COMPLEX LITIGATION STEINMAN SPRING 2016
INTRODUCTION
The Nature of Complex Litigation
Notes
Three Characteristics
Difficult legal and factual issues
Number of parties
Amount of money or stakes
Pros
Consistent outcomes
Saves judicial resources
Spreads costs among multiple parties
Cons
Deprives individual litigants of autonomy
May not take into account the particular intricacies of each case
May encourage dubious claims
BASIC JOINDER
Permissive Party Joinder
Statute/Rule
Rule 18 – Joinder of Claims
Party asserting a claim, counterclaim, crossclaim, or third-party claim may join as independent or alternative claims, as may claims as it has against opponent
Joinder of Contingent Claims – A party may join two claims even though one is contingent on the disposition of the other, but the court may grant relief only in accordance with the parties’ relative substantive rights.
In particular, a plaintiff may state a claim for money and a claim to set aside a conveyance that is fraudulent as to that plaintiff without first obtaining a judgment for the money
Rule 20 – Permissive Joinder of Parties
Plaintiffs – May join as plaintiffs if:
(A) They assert a right to relief arising out of the same transaction, occurrence, or series of transactions AND (B) Any common questions of law or fact will arise
Defendants – May be joined if:
(A) Any right to relief is asserted against them jointly or arises out of the same transaction, occurrence, or series of transactions AND (B) Any common question of law or fact will arise
Rule 21
Misjoinder of parties is not a ground for dismissing an action
On motion or on its own, the court may at any time, on just terms, add or drop a party
The court may also sever any claim against a party
Notes
General
Joinder of claims is much easier than joinder of parties, but Rule 20 is liberally interpreted
Decision to sever claims is not immediately appealable, but might be able to get immediate mandamus review (Hoffman v. De Marchena Kaluche; In re EMC Corp.)
Even if Rule 20 is satisfied, court can try cases separately under Rule 42
Elements of Permissive Joinder
Prong 1 – Same transaction, occurrence, or series of transactions or occurrences
Prong 2 – Question of law or fact common to all plaintiffs (or defendants if joining defendants)
“Same Transaction” Prong
Factors
Time, Location, and Persons Involved
Similarity of Conduct (relevant but does not ensure joinder)
How Case Will Be Proven (same evidence/proof will weigh in favor of joinder)
“Common Question” Prong
Requires only a single question
Types of Actions
Copyright – Maybe
Some courts allow joinder in file-sharing cases others do not
Patents – Not Generally
Joinder not proper based solely on allegations that defendants infringed on same patents
§ 1983
Emotional distress requires individualized proof, so not appropriate for joinder
Protective Measures
The court may issue orders – including an order for separate trials – to protect a party against embarrassment, delay, expense, or other prejudice that arises from including a person against whom the party asserts no claim and who asserts no claim against the party
Why do Parties Care About Joinder
Defendants may want to separate actions to allow finger pointing
Plaintiffs can spread costs—however, even in cases where they are not joined in a single action, there may be ways to spread those costs through consolidation
Sometimes defendants are more hesitant to proceed when everything hinges on one single jury
General consensus—Plaintiff’s prefer joinder, defendants do not
Downsides
Confusion of jury
Raises questions about how courts will handle substantive law—many different states
R42 v. R20
R20 gives parties the discretion to join—R42 allows the court to use its discretion to join actions
Default Position
Separate actions proceed separately
Parties may join if they satisfy the requirements of R20
Court may join if they satisfy the requirements of R42
Cases
Mosley v. General Motors
Facts:
10 plaintiffs joined in a § 1981 suit against GM, alleging that defendants engaged in unlawful employment practices (based on race) based on a general policy of discrimination
District court severed the action, and the COA reversed
Takeaways:
Plaintiffs were properly joined under Rule 20
Same Transaction –
The actions all arose from a company-wide policy “purportedly designed to discriminate against blacks.
There were different managers, but they were acting pursuant to a common policy
D argued that there were all different transactions, but the court held that actions being taken pursuant to the same policy satisfies the requirement
Here, the time and locations were different, but that was not fatal—policy strengthened case for commonality
Common Question – The discriminatory character of the defendant’s conduct towards the plaintiffs was common to each plaintiff’s recovery
Suffering different effects from the discrimination was not material
Common questions: did D have this policy? Did D violate Title Vii? Etc.
Individual differences about particular damages was immaterial for the purposes of common question under Rule 20
In re Stand ‘N Seal
Facts:
7 plaintiffs joined under Rule 20 against Stand ‘N Seal for injuries caused by a consumer product
Plaintiffs were injured after chemical components in the defendant’s grout sealer were modified
Takeaways:
Plaintiffs were properly joined under Rule 20
Common Transaction – Plaintiffs all asserted a right to relief arising out of the manufacture, distribution, and sale of the product and asserted a common allegation that the product was hazardous
Court distinguished case from others where plaintiffs had not pointed to a “common defect
Common Question – Was the product unreasonably dangerous?
Plaintiff’s claims rely on the same core allegation that product is hazardous
Separate trials would require redundant testimony that is not in the interest of judicial economy
There is some risk of jury confusion and prejudice, but that risk is minimized by the straightforward nature of the claims and the appropriate use of jury instructions
Stanford v. TVA
Facts:
Plaintiffs are suing two separate defendants claiming that both of their plants emit dangerous fluorine gas
Takeaways:
First Requirement – NOT MET
Defendants’ plants are separately owned and operated, and they are located different distances from the plaintiffs’ property
Their activities are separate and distinct—although they have engaged in the same types of activity
Defendants were not properly joined under Rule 20 and thus there was Rule 21 misjoinder
Court noted that misjoinder is not a grounds for dismissal of the action
Court considered whether it was proper to try these together under Rule 42
Numerous common questions of law/fact that would have met Rule 20 an
ay permit anyone to intervene who:
Is given a conditional right to intervene by federal statute
Has a claim or defense that shares with the main action a common question of law or fact
By Government Actor – Court may permit a federal or state actor to intervene if a party’s claim or defense is based on:
A statute or order made by the officer or agency; OR
Any regulation, order, requirement, or agreement issued or made under the statute or order
Delay or Prejudice – Court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights
Notes
General
Intervention provides a method for an outsider who has an interest in a lawsuit to voluntarily join the suit
Three ways to get an outsider in to a lawsuit
Rule 19 – Compulsory Joinder
Rule 23 – Class Actions
Rule 24 – Allows party to force himself into litigation
R24 v. R20
Difference is for intervention under R24, you weren’t invited but you want to join anyways
When Parties Commonly Intervene
Insurers often want to intervene when they will be required to pay
Parties may intervene on behalf of the government if they want to preserve the status quo
Lawsuit requiring disclosure of information where intervenor does not want information getting out (Donaldson)
Private parties may be further up or down the stream of commerce and may be effected by the outcome
Standing
Some courts will not allow intervention unless the party can demonstrate standing
Some courts do not require intervenors to have standing as long as there is a justiciable case and controversy between the existing parties
The Interest Requirement
Must be a significant protectable interest
A financial of economic interest alone may not justify intervention
A financial or economic interest may be required in order to differentiate an interest based solely on social, political, or moral concerns
Ask whether the intervener is within the zone of interests protected by particular law
Adequate Protection by Existing Parties
Requires a comparison of interests of the would-be intervenor and the interests of the party who is potentially deemed to already adequately represent their interests
Interests may be different if goals are the same
Government might be willing to settle the issue in a way that does not take into account the intervenor’s interest
Timely Motion Requirement
Both permissive intervention and intervention of right require a timely motion
Timeliness Factors:
Time the intervenor knew or should have known about its interest in the case
Prejudice to existing parties resulting from delay in seeking intervention
Prejudice to the intervenor if intervention is denied
Unusual circumstances militating for or against a finding of timeliness
