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Complex Civil Litigation
University of California, Berkeley School of Law
Bundy, Stephen McG.

COMPLEX CIVIL LITIGATION
BUNDY
SPRING 2012
 
 
I.         Nature of Complex Litigation
A.                  Generally
OVERVIEW
·         4 Characteristics of “complex” cases:
o    Substantive difficult or novel legal and factual issues.
o    Number of parties / claims involved.
o    Amount of money involved
o    Existence of overlapping or common issues amongst a number of cases (e.g., mass product liability)
OVERARCHING THEMES
1.                   Aggregation
2.                   What is procedure for?  Efficiency and fairness…. and maybe party participation?
a.       Efficiency:  We want a reasonably accurate outcome as quickly as possible.
b.       Due process and parties’ participation in decisions that affect their lives.
3.                   What are the courts for?
a.       Resolving private disputes?
b.       Instruments of social change?
4.                   Who should control litigation?
a.       Traditionally, π is master of her complaint.
b.       However, πs have lost much of their control, to other plaintiffs through aggregation devices, and to the judges who now manage a lot more (e.g., discovery).
c.        πs are also losing a lot of control to their own attorneys.
5.                   The relationship between substance & procedure
a.       How does substance affect procedure?
                                                               i.      Trans-substantive procedure:  E.g., If you file a case in federal court where notice pleading only requires a short & plain stmt of the claim for relief, you are held to the same simple standard whether you’re filing a diversity action for a slip-and-fall, or whether you’re filing a claim for securities fraud against a huge company.
b.       How does procedure affect substance?
                                                               i.      Erie provides the possible argument that federal procedure is changing/modifying your state substantive rights.  E.g., Class Action Rule, which tends to iron out differences between cases, may affect what liabilities Δ has to pay if found liable.  This means the amount Δ has to pay is affected by whether or not the suit becomes a class action
B.                  The Metamorphosis of Litigation
1.                   What caused the litigation “boom?”
a.       Congressional creation of new rights on which to sue
b.       Court creation of new types of suit—constitutional claims & expanded notions of product liability
c.        Some argue that it is undue litigiousness by Americans treating the court system like a slot machine
2.                   Significant shift in the type of litigation being filed
a.       Public law cases tending to involve more complex forms of litigation (instead of two-party breach of contract cases)
b.       Constitutional cases seeking reform of public institutions (jails, schools, hospitals, etc.)
c.        Cases based on rights derived from legislation & administrative regulations
d.       Environmental cases
e.        Business cases
3.                   Traditional Model versus Public Law Model
a.       Chayes, The Role of the Judge in Public Law Litigation (1976)
b.       The traditional model of litigation is being replaced with a new, emerging model, which Chayes terms the “Public Law Litigation” model.
c.        Traditional Model
                                                               i.      Bipolar: a contest between adversaries decided on a winner-takes-all basis
                                                              ii.      Retrospective: events and consequences are completed
                                                            iii.      Right & remedy are interdependent: Scope of relief depends on the substantive violation
                                                            iv.      Self-contained episode: Impact of the judgment affects the parties at hand, and entry of the judgment ends the court’s involvement
                                                             v.      Party-initiated and/or party-controlled: Responsibility for the organization and development of the case falls to the parties.
d.       Public Law Model
                                                               i.      “Sprawling and amorphous” party structure
                                                              ii.      Not necessarily adversary; much mediation and negotiation
                                                            iii.      Judge is dominant in organizing and guiding the case
                                                            iv.      Judge became the creator and manager of “complex forms of ongoing relief” that affect people outside the scope of the lawsuit and require the court’s continued involvement (e.g., school desegregation, prisoner rights, employment discrimination)
4.                   Mass Tort Litigation
a.       Chayes’ model suited the 1960’s and 1970’s, but was outdated by the 80’s and 90’s when modern mass tort litigation began to arise.
b.       Made possible by the procedural reforms of 1938, which introduced joinder devices.
c.        Class action rule was amended in 1966 allowing for injunctive and declaratory relief
5.                   Rule 23(b)(3)
a.       Is the goal efficiency, to allow courts and parties to handle many similar legal claims without requiring each individual bring his own suit?
b.       Is the goal enabling, to allow suits not possible on an individual basis to pursue social goals?
c.        Rand Institute for Civil Justice (2000) argues that it is inherently both: “Any change in court processes that provides more efficient means of litigating is likely to enable more litigation.”  RIfCJ also argues that Rule 23 is inherently an enabling mechanism, even with its efficiencies.
d.       Business representatives claim class actions benefit the attorneys more than the plaintiffs, and that consumers end up paying for the increased litigation through increased product costs.
e.        Manufacturers claim that mass-product defect suits are often based on weak evidence and basically force a settlement because of the huge financial risks associated with litigation.
f.        Consumer advocates claim that the mass suits serve a regulatory purpose, a check on business practices, but that they sometimes produce bad outcomes that benefit the attorneys more than the plaintiffs.
                                                               i.      Public cannot rely on regulatory agencies to adequately enforce CP statutes
                                                              ii.      Consumers ought to have a vehicle to obtain compensation for losses from corporate wrongdoing, even if the losses are small
                                                            iii.      This right incentivizes corporations to invest in designing safer products
6.                   The Aggregation Debate
a.       Pros
                                                               i.      Economy and efficiency
                                                              ii.      Consistency and result
                                                            iii.      Avoids inconsistencies by insuring that all cases will be resolved together at a particular point in time
b.       Cons
                                                               i.      Litigant autonomy
                                                              ii.      Fairness
                                                            iii.      Effect on strategic advantages
                                                            iv.      Effect on ability to raise individual issues
7.                   Innovation in Litigation
a.       Judicial Involvement and Management
                                                               i.      Judicial involvement (current view) vs. disinterested judge
b.       Dispute resolution as goal of civil litigation
                                                               i.      Settlement vs. judgment
c.        Do we want a judge saying this is how the law sees things, or do we want a judge working with the parties to come to a common understanding
                                                               i.      Combined or individual treatment
                                                              ii.      Same debate as above…efficiency/consistency vs. autonomy/fairness
d.       Broad vs. specific rules
                                                               i.      Broad rules, such as joinder, grant the judge great latitude in tailoring the treatment of cases
e.        Impact of procedure on substance
                                                               i.      The availability of procedures may alter substantive law in more overt ways
f.        Courts may also tinker with substantive law to facilitate procedural objectives
                                                               i.      Modeling procedures on complex cases
                                                              ii.      Our procedural rules outwardly treat all cases the same (complex and non-complex)
g.        Federalism concerns
                                                               i.      Federal judges removing shit from state courts
                                                              ii.      Attorneys manipulating the system to get in a favorable J
                                                            iii.      CAFA as a response
II.        Preclusion
A.                  Preclusion and Non-parties
·         Collateral estoppel is the judicial doctrine by which a party is precluded from relitigating issues which were decided against it in a prior proceeding. The doctrine of collateral estoppel is an outgrowth and an expansion of the concept of res judicata.
o    Res judicata, or “claim preclusion,” bars the relitigation of an entire suit

(e.g., when someone sells his claim to a debt collection agency).
Claim within Scope of Judgment:  Claim asserted in the later case has to be within the scope of the judgment in Suit #1.  This is a transaction test.  You are not allowed to “split” your claim by suing again based on the same transaction under a different legal theory.
 
THE RELAXATION OF MUTUALITY—NON-PARTIES
·         The fourth requirement for the application of collateral estoppel—mutuality —is enforced only in a few jurisdictions.
·         The doctrine of mutuality of parties requires that, in order for collateral estoppel to apply, both parties must be bound by the previous judgment.
o    In other words, the risk of estoppel must be mutual, and, therefore, only parties to the prior suit and their privies may be estopped by a previous judgment.
o    Today, strict mutuality of parties is no longer required under federal law or by the law of most states.
·         The gradual weakening of the doctrine of mutuality has stemmed from the broadening of the concept of privity and from the numerous exceptions to the doctrine carved out by the courts. In a 1942 California case, Bernhard v Bank of America, Justice Traynor abandoned the mutuality requirement, noting that
o    “[n]o satisfactory rationalization has been advanced for the requirement of mutuality. Just why a party who was not bound by a previous action should be precluded from asserting it as res judicata against a party who was bound by it is difficult to comprehend.”
·         The BERNHARD decision is regarded as a turning point in the viability of the mutuality requirement.
o    Since that decision, and despite criticism from some observers, the Supreme Court, in BLONDER-TONGUE LABORATORIES, INC V UNIVERSITY OF ILLINOIS FOUNDATION, eliminated the requirement of mutuality for collateral estoppel in federal suits.
o    Further, the Supreme Court has allowed collateral estoppel to be applied offensively, i.e., by a nonparty against the party who lost the decided issue in a prior case.
·         The Supreme Court’s BLONDER-TONGUE decision to abandon the requirement of mutuality rests on the concepts of the judicial economy, fairness to the defendant, and due process for plaintiffs.
o    The Supreme Court, referring to crowded dockets, acknowledged “the goal of limiting relitigation of issues where that can be achieved without compromising fairness in particular cases.”
o    But, the Court said, “[t]he broader question is whether it is any longer tenable to afford a litigant more than one full and fair opportunity for judicial resolution of the same issue.”
o    The Court concluded that the resolution of this issue involved not only its effect on judicial economy, but also the misallocation of resources that occurs when a party is forced to present, for example, a complete defense on the merits of a claim which the other party has already fully litigated and lost in a prior case.
·         Permitting repeated litigation of the same issue as long as the supply of unrelated defendants holds out reflects either the aura of the gaming table or a lack of discipline and of disinterestedness on the part of the lower courts, hardly a worthy or wise basis for fashioning rules of procedure.
·         Given a most significant safeguard, the full and fair opportunity to litigate, the Court saw no reason to require mutuality for collateral estoppel as well.
·         The Supreme Court relied heavily on its analysis in Blonder-Tongue when it affirmed the offensive use of collateral estoppel in PARKLANE HOSIERY CO V SHORE.
o    The Court made note of the dual purposes of collateral estoppel:
§  to protect litigants from the relitigation of identical issues and
§  to promote judicial economy.
o    After discussing how offensive use of collateral estoppel differed from the defensive use of the doctrine, the Court concluded that it was preferable to give the courts broad discretion to apply collateral estoppel offensively, rather than to prohibit its use.