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Dealing with “Frivolous” Lawsuits

Congress is currently considering legislation that would reverse the Supreme Court’s decisions in Iqbal and Twombley, discussed here previously. These decisions have significantly raised the standard for pleading a viable complaint in federal court, and enhanced the power of judges to dismiss cases that do not appear plausible, before allowing any discovery or further proceedings to occur. One danger of these Supreme Court decisions is that they have already led to increased wasteful motion practice in early stages of lawsuits. Another is that they have caused the dismissal of cases that could actually be viable after further discovery and investigation.

Twombley and Iqbal, combined with prior Supreme Court decisions embracing the use of summary judgment to increase the courts’ power to dismiss lawsuits prior to trial, represent a trend to provide the judiciary with tools for dealing with meritless lawsuits that clog the courts for no useful purpose. Should Congress decide to overrule these decisions, Congress will no doubt be criticized for caving in to the trial lawyers’ lobbies and bending over backwards to help the “little guy” attack American business unfairly.

The question that perhaps should be asked instead is whether we can design better tools to deal with meritless lawsuits than tightened pleading standards and more liberal use of summary judgment. The problem with heightened pleading standards is that they encourage even more motions to dismiss, the majority of which are still going to be denied. So, ironically, efforts to curtail frivolous plaintiffs’ suits could lead to wasteful motion practice on defendants’ part. The other problem is making it easier for courts to dismiss cases without a trial raises the potential for throwing out cases that could actually be won at trial. The same problems exist at the summary judgment stage. Summary judgments are expensive, complicated motions that use up a lot of the litigants’ time as well as the court’s time. Many of those motions are denied also, and many are filed at least in part to wear down the other side. Summary judgment also has the potential for dismissing cases that could have been won at trial.

Perhaps it would make sense to study simplified discovery and trial procedures, or early evaluation procedures, or even some sort of counseling for litigants who insist on proceeding with cases that are not likely to result in a recovery that exceeds their cost. The courts’ and the parties’ desire to weed frivolous cases out of the system is a legitimate one. But when the courts or the Congress try to bend the rules to accommodate that desire, they may be denying other parties the right to test their claims in court, and may be adding procedures that increase costs in many cases. It might be better to recognize the rights of litigants to proceed with difficult cases, but to allow those cases to proceed in a way that will not break the back of the court system.

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