LITIGATION
Statistics
General
– 250,000 cases of federal civil litigation per year
– Federal Rules adopted in 1938
o Between then and 1990 there was a
§ Sixfold increase in filings
§ Threefold increase in judges
§ Doubling of judicial caseload
· BUT this is overestimated because judges rely more on clerks and magistrate judges
o Cases since then are increasingly dropped before verdict
§ In 1937 20% of cases were dropped
§ In 1940 15% of cases were dropped
§ By 1990 only 4.3% of cases were actually tried
· Why are more cases determined outside of trial?
o Norms against trial
o Judges intervene more often than they used to
o Federal Rules facilitate trial
§ Motions have replaced much of trial activity
§ Some feel adoption of rules has discouraged trials for this reason
o criminal justice system seemingly “clogs” court dockets
Time Periods
– time periods for criminal and civil cases are basically the same
o 40% of cases last 1 day
o 19% last 2 days
o 12% last 3 days
o 21% of civil and 19% of criminal last 4-9 days
o 3% last 10-19 days
o .7% of civil and 1.2% of criminal last > 20 days
Settlement
– over a 50 year period, 1/3 of cases were settled
– about 2/3 of cases resolved by the court
– 1990 à 11% of 2/3 are trial
– 1990 à 70% resolved by pre-trial motion
– 1940 à 40% resolved by pre-trial motion
Lawyer Compensation
Contingency Fees
– Facilitated by Rule 23 [HOW? THIS RULE IS ABOUT CLASS ACTIONS]
– attorney recovers a percentage of what the plaintiff recovers
– if the plaintiff recovers nothing the attorney doesn’t get paid
o attorneys who work on a contingent fee basis must charge a higher fee than those that work on a non-contingent fee basis
§ compensate them for the risk of loss and the risk of receiving no compensation for the services rendered
§ to permit them to earn an income that would be competitive with colleagues who get paid win or lose
– Contingency Fees for lawyers are calculated by figuring the unrealized income of unsuccessful cases into each case so the lawyer can break even
– Higher fee is appropriate measure of reasonable fee
o Induces an attorney to agree to assume the risk that no compensation will be received unless she successfully achieve a benefit for the client
o If ultimately successful, to compensate for the costs suffered and investment income foregone for delay in payment
– Everyone Benefits under a Contingency Fee System
o Client gains access to judicial relief with competent counsel
o The market price for these services is fair to the client and sufficient to induce an experienced lawyer to invest in a client’s case, in lieu of investing in another business pursuit
o Both client and lawyer enjoy the same economic incentives
o Lawyer has incentive to work efficiently and successfully to reach client’s goals
– Payment Mechanics
o Most lawyers have a two-tier system: before trial and after trial (latter more costly)
o Lawyers can take an hourly fee if the plaintiff bows out early
– Constraints on Fees
o Competition
§ There is minor variation between states (Mich 33%, Ohio 40%)
o Normal type of cases à Tort Cases
§ Tort cases have a greater amount of money at stake
§ Tort damages are usually capped (ex: Medical Malpractice with cap at $250,000 with exceptions for really bad injuries)
· Caps are for the purpose of reducing litigation
o Punitive Damages
§ Regulated by legislature
§ Michiganà no punitive damages, just exemplary damages [WHAT ARE EXEMPLARY DAMAGES?]
Hourly Fees
– Includes costs, a bill is submitted to the client
– Dominant practice of defense lawyers
o Steady stream of income
o If they win, the client doesn’t pay anything from their recovery
o Can only bill one client for a given slot of time
Pro Bono
– Attorneys pay for the litigation themselves
Statutory Compensation
– the losing defendant pays the fees regardless of whether or not there has been any monetary recovery for the named plaintiff
– Designed to provide access to judicial relief for victims by providing an economic incentive for lawyers to represent them
– Encourages meritorious civil rights claims à benefits of such litigation extend to society at large, regardless of monetary damages
– Serves to deter potential violators and induce voluntary compliance with statutes
– Moving party must demonstrate that it’s the prevailing party; prevailing D’s can’t recover unless they show the P’s action was frivolous, unreasonable, w/o foundation
– Civil Rights Act, RLUIPA, Equal Access to Justice Act, Prison Litigation Reform Act
Evans v Jeff D
– Question: Do Federal District Courts have the power to approve a waiver of attorney’s fees?
– Rule 23(e)- requires court approval of settlements of class actions.
– Fees Act and Civil Rights Act (42 USC § 1988) doesn’t prohibit all settlements that don’t have attorney fees, therefore not an abuse of judicial discretion to approve this settlement without attorney’s fees
– This was an impact litigation case
– Lawyers can contract around the negative result in Evans by writing a retainer in the agreement ahead of time
– Legal aid lawyers don’t like this case
Rule 23(e) – Settlement, Voluntary Dismissal or Compromise (Class Action)
– the court must approve any settlement, voluntary dismissal, or compromise of the claims, issues or defenses of a certified class
– Rationale – judge considers how the full package of the settlement is good for the plaintiffs
Rule 68 – Offer of Judgment
– D’s can cap their liability for certain costs by making a good faith offer of settlement before trial
o If the plaintiff accepts, it’s the end of the case
o If the plaintiff rejects, the case goes on to judgment
– If the case goes to judgment after sucn an offer there are 2 possible results
o P gets more than the offer and recovers costs
o P gets less than the offer, and P’s costs are covered by the D up to the offer but not past the offer. P has to pay D their costs after the offer.
– This is a big deal in cases that use the Fee Shifting Statute 42 USC § 1988(b) which defines fees as costs, therefore the D, by making the offer, might not have to pay the P’s attorney’s fees after the offer
[DO ALL COURTS USE THE FEE SHIFTING STATUTE OR JUST SOME?]
Ethical Restraints on Lawyers
– Problem à compensation is usually a relative proportion of damages the client gets
– Civil Rights claims seeking damages à attorney will probably be compensated much less
– Injunctive Relief à attorney will be compensated more, because it won’t be against the award the plaintiff gets
Buckhannon Board & Care Home Inc. v WV Dept. of Health and Human Resources-
– Question: Does the “prevailing party” statute include a party that has failed to secure a judgment on the merits or a court-ordered consent decree, but has nonetheless achieved the desired result because the lawsuit brought about a voluntary change in D’s conduct?
– Prevailing Party – 42 USC § 3613(c)(2)
– Voluntary Changes of action not induced by the court do not count to create a prevailing party for the litigation, need judicial determination
Catalyst Theory – Plaintiff is the prevailing party if it achieves the desired result because the lawsuit brought about a voluntary change in D’s conduct
– Supreme Court shot down this idea in Buckhannon Case
o Justified it by saying there would be a second round of litigation, but there usually is anyway
Cost of Litigation
– Cost of litigation is substantial
– Example: Custody Case in Divorce in Michigan is $60,000
– Specifics:
o Depositions = $400/deposition, standard case has 10-30
o Expert Witness = $400-$500/hr (first question on cross examination is how much an expert witness is paid)
– People with small cases don’t get represented because its not worth anyone’s time
– In general, the cost of litigation is too high for middle class America – a real downside for our current civil justice system
Types of Litigation
– Impact Litigation – there is something about the world that I don’t like, and I understand that law is often a very effective tool for brining about legal change, so I’m going to use my skills as a lawyer to bring about that desired change (Ex: Evans, Buckhannon)
– Client Centered Litigation – I am an attorney that is trying to vindicate the rights of my client, I don’t really care how this affects the rest of the world. I am not motivated the change the world
o In a Public Interest World there is a tension between these two groups. The IL’s don’t take interests of their individual clients (according to the CCL’s). IL’s wonder why CCL’s don’t think about how their claims fit into the overall picture…they only care about their clients. Both right, and both wrong.
– Public Interest Litigation – Doesn’t mean liberally oriented groups, now many conservative leaning. These groups undertake IL. These people wait for the right client with the right set of facts within the right time frame to meet their objectives. They are thinking about the long range goals of the litigation
o IL and PIL litigation is motivated by the public notion of good, where material/tangible benefits of such litigation cannot be explained or accounted for the litigation. The returns on the litigation are not high for these groups (this is how you can tell one of these groups, the materiality brought about by the lawsuit won’t even cover their costs for the action usually), just want their interest to be met.
Vocabulary
– Mootness – when the defendant voluntary provides what the plaintiff wants. The case becomes moot. The Plaintiff, to perfect jurisdiction, must bring a case that is not moot. This is a judicial requirement.
– Ripeness – the opposite of mootness. The case is not ready for judicial resolution so early. Facts are not clear enough for judicial resolution. The court will stand back a while, come back later with a live case.
– Declaratory Relief – Once the court gives it, it is the authoritative statement about the situation. Parties in real situations and is binding thereafter.
– Judicial Advisory Opinion – No one is bound by the opinion. The Position of the court isn’t bound by real parties, nor real facts. Built on hypotheticals.
– Anti-Trust Case – Usually these cases are taken on by the US – very sophisticated cases. An entire division of the Department of Justice is anti-trust. The FDC has a division for antitrust also. [BUT WHAT IS IT?]
Legal Standards v Rules
– Legal Standard – a legal norm, the violation of which is completely understood ex post. We apply a standard retrospectively with some set of facts, and then we figure out whether the standard was violated
o Associated with common law
o The reasonable person standard in torts
o Allow for case by case judgments
o Downside is that you don’t know in advance whether what you’ll do will violate the legal norm
– Legal Rules – Prospective in approach
o Can go to your lawyer ahead of time and determine whether your behavior will violate a rule
o Doesn’t allow for ad hoc adjustments
REMEDIES
Declaratory Relief
– the court is declaring that one part or the other is in the wrong
– Civil Rights lawyers are often looking for this type of remedy
– Political and Rhetorical Value to Declaratory Value
Punitive Damages
– Punishment – seek to punish the D, not must make the P whole
– Deterrence – the more you pay, the more you will be deterred, especially when it’s believed that not all parties are represented (use a multiplier – [IS THIS ALLOWED AFTER BMW/STATE FARM?])
– Several states do give the punitive damages to the state by statute (ex: Indiana)
o This might invite judicial abuse because judge has incentive to award punitive damages because it pays his salary
– Some State Supreme Courts have held that some limitations to punitive damages are unconstitutional under State Law.
BMW of North America v Gore
– Question: Was the punitive damage award in the case unconstitutionally excessive?
– Constitutionality of Punitive Damages will be judged by:
o The Degree of Reprehensibility of the D’s conduct (most important)
o The disparity between the actual harm done (found by the jury) and the punitive damage award
o Difference between the punitive damage remedy and the civil or criminal fines imposed by statute or in similar cases at trial
– Constitutional element is Due Process of the Law
– Court focused too much on out of state conduct – P didn’t just ask for punitive damages for what happened to him, asked for them because it happened to
earing, but the type can be based on the reason rights were being deprived
– Does procedural due process require the chance for a hearing before the state takes someone’s stuff?
o The state can only take stuff without a hearing when one requirements listed above are met
– Fuentes was entitled to a prior hearing. IT doesn’t matter if she gets a hearing later because the 14th Amendment says you are entitled to be heard before your stuff is taken.
Why are Repo Men Okay?
– they don’t have to enter a person’s personal home
– In trespass, the plaintiff’s tend to get very small damages for trespass – they usually get nominal damages
– The repo man isn’t a state actor
– In real life the repo man isn’t going to enter your house because he’d get shot
– We could not have state action repo men, that violates due process. They are private actors.
THE CONSTITUTION AND JURISDICTION
– Article III authorizes the establishment of the system of Federal Courts
o § 1 establishes a Supreme Court, the other federal courts are optional
o § 2 sets the limits on Federal Judicial Authority
– Article IV, § 1 – “Full Faith and Credit…to be given in each state to judicial proceedings of every other state”
o Full Faith and Credit Act makes the Federal Courts follow this, it is not explicit in the Constitution
o Requires that one state recognize and enforce judgments of another state
o Judgments are entitled to full faith and credit only if the courts rendering them had Jurisdiction to do so
– 14th Amendment § 1 – Due Process Clause
o no “State shall deprive any person of life, liberty or property without the process of law.”
o Cornerstone of modern constitutional theory
o Derives its relation to jurisdiction from Pennoyer v Neff
– Article VI – Supremacy Clause
o Constitution and Federal Laws “shall be the Supreme Law of the Land, and the Judges in every State shall be bound thereby, any thing in the Constitution or Laws of any State to the Contrary notwithstanding”
JURISDICTION
Jurisdiction – the power to declare the law
Personal Jurisdiction Overview
– the power of a given court to render a judgment binding over someone or some corporation
– Rule 4(k)(1)(A) – Federal district courts have the same jurisdictional reach as the state in which it sits, unless specific federal statute or FRCP extends the reach
Pennoyer v Neff
– Take Away Point: Oregon Court Judgment against Neff was invalid because:
o Neff was never served with due process
o Court did not have jurisdiction over his real property at the time of judgment
– Jurisdiction over non-residents can be accomplished in two ways:
o Power over the Person (in personam jurisdiction)
§ Service of Process to the person in the state
o Power over the thing (in rem jurisdiction)
§ Attachment of non-resident’s property
· Attachment is the legal term for an officially sanctioned seizure of property. In Pennoyer the court never attached the property, therefore Pennoyer did not obtain a good title to the property and it was returned to Neff
§ By extension, in rem jurisdiction could be used to adjudicate claims unrelated to the property itself – Quasi in rem
· Ex: Mitchell’s claim was for legal fees, he was only interested in Neff’s property only in that it could satisfy his contract claim
– Non-Residents who had no property in the state can still be subject to jurisdiction if they had consented to it (Neff had not consented)
– Notice was an issue in the case as well
o In personam jurisdiction requires personal service/notice
o In rem jurisdiction would allow notice via publications
§ Seizure is an appropriate measure for notifying a property owner because the property in theory is always in the possession of the owner, thus they would find out this way for sure
Challenges and Waiver to Personal Jurisdiction
What can a defendant do if he feels the court lacks personal jurisdiction?
1) Collateral Attack – Do nothing by declining to appear, suffer a default judgment, and then challenge jurisdiction in her own state when the judgment is recorded therein and a writ of execution is obtained
a. This is the riskiest court of action because if the second court rejects the jurisdictional challenge, the defendant can raise no other defenses on the merits, the case is complete with judgment against the defendant
2) Challenge Jurisdiction in Answer or Pre-Answer Motion
a. Rule 12(b)(h) and (g) make the timing of the challenge critical
i. 12(b) – defenses must be asserted in the responsive pleading, or with the case of personal or subject matter jurisdiction, in a motion, which must be made before a pleading
1. a defense is not waived if it is joined with another defense or objection in a pleading or motion
ii. 12(h) – a defense of lack of jurisdiction, improper venue, insufficiency of process, or insufficiency of service of process is waived if omitted from a motion (g) or if it is neither made by motion nor included in a responsive pleading
