Cross-posted by Forbes.com at its “On the Docket” site
Two prominent governors, Rick Perry of Texas (here, subscrip. requir.) and Mitch Daniels of Indiana (here) recently expressed their support for making the losing party to litigation pay the winner’s legal costs. Nations around the world rely on this “English rule” (a.k.a. “loser pays” or as some have accurately called it, “the everywhere but here rule”) to deter frivolous litigation. America and its economy could no doubt use more tools to stop profit-seeking plaintiffs’ lawyers from gaming the civil justice system, especially at the state level. Lawsuit abuse persists in many areas of the U.S., a reality the American Tort Reform Association reminds us of at this time each year with its irreplaceable Judicial Hellholes® report. The 2010 edition is online now.
As WLF has argued for several decades, however, since anti-lawsuit abuse tools like loser pays must be legislatively enacted, an active and vigilant judiciary, for better or worse, must continue to be a consistent watchdog against the litigation industry’s excesses.
Judges can police lawsuit abuse. U.S. Supreme Court precedents Iqbal and Twombly have effectively encouraged judges to require greater particularity in plaintiffs’ complaints. A properly higher pleading standard has broadly impacted civil litigation, ranging from personal injury to patent infringement matters. For instance, just last week, a federal judge relied upon these precedents to throw out patent troll Interval Licensing’s barebones infringement complaint against Google, Facebook, Yahoo, Netflix, and others. Also, judges can deny certification to abusive class actions, a vehicle which will gain added force if the U.S. Supreme Court reverses the of the Ninth Circuit’s ruling in Dukes v. Wal-Mart next year. And as the Seventh Circuit recently demonstrated in Thorogood v. Sears, judges can use devices like the All Writs Act to slow the spread of copycat class actions. That ruling by Judge Richard Posner so infuriated Thorogood’s counsel that he penned an acerbic motion for rehearing, which the Posner-led panel denied with its own rhetorical flair.
As Judge Posner wrote in that rehearing denial, it is “the right and indeed the duty of judges to criticize lawyers who try the patience of the members of the bar, and the courts.” Federal and state civil procedure rules and the judiciary’s inherent authority allow judges to go beyond criticism when necessary and punish lawyers and litigants. Judges can impose sanctions and issue orders that defendants’ (or plaintiffs’) must pay the attorneys’ fees of its opponent.
The world of patent trolling offers us a potent example of judicial sanction authority and the financial discomfort it can create for plaintiffs (and their lawyers) who step over the line. Continue reading