Litigation reform: an institutional approach.

• Author: Burbank, Stephen B.
• Position: IV. The Role of Procedure in the Mobilization of Civil Litigation through Conclusion, with appendix and footnotes, p. 1583-1615 - Symposium: The Federal Rules of Civil Procedure at 75

IV. THE ROLE OF PROCEDURE IN THE MOBILIZATION OR DEMOBILIZATION OF CIVIL LITIGATION

1. The Federal Rules, 1938-1970: Opening the Courthouse Door

   The systematic evidence that we present in Part III supports and refines qualitative accounts of the Court's hostility to private enforcement over the last three decades, and it supports the view that the Court's decisions have had an increasingly ideological dimension. (128) Much of the data on which our analysis is based, however, are drawn from cases interpreting federal statutes. If one is interested in the federal judiciary's ability to influence private enforcement, it would be foolish to neglect the legal domain over which it has long been ceded the first, and for many decades essentially the final, word: federal procedural law. (129)

   The original Federal Rules of Civil Procedure became effective four years after the successful conclusion of a decades-long campaign to give the Court power to make prospective, legislation-like rules for the conduct of civil actions at law in the lower federal courts, akin to the rulemaking power it had long exercised under statutory delegation for suits in equity. (130) Promulgated under the Rules Enabling Act of 1934, (131) following more than two years of work by an Advisory Committee appointed by the Court, the Federal Rules merged law and equity procedure, and equity emerged very much the senior partner. (132)

   The 1938 Federal Rules were litigation-friendly. To some extent, this was due to the influence of equity procedure, with the circumstances creating equity jurisdiction requiring (or the lack of a jury permitting) tolerance of claim and party joinder and of factual and legal ambiguity. (133) One of those circumstances made discovery, albeit limited in scope, essential, namely, the effect of common law rules categorically excluding relevant evidence on a party's ability to prove a claim or defense at trial. (134) In addition, equity's appetite for ambiguity and complexity served a hunger for justice, something that could hardly be said of the common law system of pleading.

   It would be a mistake, however, to attribute the capacity of the 1938 Federal Rules to open the courthouse door primarily to the influence of equity procedure. In that respect, they are better seen as embodying the jurisprudential and social commitments of the individuals who were responsible for drafting them. (135) In rejecting common law pleading, with its obsessive quest to reach a single issue regardless of the facts, and code pleading, with its insistence on pleading all facts necessary to constitute a cause of action, the drafters of the 1938 Federal Rules embraced the insights of legal realism. (136) Pleadings are an inferior method to find out what actually happened (and if, as in common law procedure, they are often an exercise in fiction, they are useless for that purpose).

   Of course, implementing the view that pleading should play but a minor role in litigation required other means to ascertain facts that did not share the inefficiencies of the common law trial. For that, the architects of the 1938 Federal Rules wrote rules that afforded much broader discovery than had been available in equity or in any of the merged systems in the states. (137) Such broad discovery appealed to the empirical commitments of the Legal Realists. But it also appealed to the commitments of the Progressive movement in American law, of which the chief architect of the Federal Rules on discovery had long been a proponent. (138) The Progressives gained prominence in the early twentieth century, reacting to the excesses of the Industrial Revolution through a campaign for what they called "legibility"--we would say transparency. They contended that effective regulation was impossible without access to the facts concerning the regulated enterprise. (139) The system of broad discovery ushered in by the 1938 Federal Rules conferred on private litigants and their attorneys the functional equivalent of administrative subpoena power. (140)

   Thus, the architects of the 1938 Federal Rules constructed a broad highway for litigation that was free of some imposing obstacles characteristic of many other systems. (141) The "highway effect" was not, however, evident for many years. More precisely, a small federal judiciary managed to dispose of a relatively small caseload without evident strain for more than twenty years after the Federal Rules went into effect. (142) A fruitful way to home in on what changed--and what may explain the crowded federal litigation highway--is to consider conventional accounts of the so-called American litigation explosion.

   According to those accounts, the tremendous increase in civil cases in the 1970s (143) was the product of a litigious population, an imperial judiciary, and an entrepreneurial bar. (144) Whatever one thinks of the empirical basis for such accounts, (145) within them lies an important clue to the willingness and ability of more and more American individuals and firms to sue in federal court. The American bar did not wake up in 1970 and decide to become more entrepreneurial. Contingent fee arrangements "have a long history in the United States." (146) Court decisions in the 1970s did disassemble some restrictive and anti-competitive rules of a self-regulating profession. (147) Much more important, however, was the fact that Congress provided incentives that made certain types of litigation which had not been financially feasible--or, if feasible, not sufficiently rewarding even on a contingent fee basis--promising opportunities for the investment of lawyers' time and money. (148)

   Financial incentives, intended to encourage lawyers to represent those Congress endowed with a host of new statutory social and economic rights, were cabined by the substantive reach of the statutes providing them. In 1966, however, the rulemaking process produced amendments to Rule 23 that substantially expanded the scope of a trans-substantive financial incentive. That is because the 1966 amendments enlarged, potentially enormously, the domain of damages class actions, and such actions are subject to a judicially developed exception to the American Rule on fee shifting that permits one who has created a common fund to be reimbursed out of the fund. (149)

2. Procedure, Litigation, and Litigation Reform: 1971-1988

   As we have seen, once the power of statutory private enforcement regimes and of the revised class action rule to stimulate litigation on the broad highway created by the 1938 Federal Rules became apparent, the Reagan administration advocated, and legislative opponents introduced, bills to dismantle or undermine private enforcement regimes. But, the stickiness of the legislative status quo, coupled with "negativity bias" or an "endowment effect," makes repealing or consequentially amending legislation that confers popular rights more difficult than enacting it in the first place. (150)

   The judiciary is not similarly constrained--although, of course, courts are subject to other constraints (151)--which helps to explain why, as we demonstrate in Part III, an increasingly conservative Supreme Court had greater success in retrenching private enforcement. Moreover, the judiciary need not wait for cases requiring the interpretation of federal statutes to affect the volume or mix of litigation. Effective control of procedure ensures that means are available for a judiciary that is ideologically distant or driven by institutional self-interest to frustrate legislative preferences by constricting access to court.

   1. Retrenchment by Rulemaking: A Brief Experiment

      The perception that the institutional interests of the judiciary--in particular, the interest in active judicial management of a burgeoning docket--were no longer in sync with the interests of practicing lawyers, coupled with the desire to control the agenda of litigation reform, likely played an important role in the decision by the Chief Justice of the United States, who appoints all members of rulemaking committees, to change the balance of power on the key committees. (152) The original 1930s Advisory Committee did not include even one sitting judge. (153) Representation of practitioners declined over time, but even in the 1960s, there were never more than three judges, nor less than seven practitioners, on the Advisory Committee. (154) Under Chief Justice Burger, the key committees came to be dominated by judges, who are presumably more likely than lawyers or academics to protect institutional interests, as well as more susceptible to direction from on high. (155) Moreover, Burger's appointments of judges to the Advisory Committee markedly favored judges appointed by Republican Presidents, reinforcing our judgment that he sought to use appointments to influence the development of civil rules. (156) Burger made no secret of his antipathy toward the "litigation explosion" of the 1970s, a phrase that some credit him with coining. (157) One commentator observed that in the 1970s, "Chief Justice Burger frequently spoke out against what he and many others perceived as excessive litigation," and that "[s]cholars have characterized the Burger-organized Pound Conference in 1976 as the most important event in the counteroffensive against notice pleading and broad discovery." (158)

      In 1971, two months before he was nominated to the Supreme Court, Lewis Powell wrote a confidential memorandum to the chair of the Education Committee of the Chamber of Commerce, describing a "broad attack" on the "American economic system" and the steps that he recommended in response. (159) Powell observed that "American business and the enterprise system have been affected as much by the courts as by the executive and legislative branches of government" and argued that "especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change."...