The Lesser of Two Evils in the Law: Alabama Edition

Michael GrossmanAugust 28, 2017 8 minutes

It's often a throwaway line when people write that "we have the best justice system on earth, even though it's not perfect." While those of us who write about the law for a living often extol the virtues of our legal system, it's easy to lose sight of the fact that sometimes the law is forced to inflict a small injustice in order to prevent an even larger one from occurring.

Recently, the Supreme Court of Alabama issued a ruling in Nissan North America, Inc. v. Adrienne Scott that highlights how even the best justice system can let one person down, in an effort to not disappoint an even larger number of people.

A Car Catches Fire and Things Get Complex

This case began in 2015, when Adrienne Scott purchased a Nissan Juke from a local dealership. Shortly after her purchase, Ms. Scott reportedly smelled gasoline inside her car. She did what any sensible person would have done and took the car to the dealership, in order to discover what was was causing the smell.

After inspecting the car and not uncovering the source of the gasoline vapors, the dealership said there was nothing wrong with Ms. Scott's car and sent her on her way. Two days later, Ms. Scott's vehicle caught fire while she was driving down the road and was destroyed. In that incident, Ms. Scott also sustained injuries.

Like anyone else caught in a similar situation, Ms. Scott took legal action against the dealership for the botched inspection and the manufacturer for making a car that spontaneously combusted. That's when things took an interesting turn.

One Legal Grievance, Two Legal Venues

When Ms. Scott purchased her vehicle, part of the purchase process included signing an agreement to arbitrate any disputes with the dealership. Unlike court cases, which are conducted by an officer of the court and usually decided by a jury, arbitration is like a private court, where an arbitrator acts as judge and jury. The arbitrator's decision on the matter is final, legally binding, and rarely subject to appeal. While arbitration is generally a fair process, it has fewer safeguards than courts do, and as a result, is viewed as more friendly to defendants.

As I mentioned before, there were two different companies who allegedly harmed Ms. Scott, the dealership and Nissan. When she filed suit against them in court, the dealership, with whom she had signed the arbitration agreement asked the court to enforce that accord. The court agreed that the arbitration agreement governed the dispute and ordered their portion of the matter to arbitration.

At this point, even though the dispute involved a single incident, Ms. Scott's case against the dealership was scheduled to be heard by an arbitrator, while the case against Nissan was to go forward in a regular old courtroom.

This situation greatly complicated Ms. Scott's ability to hold the dealership and Nissan accountable for her injuries for a couple of reasons. The most obvious problem is that arbitration and courts are two completely separate entities. This means that instead of having a trial and sorting out blame between the parties involved in the incident all at one go, Ms. Scott's attorneys would have to conduct two different, but parallel legal actions against the dealership and Nissan. Put more simply, going through court and arbitration doubles the costs of pursuing a case and the amount of time it takes.

From Ms. Scott's perspective, a second and even more damaging problem centered around how litigating two separate cases would impact her legal strategy. The circumstances surrounding the fire that destroyed Ms. Scott's car and injured her mean that there are only 3 likely parties that could have caused this to happen. Ms. Scott could have done something that caused the fire; Nissan could have manufactured a defective car that caught fire; or the dealership's inspection could have missed a small problem that was allowed to grow and led to the fire.

I haven't come across anything that suggest Ms. Scott did anything to cause the fire, which means that if this case had gone to court with both the dealership and Nissan as defendants, their most likely defense would have been to try and blame each other. Nissan would have said the car was fine, but the dealership messed up their inspection, while the dealership would claim they did everything correctly and Nissan just made a bad vehicle. This would be ideal for Ms. Scott, because after she proved that her injuries were caused by the fire, the rest of the trial would have been Peter blaming Paul for the fire and Paul trying to blame Peter. Regardless of who the jury blamed, either the dealership or Nissan would have paid for Ms. Scott's injuries. This is about as close to a slam dunk as these cases get.

In two separate venues, things will work quite differently. At arbitration, the dealership will blame Nissan, but unlike if they were together in the courtroom, Nissan isn't going to be there to defend itself. It's not beyond the realm of possibility that the dealership could make a really great case that Nissan is responsible and the arbitrator will reward Ms. Scott far less than she would have otherwise received.

At the same time, when Nissan is at trial, one can be certain that they're going to make their best case for why the dealership is to blame. If a jury buys their arguments, then they could end up paying less than they would at a single trial. It's quite possible that both proceedings could find that Ms. Scott did nothing wrong and is entitled to 100% of her losses, but pin the blame on the empty chair defendant, whose case is being heard in another proceeding. As a result, even though both arbitration and the court will likely place almost all of the blame on the dealership and Nissan, it's very unlikely that they will do so in a way that allows Ms. Scott to recover all of her losses.

Some might ask, "Well, doesn't that risk go both ways? Couldn't both venues put 100% of the blame on the defendant that's present? Is it possible that Ms. Scott could get more compensation from having the matter heard in both venues?" While that would be a logical assumption, damages don't quite work that way. A person is unable to recover more than what they actually lost.

To understand why this works the way that it does, imagine that one of your children and another kid in the neighborhood are playing baseball in the street. Your kid winds up, fires a pitch right down the middle, and the other kid crushes the pitch, right through your neighbor Bill's window. Bill comes out, sees both kids and demands to speak with their parents. When Bill comes to your house, you apologize and offer to pay for the window. Bill tells you the window costs $500 and you write him a check for the full amount. Even though Bill recovered the cost of his loss, he figures that you paid up right away, so why not go to the other child's parents and see what he can get out of them? When Bill gets there and explains what happened, the parents of the other kid also agree to pay the full $500.

How happy are you going to be when you speak with the other child's parents and find out that between the two of you, you paid for the same broken window twice? While none of us would dispute that Bill had every right to get the cost of his window, he had no right to a dime more. Our legal system operates the same way. In Ms. Scott's case, her ruined car and injuries are essentially one big broken window. Once money is recovered to pay for them, it's not possible to get a little extra, which is why having two separate proceedings has a lot of extra risk and expense, but no opportunity for a larger reward. In fact, if the arbitrator blames Nissan, while a jury blames the dealership, Ms. Scott runs the risk of getting nothing.

In short, the complexities of trying the case in two separate venues means that Ms. Scott's slam-dunk claim against Nissan and the dealership starts to look a bit shaky. She did nothing wrong, but because of a quirk in our legal system, she may not be able to hold those who wronged her accountable.

The Court Tries to Compel Arbitration

To avoid this unfair, complex legal situation, Ms. Scott's attorneys requested that the case either be heard with both parties present before an arbitrator or in front of a jury. They didn't care which, they just wanted both defendants present at the same time. Since the dealership had a rock-solid arbitration agreement, forcing them into a courtroom against their wishes was impossible. Therefore, the trial court decided to compel Nissan to go to arbitration.

There was only one problem with this solution and it lies in what an arbitration agreement is, a contract. While it is clear that Ms. Scott and the dealership had entered into such a contract, it is equally clear that Nissan and Ms. Scott had not. In effect, the trial court tried to resolve the potential injustice that would be done to Ms. Scott by having the matter heard in two different venues by stripping Nissan of their right to have the matter heard in court, and in effect, making Nissan a party to a contract it never signed.

Two of the fundamental bedrocks of our society are that contracts are only valid when both parties agree to them and that we all possess a right to contest controversies in a courtroom before a neutral judge. The Alabama trial court's solution to the injustice that Ms. Scott was staring in the face was to violate both of those principles. Chillingly, an Alabama appeals court agreed with the trial court and upheld that decision.

That's when the Supreme Court of Alabama stepped in. At this point, whichever way the court ruled, someone was going to be put in a bad position. There was no King Solomon baby-splitting solution in this case. If the court ruled for Nissan, then it would be highly unlikely that Ms. Scott would be able to recover the full value of her losses, but if they ruled in her favor, it would establish a precedent that people could be forced to honor contracts that they never agreed to. This new principle would only be limited by what a judge found convenient.

Ultimately, the judges ruled that Nissan couldn't be compelled into arbitration against their will and sent the Nissan portion of the matter back to the lower court for trial.

Our Legal System Isn't Perfect, But it Still Works

One of the courtroom movie quotes that gets tossed around the office a lot is something Paul Newman's character says in The Verdict, "The court doesn't exist to give them justice...but to give them a chance at justice."

The lower courts, likely out of sympathy for Ms. Scott's predicament, took it upon themselves to ensure that she got justice. On the other hand, the Supreme Court of Alabama ruled in a way that, while hurting Ms. Scott's prospects of getting justice, still allowed her a chance at it. While it's understandable that anyone would feel sympathy for Ms. Scott's situation and want to arrange things so that her case isn't handicapped, the only way to do that is by stripping Nissan of its right to access our courts. Seen in this light, denying someone their right to their day in court is a far greater evil than making things harder for Ms. Scott.

Not only would stripping Nissan of its right to have the case heard before a court be an injustice in its own right, but it would set a dangerous precedent. If one is the kind of person who believes that large corporations use their size to trample of the liberties of the little guy, then this decision likely adds fuel to that fire. However, if the courts had granted the right to compel arbitration, absent any prior agreement, such a decision would likely be employed in the future by large, powerful companies like Nissan to deprive individuals of their access to our courts. That was the looming danger in the background of this case.

Perhaps the most difficult thing about cases like Ms. Scott's hard, complex situation, is that people often mistake justice that is difficult to obtain as injustice. The problem with smoothing Ms. Scott's road to justice is that it cannot be done without violating Nissan's rights and establishing a dangerous precedent that would allow the rights of others to be violated in the future. While more difficult, Ms. Scott still has her chance at justice. If the court had ruled the other way, the result would have been taking away the chance at justice for countless thousands of people in the future.

The Supreme Court of Alabama was presented with a complex case, in which they had to choose between the lesser of two evils. Thankfully, they chose correctly.