November 19, 2010
NY Times Story on Lack of Clarity in SCOTUS Opinions (See, e.g., Iqbal; Twombly)
This week’s New York Times contains an article by Adam Liptak titled Justices Are Long on Words but Short on Guidance. From the article:
The Supreme Court under the leadership of Chief Justice John G. Roberts Jr. is often criticized for issuing sweeping and politically polarized decisions. But there is an emerging parallel critique as well, this one concerned with the quality of the court’s judicial craftsmanship. In decisions on questions great and small, the court often provides only limited or ambiguous guidance to lower courts. And it increasingly does so at enormous length.
Among the examples provided are Twombly and Iqbal:
In a pair of civil procedure decisions in 2007 and 2009 that have been cited many thousands of times, the court gave trial judges more authority to throw out cases early based on, in the words of the later decision, their “experience and common sense.” That standard, Arthur R. Miller wrote last month in The Duke Law Journal, is “shadowy at best” and has caused “confusion and disarray among judges and lawyers.”
November 17, 2010
Hardaway, Berger, and DeField on E-Discovery and Rule 26
Robert Hardaway (University of Denver), Dustin Berger (Columbia University), and Andrea DeField (University of Denver) have posted E-Discovery's Threat to Civil Litigation: Reevaluating Rule 26 for the Digital Age to SSRN.
Changes in technology allow litigants to create and store much more information than has ever been possible before. Unfortunately, the costs of searching through litigants’ ever-growing sources of electronically stored information threaten to undermine the civil litigation system. Indeed, we argue that a typical civil litigant cannot sustain the costs of the discovery-related litigation. As a result, many civil litigants will never be able to obtain a judicial resolution of the merits of their case. The Federal Rules of Civil Procedure, even as amended in 2006 specifically to address the costs and scale of e-discovery, not only fail to contain the cost or scope of discovery, but, in fact, encourage expensive litigation ancillary to the merits of civil litigants’ cases. The solution to this dilemma is to eliminate the presumption that the producing party should pay for the cost of discovery in favor of a rule that would equally distribute the costs of discovery to the requesting and producing parties. While other commentators have proposed a variety of solutions to this problem, the other proposed solutions are generally inadequate because they fail to address the underlying cause of the rising costs and scope of e-discovery. We demonstrate how mandatory cost sharing gives all parties the incentive to control the cost and scale of e-discovery. We also show that some state and many foreign jurisdictions have rejected the presumption that the producer pay for the costs of discovery, thereby demonstrating that the producer-pays presumption is not essential to the operation of a civil justice system.
November 16, 2010
Decision of Interest: Mohawk, Perlman, and the Appealability of Privilege Rulings (U.S. v. Krane)
As covered earlier here, the Supreme Court decided last year that an order compelling disclosure of a document despite a claim of attorney-client privilege is not immediately appealable under the collateral order doctrine. Mohawk Industries, Inc. v. Carpenter, 130 S. Ct. 599 (2009). A recent decision in the Ninth Circuit, United States v. Krane, No. 10-30247, 2010 WL 4260978, 2010 U.S. App. LEXIS 22605 (Oct. 29, 2010), holds that Mohawk does not abrogate the so-called Perlman rule, which derives from Perlman v. United States, 247 U.S. 7 (1918). The Ninth Circuit writes (some citations omitted):
Under Perlman, a discovery order directed at a disinterested third-party custodian of privileged documents is immediately appealable because the third party, presumably lacking a sufficient stake in the proceeding, would most likely produce the documents rather than submit to a contempt citation.
The Perlman rule survives the Supreme Court's recent decision in Mohawk. In Mohawk, the Supreme Court held that “disclosure orders adverse to the attorney-client privilege” are not subject to interlocutory review under the Cohen “collateral order” exception to the final-judgment rule of 28 U.S.C. § 1291.
Perlman and Mohawk are not in tension. When assessing the jurisdictional basis for an interlocutory appeal, we have considered the Perlman rule and the Cohen collateral order exception separately, as distinct doctrines.
Mohawk forecloses interlocutory appeal of some district court orders in reliance on the fact that “postjudgment appeals generally suffice to protect the rights of litigants and assure the vitality of the attorney-client privilege.” 130 S.Ct. at 606; see also id. at 607-08 (surveying “several potential avenues” by which “litigants confronted with a particularly injurious or novel privilege ruling” might seek its immediate review “apart from collateral order appeal,” including by not complying with a disclosure order and then receiving, and appealing, a contempt citation). In contrast, the Perlman rule applies only when the privilege holder is powerless to avert the mischief of a district court's discovery order because the materials in question are held by a disinterested third party. Such third parties . . . may be likely to forgo suffering a contempt citation and appealing in favor of disclosure. . . . Further, in this case, neither the privilege holder nor the custodian of the relevant documents are parties to the underlying criminal proceedings. Thus, for all practical purposes, this appeal is [the privilege holder’s] only opportunity to seek review of the district court's order adverse to its claims of attorney-client privilege.
For more information on the case, see U.S. Law Week (79 USLW 1599).
November 15, 2010
NY Times Story on Litigation Financing
Sunday’s New York Times contains an article Investors Put Money on Lawsuits to Get Payouts, which begins:
Large banks, hedge funds and private investors hungry for new and lucrative opportunities are bankrolling other people’s lawsuits, pumping hundreds of millions of dollars into medical malpractice claims, divorce battles and class actions against corporations — all in the hope of sharing in the potential winnings.
The loans are propelling large and prominent cases. Lenders including Counsel Financial, a Buffalo company financed by Citigroup, provided $35 million for the lawsuits brought by ground zero workers that were settled tentatively in June for $712.5 million. The lenders earned about $11 million.
Most investments are in the smaller cases that fill court dockets. Ardec Funding, a New York lender backed by a hedge fund, lent $45,000 in June to a Manhattan lawyer hired by the parents of a baby brain-damaged at birth. The lawyer hired two doctors, a physical therapist and an economist to testify at a July trial. The jury ordered the delivering doctor and hospital to pay the baby $510,000. Ardec is collecting interest at an annual rate of 24 percent, or $900 a month, until the award is paid.