• The Value of Early Challenges: Richard Nagareda's 1938 All Over Again
  • April 1, 2010 | Author: Andrew J. Trask
  • Law Firm: McGuireWoods LLP - McLean Office
  • Vanderbilt law professor Richard Nagareda has written an essay for the DePaul Law Review entitled "1938 All Over Again?: Pre-trial as Trial in Complex Litigation."  For the most part, this essay is a 30,000-foot view of litigation that emphasizes “cost imposition” (academic-speak for the idea that each party might try to drive up the other party’s costs).

    Professor Nagareda’s analysis is still preliminary in places. (For example, in order to make his story of a chronological evolution work, he claims that class-action law became “distinctive” in 2006 with the In re Initial Public Offering opinion, in which the Second Circuit, like the Seventh Circuit five years before, and the Supreme Court nineteen years before that, held that a court deciding a class-certification motion must conduct a “rigorous analysis.” Most practitioners I know would call the 2009 Vinole decision in the Ninth Circuit a more recent development that better fits his thesis.)  However, much as a good essayist should, Nagareda lays out a though-provoking story about how the law has changed over time. According to him:

    • Pre-trial litigation has evolved to allow defendants to challenge (and the court to evaluate) the merits of a claim at earlier stages, much like the pre-1938 code-pleading regime under the Federal Rules of Civil Procedure.
    • That evolution has included class actions, which courts examine now with more rigor than they used to.
    • The increased rigor stems largely from concerns about costs. Parties care about the costs of litigation and the uncertainty associated with a jury trial; in class actions, plaintiffs will exploit these concerns for maximum settlement value.
    • As a result, courts should consider resolving early dispositive motions in more nuanced ways than just a binary grant or denial.

    Much of Nagareda’s argument may sound obvious to practitioners. Parties (and, increasingly, courts) care about the costs associated with pre-trial litigation. And courts often rely on partial rulings or accompanying opinions to signal to the parties their chances of prevailing on later motions (which, one might argue, provides robust pricing information). But the story Nagareda tells here is a good reminder to defendants: federal civil procedure has evolved to enable defendants to challenge meritless claims earlier and more often; there is every reason to take advantage of that opportunity.