Do the new pleading standards set out in Twombly and Iqbal meet the needs of the replica jurisdictions?

Author:Sullivan, John P.
 
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  1. INTRODUCTION

    The fundamental goal of the Federal Rules of Civil Procedure (Federal Rules), as set out in Rule 1, is "to secure the just, speedy, and inexpensive determination of every action and proceeding." (1) Prior to the adoption of the Federal Rules, both state and federal courts had long battled a list of obstacles that prevented courts from securing a fair and effective litigation system. Chief among those difficulties were the excessive technicalities of pleading practice and the substantial backlog of cases awaiting trial. But today, almost seventy-five years after the adoption of the Federal Rules, discovery, a necessary complement to notice pleading, has often become a nightmare in the judicial administration of complex federal litigation.

    Problems cry out for solutions, but solutions often create newer and bigger problems. one solution to the discovery problem is the one adopted by the Supreme Court in Bell Atlantic Corp. v. Twombly (2) and reaffirmed in Ashcroft v. Iqbal. (3) Reduced to its essentials, Twombly abandoned notice pleading and the "no set of facts" standard set out in Conley v. Gibson, (4) and imposed a new standard of "plausibility" that must be satisfied before a plaintiff can proceed to discovery. (5) An immediate question arises--how will the Twombly/Iqbal standard impact state jurisdictions that have adopted or are influenced by the Federal Rules? (6)

    There are twenty-three so called replica jurisdictions that have adopted the Federal Rules; (7) another four jurisdictions with similar rules that are set out in statutory codes; (8) and three jurisdictions that "show strong affinity to the content and organization of the Federal Rules." (9) Finally, three jurisdictions replicate many of the Federal Rules except they utilize fact pleading rather than notice pleading. (10) Thus, a majority of thirty jurisdictions, including the District of Columbia, have rules or statutes that adopt the language of Federal Rule 8(a)(2), the precise rule that was subject to interpretation in the Twombly/Iqbal decisions. It is the author's position that there are at least seven factors those thirty replica jurisdictions should consider before adopting the Twombly/Iqbal standard.

  2. THE RISE OF THE DISCOVERY PROBLEM

    In its 1970 Explanatory Statement Concerning Amendments to the Discovery Rules, the Advisory Committee to the Federal Rules of Civil Procedure made reference to the Columbia Survey's conclusion "that there is no empirical evidence to warrant a fundamental change in the philosophy of the discovery rules." (11) Yet only thirty years later, in its comments on the 2000 Amendments to Rule 26, the Advisory Committee referenced a survey of lawyers who claimed that the number one concern of the trial bar was for "increased availability of judges to resolve discovery disputes." (12) By 2006, the dramatic increase in the volume of electronic documentary discovery led the Advisory Committee to propose an amendment to Rule 26(f) to address waiver of privilege. The Advisory Committee noted that "[t]he volume of [electronically stored information] ... and the informality that attends use of email and some other types of electronically stored information, may make privilege determinations more difficult, and privilege review correspondingly more expensive and time consuming." (13) By this time, discovery in certain complex federal litigation had frequently overwhelmed both the district court judges and the federal bar.

    But how widespread was the discovery problem and what percentage of cases were actually involved? There were two important cost studies of civil discovery undertaken in the late 1990s: the first by the RAND Institute for Civil Justice (14) and the second by the Federal Judicial Center (FJC). (15) Both studies concluded that the overwhelming number of cases pass through the federal litigation process without incurring significant discovery costs. (16) They further concluded that only a small percentage of the cases filed--those involving a high degree of complexity and substantial damages--resulted in excessive discovery costs. (17)

    If we are to accept the conclusion of these studies, the real problem facing the courts is not runaway discovery costs across the spectrum of cases filed, but rather early identification of discovery problems in the small percentage of cases that actually generate excessive costs and require extensive and detailed supervision. The challenge facing any court system attempting to solve the discovery dilemma is severely complicated by the nature of the Federal Rules. As drafted, the Federal Rules make no distinction between simple and complex cases. Thus, any attempt to solve the discovery problems produced in complex litigation would necessarily also apply to the less complex cases. The FJC study demonstrated that antitrust, patent, securities, and trademark litigation made up a substantial percentage of the cases involving extensive discovery. (18) The inventory of cases filed in the replica jurisdictions would not, for the most part, include those categories of cases and thus would almost certainly have an even smaller percentage of the type of cases that generate serious discovery issues.

    What further complicated the ongoing discovery problem was the fact that discovery costs were substantially increasing every year. Those costs were not only imposed on litigants through legal expenses, but judicial supervision of discovery disputes placed a growing strain on limited federal district court resources. Whatever judicial enthusiasm there was for resolving those disputes was diminished by the opinion in some judicial circles that the time spent on supervising discovery had little impact on reducing the inventory of the hundreds of cases assigned to each judge.

    In the meantime, the Advisory Committee continued to experiment with the scope of discovery. Since 1938, there have been ten amendments to Rule 26 alone. The amendments to the discovery rules limited the quantity of depositions, their time and length, and the number of interrogatories. But the greater problem in discovery proved to lie elsewhere. Over time, it became clear that the most acute problem, and the source of the greatest cost, was document discovery. The number of relevant participants naturally limits depositions, but the addition of electronic storage to paper files and the substantial increase in electronic communication has further complicated the problems and costs of Rule 34 discovery. This, in brief, was the state of federal litigation in 2007, when the Supreme Court directly faced the issue of discovery costs in Twombly.

    1. Role of the Trial Judge Evolves from the Trial of Cases to the Supervision of Discovery and Other Pretrial Matters

    Before the adoption of the Federal Rules, the principal role of a federal or state trial judge was to try those cases that had not already been resolved by demurrer or settlement. The modern concept of a designated docket managed by a single judge who was specifically assigned to oversee an inventory of cases from filing to resolution was, as yet, unknown. Many states operated under a trial-assignment system supervised by either an assignment clerk or an assignment judge whose primary responsibility was to keep the trial sessions busy.

    Initially, if counsel for the parties were immediately prepared to resolve their dispute at trial, the case would be sent to an open session. However, if either plaintiff or defendant wanted a delay, counsel would request and most often obtain a continuance. In many jurisdictions, the readily granted continuance became an integral part of the trial court's culture. It was a culture that was accepted by both bench and bar. The grounds for continuance were unlimited, and an assignment judge soon heard them all: death in the family, illness, assignment in another court, a long needed vacation already paid for, a missing witness, a last minute need for an expert, serious ongoing settlement negotiations, etc.

    After a while, when too many continuances had been granted and the list of untried cases backed up, the chief justice would assign one of his more aggressive colleagues to attack the docket. Some forced cases to trial or settlement, while some referred cases to masters even where the parties had requested a jury trial. Despite all these stop-gap measures, over time, a stubborn backlog continued to accumulate, and hundreds of cases had to be called for trial to keep even a few trial sessions busy.

    Meanwhile, trial courts in many jurisdictions held motion sessions where judges, expert in the niceties of pleading practice, ruled on demurrers and pleas in bar. In cases where the court sustained a demurrer and where the plaintiff was not allowed to plead over, the ruling became dispositive. In many jurisdictions, motion judges applied the "Goldilocks" formula--judges ruled the complaints, declarations, or bills in equity either too simple or too complex, too conclusory or too detailed. In many code and common-law jurisdictions, rulings on pleadings became excessively technical and courts frequently avoided the merits of the case. (19) Consequently, careful pleading practice became essential if a plaintiff wanted to avoid an early and unfavorable resolution of his or her claim before the court could reach the merits. In many jurisdictions, strict judicial enforcement of pleading standards became an effective instrument for case-flow management.

    In the early decades of the twentieth century, most jurisdictions provided only limited discovery. For example, Massachusetts limited discovery to thirty interrogatories. (20) Consequently, during this period, discovery abuse was virtually unknown. The civil system, as it then existed, effectively reduced the formal process of litigation to two steps, pleadings and trial. Cases could be resolved at either stage, but if the court resolved them on the pleadings, then it did not...

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