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Why Do Plaintiffs Lose Appeals? Biased Trial Courts, Litigious Losers, or Low Trial Win Rates?

Princeton University Industrial Relations Section Working Paper No. 567

35 Pages Posted: 11 Jul 2011 Last revised: 15 May 2012

Henry S. Farber

Princeton University; National Bureau of Economic Research (NBER)

Theodore Eisenberg

Cornell University, Law School (Deceased)

Date Written: July 11, 2011

Abstract

Multiple studies find that plaintiffs who lose at trial and subsequently appeal are less successful on appeal than are losing defendants who appeal. The studies attribute this to a perception by appellate judges that trial courts are biased in favor of plaintiffs. However, at least two alternative explanations exist. First, losing plaintiffs may appeal at higher rates independent of the potential merits. Second, if plaintiffs tend to pursue to trial lawsuits where they should win on the merits less than half the time, then errors at trial will be more likely to adversely affect defendants. This study revisits the analysis of the appellate process with a theoretical model that has implications not only for appellate outcomes but for the rate of appeal. By tying together win rates at trial, appeals rates, and success rates on appeal, the model can distinguish the competing explanations for differential appellate success rates. We estimate this model using matched data on Federal District Court trials and appeals to the U. S. Circuit Courts of Appeal. We provide evidence that the lower plaintiff success rate on appeal is due to plaintiffs' pursuing lawsuits where they should win on the merits (which we define to be an outcome that will not be reversed or remanded on appeal) less than half the time. We also provide evidence against explaining asymmetric success on appeal being attributable to trial courts favoring plaintiffs and evidence against juries being favorable to plaintiffs compared to judges.

Suggested Citation

Farber, Henry S. and Eisenberg, Theodore, Why Do Plaintiffs Lose Appeals? Biased Trial Courts, Litigious Losers, or Low Trial Win Rates? (July 11, 2011). Princeton University Industrial Relations Section Working Paper No. 567. Available at SSRN: https://ssrn.com/abstract=1883599 or http://dx.doi.org/10.2139/ssrn.1883599

Henry S. Farber (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Princeton University ( email )

Industrial Relations Section
Firestone Library
Princeton, NJ 08544
United States
609-258-4044 (Phone)
609-258-2907 (Fax)

Theodore Eisenberg

Cornell University, Law School (Deceased) ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

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