1938 All Over Again? Pre-Trial as Trial in Complex Litigation
Richard A. Nagareda
Deceased (Vanderbilt University Law School)
March 10, 2010
Vanderbilt Public Law Research Paper No. 10-12
DePaul Law Review, Vol. 60, 2011
This Article analyzes the transformation of the pre-trial process for complex civil litigation. Settlement, rather than trial, has emerged as the dominant endgame. As a result, in functional terms, the pre-trial phase effectively operates as the trial. Over the past quarter-century, doctrinal developments have shifted steadily backward within the pre-trial phase the major checkpoints for judicial scrutiny of claims. The key developments consist of the Supreme Court’s summary judgment “trilogy” (1986), the rise of Daubert scrutiny for the admissibility of expert testimony (1993), the elaboration of a distinctive law of class action certification (circa 2001-06) and, most recently, the invigoration of pleading standards in the Court’s Twombly and Iqbal decisions (2007 and 2009).
During the same period, an equally dramatic transformation has taken place with respect to litigation scholarship. Insights from economics, cognitive psychology, and finance – among other non-law disciplines – have broadened the vocabulary now available for analysis. Two big-picture points emerge from this literature: first, costs (especially, the ability to impose costs on one’s opponent) matter greatly to the choice whether to continue litigation or to settle; and, second, risk (or, more specifically, variance) matters in the pricing of civil claims via settlement, above and beyond calculations of expected value.
The emergence of judicial checkpoints in the pretrial phase has elicited considerable debate – most strikingly, today, over the Court’s pleading decisions. At one level, those decisions are rightly seen as pushing against the ethos of the 1938 reforms that put into place our modern notice-pleading regime. Yet, in a deeper historical sense, we actually find ourselves today in much the same position as the 1938 reformers. Today, as then, there is a lingering – but, often, undertheorized – sense that procedure itself is having an undue and even deleterious effect on the pricing of claims via settlement. It is just that the procedure now suspected to be distortive consists of the 1938 reforms. This Article explains, in particular, how the Court’s attention to pleading standards in recent years marks a shift of emphasis from the regulation of variance in the litigation process to a concern over cost imposition.
The various pretrial checkpoints today exhibit a similar structural feature. They seek to manage variance or cost imposition by way of third-party judicial regulation – specifically, court rulings that signal “stop” or “go” on the road to trial. Evaluation of procedural doctrine as an enterprise of regulation opens up inquiry to the existence of other potential regulatory modes. The Article concludes with examination of alternatives in the nature of first-party regulation (e.g., cost shifting) and regulation in the form of judicial action that would not be dispositive vis-à-vis trial but, rather, would seek to inform directly the pricing of claims in the settlement endgame.
Number of Pages in PDF File: 44
Keywords: class actions, class certification, cost of litigation, Daubert, discovery, Iqbal, pleading, summary judgment, Twombly, varianceAccepted Paper Series
Date posted: March 11, 2010 ; Last revised: June 7, 2010
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