Civil Procedure & Federal Courts Blog

SCOTUS Cert Grant on Arbitration: Kindred Nursing Centers v. Clark

On Friday, the Supreme Court granted certiorari in Kindred Nursing Centers Limited Partnership v. Clark, which presents the question:

"Whether the FAA preempts a state-law contract rule that singles out arbitration by requiring a power of attorney to expressly refer to arbitration agreements before the attorney-in-fact can bind her principal to an arbitration agreement."

You can find all the cert-stage briefing—and follow the merits briefs as they come in—at SCOTUSblog.

 

 

 

Bone on Statistical Adjudication & Tyson Foods v. Bouaphakeo

Bob Bone has posted on SSRN a draft of his article Tyson Foods and the Future of Statistical Adjudication, which will be published in the North Carolina Law Review. Here’s the abstract:

Statistical adjudication, the practice of using sampling and other statistical techniques to adjudicate large case aggregations, is highly controversial today. In all its forms, statistical adjudication decides cases on the basis of statistical extrapolation rather than case-specific facts. For example, a court adjudicating a large class action might try a random sample of cases, average the trial verdicts, and give the average to all the other cases in the aggregation. In Wal-Mart Stores, Inc. v. Dukes, the Supreme Court rejected a sampling proposal as inconsistent with the Rules Enabling Act, calling it “Trial by Formula.” In the wake of this decision, at least one commentator declared the death of statistical adjudication.

In an important decision last term, Tyson Foods, Inc. v. Bouaphakeo, the Court changed course and breathed new life into statistical adjudication. It upheld the use of sampling to establish liability and damages in a Fair Labor Standards Act case and indicated that the procedure might be available in other cases as well. The Court’s opinion is far from clear, however, and offers little guidance to lower court judges trying to determine when and how to use the procedure in future cases.

This Article explores the impact of Tyson Foods on the future of statistical adjudication. Part I defines statistical adjudication and distinguishes it from statistical evidence. Part II shows that Tyson Foods is a case of statistical adjudication, not statistical evidence. Part III takes a closer look at the Court’s opinion in an effort to tease out factors and principles to guide future use. Part IV explores reasons for the vague discomfort with the procedure, reasons that seem to be tied to nagging doubts about the legitimacy of the procedure. Critics worry that statistical adjudication is too strange a fit with adjudication, too substantive to be legitimately implemented as procedure, and too mechanical to count as a proper form of adjudicative reasoning. Part IV argues that statistical adjudication is not as strange as it might seem, that its outcome effects do not make it too substantive, and that while it substitutes a mechanical decision algorithm for the usual reasoning process, it does so in a way that can be justified as legitimate. It is time that we recognize statistical adjudication for what it is: a useful procedural tool that, when carefully designed and selectively deployed, is capable of adjudicating large case aggregations fairly and efficiently.

 

 

 

 

Delaney on Avoidance

Erin Delaney has posted on SSRN her article, Analyzing Avoidance: Judicial Strategy in Comparative Perspective, 66 Duke L.J. 1 (2016). Here’s the abstract:

Courts sometimes avoid deciding contentious issues. One prominent justification for this practice is that, by employing avoidance strategically, a court can postpone reaching decisions that might threaten its institutional viability. Avoidance creates delay, which can allow for productive dialogue with and among the political branches. That dialogue, in turn, may result in the democratic resolution of — or the evolution of popular societal consensus around — a contested question, relieving the court of its duty. Many scholars and judges assume that, by creating and deferring to this dialogue, a court can safeguard its institutional legitimacy and security.

Accepting this assumption arguendo, this Article seeks to evaluate avoidance as it relates to dialogue. It identifies two key factors in the avoidance decision that might affect dialogue with the political branches: first, the timing of avoidance (i.e., when in the life cycle of a case does a high court choose to avoid); and, second, a court’s candor about the decision (i.e., to what degree does a court openly acknowledge its choice to avoid). The Article draws on a series of avoidance strategies from apex courts around the world to tease out the relationships among timing, candor, and dialogue. As the first study to analyze avoidance from a comparative perspective, the Article generates a new framework for assessing avoidance by highlighting the impact of timing on the quality of dialogue, the possible unintended consequences of candor, and the critical trade-offs between avoidance and power.

 

 

 

 

Call for Papers: The Ninth Annual Junior Faculty Federal Courts Workshop

Here’s an announcement with the dates and details for the Ninth Annual Junior Faculty Federal Courts Workshop:

Emory University School of Law School will host the Ninth Annual Junior Faculty Federal Courts Workshop on March 31-April 1, 2017. The workshop pairs a senior scholar with a panel of junior scholars presenting works-in-progress. The workshop is open to untenured and recently tenured academics who teach and write in federal courts, civil rights litigation, civil procedure, and other associated topics. Those who do not currently hold a faculty appointment but expect to do so beginning in fall 2017 are welcome. The program is also open to scholars wanting to attend, read, and comment on papers but not present.   There is no registration fee. The conference will begin with a dinner on Friday March 31; panels will take place on Saturday, April 1. Each panel will consist of approximately 4 junior scholars, with a senior scholar serving as commentator while leading a group discussion on the papers. Scheduled commentators include Heather Elliot, Richard Freer, Jonathan Nash, and James Pfander.

Emory Law will provide all lunches and dinners for those attending the workshop, but attendees must cover their own travel and lodging costs. Those wishing to present a paper must submit an abstract to [email protected] by November 1, 2016. Papers will be selected by a committee of past participants, and presenters will be notified by early January. Those planning to attend must register by February 20, 2017.

(H/T: Fred Smith)

 

 

 

Vladeck on Thomas on the Missing American Jury

Today on the Courts Law section of JOTWELL is Steve Vladeck’s essay, Bringing in the Jury. Steve reviews Suja Thomas’s recent book, The Missing American Jury: Restoring the Fundamental Constitutional Role of the Criminal, Civil, and Grand Juries (2016).

 

 

 

 

Eichensehr on Foreign Governments as SCOTUS Amici

Kristen Eichensehr has a post up at SCOTUSblog discussing her recent article Foreign Sovereigns as Friends of the Court, 102 Va. L. Rev. 289 (2016). Here’s the article abstract:

This Article presents the first systematic study of foreign sovereign amicus briefs in the Supreme Court. Based on an analysis of the briefing, oral arguments, and opinions in every Supreme Court merits case involving a foreign sovereign amicus since 1978, this Article argues that foreign sovereigns do and should play an important role in shaping foreign relations law. 

The Article begins with an empirical investigation of which sovereigns file, the types of cases in which they file, and the nature of the arguments they make. To a surprising extent, the Court cites foreign sovereign briefs, discusses them at argument, and even grants oral argument time to foreign sovereign amici — all despite the widespread perception that the Court is ambivalent or even hostile to foreign and international law. 

The Article then situates the Supreme Court’s treatment of foreign sovereign amici within a larger story about how the Court approaches foreign relations questions. Although scholars have attempted to systematize and explain the deference the Court gives to the U.S. government in foreign relations cases, they have largely ignored the role that foreign sovereign amici play in the very same disputes. Accounting for the role of foreign sovereign amici challenges existing scholarly accounts of how and why the Court defers to the U.S. government on foreign relations issues. 

The Article argues that the reasons underlying the Court’s deference to the U.S. government — the executive’s expertise, status as a lawmaker, and exercise of control over relevant policies — often apply to foreign sovereigns as well. This overlap in justifications for deference supports treating foreign sovereign amici similarly to the U.S. government in cases involving “international facts,” treaty interpretation, and customary international law. In cases involving foreign law, the justifications for deference suggest that foreign sovereign amici should receive more deference than the U.S. government. 

In sum, attention to foreign sovereign amici sheds light on executive-to-judicial transnational networks and provides a more nuanced picture of the competing influences on the Court’s foreign relations jurisprudence.

 

 

 

Workshop at FIU: Sant'Ambrogio on Inside the Agency Class Action

On October 25, Michael Sant'Ambrogio will be presenting Inside the Agency Class Action (covered earlier here) at Florida International University.

(H/T Howard Wasserman)

 

 

 

 

 

Federal Circuit Reverses Award of Attorney's Fees to Justin Timberlake & Britney Spears

Yesterday the U.S. Court of Appeals for the Federal Circuit issued its decision in Large Audience Display Systems v. Tennman Productions, LLC. It reversed the district court’s award of attorney’s fees to (among others) Justin Timberlake and Britney Spears. Here’s the opinion’s first paragraph:

Large Audience Display Systems, LLC (“LADS”) appeals from the district court’s order granting a motion for attorney’s fees under 35 U.S.C. § 285 filed by Appellees Justin Timberlake, Tennman Productions, LLC, Britney Spears, and Spears King Pole, Inc. (collectively, “Appellees”). We find that certain of the factors relied upon by the district court to find this case to be exceptional were entitled to no weight under § 285. We therefore vacate the district court’s award of attorney’s fees and costs, and remand for reconsideration of Appellees’ motion.

Download Large Audience Display Systems (Fed Cir)

Will the ruling affect recent rumors of a possible Spears-Timberlake collaboration? Stay tuned.

 

 

 

Fitzpatrick & Norris on Discovery Costs and Post-Summary Judgment Fee-Shifting

Brian Fitzpatrick and Cameron Norris have posted on SSRN a draft of their article, One-Way Fee Shifting after Summary Judgment. Here’s the abstract:

New, defendant-friendly discovery amendments to the Federal Rules of Civil Procedure took effect on December 1, 2015. Although the discovery amendments created more controversy than perhaps anything the rulemakers have done in recent memory, defense-side advocates are pressing a still more ambitious proposal: to outright flip who pays for discovery, from the party who produces the discovery to the party who requests it. We share the view of most commentators that so-called "requester pays" is too extreme. But we also think the current regime — so called "producer pays" — errs too far in the other direction (even after the new amendments to the rules). In this article, we rely on economic analysis to offer a middle way: to ask plaintiffs to pay the cost of responding to their discovery requests only if they do not find anything trial worthy in those requests and lose their cases on summary judgment. Although Congress certainly has the power to implement our proposal, we believe that the rulemakers may be able to do so on their own as well.

 

 

 

 

Coleman on One Percent Procedure

Brooke Coleman has posted on SSRN her article, One Percent Procedure, 91 Washington Law Review 1005 (2016). Here’s the abstract:

In this election year, political rhetoric about the one percent is already pervasive, as those with the greatest concentrated wealth prosper and the remaining population stagnates. Because of their affluence, the one percent exercise disproportionate control over political and economic systems. This Article argues that federal civil procedure is similarly a one percent regime. The crème de la crème of the bench and bar, along with equally exclusive litigants, often engage in high-stakes, complex civil litigation. It is this type of litigation that dominates both the elite experience and the public perception of what civil litigation is. This litigation is not particularly common, however; while expensive and well known, it is in the minority. Yet this litigation and the individuals engaged in it have an incongruent influence on how the Federal Rules of Civil Procedure and procedural doctrine develop. They create one percent procedure.

This Article interrogates and connects disparate phenomena related to civil litigation, including the recent discovery amendments and the rise of multidistrict litigation. It demonstrates that the elite — those who are deeply steeped in complex, high-stakes litigation — are setting the agenda and determining the rules for how the entire civil litigation game is played. It further argues that the benefits of a one percent procedure system — notably expertise of the participants — are not worth the costs; indeed, that expertise can be detrimental to the design of a civil litigation system.

As in politics and economics, a system that gives too much control to the one percent risks undervaluing and underserving the remaining ninety-nine. Using social and political science, the Article argues that the homogenous policymaking of one percent procedure creates suboptimal results. The Article concludes that the structures giving rise to one percent procedure must be modified and proposes a set of reforms intended to allow the ninety-nine percent representation in, and access to, the process of constructing our shared civil litigation system.

 

 

 

 

Grossi on Procedural Reform and Zooming in on the Claim

Simona Grossi has posted on SSRN a draft of her article, A Principled Approach to Procedural Reform: Zooming In on the Claim. Here’s the abstract:

At the core of every liberal democracy is a commitment to a wide range of individual rights. The recognition and evolution of those rights is a lively topic of public debate. Procedural law, on the other hand, is well below the public radar. Yet, federal practice and procedure are silently eroding our system of democracy through a mechanical and fragmented approach to procedure that is increasingly detached from the litigation mission in a manner that elevates form over substance, prevents the creation and enforcement of rights, and ultimately denies access to justice. This article is part of a larger project intended to change the way we think about and approach procedural law and procedural reform at the federal level. My goal is to unearth the unifying principles of federal procedure and practice, and use them to design a system that promotes the coherent, fair, and efficient creation and enforcement of substantive rights. To that end, I elaborate a theory of federal procedure and practice that assigns to the claim, the essential litigation unit, a central role in litigation analysis and reform. Testing the federal rules and procedural doctrines against the claim helps us see when procedure, operating at a very high level of abstraction and formalism, suffocates substantive law and justice, thus failing to accomplish its essential mission of means in the creation and enforcement of substantive rights. Once identified the flaws in our procedural system, the project formulates reform proposals that are intended to return the rules and doctrines to the right balance between formalism and pragmatism, one essential for the rules and doctrines to accomplish their mission. Zooming in on the claim is crucial in this respect.

 

 

 

 

Nielson & Walker on Strategic Judicial Behavior in Qualified Immunity Decisions

Aaron Nielson and Chris Walker have posted on SSRN their article, Strategic Immunity, 66 Emory L.J. 55 (2016). Here’s the abstract:

The first rule of administrative law is that discretion can be dangerous. Although discretion is often used for its intended purposes, scholars of the regulatory process understand from both theory and experience that unintended consequences sometimes result. This is one reason why the Supreme Court is cautious when it comes to agency discretion. After decades of preventing agencies from acting in arbitrary or even self-interested ways, the modern Court has developed a fairly sophisticated understanding of the risks and rewards of discretion and why it is essential to pay attention to incentives for the proper exercise of discretion.

That is, unless the Supreme Court is addressing judicial discretion. Then, its sophistication all too often gets tossed aside. Qualified immunity is a perfect example. In Pearson v. Callahan, the Court granted judges confronting novel civil-rights claims maximalist discretion whether to decide constitutional questions for the public’s benefit. The intent behind this new discretion is sound: flexibility allows judges to balance constitutional avoidance versus constitutional stagnation in light of case-specific factors. What the Court forgot, however, is that discretion can also have unintended consequences.

This Article addresses perhaps the most serious of these unintended consequences: strategic behavior by judges. While the Court recognizes that federal agencies may have incentives to use discretion in strategic ways, neither the Justices nor scholars have considered the strategic considerations that can influence a judge’s discretionary decision to clearly establish constitutional rights. The potential for strategic behavior is especially sharp, moreover, when discretion to decide constitutional questions is combined with discretion to issue unpublished, nonprecedential opinions. To illustrate this danger, this Article examines real-world judicial decisionmaking. Reviewing over 800 published and unpublished circuit decisions, this Article identifies significant “panel effects”: politically unified panels are more likely to exercise discretion either to find no constitutional violation, for “all Republican” panels, or to recognize new constitutional rights, for “all Democratic” panels. Yet on mixed panels there are no differences, suggesting a collegial concurrence or a majority compromise to avoid dissent. The decision to publish also appears to be used strategically. For instance, one in five decisions recognizing new constitutional rights is unpublished. This potential for strategic behavior — as in the administrative law context — begs for reform.

As Chris pointed out on twitter, this issue of the Emory Law Journal has a civ-pro/fed-courts vibe to it, including my article on the 2015 FRCP amendments and some interesting student comments on judicial immunity and personal jurisdiction. Check it out.

 

 

 

Thomas on The Myth of the American Jury

Suja Thomas has posted a short piece on "The Myth of the American Jury" in the International Judicial Monitor (Summer 2016 issue).  She argues that "[a]lthough the jury is imperfect, it is the best body to decide most criminal and civil matters," and summarizes her recent book, The Missing American Jury, which "argues that the jury should be restored in the United States, and it should also play a more vibrant role in many other countries."

Resnik on Federal and State Courts in our Federal System

Judith Resnik has published her article, Revising Our "Common Intellectual Heritage": Federal and State Courts in Our Federal System, at 91 Notre Dame L. Rev. 1831. 

Abstract:

This Essay pays tribute to Daniel Meltzer’s insight that, to the extent “lawyers have a common intellectual heritage, the federal courts are its primary source.” I do so by analyzing how that heritage is made and remade, as political forces press Congress to deploy federal courts to protect a wide array of interests and state courts absorb the bulk of litigation.

The heritage that Meltzer celebrated and to which he contributed was the outcome of twentieth-century social movements that focused on the federal courts as hospitable venues, serving as vivid sources of rights and remedies. A competing heritage has since emerged, as the Supreme Court shaped new doctrines constricting judicial powers and rendering courts unavailable and unavailing.

Despite the Court’s reluctance to welcome claimants, Congress continues to endow the federal courts with new authority and significant funds. But what the federal government has thus far ignored are the needs of state courts, where 100 million cases are filed annually and states struggle to honor constitutional commitments to open courts and rights to counsel for criminal defendants.

Once state courts come into focus, two other and competing understanding of courts come to the fore. One merits the term “enabling courts,” as judges aim to equip litigants with lawyers and resources for conflicts related to families, housing, and health. From “Civil Gideon” movements and self-help forms to drug and reentry courts, new initiatives underscore the goals of using courts to be responsive to social needs. But another vector of court activities falls under the nomenclature of “exploitive courts,” using discriminatory fines, fees, and threats of jail for those unable to pay to turn courts into profit centers to augment localities’ budgets.

Inequality and racial tensions are the leitmotifs of this decade; it is neither surprising nor inappropriate that these issues are played out in public courts as well as in electoral politics. But these very inequalities counsel the need to develop a new intellectual heritage, premised on the interdependencies of state and federal courts, sharing the common purpose of fulfilling constitutional obligations in this democratic polity to enable access to their public services.

Volokh & Levy on suspicious court cases seeking to get web pages taken down

Eugene Volokh and Paul Levy have an interesting post over at the Washington Post/Volokh Conspiracy. It begins:

There are about 25 court cases throughout the country that have a suspicious profile:

• All involve allegedly self-represented plaintiffs, yet they have similar snippets of legalese that suggest a common organization behind them. (A few others, having a slightly different profile, involve actual lawyers.)
• All the ostensible defendants ostensibly agreed to injunctions being issued against them, which often leads to a very quick court order (in some cases, less than a week).
• Of these 25-odd cases, 15 give the addresses of the defendants — but a private investigator (Giles Miller of Lynx Insights & Investigations) couldn’t find a single one of the ostensible defendants at the ostensible address.

Now, you might ask, what’s the point of suing a fake defendant (to the extent that some of these defendants are indeed fake)? How can anyone get any real money from a fake defendant? How can anyone order a fake defendant to obey a real injunction?

 

 

Check it out to find the answers.

 

 

 

Third Circuit Decision on Standing, Pleading, and NSA Surveillance

Last week, the U.S. Court of Appeals for the Third Circuit issued its decision in Schuchardt v. President of the United States (3d Cir. No. 15-3491). The plaintiff filed a lawsuit challenging NSA surveillance activities, but the district court dismissed for lack of standing. The Third Circuit reversed, with an opinion that begins:

This appeal involves a constitutional challenge to an electronic surveillance program operated by the National Security Agency (NSA) under the authority of Section 702 of the Foreign Intelligence Surveillance Act (FISA). Elliott Schuchardt appeals an order of the United States District Court for the Western District of Pennsylvania dismissing his civil action for lack of jurisdiction. The District Court held that Schuchardt lacked standing to sue because he failed to plead facts from which one might reasonably infer that his own communications had been seized by the federal government. Because we hold that, at least as a facial matter, Schuchardt’s second amended complaint plausibly stated an injury in fact personal to him, we will vacate the District Court’s order and remand.

The court goes on to discuss the Supreme Court’s 2013 decision in Clapper v. Amnesty International USA, as well as the general pleading standard set forth in Twombly and Iqbal.

Download Schuchardt (3d Cir)

It’s worth noting that a case similar to Schuchardt is currently pending in the Fourth Circuit. Wikimedia Foundation  v. NSA (4th Cir. No. 15-2560) is scheduled for oral argument in December. If readers are interested, below is a link to an amicus brief in the Wikimedia case that I filed on behalf of various civil procedure and federal courts professors:

Download Wikimedia v NSA (4th Cir) Law Professor Amicus Brief

 

 

 

 

 

 

Coleman on Rosenbaum on RICO & Class Action Warfare

Today on the Courts Law section of JOTWELL is Brooke Coleman’s essay, Racketeers, Mobsters, & Plaintiffs’ Mass-Action Attorneys. Brooke reviews Briana Rosenbaum’s forthcoming Iowa Law Review article, The RICO Trend in Class Action Warfare.

 

 

 

 

SCOTUS grants cert to review 9/11 lawsuits; questions presented involve Bivens, qualified immunity & pleading standards

Today the Supreme Court granted certiorari in three cases, which it then consolidated. The cases are Ziglar v. Abbasi (No. 15-1358), Ashcroft v. Abbasi (No. 15-1359), and Hasty v. Abbasi (No. 15-1363). The petitioners are federal officials challenging the Second Circuit’s decision (Turkmen v. Hasty, 789 F.3d 218 (2015)) refusing to dismiss certain claims by plaintiffs alleging they were subjected to discriminatory and punitive treatment during their confinement following the 9/11 attacks. One aspect of these cases that could prove quite important is that Justices Sotomayor and Kagan “took no part in the consideration or decision of these petitions” and have apparently recused themselves.

The three cases present slightly different but overlapping questions relating to Bivens, qualified immunity, and pleading standards. Not surprisingly, there are echoes of the Court’s 2009 decision in Ashcroft v. Iqbal, which has had a significant impact on pleading standards generally (Iqbal is already the #4 most-cited Supreme Court decision in history). 

[Update: During the cert-stage briefing and in the initial order granting certiorari, these three cases were captioned with Ibrahim Turkmen as the lead respondent (Ziglar v. Turkmen, Ashcroft v. Turkmen, and Hasty v. Turkmen). The docket and merits briefs now list Ahmer Iqbal Abbasi as the lead respondent.]  

You can find all the cert-stage briefing—and follow the merits briefs as they come in—by checking out the SCOTUSblog casefiles (Ziglar; Ashcroft; Hasty). Here are the questions presented in full...

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The End of an Era? Federal Civil Procedure After the 2015 Amendments

My article on the 2015 amendments to the FRCPs is now in print. It’s The End of an Era? Federal Civil Procedure After the 2015 Amendments, 66 Emory L.J. 1 (2016). Here’s the abstract:

The recent amendments to the Federal Rules of Civil Procedure were the most controversial in decades. The biggest criticisms concerned pleading standards and access to discovery. Many feared that the amendments would undermine the simplified, merits-driven approach that the original drafters of the Federal Rules envisioned and would weaken access to justice and the enforcement of substantive rights and obligations.

This Article argues that the amendments that came into effect on December 1, 2015, do not mandate a more restrictive approach to pleading or discovery. Although there was legitimate cause for alarm given the advisory committee’s earlier proposals and supporting documents, the final amendments — in light of their text, structure, and accompanying advisory committee notes — should be interpreted to preserve notice pleading and a robust discovery process. The more significant lesson of the 2015 amendments, therefore, may be to confirm the view that the amendment mechanism of the Rules Enabling Act is unlikely to generate consequential changes to the Federal Rules (for better or for worse). The process leading to the 2015 amendments was teed up almost perfectly for opponents of meaningful access and enforcement to make real, detrimental changes to federal pleading and discovery standards. Yet the final amendments ultimately did not do so.

Accordingly, the key battleground following the 2015 amendments will be in the federal courts themselves, as judges are called upon to interpret and apply the rules in particular cases. No doubt aware of this fact, Chief Justice Roberts has taken various steps to spin the recent amendments as making more significant changes than they actually do. These post-amendment moves are not legally authoritative and do not modify the law of civil procedure. But the Chief Justice and his allies may win the day if they are able to dominate the gestalt surrounding the 2015 amendments in a way that persuades lower court judges to take a more restrictive approach. Properly interpreted, the 2015 amendments do not support the Chief’s narrative. Recognizing this will be crucial for ensuring access and enforcement going forward.

 

 

 

 

Zimmerman et al. on the Economics and Evolution of Non-Party Litigation Funding

Alan L. Zimmerman, Fiona McKenna, Daniel J. Bush, and Cheryl Kaufman have published their article, Economics and the Evolution of Non-Party Litigation Funding in America: How Court Decisions, the Civil Justice Process, and Law Firm Structures Drive the Increasing Need and Demand for Capital, 12 N.Y.U. J.L. & Bus. 635 (2016).

From the introduction:

Economic historians have said that “America is the Canaan of capitalism, its promised land” where the tendencies of western capitalism could find fullest expression. One essential requirement for the continued success of American capitalism is a civil justice system that provides a fair and trusted forum for all parties seeking timely redress of economic disputes.

 

Beginning in kindergarten, American children start each day with a Pledge of Allegiance, ending with the words “with liberty and justice for all.” The current economic reality is that civil justice in America has become a “pay to play” process. With few exceptions, it does not function fairly or effectively unless each side of a dispute has enough capital to pay the very substantial cost of full participation.

 

The United States is experiencing a high degree of wealth and resource inequality among its citizens. There can be no ‘justice for all’ unless each side of an economic dispute can aggregate the capital needed to ‘play.’ It is not surprising that those with the greatest concentration of wealth experience discomfort when natural economic forces generate funding solutions for their less affluent, potential adversaries enabling them equal access to the field of ‘play.’

 

This paper views civil litigation initiated by a party seeking money damages through the lens of the underlying economics that impact the civil justice system's ability to achieve fair outcomes. It examines how access to capital has impacted the functioning of civil justice in the United States.

 

Participation and success in any endeavor seeking profit or economic gain in the American capitalist system requires a sufficient supply of the three basic economic elements: property, labor, and capital. The evolution of each of these elements as applied to civil litigation and the parties and lawyers seeking gain or profit has brought us to the current state of justice in America. Just as horses and buggy whips have given way to engines and motors as major economic drivers, vast developments in our capitalistic society have served as catalysts for change in the U.S. common law legal system and reshaped the nature and interplay of the required resources of property, labor, and capital within that system.

 

The paper will demonstrate that non-party litigation funding is a natural and healthy capitalistic response to the changes that have occurred in the economy and in civil justice. We examine the historical development of the three economic elements, property, labor and capital, in the context of one economic endeavor, a lawsuit in which at least one party--and all of the lawyers--seek economic gain as the objective, and how the developments have increased the need for capital investment.