Carroll, Civil Procedures Outline, Fall 2016
LIFE CYCLE OF A CASE
Incentives to Litigate
Forms of Relief
Damages (compensatory and punitive)
Punitive: to punish D’s for particularly reprehensible behavior
Has a deterrence function
They are usually limited with a cap based on multiple of compensatory damages
Generally no punitive damages for a breach of contract
Statutory: a minimum damages award set up by the legislature
Often used when compensatory damages are small and hard to prove/quantify
Courts will also limit damages, such as for medical malpractice, in order to limit litigation
Hard, economic, special vs. Soft, non-economic, general damages
Troupe holds that damages should be reasonably foreseeable based on the injury suffered, able to find a specific figure for the first category
Specific Relief: an enforceable order to do something (specific performance) or not do something (injunction)
Given when damages are an inadequate remedy, (Geohegan) needed specific performance to get someone to leave the hospital, damages were insufficient
Declaratory Relief: declares the legal rights of a party in a particular circumstance
All other judgments for remedies have an implicit declaratory element, asserting who is in the right
May just seek declaratory relief to: 1) reassure a third party (such as a bank or potential investor) that P is operating legally, 2) if P is fairly certain that D will comply with the law as soon as it is definitively declared (often the case with government Ds), 3) for strategic reasons P wants to be the first to tell their story, may help later litigation
Preliminary Injunction and Temporary Restraining Orders
Must be granted or denied before the case can be decided on the merits, used for situations where an immediate remedy is needed, later relief may be of no use
Winter v. NRDC, navy training dispute
Determine the need for a preliminary injunction using a sliding scale by comparing
1) The probable success of the claim on its merits
2) The likelihood of suffering irreparable harm w/o relief, the harm does not need to be concrete, just harm that cannot be undone or adequately compensated for
3) The balance of equities in P’s favor
4) If the injunction is in the public interest
A temporary restraining order is essentially a shorter term preliminary injunction that is implemented in dire need situations without notifying the party being restrained
Provisional Remedies and Due Process
Sometimes remedies must occur before litigation, such as replevin, but that often conflicts with due process rights
Due process regulates government action
Provisional remedies: relief pending final adjudication of the dispute
Fuentes v. Shevin, emphasized the due process rights of notice and hearing, override the right of blanket replevin
Financing Litigation
Hourly rate: lawyer just looks at how wealthy the client is, the longer the better
Incentives long cases, extra work
Flat rate: a set amount for a particular type of work, risky if you end up underestimating how long something will take, may end up underpaid
Used for predictable contract work, like adoption papers, wills
Contingency fees: an agreement between the client and the lawyer where the lawyer gets a percentage of the damages if they win but nothing if they lose
Percentages may increase as the case goes on
There is often a statutory cap on what percentage of damages a lawyer can demand
Causes lawyers to chose cases based on probability of success, amount of damages, solvency of defendant may be less important
Can result in lawyers only taking certain types of cases and maybe incentivizing quick settlement if that is the better financial option for the lawyer
Like insurance, other clients of the lawyer form the risk pool, the fees recovered from winning cases subsidize the costs of the losing cases
Non-profit/Legal Aid/ Pro Bono: doesn’t not rely on contingency fees or make clients pay but they still may attempt to get fee shifting at the end of each case
These organizations consider the righteousness of each case, the connection to their goals and the visibility of the issue
Insurance: with liability insurance, insurers will pay damages up to the policy limit and provide a lawyer to defend a claim
Other policy holders are in the risk pool, some of which have accidents
The no accident policy holders subsidize those who have accidents
Alternative Litigation Finance
Consumer Lending: groups that lend directly to clients (usually Ps in personal injury cases) giving them a loan that only needs to be repaid if they win a judgment
Total repayment never exceeds the judgment, can have high interest rates and incentivize Ps to hold out on reasonable settlement offers in the hopes of more to pay off the loan
Often used by low income Ps without access to ordinary loans, due to bad credit, etc.
Still offers a chance at getting some judgment rather than nothing
Lawyer Lending: lawyers sometimes borrow to finance their business
The bank is lending against the lawyer’s entire portfolio
Will have higher rates than ordinary loans as lawyers are not a good credit risk
Direct Investment in Commercial Claims: invest directly in lawsuits, contract with the parties or the lawyers and fund part of the litigation in return for a share of the recovery
Unlike the two above alternatives which do not investigate their borrowers, DI does
Generally interested in major commercial litigation, anti-trust, IP, contract disputes
Often the firms and clients seeking this financing are already wealthy, could fund it themselves
May do so to get a second opinion on the strength of the suit or to put less of their own capital at risk
American Rule v. English Rule
English Rule: losing side pays attorney fees
Encourages strong but low-damage cases
Discourages high-cost “law reform” suits
American Rule: each party pays own fees
Encourages “law reform” suits, riskier suits
Discourages meritorious low – damage suits
Fee Shifting
Complicates the American Rule, as the loser pays the winner’s attorney fees in particular circumstances
Often part of the settlement contract, infrequent, may occur in federal litigation
Federal Statute S 1988, courts may allow prevailing parties except the US, a reasonable fee as part of the costs for certain kinds of cases
Title VII sex and race discrimination
Title IX education discrimination
ADA
S 1983 – violation of constitutional rights
Encourages lawyers to take these cases on vindication of rights where the award is non-monetary so a contingent arrangement is not available
However, a lawyers ethical duty to their clients will encourage settling with a waiver of fees (Evans v. Jeff)
Helps the client but screws the lawyer
Agreements to reject settlements for lack of fees have been held unethical by some courts
Instead, you may ask for damages and injunctive relief that ensures that attorneys still get paid even if the fees are waived
The amount of fees are not bound by anything, fees may at times outweigh the actual damages
Some lawyer client agreements include provisions that the client must seek attorney’s fees in settlements or that the client must eventually pay the fees
(Buckhannon) you can only be awarded fees if you are the prevailing party
Catalyst theory: when a lawsuit prompts D or someone else (legislature) to change behavior without the suit being decided with a court order, so P isn’t technically a prevailing party, so they are not entitled to fees
Only prevailing P can get fees; prevailing D does not, prevailing if you win during litigation
Rationale: plaintiff might not have money; might discourage civil rights suits
Prevailing party requires judicial imprimatur of success (Buckhannon)
Encourages protection of civil rights through voluntary change in behavior
Disincentives lawyers for injunctive relief cases
es time, place, and nature of the alleged misrepresentations. Particularized facts, can’t just allege that they were fraudulent
Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally in relation to the particularity requirement (note that “generally” still must comply with Iqbal standard of Rule 8).
Chance of punitive damages for fraud cases, purpose of 9(b) is to give D’s accused of fraud fair notice of the claim and a factual grounds on which it is based
Dismissal under 9(b) usually includes leave to amend, 15(a) leave to amend given when justice so requires
Ethical Limits (FRCP 11)
Baseless allegations are a waste of time and money, long standing rules and codes forbid lawyers from making such claims, such as Bar rules.
Rule 11 regulates how lawyers and clients conduct themselves, used to deter baseless filings, doesn’t infringe on rights in the Supreme Courts view
Allows the court to enforce the standard in the midst of litigation, critics dislike this, says it may chill meritorious litigation or fail to deter enough frivolous
Covers all aspects of litigation that involves written documents except for in discovery
Most common rule 11 violation is failure to conduct adequate factual investigation
Rule 11
(a) Every pleading and written motion must be signed by attorney(s)
(b) By signing it, attorney(s) are stating that to the best of their knowledge, their motions follow these four rules
No improper purpose, such as to harass, cause delay or needlessly increase the cost of litigation
Warranted by law (existing, non-frivolous extension of) (can extend, access concerns)
You can point to precedent in sister courts if you are trying to change the law, be upfront with the court, helps the court distinguish between serious suits and cases where the lawyer didn’t do their research, so then there is a quick 12(b)(6)
There is / will be evidentiary support
Denials are warranted by facts (denials are supported by the evidence)
Allows fines to go to the court rather than D
(c) Enforcement: court may impose an appropriate sanction
If after notice and reasonable opportunity to respond the court determines that 11(b) has been violated they may sanction
Party must motion for Rule 11 sanctions on other side, of alleged violations of 11(b), must be served but must not be filed until after 21 days, give the other party a chance to cure
If warranted the court may award the prevailing party attorney fees
A court may also implement rule 11 sanctions on its own initiative
Sanctions exist, limited to what suffices to deter repetition of the offending conduct, can be non-monetary, such as additional training, firms held jointly responsible
Least severe that will adequately deter the conduct, sometimes just an apology
Sometimes monetary is unnecessary, just sanctioning in a public way is sufficient punishment, may result in lost clients
Limits of monetary sanctions, not imposed on a represented party for violating rule 11(b)(2), or on its own unless 11(c)(3) is satisfied
The sanction order must include an explanation
(d) Rule 11 does not apply to discovery
Discovery has Rule 26 and 37
