New Jersey Law Journal
28 June 2010
The civil defense bar is engaged in a much-needed effort to clarify and reform federal civil procedure rules so we can return to a time when cases got resolved based on merit, not because the cost of trial was too onerous.
While the Defense Research Institute and its partners have been seeking civil justice and procedure reform at the federal level, most recently with their submission of a comprehensive White Paper to the 2010 Conference on Civil Litigation at Duke Law School, the same rationales can be applied in New Jersey and other states.
New Jersey's judicial vision, as outlined on the courts' website, is to "provide equal access to a fair and effective system of justice for all without excess cost, inconvenience, or delay." The goal, according to the mission statement on the website, is to achieve "fair and just resolution of disputes in order to preserve the rule of law and to protect the rights and liberties guaranteed by the Constitution and laws of the United States and this State."
This is no different from the federal judiciary's goal, outlined in Federal Rule of Civil Procedure 1, that civil rules "should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding."
Unfortunately, since the promulgation of the federal rules in 1938, problems in pleading standards and discovery manipulation have become systemic. Protracted and expensive discovery battles, caused by an extremely liberal discovery language coupled with pleading standards that fail to focus the issues for trial, have turned our civil justice system into something litigants seek to avoid, rather than embrace.
Two remedial steps are necessary.
The first step is reform of initial pleading requirements. Barebones "notice pleading" needs to end. Plaintiffs' counsel cry that anything but notice pleading will close the courts to many deserving plaintiffs who should be allowed in to conduct discovery to then determine whether their claim should survive. However, requiring a statement of facts showing a plausible right to recovery, the Twombly/Iqbal standard, would promote rather than deny justice. (Unlike Federal Rule 8, New Jersey Court Rule 4:5-2 requires a "statement of the facts on which the claim is based, showing that the pleader is entitled to relief" as part of the initial complaint.)
By permitting barebones notice complaints, courts have moved away from their core purpose of evaluating and adjudicating known or cognizable claims. Furthermore, because there is no clear guidance in the federal rules on what the "short plain statement of the claim showing that the pleader is entitled to relief" requirement of Rule 8 means, litigants are left to the often inconsistent and case-specific interpretations of federal district courts.
Uniformity and predictability are hallmarks of efficiency. Under the current schema for initial pleadings, neither exists and thus Rule 8 does not advance the overall goal of "just, speedy, and inexpensive determination" of matters.
The second step, discovery reform, is needed because of the problems with notice pleading and economic warfare waged in the courts. Notice pleading allows virtually all cases to reach discovery, and, as a result, burdensome and expensive discovery is almost certain to occur. While federal district courts have the power to manage discovery under Rule 26, for the most part discovery is attorney-managed or mismanaged. District courts often lack the knowledge about the strength or weakness of a claim and are institutionally ill-suited to end abusive litigation practices.
That is why these problems have not been corrected. No longer is discovery simply designed to find additional information to support the known factual bases for a claim or explore a party's defenses. Instead, it has become a way to find the initial support for a case and, equally often, an abusive bludgeon used to create economic, as opposed to merit-based, incentives to resolve cases.
In fact, the cost of discovery often results in settlement payments disproportionate to the merits or liability risks. The scope of discovery needs to be narrowed to nonprivileged matter that would support proof of a claim or a defense. Further, the discovery needs to be proportional under Rule 26(b)(2)C), that is to say not duplicative or cumulative. The likely benefits of discovery should outweigh the burden on the producing party. Finally, electronic discovery needs to be narrowed and better managed to help reduce devastating costs borne by producing parties.
We need to embrace a system that opens the door to plausible cases, but bars the door to speculative or merely possible cases. We also need to embrace a system that minimizes cost-benefit analysis on whether to bring or defend a case. These proposed reforms would light the way to a more efficient, economic and just civil litigation system.
Cairns is president-elect of the Defense Research Institute and a partner with Gallagher Callahan & Gartrell in Concord, N.H.