Complex Litigation
Professor Florey
Spring 09
1. Introduction
a. What is Complex Litigation
i. Federal rules do not make a distinction between complex and noncomplex litigation
1. When federal rules came out no one thought litigation would develop as it did today.
2. Federal rules were set up to be flexible.
3. But federal rules weren’t really designed to handle complex cases today.
ii. Characteristics of complex litigation
1. Number of parties
a. The more parties you have the more discovery you have to do.
b. Geographical dispersion
i. Jurisdictional issues
· Personal and diversity
ii. Choice of law issues
iii. Loss of individual control
· If parties are dispersed across the country, they can’t monitor the lawyer.
2. Amount at stake
a. Maybe more temptation for lawyer self-dealing if more money is at stake.
b. Symbolic significance
c. Future consequences
i. Have a larger effect in shaping the law down the line.
3. New technologies
a. More complicated the subject matter the more you have to spend on experts, the more you have to educate the court and get the jury to understand the expert testimony.
b. Adds expense, complexity of issues and questions about the jury system.
c. Sometimes there is a drive to settle the case because both parties fear the jury will not understand the case.
4. Innovative legal theories
a. The more money and more parties at stake, it might be worth it to add a novel claim.
b. The more innovative the theories the more you have to spend on experts, aspects of discovery and lawyer time.
5. More lawyers
a. Lawyers feel like they have less control over the case.
b. Also makes it harder for the lawyers to communicate.
c. In complex cases the judges has more power.
i. Some judges may try to speed case along or limit discovery or motions.
ii. Active management by judges
· Worry about arbitrary rulings by judges
· But judges can create more efficiencies.
6. Aggregation
a. This may result in a huge amount of money.
b. However, it may be the situation that each parties claim is so small individually so it would not be worth it to each party to bring the claim individually, but together it’s a lot of money.
i. Defendants should not escape liability by hurting a large amount of people in a small way.
7. Settlement
a. Particularly true of class actions.
b. Parties may be afraid of trial.
c. Complexity may be so overwhelming that trial is not feasible.
d. Settlement can become the purpose of complex litigation.
2. Joinder
a. Permissive joinder
i. Rule 20
1. 2 requirements:
a. Right to relief arising out of the same transaction, occurrence, or series of transactions or occurrences
b. Any common question of law or fact
2. The real inquiry seems to be the first one
a. If you satisfy the first part, you probably satisfy the second.
ii. Mosley v. General Motors Corp.
1. Facts:
a. Group of employees are suing for racial and gender discrimination. More emphasis on racial.
b. Claims rely on Title VII and 42 USC 1981
i. These 2 causes of action probably have different elements
ii. Focus is on discrimination and retaliation.
c. Why does P argue claims to be joined?
i. Some pervasive policy of discrimination by GM.
ii. Some common discrimination which affects all the P’s.
2. District court orders claims to be severed.
a. Court found there was a variety of factual circumstances so there wasn’t enough evidence of relatedness among the claims.
3. Plaintiffs use interlocutory appeal (28 USC 1292)
a. District court itself makes the appeal if it’s uncertain about the rule it’s making, even if the rule is not normally appealed interlocutory.
4. 8th Circuit allows joinder.
a. Transaction has broader meaning.
b. To establish existence of the same transaction there must be a logical relationship.
i. Court looks to how this term has been interpreted in context of Rule 13
· Logical relationship requires a fairly close connection, often in time or space
· Many courts say that the bulk of evidence is similar in both.
c. Court finds that discrimination does satisfies the logical relationship
i. There are some commonalities of experience when one is discriminated against.
ii. Discrimination is systemic
· Maybe company wide policy of discrimination.
iii. Court may be giving P’s benefit of the doubt because P’s may not be aware of the discrimination they have been victim of so early on.
· Discrimination requires a lot of discovery.
5. Why do the parties want to bring their claims together?
a. It’s probably easier to show pattern of discrimination because you have more plaintiffs.
b. Cheaper for each individual P
c. Bringing together more P’s will make D look worse in front of jury.
6. Is there a benefit to joinder if you’re a D?
a. If P’s have weak case, D can rid of all the P’s more quickly.
7. Does joinder promote justice in this case?
a. Negative consequences if joinder is denied
i. GM may be able to overwhelm an individual P, and it may be the case that other P’s are going to be ground down by the same strategies GM has already used in winning.
b. If this wasn’t a discrimination suit, we might be more troubled by allowing joinder of P’s.
iii. Twombly
1. Supreme Court may have made basic pleading requirements much more rigorous.
a. Allegations of complaint must be supported by some logical facts.
b. Allegations and conclusions must not be merely conceivable but plausible.
2. One potential consequence of this case is that it is tougher to get joinder.
iv. Hall and Chance Cases
1. Situation: P has been injured by product, but you don’t know who produced the product.
a. Thus, P’s are trying to join a bunch of D’s.
2. How would Rule 20 be satisfied?
a. There is certainly common questions of fact
i. Concerning how these incidents occurred and whether there is negligence (proper warning labels).
b. Same transaction or occurrence?
i. D’s engaged in certain industry wide practices by manufacturing the product and failing to have warning labels.
ii. Also, relationship between substance and procedure.
· Also, sometimes substantive theories of liability can permit joinder
· We have a tort law theory (Summers v. Tice) and thus it makes sense to join the D’s
c. We don’t know if there are common questions of law because we haven’t done choice of law analysis
i. However, we don’t need common question of law because we have common question of fact.
ii. But substantive and procedure can also combine in questions of law.
b. Compulsory Joinder
i. Rule 19
1. Usually D makes motion and says there is someone else that should be made party to the action.
2. Occasionally court may make rule 19 motion on its own.
3. Rule 19 is a 2 stage process
a. 19(a)
i. Party must be joined if:
· In that parties absence, court cannot accord complete relief among existing parties, or
· That party claims an interest in the action, and that person’s absence:
· As a practical matter, may impair or impede the person’s ability to protect the interest, or
· Leave an existing party subject to a substantial risk of incurring multiple or otherwise inconsistent obligations because of that interest.
ii. Essentially we look at whether the party has a stake in the action. If we go forward with this case without the party are we going to unfairly prejudice the party.
iii. This is a join or no join decision
b. 19(b)
i. If a person who is required to be joined, cannot be joined, the court must determine whether the action should proceed or be dismis
have standing to sue on their own right.
iii. Interveners have a property interest
· Court says that a purely economic interest counts, doesn’t have to be legal.
· This is a significantly protectable interest.
b. Impair ability to protect interest
i. This is satisfied.
· These first 2 requirements are a lesser standard then what you need to sue on your own or under Rule 19
· Order of interest needed:
· Sue on your own – legal interest
· Rule 19 – legal or economic (must be really big economic)
· Rule 24 – legal or economic (something less is required)
Do existing parties adequately represent interest
i. Court finds that the parties don’t adequately represent the interest
· Not clear that city is concerned with property values
· There are also claims against D for bad faith and discrimination.
ii. This is a minimal standard
· You don’t have to show a lot of ways in which the parties may not adequately represent the interest.
· Just need to raise some possibility.
4. Policy
a. Liberal view of intervention:
i. Promotes social peace – if you let people intervene, people will feel more involved in the process
ii. Promotes community involvement in an action
b. On the other hand, we might argue these people are a distraction, since property interest has nothing to do with the constitutionality of the ordinance.
i. But maybe allowing these people to intervene will help judicial economy and deal with issues that might come up in future lawsuits.
v. Note Cases
1. Cascade Natural Gas
a. Court found that customers have significant interest in keeping prices low so they can intervene.
b. This was solely economic interest – it was a large interest
2. Donaldson
a. Government tried to get business records of Donaldon’s compensation from his employer.
b. Donaldson tried to intervene to prevent disclosure.
c. Court held employee did not have significant enough interest
i. Employee didn’t have legal right to intervene.
ii. Moreover, this was not a economic right, but more of a privacy right.
3. There are mixed signals from the supreme court what counts as an interest
a. Some circuits say you need significant protectable interest
b. Other circuits say you need a legally protectable interest
c. Trend is probably toward permitting somewhat freer intervention.
b. Permissive Intervention
i. Rule 24(b)
1. Requires only that parties seeking to intervene permissibly have a common question of law or fact with the main action
2. This is a very lenient standard and permits lots of parties to join.
a. But parties seeking to intervene still have to satisfy subject matter jurisdiction and independent diversity requirements.
ii. Intervention as of right v. Permissive intervention: Why do we care?
1. Parties prefer to intervene as of right
a. You are treated like a normal party and can participate fully (like in discovery)
2. Permissive interveners get fewer rights
a. May have limited discovery.
b. May only be permitted to intervene for a particular purpose.
