Recently in Institutional Reform Litigation Category


Vinny Sidhu
Legal Intern, Manhattan Institute's Center for Legal Policy

Following on the heels of its passage of the FACT Act last week, the House took up the issue of lawsuit abuse more broadly:

On Thursday, November 14, the Lawsuit Abuse Reduction Act (LARA), H.R. 2655, was passed by the U.S. House of Representatives on a 228-195 vote. LARA is designed to curb the filing of frivolous lawsuits by restoring mandatory sanctions (e.g. payment of attorney fees) where a court determines a claim to be frivolous. It would amend Rule 11 of the Federal Rules of Civil Procedure to provide for mandatory sanctions and also eliminate the "safe harbor" provision which currently allows parties to withdraw a frivolous claim within 21 days without consequences.

From a procedural standpoint, this bill would streamline the Rule 11 process by delineating a bright-line rule for remedies if a claim is deemed frivolous. This would allow for increased judicial economy in the decision-making process, because judges would not have to spend additional time determining whether sanctions are appropriate for a given case. Instead, the focus would shift strictly towards determining the appropriate size and scope of the sanctions.

From a substantive standpoint, the Rule 11 reform would create greater certainty of consequences for the claimant. Because the claimant knows that an initial ruling that a claim is frivolous leads to mandated sanctions, the subjectivity of the judge's view on whether sanctions should be applied becomes irrelevant.

At the same time, because the judge retains subjectivity as to the breadth of the sanctions, the claimant does not have the variables necessary to measure whether it still might be worth it to bring a claim or group of claims. As a result, the claimant would naturally be reluctant to bring a substandard claim in the first place, especially because the removal of the safe harbor provision would make it even riskier to do so.

Vinny Sidhu
Legal Intern, Manhattan Institute's Center for Legal Policy

One of our fundamental rights as citizens is the ability to seek redress of our grievances. Over time, this practice spread from government to private industry, as workers' rights against their employers in abusive or harmful situations were codified in legislation.

The establishment of the asbestos bankruptcy trust was meant to offer a compromise path through which employees could achieve restitution for their asbestos-related injuries, and employers could avoid cost overruns and premature bankruptcies.

However, the surreptitious manner in which the trusts have been run has allowed for opportunistic lawyers to take advantage of them by submitting frivolous, fraud-riddled claims.

The goal of the trusts stand as the fulfillment of just compensation for injured workers, but the main beneficiaries are turning out to be lawyers who make claims on behalf of "clients."

To remedy this injustice, the FACT Act was meant to mandate quarterly reporting of claims made on the trust, as well as allow for more compliance with third-party discovery requests made on the trust.

Because there are no compliance costs or other significant burdens associated with the law's passage, we can assume the asbestos industry's opposition to the FACT Act stems from a desire to lessen transparency. If there is no transparency, the industry can continue to make baseless claims and reap fraudulent profits.

Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform, has written an op-ed detailing the reasons for the asbestos industry's continued obfuscation.

Vinny Sidhu
Legal Intern, Manhattan Institute's Center for Legal Policy

Floyd Norris, author of the High & Low Finance column for the New York Times, writes about two cases the Supreme Court has decided to hear dealing with fee-shifting in patent infringement cases. The outcomes could potentially deter future, frivolous infringement suits.

Vinny Sidhu
Legal Intern, Manhattan Institute's Center for Legal Policy

The Justice Department likes to proclaim itself to be an advocate for ensuring equality of opportunity across the entire socioeconomic spectrum of America. In terms of education, it likes to claim that universal access to education for the disadvantaged is the key to maintaining a stable democracy and a generally-inclusive civic society. Ostensibly, this is certainly a salutary position, and certainly a noble policy aim.

There always seems to be, however, a disconnect that constantly emerges with the stated ends and the desired means of reaching this goal. The latest example comes to us in the form of a lawsuit aimed at halting Louisiana's voucher program. Attorney General Eric Holder is asking a federal court to halt the use of vouchers, pursuant to the mandates of a case called Brumfield v. Dodd. The stated reason is that the racial balance of schools will get altered in contravention of the desegregation orders laid out in Brumfield, and that the state should have to seek federal approval for each district in which it wishes to utilize vouchers.

Even before analyzing the legal missteps, the Justice Department's logic implicitly admits two things: 1) That racial balancing should take precedence over educational opportunity for low-income students and 2) that the chance of vouchers not meeting the Brumfield racial balancing standard is enough to repudiate the entire voucher program. If equality of educational opportunity is indeed the desired end, then this approach does not seem to be the most efficient means of reaching it.

Moreover, the Justice Department is misapplying the legal standard. Clint Bolick, vice president for litigation at the Goldwater Institute and advocate for the Louisiana chapter of the Black Alliance for Educational Options, recently wrote about the myriad misapplications:

Curiously, the Justice Department did not file its motion in any of the ongoing Louisiana desegregation cases. Instead, it seeks an injunction in Brumfield v. Dodd , a case filed nearly 40 years ago challenging a program that provided state funding for textbooks and transportation for private "segregation academies," to which white students were fleeing to avoid integration. Since 1975, private schools have had to demonstrate that they do not discriminate in order to participate in that program.

The Louisiana Student Scholarships for Educational Excellence Program restricts participation to private schools that meet the Brumfield nondiscrimination requirements. The program further requires private schools to admit students on a random basis. Thus the program clearly complies with Brumfield. And the Brumfield court has no jurisdiction over the desegregation decrees to which the Justice Department seeks to subject the voucher program.

Nor can any court properly force the state to seek advance approval from the Justice Department for a clearly nondiscriminatory program that advances the education of black children. As the Supreme Court ruled earlier this year in Shelby County, Alabama v. Holder, when it struck down the "pre-clearance" formula of the 1965 Voting Rights Act regarding federal approval for electoral changes, states cannot be forced to submit their decisions to federal oversight "based on 40-year-old facts having no logical relationship to the present day."

It does not seem like too much of a stretch to assume that, when the proffered means run so afoul of the stated ends, there is some sort of variable intervening between the point A to point B relationship. This interference generally takes the form of some sort of special interest or political motive that ends up taking precedence over the general welfare. In this case, there seems to be a symbiotic relationship between the Justice Department (which does not want to cede power over enforcing desegregation decrees) and the local school districts (which obtain federal funds in connection with these decrees). As long as the political class favors power perpetuation over the welfare of its constituents, we will continue to see the advocacy of mutated means towards empty ends.

The House Judiciary Subcommittee on the Constitution has a hearing scheduled for Friday, March 11, on the yet to be introduced Lawsuit Abuse Reduction Act, legislation that would amend Rule 11 of the Federal Rules of Civil Procedure to discourage frivolous lawsuits.

The Lawsuit Abuse Reduction Act was one of the high-profile pieces of legislation promoted by civil justice reform activists in the previous decade. Rep. Lamar Smith (R-TX), now chairman of the full Judiciary Committee, was sponsor in 2005 of H.R. 420, which passed the House 228-184 (16 House Democrats voted yes along with the Republicans) before stalling in the Senate.

The primary provision of the 2005 bill applied to the federal courts:

(Sec. 2) Amends Rule 11 of the Federal Rules of Civil Procedure (Signing of Pleadings, Motions, and Other Papers; Representations to Court; Sanctions) to: (1) require courts to impose sanctions on attorneys, law firms, or parties who file frivolous lawsuits (currently, discretionary); (2) disallow the withdrawal or correction of pleadings to avoid Rule 11 sanctions; (3) require courts to award parties prevailing on Rule 11 motions reasonable expenses and attorney's fees, if warranted; and (4) authorize courts to impose Rule 11 sanctions that include reimbursement of a party's reasonable litigation costs in connection with frivolous lawsuits.

However, the bill also sought to apply the new Rule 11 standards to state civil actions involving matters that substantially affected interstate commerce, and it had other provisions directed at state courts. That kind of language raises objections from federalism-minded conservatives (e.g. new "Tea Party" aligned House Republicans), who would otherwise support tort reform.

Accordingly, it's our understanding that the upcoming version of the bill will drop the state-specific language to apply only to the federal courts.

In the most recent issue of the Manhattan Institute's City Journal, Jim Manzi has a fascinating piece on the limits of social science. I posted my initial reaction to the piece on Marquette University Law School's faculty blog. His observation are particularly timely in light of the recent decision of a district court judge in Perry v. Schwarzenegger striking down California's constitutional amendment limiting marriage to one man and one woman.

My point relates not to same sex marriage itself, but Judge Walker's use of social science evidence and how that might relate to constitutional litigation generally. The key question is the extent to which courts ought to rely on social science evidence to overturn the laws enacted by voters and their elected representatives. This question extends well beyond the matter of same sex marriage.

According to Judge Walker, social science evidence has proven that same sex marriage will have no impact on the mores and vitality of marriage between heterosexuals and that it has proven "beyond any doubt that parents' genders are irrelevant to children's developmental outcomes."

It is certainly true that most academics who have devoted themselves to the study of gay and lesbian isses believe these assertions. But it is quite another matter to say that they have proven them. Our experience with same sex marriage is quite recent and limited. It is not clear that there is enough data to draw any conclusions about its long term impact.

As for the "genderless" nature of parenting, there are severe methodological difficulties in obtaining randomly selected comparable samples of gay and lesbian couples raising children. Comparision groups of heterosexual parents are often not limited to intact married couples raising their biological tradition and there are very few, if any, adequate longitundinal studies.

But beyond this, Manzi's article suggests that it may be difficult to ever say - at least by the standards of the physical science - what the impacts of same sex marriage are or will be. While his article focused on implications for policy making, there are lessons for judicial decisionmaking as well. A large part of Judge Walker's decision is given over to declaring the judgment of a majority of California's voters as irrational because social science purports to establish that what they believe to be true is not.

The question is not an easy one. Traditional equal protection analysis requires some scrutiny of the justificaton for legal distinctions. But it may well be that social science evidence needs to be viewed with greater skepticism than shown by Judge Walker in Perry. Constitutional litigation ought not to be seen as a battle of experts who attempt to claim the dispassion and robustness of the physical sciences to resolve contested issues of social policy.

The state wants out from under two-decade-old institutional reform litigation, and Children's Rights Inc., its adversary, is predictably seeking to block its escape. [Hartford Courant] For more on the big business of children's rights litigation, see this earlier post and this one, on a Georgia fee controversy resolved by the U.S. Supreme Court just this week.

Around the web, March 24

  • By 4-3 margin Connecticut Supreme Court finds state's constitution guarantees all children "suitable" education, finance decrees to follow [CLT]
  • Welcome Mark Steyn readers (he linked to Rick Esenberg's post on health care and the constitution);
  • Comer v. Murphy Oil: "Suing our way to a carbon-free world" [David Freddoso, Examiner]
  • Dellinger: after Stevens retirement, seniority wrinkle might tip Justice Kennedy to side more often with liberal bloc [WSJ Law Blog]
  • Gender wage gap can be fully explained, yet advocates claim critical need for Paycheck Fairness Act [Mark Perry]
  • Critics say proposed compromise in Florida legislature wouldn't really restore reliable parental waivers of liability over kids' recreation [Orlando Sentinel] Trial lawyers playing defense on several other issues in Tallahassee including slip/fall suits, AG's use of outside counsel [Sentinel, Miami Herald, AP]

[cross-posted from Overlawyered, where comments are open]

If blogging has been lighter than usual, one reason is that I've been racing forward on my new book on law schools and their influence, tentatively entitled Schools for Misrule: Legal Academia and an Overlawyered America, which is in the catalogue for Winter/Spring (a year hence) from Encounter Books. I reached first draft in December and am rapidly whipping that rough copy into something closer to final shape.

My original nickname for the book was Ten Bad Ideas from the Law Schools -- and How They Changed The World. We decided to go with something a little more dignified, but the book still tries to answer the underlying question of why so many bad ideas -- and certain kinds of bad ideas, especially -- keep emerging from the law schools. Along the way it looks at some sociological and political angles, such as why modern liberal-left leadership so often is formed in the elite law school milieu (Barack Obama, Bill and Hillary Clinton, etc.) Then it takes up a series of issues -- from institutional reform litigation and school finance to slavery reparations and international law -- in which legal academia has led campaigns to challenge and redefine the nature of government sovereignty, with consequences that have been usually unforeseen and sometimes calamitous.

I'll be blogging more on all those points over the coming year, but in the mean time I've got a request ("bleg" = blog request, or begging post) for this site's well-informed readers. One of my chapters takes up the now-ubiquitous phenomenon of law school clinics in which students represent outside clients, sometimes in "cause" litigation and sometimes not. I trace the origins of this movement (a big philanthropic push from the Ford Foundation made the difference), the resistance it met from law-school traditionalists and its eventual triumph, as well as some of its present-day manifestations, which are not always those foreseen by the circa-1970 visionaries who started the programs. The chapter is pretty good as is, I think, but I'd like to add a little more illustrative detail about the clinics, especially vignettes from the early years shedding light on what it was expected they would accomplish in changing society (a subject that isn't as well documented on the web as I'd like). Responses can be made in comments or by email to editor - at - overlawyered - dot - com. (And, yes, I've already read Heather Mac Donald's interesting City Journal critique and some of the responses it provoked.)

In a paper for the Federalist Society, longtime school-finance-watchers Eric Hanushek (Hoover) and Alfred Lindseth (Sutherland Asbill) perceive a trend toward judicial rejection of "adequacy" lawsuits that advance a state-constitutional rationale for ordering hikes in school budgets.