Yearly Archives: 2016
Jun 29, 2016 Suzette M. Malveaux
Scholars, lawyers, and litigants struggle to understand the class action landscape that has evolved over the past five decades and has sharply contracted more recently. Seminal rulings such as Wal-Mart v. Dukes and its progeny in the lower courts have sown division and analytical confusion over the meaning and normative value of this obstructionist shift in jurisprudence. In The Public Interest Class Action, David Marcus dives into this morass, examining one slice of this jurisprudential retrenchment and its varied implications—class action procedure in public interest litigation, litigation brought against government officials and agencies for injunctive relief.
Marcus’s focus on structural-reform cases against public actors illustrates how most of the policy concerns animating class certification retrenchment are unjustified, misplaced, and dangerous to enforcement of constitutional rights. Much of the academic critique has centered around the role of monetary interests in aggregation—a distortion and distraction for understanding the public interest class action. The casualties of this misalignment are vulnerable populations such as foster children, prisoners, and students with disabilities, who have historically successfully sought structural remedies through aggregate litigation. Marcus speaks directly to judges chewing on how to approach class-certification motions and counsels them to manage structural reform litigation, not destroy it. Marcus puts retrenchment advocates to their proof, concluding that they have failed to prove how public interest class actions pose policy problems that can be rectified by Rule 23 obstructionism.
The article sets up the shift in class action treatment in recent history. The “Old Era” was characterized by easy certification of public interest classes, with Rule 23(a)(2) commonality and the Rule 23(b)(2) injunctive class as the two primary entry points. Commonality was easily satisfied, as the common issue was defined at such a high level of abstraction that the mere question of liability or allegation of group harm often sufficed. Moreover, courts were reluctant to engage the merits when determining whether commonality was met. Rule 23(b)(2) was also easily cleared, and in fact, was designed with civil rights and group rights in mind.
By contrast, the “New Era”—foreshadowed by Judge Frank Easterbrook in 2008 and in full bloom over the last decade as seen in cases such as Wal-Mart—has erected numerous barriers to public interest class litigation. By heightening commonality and refashioning Rule 23(b)(2) to require indivisibility of remedy, Wal-Mart has hampered structural reform litigation that does not affect policy concerns over monetary interests the opinion purported to address. Lower courts have followed suit, regardless of the inapplicability of monetary stakes in public interest aggregation.
Without answering why this class action retrenchment has occurred, Marcus argues that judges should use class action procedure consistent with the function of Rule 23. As a starting point, he recognizes two characteristics of classes certified for injunctive relief: claim interdependence and remedial indivisibility. He then creates a three-part typology based on the different degrees of each characteristic in a particular case: I) necessarily interdependent & necessarily indivisible; II) necessarily interdependent & plausibly indivisible; or III) plausibly interdependent & plausibly indivisible.
Marcus provides useful examples. For example, a Type I case is one that involved plaintiffs challenging California highway patrol officers for enforcing a state law that punishes motorcyclists who do not wear helmets that comply with federal law. Plaintiffs contended that stopping motorists without knowing if their helmets were out of compliance necessarily lacked reasonable suspicion, in violation of the Fourth Amendment. They consequently sought to enjoin enforcement of the state law. These claims are necessarily interdependent because a judge cannot determine the validity of one motorcyclist’s claim without determining the validity of all others. Moreover, the remedy is necessarily indivisible because a remedy for one motorcyclist–an injunction prohibiting enforcement of the law—would inure to the benefit of all.
An example of a Type II case is one that involved same-sex couples challenging Virginia’s prohibition on same-sex marriage. The plaintiffs sought an injunction prohibiting enforcement of the state law prohibiting same-sex couples from obtaining marriage licenses and ordering the responsible county clerks to issue licenses. These claims are necessarily interdependent because, again, a judge cannot determine the lawfulness of the state policy against same-sex marriage for one couple without determining the same for all others. Because a court could theoretically require different remedies for each couple denied a license by each county clerk, however, the remedy is plausibly indivisible. Individually tailored injunctions, although unlikely, are possible.
An example of a Type III case is one that involved prisoners alleging a variety of problems with the healthcare provided by ten prison complexes operated by the Arizona Department of Corrections. Unlike the express policies targeted in Type I and II cases, a Type III case targets a custom or practice of deliberate indifference that plays itself out in myriad ways for thousands of prisoners at the hands of different corrections officers. These plaintiffs’ claims are only plausibly interdependent and their remedies only plausibly indivisible. This is not to say that a judge could not find unlawful systemic indifference that is manifested in different ways as to different people and issue an injunction to address the statewide problem. But depending on the level of harm challenged, the judge could also recognize individual claims and divisible remedies. The Type III public law litigation case prompts the most significant question about the propriety of Rule 23 certification.
Rather than look to the text and history of Rule 23 to explain the need for class actions in public law litigation, Marcus considers how standing and scope-of-remedy doctrines—what he calls the “right plaintiff principle”—undermine the class action device. These doctrines dictate whether the right person is seeking injunctive relief from the defendant on both the front and back ends of the litigation. Standing requires that a plaintiff have a personal stake in the outcome and suffer a personal injury-in-fact rather than a generalized one, thereby ensuring the development of a real factual record and concrete adversity necessary for informed adjudication. Standing restrictions also protect separation of powers by allowing only individuals with concrete harms to use the power of judicial enforcement, leaving citizens with generalized grievances to use the legislative process as the default for obtaining relief. Scope-of-remedy similarly requires a court to narrowly tailor relief to the actual case before it, thereby protecting the province of other courts and the circumspect range of judicial power.
These doctrines, although workable in Type I and II cases, make it difficult for an individual to successfully pursue structural reform in Type III cases. Marcus explains how the substantive law in Type III cases often vests claims in groups—an interest that is thwarted by the standing and scope-of-remedy doctrines. Relying on evidence of other individuals’ experiences in Type III cases to establish systemic liability “hardly opens the courthouse doors to ordinary members of the public and to preferences better vindicated in political arenas.”
Marcus argues that the result of this right plaintiff principle is substantive legal dormancy. And the antidote to this dormancy is the class action, properly administered.
Class action procedure can serve as a counterweight to the right plaintiff principle in public law litigation. For example, the class action requirement of commonality ensures a common course of government conduct that affects the class representative and class members alike, making the representative more than a generalized aggrieved citizen and ensuring a factually concrete record. Similarly, the juridical link between the defendant’s conduct toward the representative and toward class members means the remedy need not be limited to the class representative. Moreover, the class representative has remedial standing to seek an injunction regardless of the likelihood of future harm, because she functions as an undifferentiated member of a group vested with a claim recognized by the substantive law. So long as the class representative functions in this manner, the right plaintiff principle is not undermined.
The “class action’s chief function for public interest cases [is] to enable the vindication of claims the substantive law vests in groups, when other strands in the web of doctrinal governance for public interest litigation would unnecessarily render them dormant.” This function can guide judges in the proper administration of Rule 23.
Marcus circles back to his typology to demonstrate how the counterweight function of the class action must do heavier lifting in Type III cases. Type I and II cases, although more paradigmatic class cases, ironically need class certification less because of the relatively seamless connection between the individuals’ claims and remedies—the tighter the nexus, the less necessary certification is. In Type III cases, however, the distinction between the individual and the group matters.
The solution is for judges to focus on that function in applying both commonality and Rule 23(b)(2). Marcus proposes that judges consider two criteria for commonality: 1) proof that the substantive law vests a claim in a group that the class representative wants to represent and 2) proof that the group actually exists. An illustration is a Title VII pattern-or-practice claim for prospective relief. He similarly suggests that judges considering the counterweight function cabin Rule 23(b)(2) to those injunctions whose administration does not require individual determinations for each public interest plaintiff. In other words, the remedy sought should be broad and undifferentiated, in line with Rule 23(b)(2)’s constrictions.
In sum, this article makes an important contribution by challenging judges to consider the theory and doctrine of public interest class actions post-Wal-Mart. Its defense of modern structural reform litigation and argument against the misuse of class action procedure offers much to the literature, jurisprudence, and practice.
Jun 1, 2016 Howard M. Wasserman
In The Case Against the Supreme Court, Erwin Chemerinsky explains why he is disappointed in the Supreme Court and its failure to function as it is designed—as a countermajoritarian check on society’s worst majoritarian impulses, protecting individual rights from popular encroachment and offering a venue to minorities shut out of success in the political process. Commenting on the book, Corinna Lain argues that the source of Chemerinsky’s disappointment is his expectation that this is the Court’s function. And, she argues, the source of that expectation is the Supreme Court itself. On Lain’s telling, every case in which the Court is perceived to have “failed” in its countermajoritarian role actually reflects the Court’s success in furthering the story (I might label it a “myth”) of what it does, what it should be, and what many scholars (I would put myself in this group) hope and expect it to be.
Lain focuses on three cases routinely disparaged as judicial failures–Plessy v. Ferguson (upholding segregated railroad cars and, by extension, Jim Crow laws), Buck v. Bell (upholding forced sterilization programs), and Korematsu v. United States (upholding the exclusion of people of Japanese ancestry from the West Coast). All are uniformly recognized today as among the most grievous examples of the Court failing to protect individual rights and vulnerable minorities.
But Lain argues that the historical and cultural contexts in which the Justices operated explain, even if they do not normatively justify, the outcomes in each case. Plessy and Buck reflected what, at the time, were widely popular, accepted, and even progressive views—Booker T. Washington and other prominent African-American leaders supported segregation, Helen Keller and Margaret Sanger supported eugenics (the scientific theory underlying forced sterilization). Korematsu followed a genuinely earth-shaking event and was decided in a period of total war, over which the Court was not likely to challenge the public and the war-making branches. In fact, Lain argues, a closer look at Korematsu’s internal dynamics shows the Court doing more than we might expect–it refused to lend judicial imprimatur to internment, performing “judicial backflips” to rule only on the constitutionality of exclusion and not pass on the validity of internment). And in Ex parte Endo, Korematsu’s companion case, the Court ordered the government to release those whose loyalty had been established. Moreover, none of the three “failures” was obviously incorrect on the law as it stood at the time—the problem with these cases is not doctrinal, but that each rests on “value judgments that we strongly reject today.”
Cultural and historical context in turn affects how we should understand the judicial role. The Justices are part of the broader society and share many of its widely held ideas, which the Court’s judgments inevitably reflect. The Court’s “failures” are not necessarily decisions in which the Justices recognized a wrong but refused or were unable to stop it out of fear—the concerns that Article III protections of life tenure and guaranteed salary are designed to alleviate. Rather, the Justices shared the prevailing legal, political, and social views informing the challenged actions and simply were not going to depart from those views. That prevailing culture sets “limits on the plausible constitutional outcomes that a majority of the Justices might find agreeable,” simply because the Justices, even subconsciously, are immersed in that culture. It is unfair, Lain insists, to expect them to depart so far from societal norms that they themselves share.
Lain generalizes this argument to judicial review more broadly. In particular, it explains why the Court has most vigorously protected minorities from majoritarian overreach at the state and local, rather than national, levels. She cites the invalidation of segregated education in Brown and the recognition of procedural protections for criminal defendants in Gideon v. Wainright; we could add free speech, where the Court protected civil rights protesters and their supporters from local restrictions, but not communists or anarchists from federal prosecution. As Lain argues, when “the problem is not a pocket of oppression but rather society itself, the same values that permeate the rest of the population are highly likely to color the Justices’ views too. And that limits what the Supreme Court can realistically do.”
Yet Chemerinsky and others remain disappointed that the Court has not lived up to some ideal as a countermajoritarian protector of politically powerless minorities. Importantly, however, they can be disappointed in the Court only if they were expecting it to do better. And given Plessy, Buck, and Korematsu (to name only three), we might wonder where that expectation comes from. According to Lain, it is because the Court has convincingly established this as its role, even while not always performing it (at least not in the way many would like). Lain argues that this “role is not inherent in the Court’s composition; it did not spring forth from the Constitution fully formed. It did not have to be, but it is, and it is because the Court created it.”
Beginning with Footnote 4 of Carolene Products, the Court has sprinkled decisions with rhetorical flourishes about its standing as the bulwark protecting individuals and the Bill of Rights against the tide of popular passions, and about conducting more searching judicial inquiries into laws that disadvantage discrete and insular minorities or that touch on specific constitutional prohibitions. The Court even did this in Korematsu itself, dropping what Lain calls an “awkwardly placed” declaration that “all legal restrictions which curtail the civil rights of a single racial group are immediately suspect,” before pronouncing that suspect legal restriction constitutionally valid.
And this idea has stuck. It does not matter that the Court often has rejected the rights claim amid the rhetoric. Nor does it matter that even the Warren Court, held up as the one true period of countermajoritarianism, often acted in step with, rather than against, larger socio-political changes. Nor does it matter that some of the most rights-protective Justices have produced the greatest failures—Justice Black wrote, and Justice Douglas joined, the majority in Korematsu; Justice Holmes wrote Buck nearly a decade after planting the seeds for vigorous judicial protection of free speech.
At the same time, this rhetorical creation has some practical benefits. First, the Court’s self-conception as countermajoritarian defender frees it to actually play that role, at least at times. Broad public acceptance of the Court’s rhetoric allows the public to accept at least some of the decisions in which the Court flies in the face of majoritarian sentiment. While we do not have a full understanding of when the Court will choose to play the countermajoritarian role and when it will not, Lain argues the Court can do so even occasionally only because it has put itself in this rhetorical position. Second, the Court’s promotion of this ideal influences those who argue before and write about the Court (Chemerinsky regularly does both). It prompts them to continue bringing their arguments to the Court, continue talking about the Court, and, most importantly, continue responding to their disappointments by refining their arguments and critiques until they find the ones that work, both with the Court and with the public. As Lain summarizes the point, “the Justices cannot transcend the culture in which they live, but the expectations the Court has created can do something better—they can set in motion the very forces that can, over time, change culture itself.”
This article continues two significant recurring themes of Lain’s larger body of scholarly work—the role of cultural and historical context in constitutional decisionmaking and the historical inaccuracy of the Court’s countermajoritarianism narrative (even in those cases in which it “succeeds” in protecting individual rights). It then adds a new piece to that puzzle—the self-reinforcing influence of the Court’s rhetoric on the Court and on our expectations. Regardless of what the Court actually does or why, the expectations themselves tell “a separate, and decidedly consequential, story of Supreme Court success.”
May 18, 2016 Adam N. Steinman
Justin Pidot,
Tie Votes in the Supreme Court, Minn. L. Rev. (forthcoming 2016), available at
SSRN.
Ever since Justice Scalia passed away in February, the Supreme Court of the United States has been operating with eight justices. As readers are surely aware, this is one justice short of its statutorily mandated population of nine.
There is widespread consensus among mathematicians that the number eight is evenly divisible by two, while the number nine is not. So it should come as no surprise that the Supreme Court has handed down several 4-4 decisions in recent months, with more expected before the Term wraps this June. In light of Senate Republicans’ refusal to hold a hearing on President Obama’s nominee to replace Scalia—and predictions that such a stalemate might extend well into the next President’s term—this even-numbered state of affairs could well become the new normal. Enter Justin Pidot’s article, which provides a timely, thoughtful, and informative examination of tie votes at the Supreme Court.
Pidot begins with a little history. The basic rule that a tie vote leads to an affirmance of the lower court decision—but does not establish any binding precedent—is almost as old as the Republic itself. It dates back to the Court’s 1792 decision in Hayburn’s Case, when a six-justice Court divided equally on whether our nation’s first Attorney General, Edmund Randolph, had the authority to file a petition for mandamus ex officio.
Next, Pidot sets out the results of his empirical analysis of tie votes between 1925 and 2015. (He chose the starting date because the 1925 Judiciary Act made it so the vast majority of the Supreme Court’s docket would be at the Court’s own discretion, via a writ of certiorari.) Pidot limits his study to cases where the Court is equally divided on the judgment, rather than where the Court is equally divided as to the reasons for the judgment. Pidot also excludes from his dataset motions—such as requests for stays or writs of mandamus—that the Court denied because of a tie vote.
Within these parameters, Pidot finds 164 tie votes during the period from 1925 to 2015. He reports that in 149 of these, the Court did not identify how each of the voting Justices voted, and neither the Court as a whole nor any individual justices provided any reasoning or explanation in support. This is consistent with the one-sentence rulings we have seen from the Court so far this Term: “The judgment is affirmed by an equally divided Court.”
Pidot then turns to the fifteen cases that do not fit this description. In some, the Court noted its equally divided vote on a particular issue as part of a larger opinion resolving the case on other grounds. (This happened again just recently in Franchise Tax Board v. Hyatt, where the post-Scalia Court split 4-4 on whether to overrule Nevada v. Hall, but a 6-2 majority reversed the lower court’s judgment on other grounds.) In others, the Court divided equally as to one party but made some other disposition as to other parties—such as dismissing cert as improvidently granted (a “DIG”), or granting cert but vacating and remanding for reconsideration in light of some other decision (a “GVR”). Pidot also found one fascinatingly odd case where the Court granted certiorari and—in the same order and without merits briefing or oral argument—affirmed by an equally divided court. There were only three cases in the dataset where any justices authored an opinion that explicitly revealed their views about the particular issue on which the Court divided equally.
Pidot’s article also explores the normative implications of 4-4 ties. The major practical downside of such decisions is that they can compound a lack of uniformity in the federal judiciary, because they fail to generate binding precedent that otherwise could have resolved disagreements among lower courts. These concerns have prompted some to call for institutional changes—such as the appointment of substitute justices—to avoid tie votes.
To assess the extent to which this has been a problem, Pidot looks at the 21 tie votes that occurred between 1986 and 2010. He argues that the lack of precedential decisions in those cases did not significantly undermine uniformity. It remains to be seen whether this will still be the case if we find ourselves in a sustained period of only eight justices—rather than the more typical situation where eight-justice decisions result from occasional recusals in particular cases. But Pidot’s findings from these 21 cases are very interesting. He identifies six cases where there had not been a split of lower court authority before the Court granted cert; thus the lack of a binding Supreme Court decision did not allow a lack of uniformity to persist. In nine cases where a circuit split did exist, the Supreme Court granted cert in a later case and resolved the disagreement. For cases in this category, the two longest delays between the 4-4 affirmance and the later cert grant were nine and ten years; all of the others were four years or less (in one instance, the Supreme Court decided a follow-up case within five months). Pidot also finds two examples where a split was resolved notwithstanding the 4-4 Supreme Court affirmance, either because some lower courts changed their position or because the Executive Branch promulgated clarifying regulations. He concludes that there were only three examples during this period where an important circuit split remained unresolved following a tie vote at the Supreme Court.
Pidot proposes one change to the way 4-4 votes are currently handled. He argues that the ultimate result of a tie vote should not be an affirmance of the lower court. Rather, the Court should DIG such cases. This would have the same practical consequence of leaving the lower court decision intact. But Pidot finds a DIG preferable to affirmance for several reasons. Among other things, having justices cast affirmative votes on the merits risks biasing those justices in future cases, due to psychological dynamics such as confirmation bias, cognitive dissonance, and the “lock-in effect.” He also contends that an affirmance based on a tie vote can undermine the legitimacy of the Court—furthering the perception that the Court is political rather than impartial, raising ethical questions in future cases by indicating that justices have prejudged a particular issue, and encouraging gamesmanship by highlighting who the tie-breaking justice will be (the one who did not vote in the case that generated the 4-4 tie).
Pidot recognizes, however, that many of these concerns are not absolute. For example, judges do change their minds on certain issues. My favorite “exception that proves the rule” is Free v. Abbott Laboratories—a case that Pidot identifies as a tie vote where the issue left unresolved was addressed on the merits in a later Supreme Court decision. The Court had granted cert in Free to resolve whether supplemental jurisdiction is available for certain kinds of claims, but Justice O’Connor recused herself and a 4-4 tie ensued. When the Court revisited that issue in Exxon Mobil v. Allapattah, O’Connor was in the minority—even though the membership on the Court had not changed. So one of the justices in the Allapattah majority (Rehnquist, Scalia, Kennedy, Souter, or Thomas) must have changed his view after the vote in Free.
The current stand-off over filling Scalia’s seat on the Supreme Court means that tie votes at the Supreme Court present a more crucial challenge than ever. Pidot’s article is a must read for anyone who wishes to wade into this important topic.
May 2, 2016 Kevin C. Walsh
Josh Blackman and Howard M. Wasserman,
The Process of Marriage Equality, 43
Hastings Const. L.Q. 243 (2016), available at
SSRN.
In The Process of Marriage Equality, Josh Blackman and Howard Wasserman provide a chronicle and critical assessment of the judicial decisions about procedure, jurisdiction, and remedies through which the federal courts moved from United States v. Windsor to Obergefell v. Hodges. It is an essential article for understanding how the process unfolded.
The picture painted by the authors is not a pretty one. Some of the procedural decisions come out looking somewhat shabby, and the judges who made them possibly partial. Blackman and Wasserman do not always say so squarely, but the best explanation for some of the procedural misadventures they chronicle is likely found in partial judicial strategery: Procedural monkeying made the underlying substantive right more likely to stick, which is what the judges wanted because they were partial to the plaintiffs (and similarly situated couples) seeking it.
This is a strong claim, and one that the authors stop short of making when assessing most of the procedural decisions. But at times they come close. Consider, for example, their bottom-line assessment of why Judge Crabb of the Western District of Wisconsin granted summary judgment for the plaintiffs but delayed issuing an injunction or a stay for a week: “The most plausible explanation for this bizarre turn of events is that it was a deliberate effort to allow marriages to proceed before the court of appeals put them on hold.” Or consider their characterization of the Fourth Circuit’s denial of a stay as “inexplicable” (p. 305), and the judges’ order as revealing “what can charitably be described as deliberate indifference” to the contrary orders of the Supreme Court and other circuits.” (P. 306)
The authors do not declare themselves on the substantive correctness of Windsor or Obergefell, and it might be that the two are not of the same mind on that point. But it would be difficult to dismiss their critical assessments of “the process of marriage equality” as the product of disgruntlement with the Supreme Court’s adoption of a constitutional right to same-sex marriage. After all, their descriptions of the core issue as one of “marriage equality” and of the state laws at issue as “bans” come straight from the plaintiffs’ playbook.
The authors’ criticisms appear to arise, instead, from a sense that much of the confusion and disorder surrounding a domain that should be marked by clarity and order was unnecessary. This can be seen in the way that they praise the decisions of some of the lower courts that they examine. They describe as “particularly measured,” for example, the path chosen by lower courts that held invalid “bans on same-sex marriage, but put their judgments on hold pending the review process.” (P. 291.) They quote Judge Heyburn of the Western District of Kentucky, who expressed empathy with plaintiffs’ desire for quick action but stayed his judgment nonetheless, because “[i]t is the entire process … which gives our judicial system and our judges such high credibility and acceptance.” (P. 292.) “It is best that these momentous changes occur upon full review, rather than risk premature implementation or confusing changes. That does not serve anyone well.” (P. 292.) These are the words of the quoted judge, but they also express the thoughts of Blackman and Wasserman.
A primary difficulty with the process, they observe, is that the Supreme Court sent conflicting signals from its perch at the top of the federal judicial hierarchy. The Court initially ordered stays, presumably to maintain the status quo pending its resolution of the merits. But the Court then denied certiorari in the stayed cases, and subsequently declined to issue stays. The consequence was predictable. “[L]ower courts appeared conflicted about what to do with the penumbras emanating from the shadow docket—whether to decide cases by exercising their best judgment in light of existing precedent or to be guided by the Court’s non-precedential and unexplained signals.” (P. 285.)
Despite their evident disdain for result-oriented proceduralism, Blackman and Wasserman ultimately counsel lower courts against any “formalistic approach [that] disregards the Supreme Court’s role as traffic cop in major constitutional cases.” (P. 323.) Once the Supreme Court has taken an interest in high-stakes constitutional litigation, they argue, lower courts should put a hold on their injunctions and let the Supreme Court dictate the pace of constitutional change. (P. 324.)
There is a pragmatic streak that runs through the authors’ proceduralism. They carefully discuss, for instance, the formal legal differences between the binding authority of precedents and of injunctions. But they also acknowledge circumstances, such as when there has been a final appellate ruling, in which officials who are not formally bound by a ruling should nonetheless act as if they are. That is sometimes “the cheapest, simplest, and likely least controversial move.” (P. 272.)
Although the authors are critical of courts throughout, Blackman and Wasserman do not limit their criticisms to the courts. They devote one of the article’s three principal sections to an unsparing assessment of the unavailing attempts of state officials to use unpersuasive abstention theories to slow down federal court adjudication of states’ marriage laws.
Overall, however, the focus of The Process of Marriage Equality is on the courts, and the balance of the assessment is critical.
All of us now are still too close to the process of this particular constitutional change to have the perspective that comes with the distance of many years. But the chronicle that Blackman and Wasserman provide will remain valuable for future observers who possess such a perspective. Whether those observers view Obergefell more like Brown or more like Roe, the record of the process that led to Obergefell will remain. As one who largely agrees with Blackman and Wasserman’s critical assessments—if anything, I would be more critical—I suspect that this record is not likely to look any better with age.
Apr 14, 2016 Alexandra D. Lahav
J.J. Prescott and Kathryn E. Spier,
A Comprehensive Theory of Civil Settlement,
N.Y.U. L. Rev. (forthcoming 2016), available at
SSRN.
How should we understand settlement in civil litigation? In A Comprehensive Theory of Civil Settlement, J.J. Prescott and Kathryn Spier rethink civil settlement and take a significant step forward in the scholarly conversation about this topic. Generally, settlement has been understood as an alternative to a judicial disposition in the case. In this view, settlement is a zero-sum event from a systemic standpoint. (Of course, the parties negotiating a settlement may split the differences between them and both receive gains, but I am speaking of the court’s perspective here.) Prescott and Spier provide a new way of thinking about settlement as a continuum rather than as an either/or event that ends the dispute. At one end of the continuum is litigation according to the default procedural and substantive rules. On the other end is the termination of the dispute with an agreement. In between are many smaller agreements that parties can, and do, reach in moving toward resolution of their dispute. In explaining the implications of this insight, this article ties together disparate scholarship in a neat way. They support their argument with evidence from a sample of cases in New York’s summary jury trial docket.
The first step in their analysis is to define a settlement. Prescott and Spier define settlement as any agreement between the parties that improves their position in the litigation by some combination of (1) reducing adjudication costs, (2) mitigating losses due to risk, or (3) maximizing ex ante returns. This agreement need not end the litigation. A high-low agreement, for example, sets a range for the outcome of the case because the parties agree that regardless of what the adjudicator decides, they will set a cap and a floor to the damages. Still, the case goes to trial. In the binary view, a high-low agreement does not count as a settlement, but it is an agreement between the parties that mitigates losses due to risk. Prescott and Spier categorize partial settlements (that is, settlements that are on the continuum between no agreement and resolution) into three types: award-modification agreements, issue-modification agreements, and procedure-modification agreements.
An example of award-modification agreements, taken from the authors’ prior work and likely the inspiration for this article, are high-low agreements. Such agreements can have several consequences for litigation. For example, they might affect the level of investment in the suit by narrowing the range of possible outcomes. They might also allow parties to continue with the litigation while controlling risk leading to a resolution that they prefer to a complete settlement of the dispute. For example, the authors cite to agreements where different allocations of fault by the jury will result in different damages awards that have already been agreed upon by the parties. Thus when the parties cannot agree on how to allocate fault but can agree on the amount of damages they can still reach an agreement. Especially interesting to me, the authors show how these agreements can be structured as continuums (“smooth award-modification agreements”) rather than tiers (“kinked” agreements). This is an analysis I haven’t seen before and one that is very intriguing because, as the authors note, such a structure can increase the flexibility of the parties in negotiation. A linear settlement continuum might even be possible to institute in small cases, although other factors (such as entrenched practices) may stand in the way. And one can imagine a “smooth” award-modification agreement being very useful in larger cases.
Some of the implications of this analysis are not worked through in the paper but are quite important and open avenues for future work. That is another great contribution of this piece – once the conception of settlement is opened up, there are many opportunities to generate new ideas and analysis. For example, trials are very rare in the American court system. If the reason for the decrease in trials is due to risk adverseness, the high low agreement can cabin this risk and increase reward for both parties. Can this lead to more trials? The answer is a qualified yes, as we shall see in a moment. Another potential implication of such partial settlements is along the lines of Marc Galanter’s famous thesis of how repeat play can distort the legal system. Award-modification agreements may give repeat players who can obtain a high-low from their opponent added incentives to go to trial in cases that will benefit them in the long term. By mitigating risk, high-low agreements can create incentives for plaintiffs to take low value cases to trial where they would not in a binary settlement world. A low verdict, in turn, will improve defendant’s leverage in negotiating settlements in future cases, because cases are usually settled by reference to other settlements or to trial outcomes. Whether such distortion in fact occurs could be a subject of future inquiry.
The second category of partial settlements that Prescott and Spier address is issue-modification agreements. They analytically separate different types of issues that might be more or less amenable to partial settlements, such as legal issues that are divisible (they offer the example of comparative fault) as opposed to legal issues that are not (for example, state of mind). They rightly point out that there may be some issues with respect to which the party may take unilateral action – by not disputing the issue at trial, for example. While such a unilateral decision cannot be considered a settlement, the defendant and plaintiff may each agree to one “free” issue – an issue that each concedes to the other. Jury instructions, they argue, are also an important moment for such issue-modification agreements to take place, yet as they point out much of the cost of litigation has already been incurred at that point. This opens the possibility for parties to consider entering into such agreements early on. Considering the implications of such developments is a further line of inquiry that is suggested by this piece. Should the substantive law change to accommodate partial issue settlements? Should the procedural law be structured to make such settlements easier to reach? We already permit bifurcation and trifurcation of trials; perhaps there are other mechanisms that could be considered.
The third type of partial settlements are procedure-modification agreements. This type of agreement is often discussed in the procedural literature under the term “contract procedure” but the authors helpfully fold it in to the discussion of settlements as well. Such agreements might include waiving the jury right, altering the timing of litigation, evidence rules, secrecy, bellwether trials, and appeals. In some ways, a significant amount of real-life litigation process is negotiated, so perhaps calling agreements for extension of time and discovery schedules “settlements” goes too far and erodes the category of settlement so much that it becomes incoherent. Still, there are ways in which altering the procedure can look like a settlement, especially when it relates to appeals or extrapolation from bellwether trials. And of course these different strands may be combined. In the GM bellwether trials now ongoing in the Southern District of New York, the first bellwether trial included a secret high-low agreement. How would such an agreement affect party investment in the case and what would this mean for the extrapolated cases? The insights from this article can help answer such questions.
The authors also discuss the interesting implications of attorneys’ fees, which can be categorized as both award and procedure modifications. These have been addressed in the law and economics literature but this paper connects them to the broader question of settlement. An agreement to apply the British rule, for example, can increase risk, causing parties to invest more in the litigation. The authors demonstrate how “doubling down” in this way can increase welfare for both parties in some cases. The authors do not mention Rule 68, but that rule provides the opposite scenario: a switch from a default one-way fee shift (a modified British rule) to the American rule. An initial offer of settlement on the lower end can limit the defendant’s exposure in terms of attorneys’ fees, altering the incentive to invest in the litigation. Here, too, future work is opened up. For example, what would be the effect of a “smooth” curve in shifting attorneys’ fees, along the lines that the authors suggest in award modifications? (That is, instead of shifting fees entirely parties might agree on incremental shifts). This might be a useful way of thinking about fees in large cases such as class actions or MDLs. The next step, indeed, is to consider the ideas presented in this article for multi-party and complex litigation where more strategic behavior is likely to occur.
At the end of the article, Prescott and Spier analyze a set of data from the New York court system’s summary jury trial program to demonstrate the use of partial settlements. As they explain, the sample of cases that enters into that program is skewed. The data are still very interesting, however, and the authors hint that they may do more with it. For now, they have found two things. First, they find that settling key issues such liability is positively associated with award modification agreements and that settling damages only is negatively associated with high-low agreements (as the low is set effectively at zero with a finding of no liability). Second, they find that parties who have partially settled their cases are more likely to continue through trial rather than fully settle their cases. Overall, the New York data show that cases with high-low agreements settle about 20% of the time. Accordingly, some types of systems that encourage partial settlement may also encourage trials, with the caveat that choosing the summary jury trial process is probably a choice in favor of trial anyway. It would be interesting to test this finding on different types of cases, especially higher stakes cases. In any event, this finding provides food for thought for those civil procedure scholars who favor trials.
A Comprehensive Theory of Civil Settlement broadens our conception of what a settlement is, leading to a number of implications and further areas of study. The authors of this article are both economists, and there were some things that I would have suggested they change because of the way I know procedure to work. For example, some procedural rules, such as those on amending pleadings, are so forgiving that parties are unlikely to settle around them. Such changes would not alter the analysis overall, but my reaction reminded me how much potential there is for economists and procedural scholars to collaborate or provide input on work that approaches similar sets of questions from different angles.
