Feature
Legal Feeding Frenzy
U.S. court rules invite harassment and extortion. Here’s one way to fix them. Our March cover story.
(Page 2 of 3)
Even if the lawsuit is frivolous. Even if it was filed to extract a nuisance settlement, on the theory that submitting to (legal) extortion would cost less than fighting to get the case dismissed. And even if “appearing and defending” would include months of costly and vexatious depositions and other discovery.
Are bogus lawsuits a rarity, and are the costs they impose on all of us a reasonable price to pay to keep courthouse doors open wide for genuinely wronged plaintiffs? Not when, for example, the courts are so clogged with bogus asbestos-poisoning claims brought by plaintiffs who are not sick that the limited pool of money available to compensate those with asbestos-caused cancers is severely depleted.
General Electric Vice President and Senior Counsel Alexander Dimitrief told judges at a conference in October that 80 percent of the company’s settlement decisions are made on the basis of the costs rather than the merits. Self-serving? Sure. Exaggerated? Perhaps. But not that hard to believe.
Even the most ethical of lawyers sometimes has incentives to file far-fetched claims (and defenses). “I have made claims myself that were very unlikely to prevail,” Don Elliott told me in an interview, “in order to impose discovery costs on the other side and get a better settlement—which I did.”
In fact, Elliott believes he had an obligation to file such claims. Legal ethics emphasize a lawyer’s duty to resolve every doubt in his client’s favor and take every possible legal step to promote the client’s interests. It is in part because of the powerful economic incentives for zealous advocacy, combined with the lack of any real penalty for bringing forth bogus claims, that judges should be required to screen out weak lawsuits before they start wasting the money and time of blameless defendants.
ELLIOTT’S REMEDY for this state of affairs is for judges to do just that. Specifically, he suggests amending the federal rules so that a defendant is summoned only when a judge, having reviewed the complaint and asked probing questions about the evidence, determines it reasonable to require a response. Many or most civil lawsuits would easily clear this modest hurdle.
But far-fetched claims filed to extort nuisance settlements—which have leached hundreds of millions of dollars from defendants over the years—would (or could) be dismissed at the outset. So would many lawsuits filed for purposes of harassment, including some brought by powerful organizations. The late L. Ron Hubbard, founder of the notoriously litigious Church of Scientology, once wrote that the purpose of a lawsuit is “to harass and discourage rather than to win.”
When plaintiffs’ lawyers looking for culpable parties cast their net too wide, such as in the Lone Star Steel mill case, judges could immediately release those defendants that clearly have no business being involved in the suit. In our interview, Elliott said that his proposal would not “necessarily get rid of a lot of cases, but it would get a lot of defendants out of cases when there is no evidence that they had anything to do with the plaintiffs’ alleged injuries.”
The vast majority of judges and litigators—for both plaintiffs and defendants—would probably dismiss Elliott’s proposal as impractical and unworkable. But judges in Germany and most other European countries routinely do something very much like what Elliott proposes, apparently with good results. And federal judges and magistrates are already required by law to dismiss, without requiring any defendant to respond, every lawsuit that appears on its face to be “frivolous or malicious” or otherwise flawed—but only if it was filed by a person poor enough to be exempt from the usual $350 filing fee (“in forma pauperis,” in legal jargon).
“[I]t is unfair and humiliating,” asserts Elliott, “to subject poor people to pre-service review of their lawsuits but exempt those wealthy enough to pay a filing fee.” Indeed, if two plaintiffs file frivolous lawsuits that are identical in every particular except that one is in forma pauperis, only that one will be dismissed without requiring the defendants to respond.
The most persuasive critique of Elliott’s proposal is that it is too vaguely worded and would be applied very differently depending on the inclinations of the judge or magistrate involved. That’s cause for concern, and perhaps an argument for defining more narrowly the category of lawsuits to be rejected out of hand. Nevertheless, in my view, something like Elliott’s proposal would be a vast improvement on the awful status quo.
ELLIOTT’S PROPOSAL WILL sound familiar to those aware of the Supreme Court’s 2007 decision in Bell Atlantic v. Twombly. Because of precedent set in Twombly, in order to surmount a motion to dismiss in a federal civil case, plaintiffs must now plead enough specific facts to show that their claims are plausible—not just conceivable.
But Elliott faults Twombly for failing to block implausible claims earlier in the process, before defendants are saddled with large legal costs. “My personal experience as a litigator,” his article notes, “is that hundreds of thousands of dollars, and sometimes even millions, in defense costs can be incurred before judges rule on motions to dismiss.”
In our interview, he added that judges typically stretch out cases for months or years by giving plaintiffs several chances to amend defective complaints; in one of his own cases the defense costs ran to $165,000 before it was finally dismissed.
(On the other hand, Elliott agrees to some extent with plaintiffs’ lawyers and scholars who assail the Twombly requirement of detailed fact-pleading. He stresses that to avoid killing potentially valid lawsuits prematurely, the courts should not require “that the plaintiff be in possession of all the facts necessary to take a case to trial as a pre-condition to bringing a claim.”)
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Pseudo-Macarius| 3.18.13 @ 7:11AM
Well done, Stuart. No defendant should settle a bogus case to make it go away. That just encourages the unethical attorneys who file these cases.
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markenoff| 3.18.13 @ 12:57PM
I make $3500 a week at home stuffing envelopes. I stuff them with heroin.
CJW| 3.18.13 @ 1:21PM
Remember the Henny Youngman or Rodney Dangerfield joke:
Send me $20 and I will tell you how I make money. After I receive the $20 I reply, that is how I make money.
TLP| 3.18.13 @ 1:48PM
Even though the Lawsuit was OBVIOUSLY BOGUS, the Liberal Judge kept the case going for more than Two Years.
And, then the author goes through a litany of other Bogus Lawsuits.
I appreciate all of the Legal Nuances that you believe are the Crux of the problem, but there is only ONE REASON for all of this.
The Trial Lawyers are the #1 Contributor to the Democrat Party.
Period.
You don't believe me?
Bernie Schwatz' Loral Space and a Waiver from The Rapist to sell Top Secret Missile Navigational Technology to the Red Chinese.
You're Welcome.
Occam's Tool| 3.20.13 @ 5:30PM
There is nothing wrong with the vast majority of plaintiff attorneys that couldn't be cured by allowing defendants to turn loose 5 hungry Rottweilers on any Plaintiff and their attorney who loses a case.
Did I mention that Malpractice Plaintiff attorneys, who lose 90% of their cases, should have their nether bits blowtorched each time they lose a case?
gray man| 4.5.13 @ 12:15AM
I made $10.00 stuffing alice921's brain into an envelope and selling it to a science project.
JD| 3.18.13 @ 1:06PM
You're blaming the victims.
Many people can't afford the risk of fighting these suits. The problem isn't their fault - it's the fault of the system.
Blaming people for acting according to the incentives of a perverse system is a left-wing thing. We don't need to emulate it.
BShep| 3.18.13 @ 7:57AM
When the politicians are lawyers and the judges are lawyers and the lawyers are lawyers, then OF COURSE, the only ones who get rich are the lawyers.
What do you call a thousand dead lawyers? A good start.
Why won’t sharks attack lawyers? Professional courtesy.
Any more entries? Especially, any NEW entries?
“The first thing we do, let's kill all the lawyers.”
markenoff| 3.18.13 @ 9:42AM
“The first thing we do, let's kill all the lawyers.”
"Dick the butcher, a character no one remembers, utters one of the few memorable lines from the entire three-part Henry the Sixth cycle. Dick's Utopian idea to kill all England's lawyers is his addition to the promises of the traitorous Jack Cade, who envisions a quasi-communistic social revolution, with himself installed as autocrat. Cade alleges that all lawyers do is shuffle parchments back and forth in a systematic attempt to ruin the common people. His demagoguery is simply a calculated appeal to simple folks' longing to be left alone. Yet one may recognize Cade's moral failings and still sympathize with Dick."
http://www.enotes.com/shakespe.....ll-lawyers
CJW| 3.18.13 @ 1:35PM
The quote is actually to kill the lawyers so that there are no lawyers to oppose the attempt to control the country:
"Cade: Be brave, then; for your captain is brave, and vows reformation. There shall be in England seven halfpenny loaves sold for a penny, the three-hooped pot shall have ten hoops, and I will make it felony to drink small beer; all the realm shall be in common; and in Cheapside shall my palfrey go to grass; and when I am king, as king I will be, there shall be no money; all shall eat and drink on my score; and I will apparel them all in one livery, that they may agree like brothers and worship me their lord.
Dick: The first thing we do, let's kill all the lawyers.
Cade: Nay, that I mean to do. "
William Shakespeare, Henry the Sixth, Part II, IV, ii (1623), suggesting that all lawyers would have to die in order to impose his will as king
TLP| 3.18.13 @ 1:50PM
So, what you're saying is that Shakespeare got it Bassakwards.
I agree.
CJW| 3.18.13 @ 2:42PM
No, most people take the Dick quote out of context.
Look at Cade's statement. Sounds like Obma and the Dems campaign to the 47%.
markenoff| 3.18.13 @ 9:43AM
What do you get when yu cross a lawyer with the Godfather?
Someone who will make you an offer you can't understand.
SUBVET| 3.18.13 @ 10:32AM
Why do lawyers wear tight collared shirts....so you can't see their foreskin.
R Martin| 3.18.13 @ 1:00PM
Good one.
markenoff| 3.18.13 @ 1:03PM
A lawyer and a doctor are both driving on a winding mountain road at night coming from different directions. They come around a blind curve, they both cross the center line and they get in a fender bender. They both get out of their cars a little shaken up. The lawyer pulls out his cell phone and calls the cops. When he gets off the phone he reaches into his coat and pulls out a flask if whiskey. He takes off the top and hands it to the doctor. The doctor takes a swig and hands it back. The lawyre puts the top back on and puts it back in his coat.
"Aren't you going to have a swig?", the doctor asks.
"Not until the cops leave.", the lawyer replies.
markenoff| 3.18.13 @ 1:05PM
Two lawyers are watching TV when Eva Mendes comes on.
"Man I'd like to screw her," one says.
"Out of what?" replies the other.
Joellen| 3.18.13 @ 8:12AM
Federal Government = Absolute Power = Absolute Corruption = Absoolute Waste
And the beat goes on.
Mike G| 3.18.13 @ 8:42AM
I'm reminded of the time the company I was working for paid a woman $400 because she claimed "a jar of mayonnaise jumped off the shelf and landed on my foot".
R Martin| 3.18.13 @ 8:43AM
Most civilized countries address the issue of frivolous lawsuits quite simply: Loser Pays.
PolishKnight| 3.18.13 @ 10:25AM
Which would turn the tide for wealthy defendants. For example: The cigarette companies that for decades falsely claimed that smoking doesn't cause cancer and used every trick in the legal book to win cases and lie before congressional hearings (the best was the Clintonian trick of saying that their animal lab tests indicated that smoking is not addictive by defining the term addiction as something only applies to humans.
Small business owners would be terrified to go up against Goliath sized corporations that stiffed them. The Goliaths would make the claim that their attorney fees were in the millions and if the small business owners lost, they'd go under. The Goliaths could use these cases as warnings to others to stay in line.
The trick is how to properly define a case as "nuisance" or "frivolous." That should be attacked head on rather than a simplistic solution which may not work.
JD| 3.18.13 @ 1:07PM
You make a good point, but R Martin's is better. It simply cannot be legal to impose large costs on other people with frivolous claims.
TLP| 3.18.13 @ 1:54PM
I'm thinking that "Nuisance" and "Frivolous" are like Pornography.
You may not be able to Define it?
But, you Know It when you See It.
Kinda like your Dumbass Comment.
PolishKnight| 3.20.13 @ 9:54AM
Pornography has not only been defined, but even reinvented. The left defined a new form of pornography: "hate speech" and applied it selectively. They use it to stifle conservative speech. Ann Coulter and Mark Stein are muffled from speaking in those nations.
The Constitution is currently interpreted by The Wise Latina at the top and in lesser courtrooms by crony bureaucrats who make it say whatever they think it says. The devil is in the details and they're masters at finding that guy.
But sure, dismiss my dumbass comment. Who cares about what guys like me think? Oh, wait, the conservatives need guys just like me to turn out to vote to keep those poor millionaires from having to pay an extra 10% on their private jet and the horrors of gay marriage. Good luck with that.
Occam's Tool| 3.20.13 @ 5:32PM
Loser pays is how you reform medical malpractice laws, however.
Jacob McCandles| 3.18.13 @ 8:56AM
2 things must happen for tort reform to occur:
1. The Trial Lawyers Assn must stop giving all their money to democrats.
2. The media has to start pointing out how much damage our civil tort system does to this country.
good luck folks.
JD| 3.18.13 @ 1:13PM
The media prefers to do something else. It reports every "settlement" that a big company engages in as de facto admission of guilt and reason to pursue a more anti-business political agenda.
They would never bite the hand that feeds them!
Harry the Horrible| 3.18.13 @ 9:04AM
We need "Loser Pays." That will put a dent in frivolous law suits.
Bob K| 3.18.13 @ 9:15AM
Absolutely!
And this article should have been slated for a Friday column so it could have received comments throughout the weekend.
Bob K| 3.18.13 @ 9:10AM
If my memory is correct the "angry man" who sued the Dry Cleaner WAS a lawyer.
If the SOB had been subjected to legal disciplinary action for this incident it would have had the legally feared "chilling effect" on filing other bulls--t cases like this!
Albert Constantine Jr.| 3.18.13 @ 10:15AM
Actually, I think that the plaintiff was not merely a lawyer, but a judge (though my recollection was it was an administrative law judgeship, such as worker's compensation or similar specialty).
TLP| 3.18.13 @ 1:56PM
It's 1:55 Albert.
Do you know where your Pants are?
Occam's Tool| 3.20.13 @ 5:34PM
Albert: it was a judge. You are correct.
Bob K| 3.18.13 @ 9:24AM
My policy for many years has been never to vote for a lawyer in any elective office, other than DA or Judicial, when there was a non-lawyer running against him.
I think that this is good advice for everyone.
Any lawyer elected to any position which is not either legal or Judicial should be required to put his/her license to practice law into escrow for the length of time he/she is in office. (Sorry for the legalese.)
No one elected to public office any where should be allowed to have any association of any kind with any law firm.
gene| 3.18.13 @ 9:34AM
Loser Pays.
And if you have a REAL legit case and you are poor, a lawyer will still take you on a contingency basis.
TLP| 3.18.13 @ 1:56PM
PUBLIC DEFENDER.
markenoff| 3.18.13 @ 9:37AM
Lawyers are the kindest, bravest, warmest, most wonderful human beings I've ever known in my life.
fmm| 3.18.13 @ 10:28AM
Must be fun to take mind altering drugs :).
JD| 3.18.13 @ 1:11PM
Not as wonderful as social workers, who are almost as awesome as community organizers!
TLP| 3.18.13 @ 1:59PM
I'm not a Lawyer, but I did stay at a Holiday Express Inn, last night, where I played with myself while watching Ally McBeal Reruns on T.V.
NedB| 3.18.13 @ 10:10AM
I recommend altering the court system slightly. Use the Frank Herbert court rules. You know, the winning lawyer kills the losing lawyer. ;)
wrlord| 3.18.13 @ 12:36PM
You know, I'm getting tired of all this "blame the lawyer" BS.
First of all, for those of you demanding that the loser pays all legal fees, we ALREADY HAVE THAT for frivolous suits.
Do you want that for all suits? Do you want to have to pay millions of dollars in legal fees because, although you could only afford a street-level sole practitioner, the corporation you sued could afford a top-tier law firm? And now you have to foot the bill?
Tired of frivolous law suits? Blame the JUDGES. A lawyer has an absolute obligation to posit any cognizable claim on behalf of a client. What makes a claim cognizable rather than frivolous? The fact that judges have allowed such claims before. If the judges abdicated their responsibility by allowing a seemingly frivolous claim to go forward, the means it is legally not frivolous, and the next lawyer on the next case has a duty to bring the same sort of claim if it will fly.
As for Mr. Taylor's idea that we should have judges read through complaints before they are even served or filed, it would add an enormous expense and backlog to the courts, and worse, have a chilling effect on the right of every free man to have access to the courts. Access to the courts by all the citizens is one of the cornerstones of our free society, and limiting that would strike a major blow against the liberties guaranteed in the Constitution.
CJW| 3.18.13 @ 1:46PM
The Federeal Rules and most state rules of procedure allow a judge to impose the costs and fees on either side if there was no reasonable basis for the lawsuit or the defense of the suit.
As for tort reform, the government already has tort reform for itself, but not for private citizens.
If you want to sue the city,county, or state your suit must be one of the suits allowed by the government. And the damages for pain/suffering are capped at usually 500,000.
So is you get maimed by a City bus you will get much less than getting crippled by a Pepsi or Coke truck. This shows the hypocrisy of the Dems who regularly vote against damage caps on medical malpractice and other personal injury claims, but approved all the caps and limitations on suits against the government.
Pa, like many other states, did some limited tort reform on medical and other professional liability claims. Before you file suit you are required to have a medical, or other expert, report stating there was negligence.
TLP| 3.18.13 @ 2:02PM
He thinks he's a Warlord.
He doesn't understand what you're sayin.
wrlord| 3.18.13 @ 2:33PM
Do you? I don't see him disagreeing with me.
It's frightening that you get to vote. There ought to be an IQ test.
Occam's Tool| 3.20.13 @ 5:38PM
I have never lost a med/mal lawsuit. I HAVE, however, been sued by a plaintiff who couldn't find a SINGLE expert witness in the USA to take on her case.
wrlord, you must be an attorney. Med/mal plaintiff attorneys LOSE 90% of the time. Sorry, I have no problem with Loser Pays. Plaintiff attorneys can simply buy Litigation insurance.
JD| 3.18.13 @ 1:10PM
This article understates the problem.
It understates the cost of insurance, which spikes due to what it costs to have liability coverage in this environment.
It understates settlements that occur before going to court at all, under precisely the same extortion.
And it understates left-wing media's favored practice of trumpeting settlements as de facto admissions of guilt, for use in building the case for collectivism by virtue of the "evil" of business, when in fact the settlements are simply submissions to the extortion system that the Left created.
Job| 3.18.13 @ 1:41PM
Simple solution: PPACA or Protection from Plaintiffs and Affordable Council Act.
basically free legal council provided by our Uncle who want his tentacles in all things. Reverse Clove and Pliven.
JD| 3.18.13 @ 1:46PM
“[I]t is unfair and humiliating,” asserts Elliott, “to subject poor people to pre-service review of their lawsuits but exempt those wealthy enough to pay a filing fee.”
WHY?
This evil left-wing idea, that it is UNFAIR that people have to pay for things, causes incalculable harm to our society.
Ability to pay is not some genetic condition that people are stuck with. It's the ultimate measure of merit. There are innumerable ways to produce value in this world, and wealth simply reflects how much you have actually produced (and traded for currency).
Paying for things is definitional merit. It's earning them. Separating earning from getting causes terrible consequences for a society.
Now, that doesn't mean that in this context, frivolous lawsuits shouldn't be reviewed before they start soaking their victims. But the rationale stated here was terrible.
NoGoBlue| 3.18.13 @ 4:27PM
What's the difference between a terrorist and a female attorney?
You can negotiate with a terrorist.
Deerknocker| 3.18.13 @ 4:55PM
I don't see why there cannot be some pre-filing review done on cases that promise to generate significant legal cost. If, upon that review, it appears that a case may lack merit, the reviewing judge could order the plaintiff to pay a percentage of final litigation costs should he be unsuccessful; said percentage to be proportional to the perceived lack of merit. A perceived frivolous lawsuit may generate a responsibility for 100% of the litigation costs whereas a plaintiff in a suit with merit would not have to bear any costs. A similar review could apply at the filing of an Answer to deter frivolous defenses. No one would be prohibited from filing suit or proceeding with a claim, but would have to do so at some risk in the event of frivolous pleadings.
hrgfue | 3.18.13 @ 8:46PM
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Marc Jeric| 3.19.13 @ 2:28AM
We have here inthe US about 1,100,000 lawyers, of whom some 100,000 are trial lawyers looking for "victims" - usually trolling for them with TV commercials.
Great Britain, Japan, and Germany together have a total of about 35,000 such lawyers. How come?
Because in America you can sue anybody, and if you lose you just walk away looking for the next victim. Everywhere else the loser pays automatically all the costs of the defendent, direct and indirect, plus the full court costs.
A suitable tort reform would boost our economy by about 10-15% immediately in the first year - with lower prices and higher wages.
TORT REFORM!!! NOW!!!