Iqbal Empirics
posted by Jon Siegel
In response to my post yesterday, my colleague Orin Kerr asks whether Iqbal might lower the high costs of civil litigation by reducing the use of costly mechanisms such as discovery and summary judgment motions. This is a good question.
In analyzing Orin’s question, the first thing to notice is that, while Iqbal might save some costs, the decision also imposes costs. Because of Iqbal, pleading becomes more expensive. Not only is it more expensive to draft the initial complaint, because no one knows any more exactly what needs to be in the complaint, but, as numerous cases already show, Iqbal is returning us to the days when a case begins with “polishing the pleadings”: the defendant moves to dismiss, the court grants the motion with leave to replead, the plaintiff tries again, and we may go around multiple times (possibly including an appeal) before the plaintiff has a complaint that passes the applicable standards. And then we get to the costs of discovery and summary judgment.
The view of the drafters of the Federal Rules (particularly Dean Clark, who was very clear on this point) is that polishing the pleadings is a waste of time and money and we might as well get right to the other mechanisms that we’re just going to get to anyway, after polishing the pleadings.
So it’s not as simple as saying that Iqbal might save costs. What’s going to happen is that Iqbal will save some costs while imposing different costs. And I think the biggest cost that Iqbal is meant to save is not so much disovery costs per se, but the costs of settlements coerced by plaintiffs bringing doubtful claims against defendants who end up settling to avoid litigation costs (this is suggested by the Court’s opinion in the predecessor case of Bell Atlantic v. Twombly). The ultimate question is whether Iqbal‘s will save or impose costs on balance.
As I have previously acknowledged (before I gained fame and fortune on Concurring Opinions) this is an empirical question — and one that would be quite difficult to answer reliably. The Civil Procedure professor community, including myself, is, I think, biased in favor of the traditional answer (that strict pleading requirements end up costing more than they save) because that’s what we’ve been teaching the students for the last 70 years. But really, we should admit that it is at least possible that Iqbal would produce savings in the long run.
But I am inclined to doubt it. It seems more likely that Iqbal will just end up raising costs, by adding more pleading costs to discovery costs that will end up getting incurred anyway. And more important, Iqbal seems unfair. As some lower court cases are showing, Iqbal is trapping some plaintiffs in a Catch-22: they can’t successfully plead their cases because they don’t have information that they can’t get without discovery, which can’t get started until they successfully plead. (I suppose this will result in some savings, but again, I question whether there will ultimately be net savings.)
Given that it’s very difficult to tell whether Iqbal will save or cost money in the long run, I am inclined to say that we should continue the fairer system of letting cases get started without insisting on too much detail in the pleadings. But I would be open to rethinking the matter if anyone could come up with good empirical cost data on Iqbal.
September 9, 2009 at 6:50 am
Posted in: Civil Procedure, Uncategorized
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Responses (9)
Howard Wasserman - September 9, 2009 at 7:30 am
I would add that, at least in the civil rights context, additional pre-filing costs will land on the plaintiffs, who now must do (or try to do) extensive pre-filing investigation (possibly including FOIA and other open-records requests) just to find out if they can file a lawsuit. Again, perhaps this might be better normatively, but it is inconsistent with the system we now have under Rules 8, 11, and 12.
Orin Kerr - September 9, 2009 at 8:10 am
Thanks very much for the thoughtful reply, Jon. You write: “The Civil Procedure professor community, including myself, is, I think, biased in favor of the traditional answer (that strict pleading requirements end up costing more than they save) because that’s what we’ve been teaching the students for the last 70 years.”
I wonder if the Civil Procedure professor community is also generally more pro-plaintiff than other communities. To the extent Iqbal shifts costs from civil defendants to civil plaintiffs, you might expect that to be popular among those who identify more with civil defendants and unpopular with those who identify more with civil plaintiffs.
Ray Campbell - September 9, 2009 at 8:25 am
Iqbal will clearly save litigation costs in the sense that closing the court house altogether would save litigation costs. In the same vein, you could save a lot of litigation costs by randomly dismissing every third case when it is first filed. I don’t gather that’s what Orin had in mind.
Turning to what I think he did mean (and without intending to put words in his mouth), will tighter pleading make discovery and motion practice proceed more efficiently, if a case clears the initial pleadings hurdle? I can’t speak to the empirical issue; I can’t even imagine how you could get good before/after data. All the same, I very much doubt Iqbal will streamline the litigation process for those cases that clear the bar. Complaints can be amended, and very often are even well into discovery, so there’s no reason to assume that the initial complaint subjected to Iqbal scrutiny will be the complaint that controls at the summary judgment or trial stages. The scope of permissible discovery under Rule 26(b)(1) is very broad, and subject to the existing constraints (local rules limiting discovery requests, cost, etc.) both plaintiffs and defendants are going to try to get as much discovery as makes economic sense. With regard to summary judgment, defendants are still going to try to narrow or dispose of the case if they see any weakness in proof.
Other than eliminating cases at the outset – which might be weak cases or just might be cases where the initial information asymmetries are very strong – I don’t see a reason to think Iqbal pleading will cut subsequent litigation expenses. (With regard to Howard’s point, while it is well taken, there are lot of previously litigable cases where the plaintiff cannot do effective pre-filing discovery of the sort Iqbal seems to require; the critical information will be locked up in confidential corporate files.)
TJ - September 9, 2009 at 9:40 am
I think you need to separate out long-term costs from short-term costs. As in your previous post, you say a cost is that “no one knows any more exactly what needs to be in the complaint.” But that is largely because Iqbal is so new, whereas we have had 70 years of experience on what needed to go into a Conley complaint. Over time, people will get a better sense of what needs to go into a Iqbal complaint.
Ray Campbell - September 9, 2009 at 10:25 am
“Over time, people will get a better sense of what needs to go into a Iqbal complaint.”
Normally, that would be true, but I wonder if that will be the case with Iqbal (if it survives without being dialed back, which I also wonder about.) Iqbal puts a lot of discretion in the hands of the district court judge, who is supposed to determine what is plausible based on factors that seem inherently personal such as “experience” and a given judge’s understanding of “common sense.” I think one of the pernicious aspects of Iqbal is that because of the vague and inherently personal inquiry it invites it will mean one thing in one courtroom, and quite a different thing down the hall. That will increase costs as both plaintiffs and defendants jockey to get before a judge with a favorable interpretation. It also means that a common understanding as to what Iqbal requires may not occur, at least not until federal judges all come to work with common sets of experience behind them, a standard understanding of what “common sense” directs, and common inclination to tip toward being permissive or restrictive toward plaintiffs.
Beyond that, if we are going to look at the long term costs of Iqbal, you really have to get into how it interrelates with substantive law and the goals of those laws. The Iqbal rule is trans-substantive on its face, but its impact won’t be equally severe in all types of cases. It will have more effect in those types of cases typically involving information asymmetry where defendants hold critical information about causation that cannot be accessed without discovery. In those settings, it will impact whether cases can be brought, which will impact deterrence goals, and will therefore impact whether the efficiencies and cost avoidance expected from the substantive rules are in fact achieved. (Permissive pleading has its own impact on deterrence, of course, and distorts things in its own way.) To really get a handle on the full long term costs, you would have to unpack those sorts of effects.
Matthew Reid Krell - September 9, 2009 at 12:41 pm
Empirical analysis is going to be difficult right now, in part due to a paucity of data, in part simply due to a lack of a solid theory on which to ground the empirics. But modeling is certainly possible, and would provide a solid footing for future empirical analysis.
Anyone interested in writing a paper modeling the economic costs of Iqballitigation versus Conley litigation?
Matthew Reid Krell - September 9, 2009 at 12:43 pm
Ray, it sounds like you’re starting to develop a solid model. If you’re interested in nailing it down and making it rigorous, contact me.
Mike Cernovich - September 9, 2009 at 1:45 pm
It will complicated to make policy-and-custom claims under Section 1983. How do you specifically plead a policy or custom if you aren’t able to obtain discovery about internal city affairs?
Let’s say, e.g., you are suing a police officer for excessive force. The word on the street is that excessive force is tolerated in the local police department. The police chief knows what is up. He doesn’t care.
Thus, you add a policy-or-custom claim to your complaint. Your theory is that a final policy maker acquiesced in the face of excessive force. That is a legit theory of liability.
Post Iqbal, will it be enough to allege that a policy maker acquiesced when confronted with a culture of police abuse? Or will that allegation be too speculative and implausible?
Let’s face it: Many complaints involve guesswork and assumptions at the pleading stage. When a government employee does something awful but isn’t punished: Doesn’t it make sense to assume that awful conduct is sanctioned by his boss? And that others have probably gotten away with similar conduct?
You need more than one awful officer to establish municipal liability. So, post Iqbal, many pro-defense courts will dismiss the case at the pleading stage. “You just have one guy doing bad stuff. You need more than one. Your allegation that the city allows other officers to do awful stuff is just speculation.”
In theory, you could FOIA police disciplinary records that would strengthen your allegations. Anyone here ever tried doing that? As the smart-alecs say as they roll their eyes: “Good luck with that.”
David Levine - September 9, 2009 at 8:31 pm
“But really, we should admit that it is at least possible that Iqbal would produce savings in the long run.”
–We need make this admission only if it is plausible that Iqbal would produce savings
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