Recently in Procedure Category

A new report by Josh Wright finds, says the Pennsylvania Record,

that Philadelphia courts host an especially large number of cases and have a larger docket than expected; Philadelphia plaintiffs are less likely to settle than plaintiffs in other state courts; and Philadelphia plaintiffs are disproportionately likely to prefer jury trials.

"These findings are consistent with a conclusion that Philadelphia courts demonstrate a marked and meaningful preference for plaintiffs, consistent with both the Complex Litigation Center's intention of inviting 'business' from other courts and criticisms that Philadelphia's courts provide a unique combination of advantages for plaintiffs," the study states.

The Complex Litigation Center handles mass tort cases such as asbestos lawsuits and other drug litigation or similar cases. It was designed to streamline mass tort cases and simplify resolution, but instead seems to have created a climate "inviting" to business from plaintiffs in other jurisdictions, the study states.

"While this may provide additional work for Pennsylvania lawyers, it also increases the cost of operating the civil justice system in Philadelphia and Pennsylvania more generally - a cost borne by the state's consumers and businesses," Wright's study concludes.

H.B. 1552, pending in the Pennsylvania legislature, would require suits to be filed in the county where the injury occurred. Plaintiffs' lawyers claim that the bill is unconstitutional because the legislature doesn't have authority to regulate civil procedure.

Robert Ambrogi writes of two recent cases where experts retained by or on behalf of Stan Chesley essentially disavowed their testimony after being confronted with unpleasant facts that had been kept from them in drafting their testimony. My Point of Law post on the subject is quoted.

A creative insight from Andrew Blair-Stanek in the Florida Law Review (via Volokh):

The Supreme Court's 2007 decision in Bell Atlantic Corp. v. Twombly has baffled and mystified both practitioners and scholars, casting aside the well-settled rule for evaluating motions to dismiss in favor of an amorphous "plausibility" standard. This Article argues that Twombly was not revolutionary but simply part of the Court's ever-expanding application of the familiar three-factor Mathews v. Eldridge test. Misused discovery can deprive litigants of property and liberty interests, and in some cases Mathews requires the safeguard of dismissing the complaint. This Article's insight explains Twombly's origins and structure, while also suggesting a source for lower courts to draw on in developing post-Twombly jurisprudence.

An interesting implication is that loosened pleading standards are not permissible without loser-pays.

It's well known that patent trolls forum-shop to get their cases in the Marshall courthouse of the Eastern District of Texas, to the point of setting up empty offices in the neighborhood to create venue. But, surprisingly, I've never seen a complete explanation written why. Let me do so.

1) Only two judges sit in the Marshall division. Correctly or incorrectly, they are perceived as judges who rarely grant summary judgment, and let juries decide issues. Moreover, judge-shopping is possible: one of the judges has a close relative in private practice, creating strategic disqualification opportunities. (Judge David Folsom's announced retirement may or may not change this dynamic, depending on who is appointed to replace him.)

2) The Eastern District of Texas is perceived to have plaintiff-friendly juries. (Only 20% of the population holds a bachelor's degree, meaning that technically complicated cases may well get decided on grounds other than the science.) The actual quantitative trial win-loss record of patent plaintiffs in the E.D. Tex. isn't so spectacular in recent years, which leads some to call the idea of plaintiff-friendly juries a myth. But that quantitative record needs to be discounted because, qualitatively, much poorer cases get to the jury in the Eastern District than elsewhere. (That said, adjustment of defense trial tactics in recent years seems to have had some effect.) And once plaintiffs do win, the juries tend to be on the high side on the damages calculations.

3) The Eastern District of Texas, like many other federal districts, has a "rocket docket": local civil rules of procedure for patent cases expedite the consideration of such cases. There's nothing inherently wrong with this, but the effect is a benefit for patent plaintiffs. A patent plaintiff who has its act together will have its ducks in a row pre-filing: all of its research, experts, and infringement theory of the case prepared. In most litigation, it's the plaintiffs who need discovery the most: lots of document discovery to find smoking guns, lots of depositions to induce witnesses into saying things that can be perceived as damaging admissions. Plaintiffs need discovery in patent cases, too, especially if they're hoping to prove "willfulness," but defendants need discovery more. Defendants will be working from scratch, and hoping to find evidence to invalidate a patent. An expedited discovery schedule makes that more difficult. An expedited discovery schedule also requires a larger team of litigators, because limited bandwidth makes lean staffing inadvisable. This has the potential to make a case more expensive than it would be with a longer schedule, both in terms of cash flow and because there's more wasted and duplicated effort conveying information when one is coordinating a larger team of attorneys, though there is the countervailing effect of the impossibility of no-stone-left-unturned/scorched-earth litigation that can take place with a conventional litigation schedule.

4) The remoteness of the Marshall location raises litigation costs considerably. Every 15-hour round-trip by a senior litigator having to change planes in Atlanta adds $10,000 or more to the bill. This, combined with the decreased likelihood of resolving the litigation through motion practice rather than expensive trials, and the increased costs of the rocket docket, means that there's an in terrorem effect from simply bringing the lawsuit: the patent troll can offer to settle for far less than the cost of litigation, and the defendant, who does not collect the full social value from invalidating a bad patent, often does not have the incentive to keep fighting.

In an extraordinary two-sentence order in Jewel v. NSA, the Ninth Circuit has accepted for filing an ex parte in camera classified brief that the plaintiffs will not be allowed to see. You'd think the government would be grateful for this seemingly unprecedented breach of due process, but they have instead doubled down to warn the judges not to ask any questions that would disclose information from that brief in public. [Politico]

If the Ninth Circuit is going to adopt such a policy, they should at least justify it with an opinion. Because that order is presumptively illegal. As we've previously quoted Judge Easterbrook in Union Oil Co. of California v. Leavell, 220 F.3d 562, 567-68 (7th Cir. 2002):

"Even disputes about claims of national security are litigated in the open. Briefs in the Pentagon Papers case, New York Times Co. v. United States, 403 U.S. 713, 91 S.Ct. 2140, 29 L.Ed.2d 822 (1971), and the hydrogen bomb plans case, United States v. Progressive, Inc., 467 F.Supp. 990, rehearing denied, 486 F.Supp. 5 (W.D.Wis.), appeal dismissed, 610 F.2d 819 (7th Cir.1979), were available to the press. ... Judicial proceedings are public rather than private property, U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 27-29, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994); In re Memorial Hospital of Iowa County, Inc., 862 F.2d 1299, 1302-03 (7th Cir.1988), and the third-party effects that justify the subsidy of the judicial system also justify making records and decisions as open as possible. What happens in the halls of government is presumptively public business. Judges deliberate in private but issue public decisions after public arguments based on public records. The political branches of government claim legitimacy by election, judges by reason. Any step that withdraws an element of the judicial process from public view makes the ensuing decision look more like fiat, which requires compelling justification."

The circumscribed public oral argument will be held August 31, 2011, but the Ninth Circuit website doesn't yet indicate whether it will be in San Francisco or Pasadena.

Cecil (FJC) et al., Motions to Dismiss for Failure to State a Claim after Iqbal: Report to the Judicial Conference Advisory Committee on Civil Rules:

This report presents the findings of a Federal Judicial Center study on the filing and resolution of motions to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The study was requested by the Judicial Conference Advisory Committee on Civil Rules. The study compared motion activity in 23 federal district courts in 2006 and 2010 and included an assessment of the outcome of motions in orders that do not appear in the computerized legal reference systems such as Westlaw. Statistical models were used to control for such factors as differences in levels of motion activity in individual federal district courts and types of cases.

After excluding cases filed by prisoners and pro se parties, and after controlling for differences in motion activity across federal district courts and across types of cases and for the presence of an amended complaint, we found the following: There was a general increase from 2006 to 2010 in the rate of filing of motions to dismiss for failure to state a claim (see infra section III.A); In general, there was no increase in the rate of grants of motions to dismiss without leave to amend. There was, in particular, no increase in the rate of grants of motions to dismiss without leave to amend in civil rights cases and employment discrimination cases (see infra section III.B.1); Only in cases challenging mortgage loans on both federal and state law grounds did we find an increase in the rate of grants of motions to dismiss without leave to amend. Many of these cases were removed from state to federal court. This category of cases tripled in number during the relevant period in response to events in the housing market (see infra section III.B.1). There is no reason to believe that the rate of dismissals without leave to amend would have been lower in 2006 had such cases existed then; There was no increase from 2006 to 2010 in the rate at which a grant of a motion to dismiss terminated the case (see infra section III.B.1).

Of course, there could be hidden effects that the study is not picking up. Some judges are going to be resistant to Twombly and Iqbal; others were already applying a heightened standard of review of complaints before Twombly (recall that Twombly itself involved an appeal to the Second Circuit from a plaintiff who had had his complaint dismissed). And the mix of cases that are going to be brought post-Twombly are different. We will still see cases dismissed because of lawyers pushing the envelope and failing to create new law. But, after Twombly, the hypothetical 100-page complaint alleging wildly implausible conspiracies is much more likely to be filed by a deranged pro se than a lawyer who cares about adhering to ethical standards. Meritless implausible complaints that would have been filed in 2005 are less likely to be filed in 2011, but it's hard to say that that is a bad thing.

Russell Jackson analyzes recent Supreme Court and lower-court personal jurisdiction jurisprudence.

Tort reform advocates are often accused of being in the pocket of the insurance industry, but insurers are sometimes among the worst offenders in the civil justice system. Allstate is suing Toyota for $3 billion of subrogation claims relating to the bogus sudden acceleration theory, and has hired Cozen O'Connor to push for ludicrous venue rulings to forum-shop the case in Los Angeles County. [NLJ]

American lawsuits have wide-ranging discovery rules requiring the production of documents. These require attorneys to screen hundreds of thousands of documents for relevance. It's disadvantageous enough for a party to a lawsuit to have to disclose what it's required to disclose, but disclosing documents that a party is entitled to withhold (such as documents outside the scope of the discovery request or attorney-client privileged documents) could have severe consequences.

Now, there are a wide range of possible rules that could govern the inadvertent disclosure of privileged documents, but they generally fall into one of two categories. For example, the default rule could be a Golden Rule: if an attorney receives a privileged document mistakenly produced by the other party, they could be required to return it without being allowed to use it. The other alternative is a sort of strict liability: if the privileged document is produced, the other side "wins" and gets to keep and use the document; if one's really nasty about it, one could argue that the privilege is waived with respect to privileged documents that weren't produced.

The second rule obviously has dynamic consequences in how document production is done. If a law firm is not allowed to make mistakes in producing documents, it has to take much more care, and spend much more time and money and resources double-checking to ensure that no one has made a mistake in approving the production of privileged documents. This is pure wealth-destroying social cost to pay highly educated lawyers to do the economic equivalent of digging holes and filling them in again, but it's good for the lawyers. At the end of the day, not many more privileged documents are disclosed than under the alternative rule where inadvertently produced privileged documents are required to be returned, but a lot more money is spent by parties on the lawyers getting to that result.

Guess which default rule is generally adopted by the courts? You got it: the socially wasteful one that transfers wealth to attorneys. And a law firm that gets it wrong and accidentally produces thousands of privileged documents to the other side gets castigated for a "blunder" and exposed to potential malpractice liability, ensuring that it is forced to spend lots of money on overeducated hole-digging and filling-in-of-holes.

Related: Mark Herrmann (also at Above the Law) on "clawback" agreements.

The Senate Judiciary Committee on Thursday voted out S. 623, the Sunshine in Litigation Act, intended to compel judges to open settlement agreements and other court proceedings that seal confidential documents. Sen. Herb Kohl (D-WI), the sponsor, and Sen. Chuck Grassley (R-IA), talked about how the bill been improved and made more balanced. We don't see it. (See Shopfloor post, "Sunshine in Litigation Act, Polished Up a Little.")

An interesting little exchange followed the 12-6 vote to report out the bill:

Chairman Patrick Leahy (D-VT): I want to compliment Sen. Kohl. I know he has worked a long, long time on this.

Kohl: 18 years.

Sen. Dianne Feinstein (D-CA): 18 years?

Kohl: It's been around for 18 years.

Leahy: 18 years. So congratulations.

We detect solicitude toward a senior. Sen. Kohl recently announced his decision not to seek re-election, and -- based on our decade of experience in and around the North Dakota Legislature -- we'd say his colleagues are paying respect to the Senator's years of service by letting the bill get out of committee and maybe even pass the Senate. Legislatures are human institutions, after all, and this sort of gesture has its place. Just as long as the bill doesn't become law.

BTW, the first time the Senator introduced the bill was August 6, 1993. It was S. 1404, the Sunshine in Litigation Act of 1993.