were tried. Today, trials are a rare luxury. I fear that our profession has lost the trial fluency of the great days of trial work.

I have noticed that other LCA members tend to answer this question in one of two ways: (1) by expressing doubt whether the old days really were so different, or (2) by noting that the profession was limited to white Protestant males. On whether lawyering really was different, I am sure that it was. Without photocopiers, quick mail and fax and email, and for that matter without widespread business documentation, the bulk of a case had to occur in trial, not in discovery. As for discrimination, I see no reason to believe that the higher frequency of trials was causally linked to racial, gender, and religious discrimination, even though historically they coincided. So I think it is fair to think of the older days as a golden age of trial work from a professional, craft perspective, even though the work occurred in a world unfair in many other ways.

 

11. Diversity, along with excellence and integrity, is central to the LCA's mission and plays a fundamental role in our selection of Fellows, growth, and goals. We want to quote you on diversity in the next issue of Litigation Commentary & Review, as well as in the Diversity Law Institute's new website. In a word, sentence, or paragraph, what, in your opinion, is the significance or importance of furthering diversity within the profession of law and throughout our system of justice?

This is one question on which it may be a little harder for me to walk the walk because I have a solo practice. I don’t have anyone to advance, or retard, except myself. It is my belief that the profession is doing an okay job bringing women into the ranks, though there remains work to do, particularly in upper echelon positions, that religion is no longer an issue if hiring or advancement (although unfortunately religion may become a barrier for Muslims if we are not careful), but still a bad job on racial minorities. Diversifying by gender and religion has brought fresh air to the law, just as it is slowly doing to Congress. But we are not getting similar benefits from broad racial diversification because we have not achieved it. Lawyers who do not have diverse interactions are the poorer for the lack. Lack of diversity also means that our profession is not equipped to serve the whole society zealously, even though it should be. The LCA’s commitment to diversity was one of its most appealing aspects, to me, when I joined; I hope to hear again at one of the annual meetings on how we are doing.

 

12. How would you like to be remembered in life?

This is the easiest question: for my friends and Mara and Alexander. (I assume this means remembered in death, during my unconscious afterlife?)

 

13. What is your motto?

I never imagined having a motto.

But now I am suspicious: Is Ross Fishman going to persuade me that I really do need mottos and brands at the next LCA meeting? I’m already carrying a set of business cards in my left pocket at meetings and putting cards received into my right pocket, not holding both drinks and food so that I can’t shake hands, not squandering all of my scarce meeting time on existing friends . . . .

 

15. What object in your office serves to re-energize you when your mood needs an adjustment?

I can see the Berkeley hills, downtown Oakland and the Oakland hills, the Bay Bridge and a portion of downtown San Francisco from my desk. If I walk to the window I can see the Golden Gate Bridge. I picked this office as soon as I saw the view and it continues to offer me great pleasure.

 

17. In addition to holding a law degree, you attended the Kennedy School of Government and have a Ph.D. How have you used those credentials in your practice and what was your Ph.D. concentration?

My Ph.D. concentration is in public policy. I went back to school in 1993 after a decade at Susman Godfrey in Houston to follow up on graduate work in economics that I had done before law school. I had been unable to sate my wide curiosity about many aspects of our society through the practice of law alone. My purpose, though, was pretty much to indulge myself by buying time to read a lot of sociology, political science, and economics, as well as a little legal theory.

I did not expect my Ph.D. to have anything to do with my practice when I enrolled in the Ph.D. program. I was right, at least, as far as my trial work, expert work, and service as an arbitrator within the United States. I have sensed that having a Ph.D. has had some weight in international arbitration. But I have always viewed my own education as a consumption good, not an investment good, and I will go to my grave – no time soon -- holding that view.

 

18. Your verdicts have included, along with LCA Fellow Mark Wawro, an award of $536 million rendered in Texas state court against El Paso Natural Gas Company over El Paso’s failure to take or pay for natural gas from a huge field in South. How document-laden was that case and what method did you utilize in communicating such a complex case to the jury?

This is the case I discussed in response to the first question. The TransAmerican/El Paso case, which began a year after I joined Susman Godfrey in Houston, was the first big case for which I had all of the discovery responsibility, and it was a big document case. We took dozens of depositions and, though before the era of computer files and emails, had a big set of documents to review. We used very simple demonstrative techniques – document blowups, simple charts, lists of points, highlighting -- in that 1988 trial. (I can picture Ric Gass reacting with horror, probably even in those innocent years, at just how simple the techniques were. But they told a clear story very well).

The trial boiled down to two main questions: (1) Did El Paso repudiate its take-or-pay contract with TransAmerican, our client? (2) What were damages if El Paso repudiated a contract with many years left to run, when most of the wells that would be producing over that time had not even been drilled? The evidence on liability boiled down to a small number of internal memos that were so bad they did not need much embellishment. Mark Wawro used blowups of the worst documents with selected text highlighted. The memos discussed a “contract cure” program in which El Paso would pay gas sellers who were willing to give up their contract price and accept a lower price, but not companies that insisted on getting the full take-or-pay payment they were due. El Paso punished counterparties who insisted upon El Paso’s honoring its contracts.

On damages, the expert projections of production and future prices, and ultimately damages, were a duller matter. We nonetheless found ways to make them exciting. For instance, I was able to show that El Paso’s estimate of future production was so low that it barely assumed more than the next year or two of production. I undercut El Paso’s argument that the area was so highly faulted that no one knew what the next well would bring with evidence that for any group of wells average total per-well production, initial production rates, and declines were highly predictable. El Paso called all undrilled wells “phantom” wells and would not include any undrilled well in its model; I showed that today’s producing wells had been “phantom” wells in this sense just a few years before. So we had a lot of ways to undercut El Paso’s experts by focused, very plain-English cross examination.

To me the contemporary takeaway about documents from the TransAmerican case is that, even though juries today live in a more sophisticated electronic world, you must keep your themes simple and, no matter how complex your points, anchor them in the main arguments of your overarching case.

 

19. You are frequently retained as an expert. Tell us in what type cases you have testified and what it is like being on the other side of cross-examination.

Interesting question. I find being examined as an expert, much as I do being an arbitrator, a great way to get another perspective on what we do as trial lawyers. I have been an expert in over 20 cases, all in the energy field. In most of those cases I have testified on class certification, but I have testified as well on the substance of natural gas markets, contracts, and regulation (and deregulation), and on settlement fairness.

Testifying reminds you quickly that it is the lawyer, not the expert, who determines the range of testimony. The areas on which you need to prepare are much greater than the number of areas that can be covered at trial. So if you are addicted to control, as many trial lawyers are, expert witnessing is not for you. Testifying lets you experience some of the fundamentals of trial work, if you are not careful to experience them painfully: the need to resist volunteering answers that go beyond the question, as those answers almost always open up new lines of inquiry; the need to focus on precisely what was asked before answering; and the absolute need to avoid hyperbole and overly strong language unless you are absolutely, positively (as the old ad went) sure that you can back it up. The “once burned, twice shy” school produces a lasting education.

 

20. As one of the country’s most desired arbitrators in selected fields [sic*], tell us how you deal with the evidentiary differences between courtroom presentation and arbitration rules, and the relative weight given the two. That is, is evidence otherwise presentable in a courtroom setting given preference over more broadly presented evidence at arbitration.

*“Selected fields”? What’s with that? To paraphrase Walt Whitman, my arbitration practice contains multitudes, not just selected fields.

On the merits of this question, I, like most arbitrators, usually do not follow the rules of evidence. The varying provider rules under which arbitrations occur provide that the rules of evidence do not apply (although I am listed by one organization, Fed-Arb of Palo Alto, that uses the Federal Rules, including the Federal Rules of Evidence). If I am the chair or a solo arbitrator, though, I do tell the parties to feel free to cite evidentiary rules if they want me alerted that they think there is a reason to discount, and perhaps even totally disregard, a given document. I have been taken a bit aback by some of the latest psychological work, which suggests that jurors who are shown documents that ordinarily would be excluded often reach different results than had they not seen the documents, even when they are instructed to disregard them. This suggests that arbitrators who think that “Well, I’m not like a jury, I know how to disregard evidence” may be at least partly fooling themselves.

Arbitrators tend to avoid evidentiary exclusion for two reasons: it is easier not to have to rule on objections, and preventing a party from putting on its case is one of the few grounds for vacatur under most arbitration regimes, including under the Federal Arbitration Act. I am not impressed by that reasoning. So much deference to arbitral decisions is required that if an arbitrator has any reason at all to exclude a document, and is careful to put the reason in an order or elsewhere in the record, there is no real risk of being overturned. I will exclude a document if a party persuades me that it is entirely prejudicial and not at all probative, or that it is so prejudicial that any benefit is outweighed by prejudice. But that rarely happens. I can think of only a handful of times, in over 20 years of serving as an arbitrator, that I’ve excluded evidence. I’m pretty sure that I’m a minority among arbitrators on my willingness to exclude even that many documents.

 

 By G. Steven Henry