Class 4- Jurisdiction, Class Actions, and Managerial Judging

1. Personal Jurisdiction

*World-Wide Volkswagen v. Woodson

Review "Preliminary Objections" from Class 2

2. Subject Matter Jurisdiction (Federal Question and Diversity Jurisdiction)

*U.S. Constitution Article Ill and Federal Subject Matter Jurisdiction Statutes

Diversity Jurisdiction

3. Class Actions

*FRCP Rule 23

The Federal Rule (we will focus especially on 23(b2) and 23(b3) class actions

*General Telephone v. Falcon

4. Managerial Judging and Alternate Dispute Resolution

FRCP Rule 16

Sample court-sponsored ADR letter

Alternate Dispute Resolution

Managerial Judging

Personal Jurisdiction

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•woRLD-WIDE VOLKSWAGEN CORP. v. WOODSON -444 u.s. 286 (1980)

· Justice WHl'l'E delivered the opinion of the Court:

641

The issue before us is whether, consistently with the Due Process Clause of the Fourteenth Amendment, an Oklahoma court may exercise in personam jurisdiction over a nonresident automobile r~tailer and its wholesale distri~ butor in a products-liability action; when the defendants' only connection with Oklahoma is the fact that an automobile sold in New York to New York residents became involved in an accident in Oklahoma.

I

Respondents Harry and Kay Robinson purchased a new Audi automobile from petitioner Seaway Volkswagen, Inc. (Seaway), in Massena, N.Y., in 1976. The following year the Robinson family, who resided in New York, left that State for a new home in Arizona. As they passed through the State of Oklahoma, another ear struck their Audi in the rear, causing a fire which severely burned Kay Robinson and her two children.1

The Robinsons subsequently brought a products-liability action in the District Court for Creek County, Okla., claiming that their injuries resulted from defective design and placement of the Audi's. gas tank and fuel system. 'I'hey joined as defendants the automobile's manufacturer, Audi NSU Auto

· Union Aktiengesellsehaft (Audi); ita importer Volkswagen of America, Inc. (Volkswagen);: -its regional distn"butor, petitioner World-Wide Vol)mwagen Corp. (World-Wide); and its retail dealer, petitioner Seaway. Seaway and World-Wide entered special appearances,3 claiming that Oklahoma's exercise of jurisdiction over them would offend the limitations on the State's jurisdiction

.. ·.Imposed by the Due Process Clause of the Fourteenth Amendment. · The facts presented to the District Court showed that World-Wide is incor-

porated and has its business office in New York. It distributes vehicles, parts, and accessories, under contract with Volkswagen, to retail dealers in New York,

1. The driver of the other automobile does not figure in the present litigatian. •

0 ! S. Volkswagen also entered a special appearance in the District Court, but unlike World-Wide · and Seaway !lid not seek review in the Supreme Court of Oklahoma and is not a petitioner-here.

-Both Volkswagen .and Audi remain as defendants in the litigation pending before the District Court . Ill Oklahoma.

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642 7 • The Choice of liD Appropriate Court: Penonal Jurisdiction, Notice, and Venue

New Jersey, and Connecticut. Seaway, one of these retail dealers, is incorpo­rated and has its place of business in New York. Insofar as the record reveals, Seaway and World-Wide are fully independent corporations whose relations with each other and with Volkswagen and Audi are contractual only. Respon­dents adduced no evidence that either World-Wide or Seaway does any business in Oklahoma, ships or sells any products to or in that State, has an agent to receive process there, or purchases advertisements in any media calculated to reach Oklahoma. In fact, as respondents' counsel conceded at oral argument, there was no showing that any automobile sold by World-Wide or Seaway has ever entered Oklahoma with the single exception of the vehicle involved in the present case.

Despite the apparent paucity of contacts between petitioners and Oklahoma, the District Court rejected their constitutional claim and reaffirmed that ruling in denYing petitioners' motion for reconsideration. Petitioners then sought a writ of prohibition*'in the Supreme Court of Oklahoma to restrain the District Judge, respondent Charles S. Woodson, from exercising in personam jurisdiction over them. They renewed their contention that, becauSe they had no "minimal contacts," with the State of Oklahoma, the actions of the District Judge were in violation of their rights under the Due Process Clause.

The Supreme Court of Oklahoma denied the writ, holding that personal jurisdiction over petitioners was authorized by Oklahoma's "long-arm" statute, Okla. Stat., Tit. 12, § 1701.03(aX4) (1971).7 Although the court noted that the proper approach was to test jurisdiction against both statutory and constitutional standards, its analysis did not distinguish these questions, prob­ably because § 1701.03(aX 4) has been interpreted as conferring jurisdiction to the limits permitted by the U.S. Constitution. The court's rationale was contained in the following paragraph:

In the case before us, the product being sold and distributed by the petitioners is by its very design and purpose so mobile that petitioners can foresee its possible use in Oklahoma. This is especially true of the distributor, who has the exclusive right to distribute such automobile in New York, New Jersey and Connecticut. The evidence presented below demonstrated that goods sold and distributed by the petitioners were used in the State of Oklahoma, and under the facts we believe it reasonable to infer, given the retail value of the automobile, that the petitioners derive substantial income from automobiles which from time to time are used in the State of Oklahoma. This being the case, we hold that" under the facts presented, the trial court was justified in concluding that the petitioners derive substantial revenue from goods used or consumed in this State.

• Eds.' Note: This writ was the best available means for an immediate appeal of the bial judge's ruling refusing to di.smiss the action.

7. This subsection provides: • A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action orcleimfor relief arising from the person's .•. causing tortious injury in this state by act or omisaion outside this state if be regularly does or solicits business or engages in any other persistent course of conduct, or derives substantial revenue from roods used or consumed or services rendered, in this state ; •• • The State Supreme Court ~ected jurisdiction based on § 1701.03(a)(3), which authorizes jurisdiction over any person "caus­ing tortious injury in this state by an act or omission in this state." Something in addition to the infliction of tortious injury was required.

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· We granted certiorari to consider an important constitutional question with .• respect to state-court jurisdiction and to resolve a conflict between the Supreme • •Court of Oklahoma and the highest courts of at least four other States. We

n ' .. .._The Due Process Clause oftlie Fourteenth Amendment limits the power of a ·ltate· court to render a valid personal judgment against a nonresident

.. defendant. A judgment rendered in violation of due process is void in the ren­. daring State and is not entitled to full faith and credit elsewhere. Pennoyer v. ·Neff, 95 U.S. 714, 732-733 (1877). Due process requires that the defendant be :lfiven adequate notice.ofthe suit,·Mullane v. Central Hanover Trust Co., 389 U.S. 306,313-314 (1950); and be subject to the personaljurisdiction of the court, international Shoe Co. v. Washington, 326 U.S. 310 (1945). In the present case, It is not contended that notice was :i:hadequate; the only question is whether these particular petitioners were subject to the jurisdiction of the Oklahoma courts. ·

· As has long been settled, and as we reaffirm today, a state court may ex'Eircise ·personal jurisdiction over a nonresident defendant only so long as there exist "minimum contacts" between the defendant and the forum State. International Shoe Co. v. Washington, supra, at 316. The concept of minimum contacts, in turn; can be seen to perform two related, but distinguishable, func­·tions. It proteCts the defendant against the burdens oflitigating in a distant or inconvenient forum. And it acts to ensure that the States through. their courts, 'do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.

The protection ·against inconvenient litigation is typically described in terms of''reasonableiiess" or !'fairness." We have said that the defendant's con­tacts with the forum State must be such that maintenance of the suit "does not offerl.d 'traditional notions of fair play ·and substantial justice.'" International Shoe Cr;~. v. Washington, supra, at 316, quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940). The relationship between the defendant and the forum must be such that it is !'reasonable ... to require the corporation to defend the particular suit which' is brought there." 326 U.S. at 317.lmplicit in this emphasis on reason­ableness is the unders~ding that tlie burden on the defendant, while always a primary concern, will' in an lippropriate case be considered in light of other relevant factors, including the forum State's interest in adjudicating the dis­pute, see McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957}; the plaintiffs interest in obtaining convenient and effective relief, see Kulko u. California Superior Court [436 U.S. 84, 92 (1978)], at least when that interest is not adequately protected by the' plaintift's power to choose the. forum, of. Shaffer v. Heitner, 433 U.S. 186, 211, n.37 (1977); the interstate judicial sys­tem's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies, see Kulko v. California Superior Court; supra, 436 U.S. at 93, 98.

. The limits imposed on state jurisdiction by the Due Process Clause, in its role as a guarantor against inconvenient litigation, have been substantially relaxed over the years. As we noted in McGee v. International Life Ins. Co.

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644 7 • The Choice of an Appropriate Court: Personal Jurisdiction, Notice, and Venuo

[355 U.S. 220, 222-223 (1957)], this trend is largely attributable to a fundamental transformation in the American economy: "Today many commercial transactions touch two or more States and may involve parties separated by the full continent. With this increasing nationalization of com-· merce has come a great increase in the amount of business conducted by m8il across state lines. At the same time modem transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity." The historical developments noted in McGee, of course, have only accelerated in the generation since that case waR decided.

Nevertheless, we 1\r;:lve never accepted the proposition that state lines aro irrelevant for jurisdictional purposes, nor could we, and remain faithful to thu principles of interstate federalism embodied in the Constitution. The economic interdependence of-the States was foreseen and desired by the Framers. In tlw Commerce Clause, they provided that the Nation was to be a common market, n "free trade unit" in which the States are debarred from acting as separablo economic entities. But the Framers also intended that the States retain many essential attributes of sovereignty, including, in particular, the sovereign power to try causes in their courts. The sovereignty of each State, in turn, implied a limitation on the sovereignty of all of its sister States -a limitation express or implicit in both the original scheme of the Constitution and tho Fourteenth Amendment.

Hence, even while abandoning the shibboleth that "[t]he authority of every tribunal is necessarily restricted by the territorial limits of the State in which it itl established," Pennoyer v. Neff, supra, 95 U.S. at 720, we emphasized that tho reasonableness of asserting jurisdiction over the defendant must be assessed "in the context of our federal system of government," International Shoe Co. v. Washington, 326 U.S. at 317, and stressed that the Due Process Clause ensure~:~ not only fairness, but also the "orderly administration of the laws," id., at 319. AR we noted in Hanson v. Denckla, 357 U.S. 235, 250-251 (1958): "As technological progress has increased the flow of commerce between the States, the need for jurisdiction over nonresidents has undergone a similar increase. At the samo time, progress in communications and transportation has made the defense of n suit in a foreign tribunal less burdensome. In response to these changes, tho requirements for personal jurisdiction over nonresidents have evolved from the rigid rule of Pennoyer v. Neff, 95 U.S. 714, to the flexible standard or International Shoe Co. v. Washington, 326U.S. 310. Butitisamistaketoassuml' that this trend. heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. Those restrictions are more than a guarantee or immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States."

Thus, the Due Process Clause "does not contemplate that a state may mako binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations." International Sha« Co. v. Washington, 326 U.S. at 319. Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to thll controversy; even if the forui!l.State is the most convenient location for litiga· tion, the Due Process Clause, acting as an instrument of interstate federalism,

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L Minimum-Contacts Analysis in Operation 645

may sometimes act to divest the State of its power to render a valid judgment. Hanson v. Denckla, supra, 357 U.S. at 251, 254.

m· Applying these principles to the case at hand, we find in the record before us

a total absence of those affiliating circumstances that are a necessary predicate to any exercise of state-courtjurisdiction. Petitioners carry on no activity what­soever in Oklahoma. They close no sales and perform no services there. They avail themselves of none ofthe privileges and benefits of Oklahoma law. They solicit no business there either through salespersons or through advertising reasonably calculated to reach the State. Nor does the record show that they regularly sell cars at wholesale or retail to Oklahoma customers or residents or that they indirectly, through others, serve or seek to serve the· Oklahoma market. In short, respondents seek to base jurisdiction on one, isolated occur­rence and whatever inferences can be drawn therefrom: the fortuitous circum­stance that a single Audi automobile, sold in New York to New York residents, happened to suffer an accident while passing through Oklahoma ..

It is argued, however, that because an automobile is mobile by its very design and purpose it was "foreseeable" that the Robinsons' Audi would cause injury in Oklahoma. Yet "foreseeability" alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause. In Hanson v. Denckla, supra, it was no doubt foreseeable that the settlor of a Delaware trust.would subsequently move to Florida and seek to exercise a power of appointment tllere; yet we held that Florida courts could not ·constitutionally exercise jurisdiction over a Delaware trustee that had no other contacts with the forum State. In Kulka v. California Superior Court, 436 U.S. 84 (1978), it was surely "foresee­able" that a divorced wife would move to California from New York, the domicile of the marriage, and that a minor daughter would live with the mother. Yet we held that California could not exercisejurisdiction,in a child-support action over the former husband who had remained in New York.

If foreseeability were the criterion, a local California tire retailer could be forced to defend in. Pennsylvania when a blowout occurs there, see Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc., 239 F.2d 502, 507 (4th Cir. 1956); a Wisconsin seller of a defective automobilejack could be haled before a distant court for damage caused in New Jersey, Reilly v. Phil Tolkan Pontiac, Inc., 372 F. Supp. 1205 (N.J.1974); or a Florida soft-drink concessionaire could be sum­moned to Alaska to account for injuries happening there, see Uppgren v. Executive Aviation SerJJices, Inc., 304 F. Supp. 165, 170-171 (Minn. 1969). Every seller of chattels would in effect appoint the chattel his agent for service of process; His amenability to suit would·travel with the chattel. We recently abandoned the outworn rule of Harris v. Balk, 19.8 U.S. 216 (1905), that·the interest of a creditor in a debt could be extinguished or otherwise affected by any State having transitory juristiiction over the debtor. Shaffer v. Heitner, 433 U.S. 186 (1977). Having [interred] the mechanical rule that a creditor's ame­nability to a quasi in rem action travels with his debtor, we are unwilling to endorse an analogous principle in the present case.

This is not to say, of course, that foreseeability is wholly irrelevant. But the foreseeability that is critical to due process analysis is not the mere likelihood

. 646 7 • The Choice of an Appropriate Court: Pei'IIOIIal JurisdictiOD, Notice, and Venue

that a product will find its way into the forum State. Rather, it is that the defendant's conduct and connection with the forum State are ·such that he should reasonably anticipate being haled into court there. See Kulka v. California Superior Court, supra, 436 U.S. at 97-98; Shaffer v. Heitner, 433 U.S. at 216, and see id. at 217-219 (Stevens, J., concurring in judgment). The Due Process Clause, by ensuring the "orderly administration of the laws," International Shoe Co. v. Washington, 326 U.S. at 319, gives a degree of pre­dictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.

When a corporation "purposefully avails itself of the privilege of conducting activities within the forum State," Hanson v. Denckla, 357 U.S. at 253, it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State. Cf. Gray v. American Radia· tor & Standard Sanitary Corp., 22 TIL 2d 432 (1961).

But there is no such or similar basis for Oklahoma jUrisdiction over World­Wide or Seaway in this case. Seaway's sales are made in Massena, N.Y. World­Wide's market, although substantially larger, is limited to dealers in New York, New Jersey, and Connecticut. There is no evidence of record that any automo­biles distributed by World-Wide are sold to retail customers outside this tristate area. It is foreseeable that the purchasers of automobiles sold by World-Wide and Seaway may take them to Oklahoma. But the mere "unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State." Hanson v. Denckla, supra at253.

In a variant on the previous argument, it is contended that jurisdiction can be supported by the fact that petitioners earn substantial revenue from goods used in Oklahoma. The Oklahoma Supreme Court so found drawing the infer­ence that because one automobile sold by petitioners had been used in Oklahoma, others might have been used there also. While this inference seems less than compelling on the facts of the instant case, we need not question the court's factual findings in order to reject its reasoning.

This argument seems to make the point that the purchase of automobiles in New York, from which the petitioners earn substantial revenue, would not occur but for the fact that the automobiles are capable of use in distant States like Oklahoma. Respondents observe that the very purpose of an automobile is to travel, and that travel of automobiles sold by petitioners is facilitated by an extensive chain of Volkswagen service centers throughout the country, includ­ing some in Oklahoma. However, financial benefits accruing to the defendant

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647

a collateral relation to the forum State will not support jurisdiction if they • not stem from a constitutionally cognizable contact with that State. See

v.·California Superior Court, 436 U.S. at 94-95. In our.view, whatever r.iJUIIl'ginal revenues ·petitioners may receive by virtue of the fact that their ; Dl'!Ddtacts are capable of use in Oklahoma is far too attenuated a contact to justify

State's exercise of in personam jurisdiction over them. ··',Because we find that petitioners have no "contacts, ties, or relations'" with

r.nFM ... "TJ'ItP. ofOklahoma,International Shoe Co. v. Washingtop., supra,326 U.S. · · i.t''319, the judgment of the Supreme· Court of Oklahoma. is Reversed.

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;.,:, •. Justice BRENNAN, dissenting: ... In [this case], I would find that the forum State has an interest in per­

ltlitting the litigation to go forward, the litigation is connected to the forum, the .. defendant is linked to the forum, and the burden of defending is not unreason­

.• able. Accordingly; I would hold that it is neither unfair nor unreasonable to·

. · require these defendants to defend in the forum State .... · · The interest of the forum State and its connection to the litigation is strong.

The automobile accident underlying the litigation occurred in Oklaho:m&.:,Tlie : plaintiffs were hospitalized in Oklahoma when they brought suit. Essential

witnesses and evidence were in Oklahoma. See Shaffer v. Heitner, 433 U.S . · at~208. The State has a legitimate interest in enforcing its laws designed to

keep its highway system safe, and the trial can proceed at least as efficiently in Oklahoma as anywhere else. · •

The petitioners are not unconnected with the forum. Although both sell automobiles within limited sales territories, each sold the automobile which in fact was driven to Oklahoma where it was involved in an accident. It may be,,true, as ·the Court suggests, that each sincerely intended to limit· its commercial impact to the-limited territory, and that each intended to accept the benefits and protection of the-laws only of those States within the territory. But obviously these were unrealistic hopes that cannot be treated as an autOmatic constitutional shield.

An automobile simply is not a stationary item or ohe designed to be used in one place. An automobile is- intended ·to be moved around. Someone fu the business of selling large numbers ·of automobiles can hardly plead ignorance of their mobility or pretend that the automobiles stay'}lut after they are sold. It is not merely that a dealer in automobiles foresees that they will move. 444U.S. at 295 .. The dealer actually 4:ltends that the purchasers will use. the automobiles to travel to distant States where the dealer does not directly "do business.'" The sale of an automobile does purposefully inject the vehicle into the stream of interstate commerce so that it can travel to distant States: See Kulko, 436 U.S. at 94:Hanson v. Denckla, 357 U.S. 235, 253 (1958).

· ... The Court accepts that a State may exercise jurisc;tiction over a distrib­utor whicli '~serves'" that State "indirectly" by "deliver[ingl its products into the stream of commerce with the expectation that they will be purchased by con­sumers in. the forum State." 444 U.S. at 297-298. It is diffiCult to see why the Constitution sho~d distinguish between a case involving goods which reach a distant State through a chain of distribution and a case involving goods which reach the sa.me State because a consumer, using.them as the dealer knew the customer would, took them -there. In each case the seller purposefully injects

648 '1 • The Choice of an Appropriate Court! PeraoDBl Jurisdiction,. Notice, and Venue

the goods into the stream of commerce and those goods predictably are used in the forum State.

Furthermore, an automobile seller derives substantial benefits· from States other than its own. A large part of the value of automobiles is the extensive, nationwide network of highways. Significant portions of that network have been constructed by and are maintained by the individual States, including Oklahoma. The States, through their highway programs, contribute in a very direct and important way to the value of petitioners' businesses. Addition­ally, a network of other related dealerships with their service departments operates throughout the country Ul'lder the protection of the laws of the various States, including Oklahoma, and enhances ihe value of petitioners' businesses by facilitating their customers' traveling.

Thus, the Court errs in its conclusion, 444 U.S. at 299, that "petitioners have no 'contacts, ties, or relations'" with Oklahoma. There obviously are con­tacts, and, given Oklahoma's connection to the.litigation, the contacts are suf­ficiently significant to make it fair and reasonable for the petitioners to submit to Oklahoma's jurisdiction ....

The plaintiffs in [this] case brought suit in a forum with which they had significant contacts and which had significant contacts with the litigation. I am not convinced that the defendants would suffer any "heavy and disproportion­ate burden" in defending the suits. Accordingly, I would hold that the Consti­tution should not shield the defendants from appearing and defending in the plaintiffs' chosen fora. ·

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Subject Matter Jurisdiction

United States Constitution: Article Ill (excerpt)

SECTION 1.

The judicial power of the United States, shall be vested in one Supreme Court, and in such

inferior courts as the Congress may from time to time ordain and establish. The judges, both of

the supreme and inferior courts, shall hold their offices during good behaviour, and shall, at

stated times, receive for their services, a compensation, which shall not be diminished during

their continuance in office.

SECTION 2.

The judicial power shall extend to all cases, in law and equity, arising under this Constitution,

the laws of the United States, and treaties made, or which shall be made, under their

authority;--to all cases affecting ambassadors, other public ministers and consuls;--to all cases

of admiralty and maritime jurisdiction;--to controversies to which the United States shall be a

party;--to controversies between two or more states;--between a state and citizens of another

state;--between citizens of different states;--between citizens of the same state claiming lands

under grants of different states, and between a state, or the citizens thereof, and foreign states,

citizens or subjects.

Two leading subject matter jurisdiction statutes for the US federal courts

28 U.S. Code § 1331. Federal question

The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

28 U.S. Code § 1332. Diversity of citizenship; amount in controversy; costs (excerpts)

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between--

(1) citizens of different States;

(2) citizens of a State and citizens or subjects of a foreign state;

(3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and

(4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States.

For the purposes of this section, section 1335, and section 1441, an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled.

(b) Except when express provision therefor is otherwise made in a statute of the United States, where the plaintiff who files the case originally in the Federal courts is finally adjudged to be entitled to recover less than the sum or value of $75,000, computed without regard to any setoff or counterclaim to which the defendant may be adjudged to be entitled, and exclusive of interest and costs, the district court may deny costs to the plaintiff and, in addition, may impose costs on the plaintiff.

(c) For the purposes of this section and section 1441 of this title--

(1) a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business, except that in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such insurer shall be deemed a citizen of the State of which the insured is a citizen, as well as of any State by which the insurer has been incorporated and of the State where it has its principal place of business;

(2) the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent, and the legal representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the infant or incompetent.

[section (d), which I have deleted here, addresses jurisdiction in class actions]

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'772 8 • The Choice of an Appropriate Court: Subject Matter Jurisdiction and Removal

C. DIVERSITY JURISDICTION

While it is understandable that the Framers would grant the federal courta authority to hear cases arising under federal law; it is harder to explain the provision of diversity jurisdiction, which provides for the adjudication of state~ law claims in federal court. No doubt a major impetus was the concern in 1789 (when persons identified more with their locality than with the new national entity) that the state courts might not be level playing fields in cases pitting nonresident litigants against forum residents. Thus a Virginia plaintiff suing a Maryland citizen in Maryland may do so in federal court; and a Maryland citizen sued by a Virginia plaintiff in Vrrginia may remove from state to federal court. This rationale does not, however, explain why Article m makes a federal forum available to a resident plaintiff suing a nonresident defendant. Nor does concern about provincial bias carry much weight in the modem era.

Diversity jurisdiction has iong been controversial. Judge Henry Friendly wrote a seminal article in 1928 documenting the debate over it at the time of tho framing of the Constitution and persisting thereafter. Henry J. Friendly, The Historic Basis of Diversity Jurisdiction, 41 Harv. L. Rev. 483 (1928). Over tho years there have been legislative efforts (so far unsuccessful) to eliminate it. A 1982 Report of the House Judiciary Committee submitted in support of one such attempt observed: "[TJhe abolition of diversity jurisdiction is an hnportant step in reducing endemic court congestion and its insidious effects on liti­gants .... [TJhe original reasons for diversity jurisdiction have long since disappeared."

Congress has always imposed an amount in controversy requirement on this exercise of adjudicatory power, originally $500 and currently $75,000. See 28 U.S.C. § 1332(a). And an early Supreme Court opinion, Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806), imposed another significant limitation by requiring "complete diversity"- every plaintiff must be a citizen of a different state than every defendant in the action. Shared citizenship between any two parties across the "v." defeats jurisdiction. The Court has adhered to the requirement for complete diversity. See Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 553 (2005).

Significantly, Strawbridge has been read as an interpretation of§ 1332 and not an Article ill requirement, meaning that Congress is free to modify the complete diversity rule as it has to permit federal interpleader actions on "min­imal diversity"- that is, as long as any two rival claimants are diverse. See 28 U .S.C. § 1335 and State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523 (1967). Federal actions where there is only minimal diversity have also been

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C. Diversity Jurisdiction · 773

recently authorized by the Multiparty, Multiforum Trial Jurisdiction Act and by the Class Action Fairness Act, both discussed in Part C.3.

In a case where the requirements of28 U.S.C. § 1332 are met, consider how counsel choose between·federal or state court. Would you expect judges of the two systems to share the same sympathies, ·backgrounds, and philosophies? What about their relative abilities? ·Note that state court judges· are elected in most states, while federal judges are appointed for life. Time~to-trial and backlogs are likely to differ in particular localities. Might the loeation of the court influence your decision, as between, for example, a federal court that will draw a mostly suburban jury and a state court in the inner city? What about cost differentials? Another question, which we will address in Chapter 9, is whether the same substantive laws and procedures would be applied in tlfe state and federal courts in the diversity action~

1. Defining Citizenship

The citizenship of a natural person is determined for diversity purposes by the concept of domicile, defined as the person's "true, fixed, and permanent home and princi~ establishment, and to which he has the intention of return­ing whenever he is absent therefrom." Mas u. Perry, 489 F.2d 1396, 1399 (5th Clr. 1974). Current residence Itself is nQt sufficient to establish domicile; there must be an intention to remain iJ?.definitely (whatE!verthat means). The inqUirY is highly fact specific. . · . • . . .

A recurrent issue is whether a student retains her original d.OD:u~e or gahls a new one while attending school in·a diderent State. When Judy Mas sued'her landlord, Oliver Perry, in federal district court in Baton Rouge alleging he had surreptitiously observed her and her husband through lniriOrs installed .iJl their bedroom and bathroom, the Louisiana defendant moved to dismiss for lack of subject matter jurlSdiction. Perri iirgued that Mas was $a a Lou:isiarla ci~n. thus defeating diversity. The cio1.J!t disaireed: ··

.Mrs. Mas's [home state] Mississippi d9mii:ile was disturbed neither by her year in Louisiana prior to ~er ID.ilrri,age nor as a reSUlt of the time she .and her -~usband spent at LSU Bfter their marriage, since. for both Periods she was a graduate assistant at LSU. Though she testified that after her matriage she had no int.en-· tion of returning to her parents' home in Mississippi, Mrs. Mas ·did not effect a change of domicile since she and Mi. Mas were in Louisiana only· as students and lacked the requisite intention to remain there. Until she acquires a new domicile, she remains a domiciliary, and thus a citizen, of Mississippi.

Mas v. Perry, supra, 489 F .2d at 1399. See also Dunlap u. Wells; 741 F.2d 165 (8th Cir. 1984) (eight-year-old boy did not become a citizen ofTexas even though his Arkansas parents placed him in a special care home in that state and a local guardian had been appointed for him); Mitchell u. Mackey, 915 F. Supp~ 388 (M.D. Ga. 1996) (student at a Georgia college was considered a domiciliary of her parents' new Florida residence and not Georgia even though she had never set foot in.their Florida home, because she intended to establish permanent residence with her parents after school and was unable to live alone. due to

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774 8 • The Choice of an Appropriate Court: Subject Matter Jurisdiction and Remov•l

injuries suffered in the accident sued upon). But compare Gordon v. Steele, 37fJ F. Supp. 575 (W.D. Pa. 1974) (an emancipated nineteen-year-old college stu• dent living in an apartment at school became a citizen ofldaho even though sho retained her Pennsylvania driver's license and spent some vacations at hur parents' home in Erie because she did not intend to return to Pennsylvanin after school: "If the new state is to be one's home for an indefinite period ol' time, he has acquired a new domicile.")

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Class Action

Rule 22 RULES OF CIVIL PROCEDURE

or limit-the remedy provided by 28 U.S.C. §§ 1335, 1397, and 2361. An action under those statutes must be conducted under these rules.

Comparative State Provisions

California Civil Procedure Code § 386

(a) A defendant, against whom an action is pending upon a contract, or for specific personal property, may, at any time before answer, upon affidavit that a person not a party to the action makes against him, and without any collusion with him, a demand upon such contract, or for such property, upon notice to such person and the adverse party, apply to the court for an order to substitute such person in his place, and discharge him from liability to either party, on his depositing in court the amount claimed on the contract, or delivering the property or its value to such person as the court may direct; and the court may, in its discretion, make the order; or such defendant may file a verified cross-complaint in interpleader, admitting that he has no interest in such amount or such property claimed, or in a portion of such amount or such property and alleging that all or such portion of the amount or property is demanded by parties to such action or cross-action and apply to the court upon notice to such parties for an order to deliver such property or portion thereof or its value to such person as the court shall direct. And whenever conflicting claims are or may be made upon a person for or relating to personal property, or the performance of an obligation, or any portion thereof, such person may bring an action against the conflicting claimants to compel them to interplead and litigate their several claims. The order of substitution may be made and the action of interpleader may be maintained, and the applicant or interpleading party be discharged from liability to all or any of the conflicting claimants, although their titles or claims have not a common origin, or are not identical but are adverse to and independent of one another.

(b) Any person, firm, corporation, association or other entity against whom double or multiple claims are made, or may be made, by two or more persons which are such that they may give rise to double or multiple liability, may bring an action against the claimants to compel them to interplead and litigate their several claims.

When the person, firm, corporation, association or other entity against whom such claims are made, or may be made, is a defendant in an action brought upon one or more of such claims, it may either file a verified cross-complaint in interpleader, admitting that it has no interest in the money or property claimed, or in only a portion thereof, and alleging that all or such portion is demanded by parties to such action, and apply to the court upon notice to such parties for an order to deliver such money or property or such portion thereof to such person as the court shall direct; or may bring a separate action against the claimants to compel them to interplead and litigate their several claims. The action of interpleader may be maintained although the claims have not a common origin, are not identical but are adverse to and independent of one another, or the claims are unliquidated and no liability on the part of the party bringing the action or filing the cross-complaint has arisen. The applicant or interpleading party may deny liability in whole or in part to any or all of the claimants. The applicant or interpleading party may join as a defendant in such action any other party against whom claims are made by one or rriore of the claimants or such other party may interplead by cross-complaint; provided, however, that such claims arise out of the same transaction or occurrence.

* * *

Rule 23. Class Actions

[See the various provisions of the Class Action Fairness Act of 2005 in Part II, infra, as follows: 29 U.S.C. § 1332(d) (federal jurisdiction over class actions), 28 U.S.C. § 1453 (removal of interstate class actions to

64

PARTIES Rule 23 federal court), and 28 U.S.C. §§ 1711-1715 (control of class-action settle­ments). See also 28 U.S.C. § 1369, infra Part II, p. 257.]

(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:

(1) the class is so numerous that joinder of all members IS

impracticable;

(2) there are questions of law or fact common to the class;

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and

(4) the representative parties will fairly and adequately protect the interests of the class.

(b) Types of Class Actions. A class action may be maintained if Rule 23(a) is satisfied and if:

(1) prosecuting separate actions by or against individual class members would create a risk of:

(A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or

(B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests;

(2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or

(3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only indi­vidual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include:

(A) the class members' interests in individually controlling the prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.

(c) Certification Order; Notice to Class Members; Judgment; Issues Classes; Subclasses.

65

Rule 23 RULES OF CIVIL PROCEDURE

(1) Certification Order.

(A) Time to Issue. At an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action.

(B) Defining the Class; Appointing Class Counsel. An order that certifies a class action must define the class and the class claims, issues, or defenses, and must appoint class counsel under Rule 23(g).

(C) Altering or Amending the Order. An order that grants or denies class certification may be altered or amended before final judgment.

(2) Notice.

(A) For (b)(l) or (b)(2) Classes. For any class certified under Rule 23(b) or (b)(2), the court may direct appropriate notice to the class.

(B) For (b)(3) Classes. For any class certified under Rule 23(b)(3), the court must direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice must clearly and concisely state in plain, easily understood language:

(i) the nature of the action;

(ii) the definition of the class certified;

(iii) the class claims, issues, or defenses;

(iv) that a class member may enter an appearance through an attorney if the member so desires;

(v) that the court will exclude from the class any member who requests exclusion;

(vi) the time and manner for requesting exclusion; and

(vii) the binding effect of a class judgment on mem­bers under Rule 23(c)(3).

(3) Judgment. Whether. or not favorable to the class, the judgment in a class action must:

(A) for any class certified under Rule 23(b)(l) or (b)(2), include and describe those whom the court finds to be class members; and

(B) for any class certified under Rule 23(b)(3), include and specify or describe those to whom the Rule 23(c)(2) notice was directed, who have not requested exclusion, and whom the court finds to be class members.

66

PARTIES Rule 23 ( 4) Particular Issues. When appropriate, an action may be

brought or maintained as a class action with respect to particular issues.

(5) Subclasses. When appropriate, a class may be divided into subclasses that are each treated as a class under this rule.

(d) Conducting the Action.

(1) In General. In conducting an action under this rule, the court may issue orders that:

(A) determine the course of proceedings or prescribe meas­ures to prevent undue repetition or complication in presenting evidence or argument;

(B) require-to protect class members and fairly conduct the action-giving appropriate notice to some or all class mem­bers of:

(i) any step in the action;

(ii) the proposed extent of the judgment; or

(iii) the members' opportunity to signify whether they consider the representation fair and adequate, to intervene and present claims or defenses, or to otherwise come into the action;

(C) impose conditions on the representative parties or on intervenors;

(D) require that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly; or

(E) deal with similar procedural matters.

(2) Combining and Amending Orders. An order under Rule 23(d)(l) may be altered or amended from time to time and may be combined with an order under Rule 16.

(e) Settlement, Voluntary Dismissal, or Compromise. The claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval. The following procedures apply to a proposed settlement, voluntary dismissal, or com­promise:

( 1) The court must direct notice in a reasonable manner to all class members who would be bound by the proposal.

(2) If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and adequate.

(3) The parties seeking approval must file a statement identify­ing any agreement made in connection with the proposal.

67

Rule 23 RULES OF CIVIL PROCEDURE

( 4) If the class action was previously certified under Rule 23(b)(3), the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so.

(5) Any class member may object to the proposal if it requires court approval under this subdivision (e); the objection may be withdrawn only with the court's approval.

(f) Appeals. A court of appeals may permit an appeal from an order granting or denying class-action certification under this rule if a petition for permission to appeal is filed with the circuit clerk within 14 days after the order is entered. An appeal does not stay proceedings in the district court unless the district judge or the court of appeals so orders.

(g) Class Counsel. (1) Appointing Class Counsel. Unless a statute provides

otherwise, a court that certifies a class must appoint class counsel. In appointing class counsel, the court:

(A) must consider:

(i) the work counsel has done in identifYing or investi­gating potential claims in the action;

(ii) counsel's experience in handling class actions, oth­er complex litigation, and the types of claims asserted in the action;

(iii) counsel's knowledge of the applicable law; and

(iv) the resources that counsel will commit to repre­senting the class;

(B) may consider any other matter pertinent to counsel's ability to fairly and adequately represent the interests of the class;

(C) may order potential class counsel to provide informa­tion on any subject pertinent to the appointment and to propose terms for attorney's fees and nontaxable costs;

(D) may include in the appointing order provisions about the award of attorney's fees or nontaxable costs under Rule 23(h); and

(E) may make further orders in connection with the ap­pointment.

(2) Standard for Appointing Class Counsel. When one applicant seeks appointment as class counsel, the court may appoint that applicant only if the applicant is adequate under Rule 23(g)(l) and (4). If more than one adequate applicant seeks appointment, the

68

PARTIES Rule 23 court must appoint the applicant best able to represent the interests of the class.

(3) Interim Counsel. The court may designate interim counsel to act on behalf of a putative class before determining whether to certify the action as a class action.

( 4) Duty of Class Counsel. Class counsel must fairly and adequately represent the interests of the class.

(h) Attorney's Fees and Nontaxable Costs. In a certified class action, the court may award reasonable attorney's fees and nontaxable costs that are authorized by law or by the parties' agreement. The following procedures apply:

( 1) A claim for an award must be made by motion under Rule 54(d)(2), subject to the provisions of this subdivision (h), at a time the court sets. Notice of the motion must be served on all parties and, for motions by class counsel, directed to class members in a reasonable manner.

(2) A class member, or a party from whom payment is sought, may object to the motion.

(3) The court may hold a hearing and must find the facts and state its legal conclusions under Rule 52(a).

( 4) The court may refer issues related to the amount of the award to a special master or a magistrate judge, as provided in Rule 54(d)(2)(D).

Amendments to Federal Rule 23 and Comparative State Provision

(a) Amendments in 2003 Altering Subsections (c) and (e) and Adding Subsections (g) and (h)

The 2003 amendments to Rule 23 were designed to give greater protection to class members, in particular members of 23(bJ(3) classes. Subsections (c)(2)(B) and (e) were designed to provide additional protections by prescribing detailed require­ments of notice upon class certification, by giving those who would be bound notice and an opportunity to be heard regarding the adequacy of a proposed settlement, and by providing the right of individual class members to opt out of settlement even though they had refused the right to opt out at an earlier point in the case.

Subsection (g) was added to specify the details of the appointment of a class counsel. A problem exists when members of a class have individual lawyers who vie for the position of class counsel, i.e. the lawyer who will be in charge of the litigation, and who, as a result, will be the primary recipient of the fees (often very large) engendered by the case.

Subsection (h) was added to require notice and an opportunity for class members to object to the awarding of the amount of attorney fees and costs sought in the case.

(b) Comparative State Provision

California Civil Procedure Code § 382

* * * (W]hen the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.

69

Rule 23.1 RULES OF CIVIL PROCEDURE

Rule 23.1 Derivative Actions

(a) Prerequisites. This rule applies when one or more sharehold­ers or members of a corporation or an unincorporated association bring a derivative action to enforce a right that the corporation or association may properly assert but has failed to enforce. The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of shareholders or members who are similarly situated in enforcing the right of the corporation or association.

(b) Pleading Requirements. The complaint must be verified and must:

(1) allege that the plaintiff was a shareholder or member at the time of the transaction complained of, or that the plaintifrs share or membership later devolved on it by operation of law;

(2) allege that the action is not a collusive one to confer jurisdiction that the court would otherwise lack; and

(3) state with particularity:

(A) any effort by the plaintiff to obtain the desired action from the directors or comparable authority and, if necessary, from the shareholders or members; and

(B) the reasons for not obtaining the action or not making the effort.

(c) Settlement, Dismissal, and Compromise. A derivative ac­tion may be settled, voluntarily dismissed, or compromised only with the court's approval. Notice of a proposed settlement, voluntary dismissal, or compromise must be given to shareholders or members in the manner that the court orders.

Rule 23.2 Actions Relating to Unincorporated Associations

This rule applies to an action brought by or against the members of an unincorporated association as a class by naming certain members as representative parties. The action may be maintained only if it appears that those parties will fairly and adequately protect the interests of the association and its members. In conducting the action, the court may issue any appropriate orders corresponding with those in Rule 23(d), and the procedure for settlement,· voluntary dismissal, or compromise must correspond with the procedure in Rule 23(e).

Notes on the Adoption in 1966 of Federal Rule 23.2

The substance of Rule 23.2 was not directly treated prior to its addition in 1966. The Advisory Committee's Notes to the Rule read as follows:

Although an action by or against representatives of the membership of an unincorporated association has often been viewed as a class action, the real or main purpose of this characterization has been to give "entity treatment" to the association when for formal reasons it cannot sue or be sued as a jural person under Rule 17(b). See Louisell & Hazard, Pleading and Procedure: State and

70

PARTIES Rule 25 Federal 718 (1962); 3 Moore's Federal Practice~ 23.08 (2d ed. 1963) * * *. Rule 23.2 deals separately with these actions, referring where appropriate to Rule 23.

Rule 24. Intervention

(a) Intervention of Right. On timely motion, the court must permit anyone to intervene who:

(1) is given an unconditional right to intervene by a federal statute; or

(2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.

(b) Permissive Intervention.

(1) In General. On timely motion, the court may permit anyone to intervene who:

(A) is given a conditional right to intervene by a federal statute; or

(B) has a claim or defense that shares with the main action a common question of law or fact.

(2) By a Government Officer or Agency. On timely motion, the court may permit a federal or state governmental officer or agency to intervene if a party's claim or defense is based on:

(A) a statute or executive order administered by the officer or agency; or

(B) any regulation, order, requirement, or agreement is­sued or made under the statute or executive order.

(3) Delay or Prejudice. In exercising its discretion, the court must consider whether the intervention will unduly delay or preju­dice the adjudication of the original parties' rights.

(c) Notice and Pleading Required. A motion to intervene must be served on the parties as provided in Rule 5. The motion must state the grounds for intervention and be accompanied by a pleading that sets out the claim or defense for which intervention is sought.

Rule 25. Substitution of Parties

(a) Death.

(1) Substitution if the Claim Is Not Extinguished. If a party dies and the claim is not extinguished, the court may order substitution of the proper party. A motion for substitution may be made by any party or by the decedent's successor or representative. If the motion is not made within 90 days after service of a statement

71

C. THE FEDERAL RULE

The prerequisites for a federal class action are set forth in Fed. R. Cliv. P. 23(a) and (b). Subsection (a) contains four requirements -all of which must be satisfied to m.aintSin any federal class action. The four prerequisites. are numer­osity, commonality, typicality., and representativeness. Subsection (b) also con­tains four· requirements, but.each ofthese constitutes a different type of class action, and thus, only·one of the subsection·(b) categories in.ust be .satisfied in or.der to maintain a class action under Rule 23. ·.

1~ .. The Prerequisites ··.-io":_, . . ·. In this subsubsection we outline each of the four prerequisites* set forth in

Rule 23(a): '

numerosity; commonality;

'•.

'. tOne might instead suggest that there are me prerequisites: the fOUr identified here 'plus identification o£ tbs class. Rule 23(a) identifies the four and presumes the fifiJl. ·

.- ..

940 11. Class Actions: It All Comes Togeth«.~•'

• typicality; and • representativeness.

First, Fed. R. Civ. P. 23(a)(l) requires that "the class is so numerous thnl. joinder of all members is impracticable." However, there is no set numbeT uf members to satisfy this requirement of numerosity; indeed, groups of as many as 350 have been held too small for a class action, yet groups of25 or more hav1.• been held sufficient. See Charles Wright and Mary Kay Kane, Law of Feden;/ Courts§ 72 (6th ed. 2002).

Second, Fed. R. Civ. P. 23(a)(2) requires "questions oflaw or fact common l.n the class." This requirement of commonality demands an analysis similar tn what you learned to do under Fed. R. Civ. P. 20 (permissive joinder) and undor· Fed. R. Civ. P. 42(a) (consolidation).

Third; Fed. R. Civ. P. 23(aX3) requires that "the claims or defenses of th11 representative parties are typical of the claims or defenses of the class." ThiH typicality requirement originates with the Due Process Clause, which, in turn, requires that the interests of a party be adequately represented and protected in order for that party to be bound by the decision of a court.

Fourth, and finally, Fed. R. Civ. P. 23(a)(4) requires that the representll· tives named in the class action ''fairly and adequately protect the interests of' the class." This requirement, usually labeled representativeness, requires thn judge to consider whether the named representatives and their counsel havo the sufficient expertise, capacity, and interests at stake to represent the claHH. And it is the responsibility of the class counsel to persuade the trial judge thnl; the named class representatives are truly representative of the class.

To be sure, the four requirements set forth in Fed. R. Civ. P. 23(a) overlap. Trial judges are usually afforded broad discretion on the question whetho1' these initial requirements have been met.

2. The Typology

In addition to satisfying all four of the prerequisites of Rule 23(a), a claaH

action will be certified only if it meets one of the types of actions recognized by Rule 23(b). Rule 23(b) recognizes three types of mandatory class actions: tho (b)(lXA) incompatible standards class action; the (b)(l)(B) limited fund claMH action; and the (bX2) equitable class action. For each of these types, participu~· tion in the class is mandatory because members of the class have no right to opl. out of the class and pursue litigation independently. (The constitutionality uf these mandatory class actions is somewhat suspect, but the Supreme Court hurt yet to provide clear guidance. See generally Samuel Issacharoff,Preclusion, Du.r• Process, and the Right to Opt-Out of Class Actions, 77 Notre Dame L. Rev. 1057 (2002).) Rule 23(b) also provides one type of voluntary class action; in the (b)(:!) co~on question class action, class members must be offered the opportunity to opt out of the class.

First, the incompatible standards class action is permitted only in instanctlH where the putative class counsel can persuade the trial judge that "the proS(,. cution of separate actions by or against individual members of the class would create a risk of inconsistent or varying adjudications with respect to individual

C. The Federal Rule 941

members of the class which would establish incompatible standards ofconduct for the party opposing the class." Fed. R. Civ. P. 23(b)(lXA). Put another way, this type of class action is appropriate if· and only if, absent a class action, the defendant(s) could be subject to incompatible mandates as to its future conduct:

The class is designed to protect against the non-class party's being placed in a stalemated or conflicted position and is applicable only to actions in which there is not only a risk of inconsistent adjudications but also where the nonclass party could be sued for different and incompatil~le affirmative relief.

. . Employers Insurance of Wausau v. FDIC, 112 F.R.D. 52, 54 (E.D. Tenn. 1986). This concept shoul~ be familiar to you, as it resembles the test for invqluritary joinder under Fe_d. R. Civ. P. 19(~)(l)(B)(ii). Similarly, the incompatible stan­dards class action is designed to provide meaningful relief to plaintiff~ while protecting defeqdants from multiple or inconsistent obligations.

Second, the limited funds class action is permitted only in instances where there is a risk that "adjudications with respect to individual. class members that, as a practical matter, would be dispositive of the interests of the other members not parties to tlle individual- adjudications or would substantially impair or impede their ability to protect their interests." ;Fed. R. Civ. P. 23(b)(l)(B). The putative class counsel thus must persuade the district court judge that the defendants' available assets would be insufficie1;1t t;o pay all claims, and that the limited funds class action is the best mechanism to promote equal treatment of all litigants. Limited fund class actions thus are reminiscent of other procedural mechanisms designed to protect non parties, in(!luding :Fed. R. Civ. P. 19(a)(l)(BXi) and Fed. R. Civ. P. 24(aX2).

Third, a-class action is permitted under Fed. R. Civ. P. 23(b)(2) when "the party opposing the class has acted or. refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declara­tory relief is appropriate respecting the class as a whole." Ahom~genou,s_class is the touchstone for certification of~ (b)(2) action. Homoge_neity allows the court to dispense with notice to the class and bind all members to any judgment on the merits without an opportunity to opt out. In class actions alleging employment discrimination, for example, homogeneity may exist because the class of plain­tiffs, by sharing a common characteristic subject to discrimination unifi13s the class and makes :final injunctive relief appropriate. Although the Advisory Committee Notes explain that the equitable class action is not li~ted to civil rights cases, for many years the vast majority of class actions certified un~er this section were of that type. Consider other types of illegal activity _that would justify injunctive or declaratory relief that would inure to the benefit of the entire class. ·

The fourth and final type of class a~on is the most controversial. Class actions under Fed.R. Civ. P. 23(b)(3) require a finding "that the questions oflaw · or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available meth­ods for fairly and efficiently adjudicating the controversy." Under this ~ of class action, all class members "who ~ be identified through reasonable

·. effort" must be given individual notice of the class action as,well as the oppor­tunity to opt out of the class action lawsuit. See Fed. R. Civ. P. 23(c)(2)(B).

f ..

942 11 • Class Actions: It~ Comes Together

The cost of notifying a putative class of plaintiffs can be prohibitively expensive. See Eisen v. Carlisk & Jacquelin, 417 U.S. 156 (1974) (notice by publication plus notification to a portion of the class held inadequate, and the cost of send­ing notice could not be shifted to the defendant); Oppenheimer Fund v. Sanders, 437 U.S. 340 (1978) (burden ofidentifying class members could not be shifted to defendant as part of discovery, when information was not otherwise relevant). Moreover, the threat or reality of numerous opt-outs can make a settlement of the class action much harder to obtain.

There also are special requirements for a 23(bX3) class.action. In particular, the putative class counsel must persuade the court that COlnmon questions of law or fact predominate over individual questions and also that a class action is superior to other available, fair, and efficient methods of adjudication. The rule then identifies four matteJ:"s that are "pertinent" to these requirements: (1) the particular interests of class members to· control their own lawsuits; (2) the (prior) commencement of other relevant lawsuits; (3) the desirability of concen­trating the litigation into a single forum; and (4) the manageability of the class. These considerations often accent a concern for what frequently is referred to as the splintering problem, i.e., the issues for each putative class member are unique, requiring individualized evidence, thus diminishing or eliminating the advantages of a class action.

The 23(b)(3) class action is often a vehicle for the vindication of consumer rights. An individual who wishes to challenge the manufacturer of defective siding or wishes to challenge the credit card issuer with unfair credit card policies may not have the realistic option to file an individual case against a large company (or, in certain instances, against an entire industry). However, it may be in this very same category of cases that the circumstances of some or many members are particularly unique. Indeed, the Advisory Committee Notes to the 1966 amendments to Rule 23 suggest that the 23(bX3) class action would not ordiilarily be appropriate for fraud or mass accident cases, because of the splintering on issues of liability, causation, damages, and defenses. Notwith­standing the warning, numerous fraud, mass accident, and even mass tort cases have been certified as this type of class action.

:..·

C. The Federal Rule 945

Before you read a few class action cases that apply various portions of the ru1e, you shQuld also b~ made aware of some practical implications of pursuing a class action. or- course, there are tremendous advantages and opportunities when representing a class. First, the defendant(s) cannot moot your case by simply giving the named representative or representatives the relief that they want. A class action is also a way to provide legal representation and relief to hundreds or thousands of individuals who cannot afford lawyers or may not even be aware df their legal rights. A class action may be a good way to rally support and publicity for a cause, and it may be the only way to·attract good· lawyers to engage in expensive and time-consuming li,tigation. The mere threat of bringing a class action may Jeverage a better settlement for your client.

At the same time, however, filing a class action is not without risk: First, you must be prepared to shift; your loyalty from your individual client(s) to the entire class. And in a class action, the named representatives usually are

I

948 11. Class Actions: It All Comes Together

entitled only to the same relief as all other class members. The time, expense, and commitment of pursuing a class action can be enormous, dwarfing other demands on your time. You may also prepare to be challenged as the lead counsel, and may end up in a subsidiary role or even excluded. Further, if a case is certified as a class action, you should expect the district judge to play a much more active role in case management than she otherwise might. See Fed. R. Civ. P. 23(d). In sum, the decision whether to pursue a class action is a crucial one=for_ ~~ur _client, for!:ou, your law partners. and for ''the cause."

.. · .. ,

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Fed.R.Serv.2d 371

(Cite as: 457 U.S. 147, 102 S.Ct. 2364)

P" This is edited for class.

Supreme Court of the United States

GENERAL TELEPHONE COMPANY OF the

SOUTHWEST, Petitioner

v.

Mariano S. FALCON.

No. 81-574.

Argued April 26, 1982.

Decided June 14, 1982.

Justice STEVENS delivered the opinion of the Court.

The question presented is whether respondent

Falcon, who complained that petitioner did not pro­

mote him because he is a Mexican-American, was

properly permitted to maintain a class action on behalf

of Mexican-American applicants for employment

whom petitioner did not hire.

I

In 1969 petitioner initiated a special recruitment

and training program for minorities. Through that

program, respondent Falcon was hired in July 1969 as

a groundman, and within a year he was twice pro­

moted, first to lineman and then to lineman-in-charge.

He subsequently refused a promotion to install­

er-repairman. In October 1972 he applied for the job

of field inspector; his application was denied even

though the promotion was granted several white em­

ployees with less seniority.

Falcon thereupon filed a charge with the Equal

Employment Opportunity Commission stating his

belief that he had been passed over for promotion

because of his national origin and that petitioner's

promotion policy operated against Mexi­

can-Americans as a class. In due *150 course he re-

ceived a right-to-sue letter from the Commission and,

in April 1975, he commenced this action under Title

VII of the Civil Rights Act of 1964, 78 Stat. 253, as

amended, 42 U.S.C. § 2000e et seq. (1976 ed. and

Supp.IV), in the United States District Court for the

Northern District of Texas. His complaint alleged that

petitioner maintained "a policy, practice, custom, or

usage of: (a) discriminating against [Mexi­

can-Americans] because of national origin and with

respect to compensation, terms, conditions, and priv­

ileges of employment, and (b) ... subjecting [Mexi­

can-Americans] to continuous employment discrimi­

nation." FNI Respondent **2367 claimed that as a

result of this policy whites with less qualification and

experience and lower evaluation scores than re­

spondent had been promoted more rapidly. The com­

plaint contained no factual allegations concerning

petitioner's hiring practices.

FNl. App. 14. In paragraph VI ofthe com­

plaint, respondent alleged:

"The Defendant has established an em­

ployment, transfer, promotional, and sen­

iority system, the design, intent, and pur­

pose of which is to continue and preserve,

and which has the effect of continuing and

preserving, the Defendant's policy, prac­

tice, custom and usage of limiting the em­

ployment, transfer, and promotional op­

portunities of Mexican-American em­

ployees of the company because of na­

tional origin." !d., at 15.

Respondent brought the action "on his own behalf

and on behalf of other persons similarly situated,

pursuant to Rule 23(b)(2) of the Federal Rules of Civil

Procedure." FNZ The class *151 identified in the com­

plaint was "composed of Mexican-American persons

who are employed, or who might be employed, by

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Fed.R.Serv.2d 371

(Cite as: 457 U.S. 147, 102 S.Ct. 2364)

GENERAL TELEPHONE COMPANY at its place of

business located in Irving, Texas, who have been and

who continue to be or might be adversely affected by

the practices complained of herein." FNJ

FN2. /d., at 13. Rule 23 provides, in part:

"(a) Prerequisites to a Class Action. One or

more members of a class may sue or be

sued as representative parties on behalf of

all only if (1) the class is so numerous that

joinder of all members is impracticable, (2)

there are questions of law or fact common

to the class, (3) the claims or defenses of

the representative parties are typical of the

claims or defenses of the class, and ( 4) the

representative parties will fairly and ade­

quately protect the interests of the class.

"(b) Class Actions Maintainable. An action

may be maintained as a class action if the

prerequisites of subdivision (a) are satis­

fied, and in addition:

"(2) the party opposing the class has acted or

refused to act on grounds generally applica­

ble to the class, thereby making appropriate

final injunctive relief or corresponding de­

claratory relief with respect to the class as a

whole .... "

FN3. App. 13-14. The paragraph of the

complaint in which respondent alleged con­

formance with the requirements of Rule 23

continued:

"There are common questions of law and

fact affecting the rights of the members of

this class who are, and who continue to be,

limited, classified, and discriminated

against in ways which deprive and/or tend

to deprive them of equal employment op-

portunities and which otherwise adversely

affect their status as employees because of

national origin. These persons are so nu­

merous that joinder of all members is im­

practicable. A common relief is sought.

The interests of said class are adequately

represented by Plaintiff. Defendant has

acted or refused to act on grounds gener­

ally applicable to the Plaintiff." !d., at 14.

After responding to petitioner's written interrog­

atories, FN4 respondent filed a memorandum in favor of

certification of "the class of all hourly Mexican

American employees who have been employed, are

employed, or may in the future be employed and all

those Mexican-Americans who have applied or would

have applied for employment had the Defendant not

practiced racial discrimination in its employment

practices." App. 46-47. His position was supported by

the ruling of the *152 United States Court of Appeals

for the Fifth Circuit in Johnson v. Georgia Highway

Express, Inc., 417 F.2d 1122 (1969), that any victim of

racial discrimination in employment may maintain an

"across the ooard" attack on all unequal employment

practices alleged to have been committed by the em­

ployer pursuant to a policy of racial discrimination.

Without conducting an evidentiary hearing, the Dis­

trict Court certified a class including Mexi­

can-American employees and Mexican-American

applicants for employment who had not been hired.

FN4. Petitioner's Interrogatory No.8 stated:

"Identify the common questions oflaw and

fac[t] which affect the rights of the mem­

bers ofthe purported class." Id., at 26.

Respondent answered that interrogatory as

follows:

"The facts which affect the rights of the

members of the class are the facts of their

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Fed.R.Serv.2d 37I

(Cite as: 457 U.S. 147, 102 S.Ct. 2364)

* * *

employment, the ways in which evalua­

tions are made, the subjective rather than

objective manner in which recommenda­

tions for raises and transfers and promo­

tions are handled, and all of the facts sur­

rounding the employment of Mexi­

can-American persons by General Tele­

phone Company. The questions of law

specified in Interrogatory No. 8 call for a

conclusion on the part of the Plaintiff." ld,

at 34.

**2368 Following trial of the liability issues, the

District Court entered separate findings of fact and

conclusions oflaw with respect first to respondent and

then to the class. The District Court found that peti­

tioner had not discriminated against respondent in

hiring, but that it did discriminate against him in its

promotion practices. App. to Pet. for Cert. 35a, 37a.

The court reached converse conclusions about the

class, finding no discrimination in promotion prac­

tices, but concluding that petitioner had discriminated

against Mexican-Americans at its Irving facility in its

hiring practices.

After various post-trial proceedings, the District

Court ordered petitioner to furnish respondent with a

list of all Mexican-Americans who had applied for

employment at the Irving *153 facility during the

period between January I, I973, and October I8,

I976. Respondent was then ordered to give notice to

those persons advising them that they might be enti­

tled to some form of recovery. Evidence was taken

concerning the applicants who responded to the no­

tice, and backpay was ultimately awarded to I3 per­

sons, in addition to respondent Falcon. The total re­

covery by respondent and the entire class amounted to

$67,925.49, plus costs and interest.

Both parties appealed. The Court of Appeals re­

jected respondent's contention that the class should

have encompassed all of petitioner's operations in

Texas, New Mexico, Oklahoma, and Arkansas. On the

other hand, the court also rejected petitioner's argu­

ment that the class had been defined too broadly. For,

under the Fifth Circuit's across-the-board rule, it is

permissible for "an employee complaining of one

employment practice to represent another complain­

ing of another practice, if the plaintiff and the mem­

bers of the class suffer from essentially the same in­

jury. In this case, all of the claims are based on dis­

crimination because of national origin." 626 F.2d, at

375. The court relied on *154Pqyne v. Travenol La­

boratories. Inc., 565 F .2d 895 (1978), cert. denied,

439 U.S. 835, 99 S.Ct. 118, 58 L.Ed.2d I3l. in which

the Fifth Circuit stated:

"Plaintiffs' action is an 'across the board' attack

on unequal employment practices alleged to have been

committed by Travenol pursuant to a policy of racial

discrimination. **2369 As parties who have allegedly

been aggrieved by some of those discriminatory

practices, plaintiffs have demonstrated a sufficient nexus to enable them to represent other class members

suffering from different practices motivated by the

same policies." 565 F.2d, at 900, quoted in 626 F.2d,

at 375.

On the merits, the Court of Appeals upheld re­

spondent's claim of disparate treatment in promotion,

but held that the District Court's findings relating to

disparate impact in hiring were insufficient to support

recovery on behalf of the class. *155 * * * [W]e

granted certiorari to decide whether the class action

was properly maintained on behalf of both employees

who were denied promotion and applicants who were

denied employment.

II

The class-action device was designed as "an ex­

ception to the usual rule that litigation is conducted by

and on behalf of the individual named parties only."

Class relief is "peculiarly appropriate" when the "is­

sues involved are common to the class as a whole" and

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when they "tum on questions of law applicable in the

same manner to each member of the class." For in

such cases, "the class-action device saves the re­

sources of both the courts and the parties by permitting

an issue potentially affecting every [class member] to

be litigated in an economical fashion under Rule 23."

* * * ill We have repeatedly held that "a class repre­

sentative must be part of the class and 'possess the

same interest and suffer the same injury' as the class

members.

* * * We also recognized the theory behind the Fifth

Circuit's across-the-board rule, noting our awareness

"that suits alleging racial or ethnic discrimination are

often by their very nature class suits, involving

classwide wrongs," and that "[c]ommon questions of

law or fact are typically present." !d., at 405, 97 S.Ct.,

at 1898. In the same breath, however, we reiterated

that "careful attention to the requirements of Fed. Rule

Civ.Proc. 23 remains nonetheless indispensable" and

that the "mere fact that a complaint alleges racial or

ethnic discrimination does not in itself ensure that the

party who has brought the lawsuit will be an adequate

representative of those who may have been the real

victims of that discrimination." ld., at 405-406, 97

S.Ct., at 1898.

ill We cannot disagree with the proposition un­

derlying the across-the-board rule-that racial dis­

crimination is by definition class discrimination. But

the allegation that such discrimination has occurred

neither determines whether a class action may be

maintained in accordance with Rule 23 nor defines the

class that may be certified. Conceptually, there is a

wide gap between (a) an individual's claim that he has

been denied a promotion on discriminatory grounds,

and his otherwise unsupported allegation that the

company has a policy of discrimination, and (b) the

existence of a class of persons who have suffered the

same injury as that individual, such that the individu­

al's claim and the class claims will share common

questions of law or fact and that the individual's claim will be typical of the class claims. FNB **2371 For

respondent to *158 bridge that gap, he must prove

much more than the validity of his own claim. Even

though evidence that he was passed over for promo­

tion when several less deserving whites were ad­

vanced may support the conclusion that respondent

was denied the promotion because of his national

origin, such evidence would not necessarily justify the

additional inferences ( 1) that this discriminatory

treatment is typical of petitioner's promotion practices,

(2) that petitioner's promotion practices are motivated

by a policy of ethnic discrimination that pervades

petitioner's Irving division, or (3) that this policy of ethnic discrimination is reflected in petitioner's other

employment practices, such as hiring, in the same way

it is manifested in the promotion practices. These

additional inferences demonstrate the tenuous char­

acter of any presumption that the class claims are

"fairly encompassed" within respondent's claim.

FN 13. The commonality and typicality re­

quirements of Rule 23(a) tend to merge. Both

serve as guideposts for determining whether under the particular circumstances mainte­

nance of a class action is economical and

whether the named plaintiffs claim and the

class claims are so interrelated that the in­

terests of the class members will be fairly and

adequately protected in their absence. Those

requirements therefore also tend to merge

with the adequacy-of-representation re­

quirement, although the latter requirement also raises concerns about the competency of

class counsel and conflicts of interest. * * *

Respondent's complaint provided an insufficient

basis for concluding that the adjudication of his claim

of discrimination in promotion would require the

decision of any common question concerning the

failure of petitioner to hire more Mexican-Americans.

Without any specific presentation identifying the

questions of law or fact that were common to the

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(Cite as: 457 U.S. 147, 102 S.Ct. 2364)

claims of respondent and of the members of the class

he sought to represent, it was error for the District

Court to presume that respondent's claim was typical

of other claims *159 against petitioner by Mexi­

can-American employees and applicants. If one alle­

gation of specific discriminatory treatment were suf­

ficient to support an across-the-board attack, every

Title VII case would be a potential companywide class

action. We find nothing in the statute to indicate that

Congress intended to authorize such a wholesale ex­

pansion of class-action litigation. FN 15

FN15. If petitioner used a biased testing

procedure to evaluate both applicants for employment and incumbent employees, a

class action on behalf of every applicant or

employee who might have been prejudiced

by the test clearly would satisfy the com­

monality and typicality requirements of Rule

23(a). Significant proof that an employer

operated under a general policy of discrimi­

nation conceivably could justify a class of

both applicants and employees if the dis­

crimination manifested itself in hiring and

promotion practices in the same general

fashion, such as through entirely subjective

decisionmaking processes. In this regard it is

noteworthy that Title VII prohibits discrim­

inatory employment practices, not an ab­

stract policy of discrimination. The mere fact

that an aggrieved private plaintiff is a mem­

ber of an identifiable class of persons of the

same race or national origin is insufficient to

establish his standing to litigate on their be­

half all possible claims of discrimination

against a common employer.

The trial of this class action followed a predicta­

ble course. Instead of raising common questions of

law or fact, respondent's evidentiary approaches to the

individual and class claims were entirely different. He

attempted to sustain his individual claim by proving

intentional discrimination. He tried to prove the class

claims through statistical evidence of disparate im­

pact. Ironically, the District Court rejected the class

claim of promotion discrimination, which conceptu­

ally might have borne a closer typicality and com­

monality relationship with respondent's individual

claim, but sustained the class claim of hiring dis­

crimination. As the District Court's bifurcated findings

on liability demonstrate, the individual and class

claims might as well have been tried separately. It is clear that the maintenance of respondent's action as a

class action did not advance "the efficiency and

economy of litigation which is a principal purpose of

the procedure."

**2372 ill *160 We do not, of course, judge the

propriety of a class certification by hindsight. The

District Court's error in this case, and the error in­

herent in the across-the-board rule, is the failure to

evaluate carefully the legitimacy of the named plain­

tiffs plea that he is a proper class representative under

Rule 23(a). * * * Sometimes the issues are plain enough from the pleadings to determine whether the

interests of the absent parties are fairly encompassed

within the named plaintiffs claim, and sometimes it

may be necessary for the court to probe behind the

pleadings before coming to rest on the certification

question. Even after a certification order is entered, the

judge remains free to modify it in the light of subse­

quent developments in the litigation.FN 16 For such an

order, particularly during the period before any notice

is sent to members of the class, "is inherently tenta­

tive." This flexibility enhances the usefulness of the

class-action device; actual, not presumed, conform­

ance with Rule 23(a) remains, however, indispensa­

ble.

FN16. "As soon as practicable after the

commencement of an action brought as a

class action, the court shall determine by

order whether it is to be so maintained. An

order under this subdivision may be condi­

tional, and may be altered or amended before

the decision on the merits." Fed.Rule

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(Cite as: 457 U.S. 147, 102 S.Ct. 2364)

Civ.Proc. 23(c)(l ).

III

* * * The judgment of the Court of Appeals affirming

the certification order is reversed, and the case is re­

manded for further proceedings consistent with this

opinion.

It is so ordered.

[Chief Justice BURGER's opinion, concurring in part

and dissenting in part, is omitted.]

© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.

Alternate DispUte Resolution

Rule 15 RULES OF CIVIL PROCEDURE

(c) Rule 15(c)

New Jersey Civil Practice Rule 4:9-3

Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading; but the court, in addition to its power to allow amendments may, upon terms, permit the statement of a new or different claim or defense in the pleading. * * *

(d) Rule 15(d)

See New York Civil Practice Law and Rules 3025(b) as set out in connection with Federal Rule 15(a), supra.

Rule 16. Pretrial Conferences; Scheduling; Management

(a) Purposes of a Pretrial Conference. In any action, the court may order the attorneys and any unrepresented parties to appear for one or more pretrial conferences for such purposes as:

(1) expediting disposition of the action;

(2) establishing early and continuing control so that the case will not be protracted because of lack of management;

(3) discouraging wasteful pretrial activities;

( 4) improving the quality of the trial through more thorough preparation; and

(5) facilitating settlement.

(b) Scheduling.

(1) Scheduling Order. Except in categories of actions exempt­ed by local rule, the district judge-or a magistrate judge when authorized by local rule-must issue a scheduling order:

(A) after receiving the parties' report under Rule 26(D; or

(B) after consulting with the parties' attorneys and any unrepresented parties at a scheduling conference or by tele­phone, mail, or other means.

(2) Time to Issue. The judge must issue the scheduling order as soon as practicable, but in any event within the earlier of 120 days after any defendant has been served with the complaint or 90 days after any defendant has appeared.

(3) Contents ofthe Order.

(A) Required Contents. The scheduling order must limit the time to join other parties, amend the pleadings, complete discovery, and file motions.

(B) Permitted Contents. The scheduling order may:

(i) modify the timing of disclosures under Rules 26(a) and 26(e)(l);

(ii) modify the extent of discovery;

54

PLEADINGS AND MOTIONS Rule 16 (iii) provide for disclosure or discovery of electronically

stored information;

(iv) include any agreements the parties reach for as­serting claims of privilege or of protection as trial-prepara­tion material after information is produced;

(v) set dates for pretrial conferences and for trial; and

(vi) include other appropriate matters.

(4) Modifying a Schedule. A schedule may be modified only for good cause and with the judge's consent.

(c) Attendance and Matters for Consideration at a Pretrial Conference.

(1) Attendance. A represented party must authorize at least one of its attorneys to make stipulations and admissions about all matters that can reasonably be anticipated for discussion at a pretrial conference. If appropriate, the court may require that a party or its representative be present or reasonably available by other means to consider possible settlement.

(2) Matters for Consideration. At any pretrial conference, the court may consider and take appropriate action on the following matters:

(A) formulating and simplifying the issues, and eliminating frivolous claims or defenses;

(B) amending the pleadings if necessary or desirable;

(C) obtaining admissions and stipulations about facts and documents to avoid unnecessary proof, and ruling in advance on the admissibility of evidence;

(D) avoiding unnecessary proof and cumulative evidence, and limiting the use of testimony under Federal Rule of Evi­dence 702;

(E) determining the appropriateness and timing of sum­mary adjudication under Rule 56;

(F) controlling and scheduling discovery, including orders affecting disclosures and discovery under Rule 26 and Rules 29 through 37;

(G) identifying witnesses and documents, scheduling the filing and exchange of any pretrial briefs, and setting dates for further conferences and for trial;

(H) referring matters to a magistrate judge or a master;

(I) settling the case and using special procedures to assist in resolving the dispute when authorized by statute or local rule;

55

Rule 16 RULES OF CIVIL PROCEDURE

(J) determining the form and content of the pretrial order;

(K) disposing of pending motions;

(L) adopting special procedures for managing potentially difficult or protracted actions that may involve complex issues, multiple parties, difficult legal questions, or unusual proof prob­lems;

(M) ordering a separate trial under Rule 42(b) of a claim, counterclaim, crossclaim, third-party claim, or particular issue;

(N) ordering the presentation of evidence early in the trial on a manageable issue that might, on the evidence, be the basis for a judgment as a matter of law under Rule 50(a) or a judgment on partial findings under Rule 52(c);

(0) establishing a reasonable limit on the time allowed to present evidence; and

(P) facilitating in other ways the just, speedy, and inexpen­sive disposition of the action.

(d) Pretrial Orders. After any conference under this rule, the court should issue an order reciting the action taken. This order controls the course of the action unless the court modifies it.

(e) Final Pretrial Conference and Orders. The court may hold a final pretrial conference to formulate a trial plan, including a plan to facilitate the admission of evidence. The conference must be held as close to the start of trial as is reasonable, and must be attended by at least one attorney who will conduct the trial for each party and by any unrepre­sented party. The court may modify the order issued after a final pretrial conference only to prevent manifest injustice.

(f) Sanctions.

(1) In General. On motion or on its own, the court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)­(vii), if a party or its attorney:

(A) fails to appear at a scheduling or other pretrial confer­ence;

(B) is substantially unprepared to participate-or does not participate in good faith-in the conference; or

(C) fails to obey a scheduling or other pretrial order.

(2) Imposing Fees and Costs. Instead of or in addition to any other sanction, the court must order the party, its attorney, or both to pay the reasonable expenses-including attorney's fees-incurred because of any noncompliance with this rule, unless the noncompli­ance was substantially justified or other circumstances make an award of expenses unjust.

56

PLEADINGS AND MOTIONS Rule 16 Amendments to Federal Rule 16 and Comparative State Provisions

(a) Amendments in 1983 and 1993 to Federal Rule 16

The purpose of the 1983 changes was to alter the focus of pretrial conferences to encompass all aspects of case management and not merely the conduct of the trial. The most dramatic addition was the mandatory scheduling order that must be prepared even in the absence of a formal pretrial conference (unless the case is exempted by local rule).

In 1993, the rule was modified to broaden the scope of what may be considered at pretrial conferences. What is now paragraph (c)(2)(E) was added to allow parties to discuss at pretrial conferences the possibility of summary judg­ment under Rule 56. Paragraph (c)(2)(I) was revised to refer to alternative dispute resolution techniques, especially those authorized by local rule or statute.

(b) Comparative State Provisions

New Jersey Civil Practice Rule 4:25-1

(a) Actions to Be Pretried. Pretrial conferences in contested actions may be held in the discretion of the court either on its own motion or upon a party's written request. The request of a party for a pretrial conference shall include a statement of the facts and reasons supporting the request. * * *

(b) Pretrial Order. Immediately upon the conclusion of the conference, the court shall enter a pretrial order to be signed forthwith by the attorneys, which shall recite specifically:

(1) A concise descriptive statement of the nature of the action.

(2) The admissions or stipulations of the parties with respect to the cause of action pleaded by plaintiff or defendant-counterclaimant.

(3) The factual and legal contentions of the plaintiff as to the liability of the defendant.

(4) The factual and legal contentions of the defendant as to non-liability and affirmative defenses.

(5) All claims as to damages and the extent of injury, and admissions or stipulations with respect thereto, and this shall limit the claims thereto at the trial. * * *

(6) Any amendments to the pleadings made at the conference* * *.

(7) A specification of the issues to be determined at the trial including all special evidence problems to be determined at trial * * *.

(8) A specification of the legal issues raised by the pleadings which are abandoned or otherwise disposed of. * * *

(9) A list of the exhibits marked in evidence by consent.

(10) Any limitation on the number of expert witnesses.

(11) Any direction with respect to the filing of briefs. * * * (12) In special circumstances· the order of opening and closing to the jury at

the trial.

(13) Any other matters which have been agreed upon in order to expedite the disposition of the case.

(14) In the event that a particular member or associate of a firm is to try a case, or if outside trial counsel is to try the case, the name must be specifically set forth. No change in such designated trial counsel shall be made without leave of court if such change will interfere with the trial schedule. * * *

(15) The estimated length of the trial.

(16) When the case shall be placed on the weekly call.

57

Rule 16 RULES OF CIVIL PROCEDURE

When entered, the pretrial order becomes part of the record, supersedes the pleadings where inconsistent therewith, and controls the subsequent course of action unless modified at or before the trial or pursuant to R. 4:9-2 to prevent manifest injustice. The matter of settlement may be discussed at the sidebar, but it shall not be mentioned in the order.

* * *

TITLE IV. PARTIES

Rule 17. Plaintiff and Defendant; Capacity; Public Officers

(a) Real Party in Interest.

(1) Designation in General. An action must be prosecuted in the name of the real party in interest. The following may sue in their own names without joining the person for whose benefit the action is brought:

(A) an executor;

(B) an administrator;

(C) a guardian;

(D) a bailee;

(E) a trustee of an express trust;

(F) a party with whom or in whose name a contract has been made for another's benefit; and

(G) a party authorized by statute.

(2) Action in the Name of the United States for Another's Use or Benefit. When a federal statute so provides, an action for another's use or benefit must be brought in the name of the United States.

(3) Joinder of the Real Party in Interest. The court may not dismiss an action for failure to prosecute in the name of the real party in interest until, after an objection, a reasonable time has been allowed for the real party in interest to ratify, join, or be substituted into the action. After ratification, joinder, or substitution, the action proceeds as if it had been originally commenced by the real party in interest.

(b) Capacity to Sue or Be Sued. Capacity to sue or be sued is determined as follows:

(1) for an individual who is not acting in a representative capacity, by the law of the individual's domicile;

(2) for a corporation by the law under which it was organized; and

(3) for all other parties by the law of the state where the court is located, except that:

58

William G. Young· District Judge

Dear Litigant:

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

BOSTON, 02109

Date:. __ -'---

Your case has been assigned to this session of the U.S. District Court for all pretrial proceedings and trial I assure you that our goal is to give your case a fair, impartial; and just trial as soon as possible. To that end, I have today met

688 6 • Questioning and Taming the Current System

with the attorneys and placed your case on the running trial list in this session as of ____ _

As you may appreciate, full-scale ~ls are expensive, and the time· spenL awaiting trial is frequently lengthy. Therefore, I want you to be aware of various other programs we offer that may possibly resolve your case to your satisfaction with less expense and delay. Each of these programs is voluntary, and all parties to the lawsuit must agree before implementing any such program in your case. I list these programs in the order that they most resemble a trial in this Court.

1. Trial before a Magistrate Judge: You may agree to try your case, with or without a jury, before a U.S. Magistrate Judge. A Magistrate Judge is a judicial officer appointed by the judges of this Court for this purpose. The trial takes place in this courthouse and, if a jury has been claimed, before a federal jury. The advantage of this program is its speed-cases can usually be reached for trial before a Magistrate Judge within a few months. Moreover, the parties can usually agree with the Magistrate Judge upon a specific day to begin the trial. There is no charge for this service.

2. Trial before a retired Superior Court Justice: You may agree to try your case to a federaljury before a distinguished retired justice of the Massachusetts Superior Court. The Superior Court is "the great trial court of the Common­wealth," and its justices are experts on jury trials and issues of Massachusetts law. The advantages are the same as for trials before Magistrate Judges-a speedy hearing antl definite trial date. The cost of this program to you will be ~~~~~~~b~~-~~~~~~~ will take place" in this courthouse before a federal jury.

3. Arbitration: You may agree to resolve your case by submitting it to a skilled neutral arbitrator or groUp of arbitrators. You will have a chance to par­ticipate in the choice of arbitrators. Advantages of this program are that prompt arbitration hearings may be scheduled and the arbitrators may be technically skilled in the issues~aised in this lawsuit. You and the other parties will share the costs of the arbitrators and the administration of the arbitration program.

4. Summary jury trial: You may agree to a summary jury trial. This is an advisory one-day proceeding before a federal jury. Each party will have the chance. to make a brief presentation of its position, and, properly charged as to the law, the jury will render a nonbinding advisory verdict. I will meet with the attorneys that same day to discuss whether a settlement of the case is · possible and proper. It may be helpful to you and the other parties to obtain the views of the summary jury in order to better evaluate your position. There is no cost for this program.

5. Mediation: You may agree to voluntary mediation. If you agree, I will appoint a skilled, neutral, and experienced mediator promptly to explore with all parties and their attorneys whether a settlement ofthis case may be reached that will satisfy your basic concerns. Unlike the previous options, mediation never imposes a result on the parties. Rather, it seeks to reach agreement. Prompt mediation may minimize your overall litigation costs.

6. Early TU!utralevaluation: You may agree to have your case evaluated by a neutral attorney skilled in the issues rai.sed in this case. This may assist you in evaluating your position and may aid you in deciding whether to settle, press on to trial, or avail yourself of one or more of these other options.

. Alternative Dispute Resolution 589

Your attorney is familiar with each of these options and can advise 'YOU in concerning what advantages they may offer you. If the parties can agree,

may pursue variations on these options with·the support of this Court. ·Should you wish further information on any of these points or should all

agree to pursue 'any one or a variant of any of them, your· attorney feel free to consult with Courtroom Deputy Clerk Kate Myrick, Esq.,

Docket Clerk Elizabeth Smith.

B. Alternati-v:e Dispute Resolution 577

B. ALTERNATIVE DISPUTE RESOLUTION

Critics of the ad\Tersary system and the burgeoning workload of the courts often advocate. alternative procedures for resolving human problems with greater use of negotiation, compromise, and direct involvement of the parties in pr()blem solving. The adversary system tends to translate tensions and con­flicts into a: dualist pattern ofwin-or-lose and aU-or-nothing frameworks; it also tends to emphasize the sole goal of individual gain fo:r: each party. Professor Carrie Menkel-Meadow contrasts the adversary framework with a problem­solving focus. "'nstead of'maximizing individual gain,' we can be-focused on 'solving the problem: 'creating the transaction,' 'planning for the future,' 'improving relationships,' and perhaps even seeking ~oint gain' and 'achieving justice.' Thus, a good legal problem solver needs a greater repertoire of intellec­tual choices or 'tropes' as weli as a much broader and deeper set of behaviors." Carrie J. Menkel-Meadow, When Winning Isn't Everything: The Lawyer ,as Problem Solver, 28 Hofstra L. Rev. 905, 910 (2000). A broader repertoire of options should place litigation within a larger toolbox among a variety -of other problem-solving and dispute-resolving techniques. This section: describes varying techniques, identifies contemporary debates and issues arising with them, and points to resources for learning more.

Alternatives to iidjudication may also improve party and public satisfaction and voluntary compliance with resolutions. The two most basic alternatives to litigation, of course, are "lumping it," in which an injured or unhappy .party decides to live with the harm or dissatisfaction without pursuing a complaint or seeking redress, and negotiation, used by a dissatisfied or harmed party to pursue an informal accommodation or settlement by directly discussing it with the other party. Negotiating skills, of course, are also useful in preventing conflicts and structuring relationships and deals in business, nonprofit organ­izations, and family relationships. Yet simple negotiation between the parties or even between their lawyers may not be sufficient where there is little trust, sh~ experience, or civility. Even when they prefer informal nonjudicial approaches, parties and lawyers increasingly turn· to third parties to help resolve their disputes because they lack trust, experience, or mores that would permit them to reach a satisfactory result without help.

'"Alternative Dispute Resolution" (ADR) is a general term referring to alter­natives to the formal _adversarial process that offer more guidance and support than simple negotiation between the parties or their representatives. ADR supporters champion its potential for circumventing the cost and delay of lit­igation and for generating flexible and creative solutions to djsputes. Its critics charge_.., that its methods expose parties to the results of unequal bargaining power, secrecy, and compromise of rights and thus undermine precisely what a court could enforce. _

More specifically, two basic alternatives are: Mediation: A neutral actor facilitates an agreement that is negotiated

- between the disputants. Mediation can be especially constructive· where the disputing parties have ongoing relationships, as with divorcing parents facing issues of child custody and·visitation. Observers identify two types of mediators: facilitative imd evaluative, although in neither instance does the

· mediator make a decision. A facilitative mediator works instead to improve

. ..,

-

·.i j I

578 6 • Questioning and Taming the Current System

communication, elicit statements and mutual understandings of each side's underlying needs and goals, and encourage parties to generate options in order to help them find a solution they can jointly embrace. Evaluative media­tors, in contrast, elicit strengths and weaknesses on each side of the dispute and then offer estimates of what would happen if the dispute ends up before a judge in terms of legal or factual determinations or economic valuations of disputed issues. See Leonard L. Riskin, Understanding Mediators' Orientations, Strate­gies, and Techniques: A Grid for the Perplexed, 1 Harv. Negot. L. Rev. 7 {1996). A further distinction compares the hope that mediation will help transform individuals, communities, and institutions with the pragmatic use of mediation to help existing relationships and systems work better. See Joseph Folger and Robert Baruch Bush, Ideology, Orientation to Conflict, and Mediation Dis­course, in New Directions in Mediation 3-25 (Joseph Folger et al. eds., 1994); see also Deborah Kolb and Associates, When Talk Works: Profiles of Mediators 466-468 {1994).

Arbitration: The disputing parties agree upon the selection of a neutral and skilled decision-maker who is entrusted with making a final, binding, and non­appealable judgment based on presentations by the parties. Although in the past, the scope of issues open to arbitration was confined to those over which the parties could contract, increasingly the scope of arbitration includes statutory claims if included within an agreement to submit disputes to arbitration. The procedure can be quite informal or instead it can mirror courtroom practices, including rules governing evidence and motions. The arbitrator's ability to fashion remedies is broad, given historic limitations on judicial review of arbi­tration, although courts may be involved in enforcing arbitrated solutions -as the product of enforceable contractual agreements-or even in reviewing arbi­trations when such review is itself agreed to by the parties. See Karen A. Sasser, Comment, Freedom to Contract for Expanded Judicial Review in Arbitration Agreements, 31 Cumb. L. Rev. 337 {2001). With historic roots in resolving dis­putes between organized labor and management, arbitration has spread in recent years to disputes between non-unionized employees and their employ­ers, consumers and retailers, physicians and patients, physicians and health care provider organizations, and international commercial transactions. A notable difference between arbitration and trials is the absence of a right to a jury in arbitration. Ever since Congress adopted the Federal Arbitration Act in 1925, courts have enforced the agreement to arbitrate as well as the results of arbitration.

Professor Jeffrey W. Stempel, in The Inevitability of the Eclectic: Liberating ADR From Ideology, 2000 J. Disp. Resol. 247, compares mediation and arbiira­tion this way:

Mediation was not established through years of legislative lawmaking and case­by'i:ase adjudication as was arbitration. Rather, the growth and popularity of mediation has been more organic. Mediation has become prevalent in the past two decades through either voluntary decisions to mediate or court-prompted mandatory or suggested mediation. In a sense, mediation bas grown in a less litigation-driven manner both because it is different than arbitration and because it has benefited from riding in the wake of ADR acceptance established by arbi­tration proponents.

B.- Alternative Dispute Resolution 579

·. · ··'Structurally, ofcourse, mediation and arbitration are quite different. Arbitra­tion resembles leBS formalized litigation. In arbitration, there is·advocacy, argu­ment and decision or litigation, but relaxed rules of evidence, procedure, and appeal. Mediation, by design, seeks less 8l'gUJD.ent and more reconciliation than decision.~ a result, segments of the ADR community trained in arbitration but moving intO mediation are likely to have greater toierance for evaluation, perhaps even a preference for it. The segment of the mediation community. that did not tr~vel thrOUgh the lawyering or arbitration processes lacks this legal background and kinship With acijudication .... In addition, many proponents of ADR with a legal background may have specifically moved into mediation out of dissatisfaction with the.contentiousnesli ·oflaw and its adjudicative imperative. ThUs, many of the lawyer mediators will resist evaluation in mediation not only because of a view as to what constitutes the essence of mediation but also because they have found evaluation wanting in litigation or arbitration.

As advocated by ADR visionaries, such as Frank Sander, ma.D.y courts have folded mediation, arbitration, settlement conferences, and other alternative dispute resolution programs within their buildings and programs. Congress adopted the federal Alternative Dispute Resolution Act of 1998, which requires each· federal district court to adopt a dispute resolution program and many states have incorporated mediation and other ADR techniques within their eourt systems. The conjunction· of ADR and courts has produced institutional innovation!!, such as the summary jury trial, invented by Judge Thomas Lam­bros. The .summazy jury trial iS a court-initiated and supervised voluntary and nonbinding settlement process intended.to offer each party a chance to present their factual case before a jury. The jury then reports its reaction to the conflicting evid.;nce and thereby offers the settlement process outside informa­tion about the weaknesses in·each party's case. See Thomas D. Lambros, The Summary Jury Trial: An Effective Aid to Settlement, 77 Judicature 6 (1993). · Other innovations include the case-screening conference, designed to elicit facts and details surrounding cases in order to match the parties with both a particular dispute process and a specific neutral third-party to assist in the resolution. See Erika B. Gray, One Approach to Diagnostic Assessment of Civil Cases: The Individual Case-&reening Conference, The COurt Manager 21 (Slimmer 1992). '

Once incorporated into the judicial process, however, ADR may decline in quality or even depart from its own preconditions. Nancy Welsh warns that civil nonfamily ''mediation" in courts often devolves into traditional settlement con­ferences, dominated by lawyers, and compromised monetary settlements. As a result, it fails to empower parties, promote mutual communication and understanding, or develop creative solutions. Nancy A Welsh, Making Deals in Court-Connected Mediation: Whafs.Justice Got to Do With It?, 79 Wash. U. L. Q. 787 (2001). Not only does this development disappoint those who had high hopes for mediation, it also jeopardizes the perceived fairness of the court-spon­sored process, which has historically rested on procedures allowing,parties to tell their stories to a neutral and even-handed third party.Id., at 820-822. If the parties develop strong relationships with their lawyers and are able to observe their lawyers' presentations, Welsh suggests that court-connected ADR can comport with procedural justice. But lawyers who do not understand or do not appropriately tell their clients' stories and mediators who exclude the

580 6 • Questioning and Taming the Current System

parties from discussions or pressure parties into settlements risk undermining procedural justice. !d. at 857. ·

When should ADR be pursued, and of what sort-a new innovation, arbi­tration or me.diation, and if mediation, facilitative or evaluative? In this con­text, consider how a range of scholars and practitioners describe the strengths and limitations of the alternatives in comparison with litigation and with one another-in theory and in practice. Note also that the decision to pursue ADR can be made at varying stages of the dispute. Individuals can choose ADR once the dispute arises, or the court can recommend ADR or make ADR a precondition for filing of the complaint. Also, private parties, long before any dispute arises, can specify in contractual agreements to submit grievances or disputes to mediation, arbitration, or another procedural alternative.

1. What Advocates Say About ADR

a. Unlike the tension, hairsplitting, and hostility promoted by the adversary system, mediation and arbitration can build trust between the parties. As an initial matter, the parties negotiate common ground rules to mediate or agree upon a shared decision maker to arbitrate-and thereby start the process of resolving their dispute with agreement rather than further conflict. See Jethro K. Lieberman and James F. Henry, Lessons from the Alternative Dispute Resolution Movement, 53 Chi. L. Rev. 424 (1986).

b. The results of ADR are superior to the results of adjudication because they require less time and expense·, generate flexibility, and allow people to deal with the emotional as well as financial features of disputes. ADR also permits creative solutions such as renegotiating an entire contract rather than pursu­ing a breach of contract and antitrust claims. AnADR solution in a child custody dispute can arrange a weekly parental visitation schedule to accommodate the desires of the two children to spend some time apart and some time together, as well as with the divorced parents, rather than a rigid schedule moving the children together to one parent for the week and the other for the weekend. See Frank E. A Sander, Dispute Resolution Within and Outside the Courts (National Association of A~meys General and ABA 1990); The Paths of Civil Litigation, 113 Harv. L. Rev. 1851, 1852-1853 (2000); Jonathan R. Harkavy, Privatizing Workplace Justice: The Advent of Mediation in Resolv­ing Sexual Harassment Disputes, 34 Wake Forest L. Rev. 135 (1999).

c. Use of ADR promotes party control, self-determination, and satisfac­tion-even across cultural differences-while lowering court caseloads and expenses. Leonard Riskin and James E. Westbrook, Dispute Resolution and Lawyers 5 (2d ed. 1997); Cynthia A Savage, Culture and Mediation: A Red Herring, 5 Am. U. J. Gender & Law 269 (1996).

2. What Critics Say About ADR

a. Because of its greater informality, ADR does not guard against the imbal­. ances in power between disputing parties and instead allows more powerful

parties to take advantage ofless powerful parties. See Richard Delgado et al., '·

B. Alternative Dispute Resolution 581

Fairness and Formality: Minimizing the Risk of Prejudice in Alternative Dis­pute Resolution, 1985 Wis. L. Rev. 1359 (1985).

·b. By focusing on individuals and. typically operating in sessi~ closed to public. view, ADR veils the public implications of private. settlements and ·derails the collective action that litigation can help mobiliZe.· Carrie Menkel­Meadow, Pursuing Settlement_in an Adversary Culture: A Tale of Innovation Co-opted or "The Law of .ADR," 19 Fla. St.·u. L. Rev. 1 (1991).

c. ADR undermines or waters down rights and justice by generating private compromises acceded to by parties lacking full autonomy or control, which creates speci~ dangers to constitutional rights, civil rights, and environmental law. Owen M. Fiss, Against Settlement, 93 Yale L.J. 1073 (1984).

d. In practice, ADR.often does not save costs or time especially .when the parties continue to retain separate legal representation and when the. process is prolonged. Lisa Bernstein, Understanding the Limits of Court-Connected ADR A Critique of Federal Court-Annexed Arbitration Programs, 141 U. Pa. L. Rev. 2169 (1993); see James S. Kak.alik et al.,An Evaluation of Mediation and Early Evaktation Under the Civil Justice Reform Act (1996). But see Michael Heise, Justice Delayed?: An Empirical Analysis of Civil Case Disposition Time, 50 Case W. Res. L. Rev. 813 (2000) for more positive results.

- e. In practice, rather than empowering parties, ADR and particularly medi­ation-programs within. courts tend to pressure parties.into accepting settle­ments that reflect the agendas of the mediator, or the party with more political or economic power. Delgado, supra; Laura Nader, Disputing Without t/&e Force of Law, 88 Yale L.J. 998 (1979).

The arguments in favor of ADR have contributed to a massive increase during the 1980s and 1990s in the use of mediation, arbitration, and other variations both by private initiative and through court-connected programs. For. example, in 1991, only a few federal courts had court-based mediation programs; by 1996, all federal courts offered access to alternative dispute res­olution, with mediation the preferred alternative. A preliminary study of forty­nine U.S. district courts found that court programs considered 24,885 for some form of ADR and, of those, referred 15,556 to mediation. In Resolving Disputes; Mediation Most Favored Option in District- Courts, 88 The Third Branch (Admin. Office of the U.S. Courts, Washington, D.C.), July 2006, available at http://www.uscourls.gove/ttb/07-06/mediation/index.html; .Yet the argu­ments againstADR reflect a more recent backlash that has triggered the devel­opment of due process protOc:ols within the American Arbitration Association's own guidelines for employment and consumer disputes. Legislative reforms have also put a brake on court-mandated ADR.

Managerial Judging

592 6 • Questioning and Taming the Current System

many respects defends Judge Jack Weinstein's supervision of a settlement of mass tort claims in litigation arising from armed services exposure to Agent Orange during the Vietnam War.

The section also offers excerpts from a recent judicial opinion issued as part · of a managerial approach to a body of numerous claims, and a related practice

exercise. You will want to reread Fed. R. Civ. P. 16 as you proceed through this section .

• WILLIAM W. SCHWARZER, MANAGING CIVIL LITIGATION: THE TRIAL JUDGE'S ROLE 61 Judicature 400 (1978)

My concern here is less with the judge's role at trial than before trial. Most civil cases are terminated before trial: in the federal system, less than 10 percent of the cases filed go to trial. Most judicial and private effort is expended on litigation that never reaches trial, through discovery, motions and other formal and informal interlocutory proceedings. It is a frequent complaint· that costs incurred even before trial make litigation uneconomical. In addition, what is done in proceedings before trial tends to determine the scope and dimensions of the trial itself. The role of the judge in the pretrial stage of lit­igation is therefore of sufficient importance to warrant consideration.

Because of the great impact of pretrial activitY and proceedings on the magnitude of the burden imposed by litigation on the courts and parties, and because there is room for improvement in the disposition oflitigation, whether or not it is eventually tried, I urge that judges intervene in civil litigation and take an appropriately active part in its management from the beginning. If that role is discharged in a fair, informed and sensitive manner, it should aid greatly in achieving these objectives:

1. Define the issues to be litigated and limit pretrial activity to relevant matters;

2. Control pretrial discovery and other activity to avoid unnecessary expense and burden;

3. Arrive at a settlement of the controversy as early as possible or attempt. to discover methods for resolving it as expeditiously and economically aH possible; and

4. Insure that any trial will be well prepared and limited strictly to matten~ that cannot be otherwise disposed of.

JUDICIAL MANAGEMENT POWER

No reform of the judicial system is needed to enable the trialjudge to perform these kinds of litigation management functions on his own motion, as many judges already do. In the federal system, the Federal Rules of Civil Procedure, particularly Rule 16, give the judge sufficient authority and discretion to inter­vene sua sponte in pretrial proceedings. Moreover, the U.S. Supreme Court haH recognized "the power inherent in every court to control the disposition of tho

. = ,J.

C. Managerial Judging and the Bole of Courts 593

causes on its docket with economy of time and effort for itself, for counsel and for litigants."

Neither the court's inherent management power nor its power under Rule 16 is unlimited. Parties cannot be compelled to lingate the case according to the. court's discretion. They can, however, be compelled to comply with pretrial p~cedures reasonably necessary to implement Rule 1 of the Federal Rules ·of Civil Procedure to assure the 'just, speedy and inexpensive determination of every action." While the coUI"t!! appear not to be wholly in agreement on wher~­to draw the line, judges clearly have the power to require that cases be fully and adequately prepared before they go to trial and that pretrial activity be con-ducted economically and efficiently. ·

Although adequate power exists for judicial intervention, the concept of judicial intervention runs counter to accepted notions. The first of these ·' •.. is the traditional conception of the judge's role in the adversary process: that the judge is supposed to be passive· and let lawyers litigate without interference except when one side or the other calls upon him. .As Justice David W. Peck has put it, la-wyers and judges "are apt to think. of the.inselves as representing

· opposite poles and exercising divergent functions. The lawyer partisan, the judge reflective."

Judge Frankel, in his recent Cardozo lecture, "The Search for Truth-An Umpireal View," argued that

I

(o]ur system does not allow much room for effective or just intervention by the trial . judge m the adversary fight about the facts. The judge views the case from a peak of

Ol:fmpian ignorance. His intrusion will in too many cases result from partial or skewed insights ... :• -

Marvin Frankel, The Search for Truth-An Umpireal View, 123 U. Pa. L. Rev. 1031, 1042 (1975). Later in the lecture, he stressed that

the ignorance and unpreparedness of the judge are intended axiOms of the sys­tem .• · .. The judge is not to have investigated or explored the e'Vidence before trial ... without an investigative file, the American trial judge iS• a blind and blundering intruder, acting in spasms as sudden flashes of seeming light may lead or mislead him at odd times.

Jd. Though each of these observers was discussing the judge's role at trial, · rather than before trial, they reflect an attitude to which pretrial intervention

would be foreign. It somehow equates ignorance with impartiality, and it fails to . take into account the extent to which even the passive judge must in the normal , course intervene in the fight about the facts and make rWings regardless of any. ti7T•n.,.,"n''" or la~k of preparation. In every interlocutory dispute about disoov­

amendments, joinder, class action determination and pretrial relief, the must make decisions which (1) are made without the benefit of a full and

"...!?JlnpJ.ete record, and (2) have a direct impact on the fight about facts by aiding and hampering the other. Similarly, rulings at the trial on the admi.s­

•. a .......... ,.v of evidence and the scope of examination must be based on the judge's 1i:wrre11t appraisal of the facts of .the case and his judgment concerning the

the trial should follow.

_,.._i

., I !

594 6 • Questioning and Taming the Current System

THE NEED FOR INTERVENTION

The judge is, of course, not to become a third party in a general search for the truth. But ignorance and lack of preparation do not insulate him from having direct control over how coimsel conduct the litigation, whether he acts sua sponte or only when called upon by the parties. His rulings through the litigation, even procedural ones, implicate the merits and affect the out­come, yet must be made on the strength of whatever k:D.owledge of the case the judge is able to acquire along the way. In any case; therefore, the cause of justice would seem to be better served by an informed and prepared judge capable of making sound rulings than by Judge Frankel's model of "the ignorant arid unprepared judge [who) is, ideally, the properly bland figurehead in the adversary scheme of things.".,,.

The reform of pretrial discovery under the Federal Rules of Civil Proced.nre, it is true, was intended to minimize judicial intervention. But, that philosophy, though still widely held, is giving way to a growing recognition that it imposes unacceptable costs. For complex litigation, for example, courts have adopted procedures under the Manual for Complex Litigation premised on active judi­cial management of the litigation frOm the outset. The time has come to consider a similar approach for civil litigation generally.

The present crisis might well be relieved by revised or new rules of proce­du.re in such areas as discovery and class actions. But the utility of rules is directly proportional to the wisdom and firmness with which they are admin­istered. Because each case is unique in its facts, personalities and needs, general rules do not obviate the need for individualized judicial management.

No TIIBEAT TO FAIBNESS

It may be argued that intervention sua sponte jeopardizes the judge's appearance of impartialitY. Inasmuch as action resulting from intervention may be interpreted as favoring one party at the expense of the other, the fact that the action was taken on the initiative of the judge, not in response to one party's application, may give rise to suspicions of bias. The argument lacks force, however, where the judge acts in a reasoned and fair manner after having heard the parties and having considered their views.

Moreover, justice is not better served by the passive judge who by inaction permits litigation to blunder along its eostly way toward exhaustion of the liti­gants, when it might have long been settled or at least controlled to everyone's benefit. One may fairly ask whether the parties left to themselves can always be depended on to prosecute litigation diligently, economically and in good faith; to avoid wars of attrition and harassment; obstruction and delay; and to exclude extraneous personal considerations from the conduct of the litigation .• '"" ~

Judges must appear, as well as be, fair in their conduct, but they ought not to be hobbled by the fear that entirely proper actions might arouse suspicion. ...

Tm: EFFICIENCY ISSUE

Finally, judicial intervention is met by contradictory arguments from opposing camps. First, some criticize preoccupation with efficiency, placing

C. Managerial-Judging and the Role of Co~--- 595

quantity. above quality in dispensing justice. Implying judges are becoming subservient to computel'S and productivity statistics, they argue "slow justice is always preferable to speedy injustice."· -.

That argument, however, does not undercut the case for judicial manage­ment of litigation: when the purpose is to achieve the optimum allocation of reB()urces, judicial and private. H by judicial intervention, discovery burdens are lightened, the interests of justice are served for litigants directly involved and for others,whose cases are pending.

· Then there are those who argue that judicial intervention is an inefficient use. of the judge's limited time; and that judges should "m:i.nimize •.. [their] investment of time through, the early stages of a case." Statistics have been offered to prove that pretrial conferences resulted in a net ·-loss of judicial time, but many judges disagree. An bout or less spent reviewing the case file and meeting with lawyers may often produce substantial time·!Javings by, for example, obviating future discovery disputes and motions, disclosing areas of factual or legal agreement, eliprinating issues from . trial, bringing about an earlier settlement, or reducing the time required for trial.

AB we will discuss later; the controversy is likely to assume more modest dimensions and more manageable shape after. the judge, with his knowledge and experience, has discussed the case with the parties and directs them to talk. t9 each other. And as cases are brought to a more rapid conclusion than under the traditional "laissez~faire" system, the quality of justice improves because judges will have more time to devote to the cases remaining on their docket. It seems, therefore, that the busier the judge and the heavier his case load, the more urgent the need for intervention early in civil' cases, especially'·when calendars are burdened with criminal cases entitled to priority.... .

· The time .has come to discard the stereotype of "the ignorant and unpre­pared judge [asHhe properly bland figurehead in the adversary scheme of things," the fear that the interests of justice will be compromised by judicial intervention, and the assumption that judges are too busy to use their time·· wisely. It is time 'to clear the way for active judicial participation in the man.,. agement of civil litigation.

,, ' TB:E PRoCESS OF INTERVENTION

The purpose of judicial intervention iS .to promote the 'just,. speedy, and inexpensive determination .to every action." It contemplates that the judge,· having familiarized himself with the file and the controlling law and discussed tb.e case .informally with counsel, will then supply the appropriate degree of

.. gUidance based on his judgment and experience. · .-:· ·. Probably the most effective setting is an informal conference in chambers

with both counsel and, where appropriate, the clients. The formality of the rourtroom, with its .trappings of adversary confrontation, hardly promotes

· the reasoned dialogue, flexibility and accommodation to which the judge's iri.ter-vpntion should lead: ' . ::

· ,,. · Discovery disputes, for example, generally. are more readily and construe~ · · iively resolved by in-chambers discussion moderated by the judge than by f~rmal motion. Similarly, a determination of whether or not a particular

· ~sue is in dispute and requires trial may be better made in chambers.

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Settlement conferences certainly belong in chambers, not in the courtroom. And settlement negotiations are often the next logical step after informal discussion has revealed that the differences between the parties are not as great as con­ventional litigation posturing had indicated.

As early in the litigation as possible, the judge should urge counsel to define the factual and legal issues, to develop an appropriate discovery program, and to lay out a schedule for motions, pretrial and trial. Working with the judge on these matters, counsel are likely to be more reasonable than •if left to them­selves. The mere expectation of intervention-the knowledge that the judge is watching or at least available to intervene-is likely to moderate the litigation tactics of the parties, minimizing the need for actual intervention.

Defining and specifying issues at an early conference between court and counsel is of great importance. Rule 8 of the Federal Rules of Civil Procedure requires that the complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Pleadings rarely meet that test. A conference will help disclose just what claim plaintiff asserts to obtain relief and what is in issue. This will narrow the scope of the controversy and focus discovery·on essentials. It may reveal areas of agreement and issues that can be disposed of by motion in advance of trial; the judge may call for the filing of motions which appear to him to have possible merit and which a party may have overlooked. It may also indicate that motions contemplated by a party would be futile, thus saving time and expense for everyone .••..

THE JUDGE'S AppROACH

By participating in a settlement conference, the judge must not, and need not, create doubts in the minds of parties about their ability to obtain a fair trial. He may well determine that a settlement conference should be held before another judge who will not try the case or, if he himself has participated in discussions, that another judge should try the case. But a judge need not jeop­ardize the appearance of impartiality ifhe simply suggests to the parties how an objective observer might react to some of the evidence and contentions of the parties.

Judicial intervention to promote the settlement of cases should be an exercise in tact and understanding, not coercion. The judge who can listen with a third ear may well receive subliminal messages pointing the way to settlement. And having won the confidence and respect of the parties, a sympathetic and knowledgeable judge will be in a better position to discuss the strengths and weaknesses of the case with each side, perhaps separately, to persuade them ofthe benefits of settlement and to suggest means to narrow differences. Once the conference procedure has become known to the bar, more­over, counsel, aware of what is expected, will tend to begin negotiations on their own sooner and more seriously.

The passive judge who, conforming to the traditional role model, passes up the opportunity to serve as a catalyst for settlement, will probably try many cases that could have been settled and, in doing so, will render no particular benefit to the administration of justice.

If the case must go to trial, judicial intervention can help assure that it has been thoroughly prepared. Merely holding a pretrial conference, however,

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C. Managerial Judging and the Role of Courts 397

accomplishes little. The benefits of pretrial are directly proportional to the amount of effort invested by court and counsel.

At the pretrial conference, the judge, having prepared himself by review of t:he file, should require each side to specify the disputed legal and factual issues, to identify the proposed witnesses in the order they will appear, to summarize each. witness's testimony, and to identify and exchange each proposed exhibit and state its foundation. This process will produce many, sometimes surprising benefits:

1. It will expose the unprepared lawyer and prevent the wasteful charades that pass for trials when lawyers are unprepared;

2. It will enable the judge to spot undisputed issues (which can be disposed of by stipulation) and ·redundant or unnecessary evidence;

8. It will disclose evidence problems which can be resolved in advance, rather than in time-consuming and disruptive side-bar conferences at trial; .

4. It will permit resolution of foundation and authenticity issues concerning · exhibits, further saving trial time; and

5. It may indicate the possibilitY of deciding some issues on motion.

Intervention at this point means that no case goes to trial until the shape and­content of the trial have been thoroughly discussed by court and counsel. Experience has shown that the trial time saved as a result of.thorough pretrial far exceeds the time required for pretrial. Pretrial should, however, be tailored to the needs of the particular case to spare the parties the expense and burden of complying with boilerplate pretrial orders that impose requirements dispropor­tionate to the case.

Finally, the education the judge receives in the process will enable him to try the case in more informed and effective fashion, perhaps even reducing risk of reversible error ..•.

• dUDITH RESNIK, MANAGERW.. dUDGES AND COURT DELAY: THE UNPROVEN ASSUMPTIONS 28 Judge's J, 8 (1994)

In growing numbers, federal judges are adopting an increasingly manage­rial stance. Judges not only adjudicate the merits of issues presented to them by litigants but also meet with parties in chambers to encourage settlement of disputes and to supervise case preparation. As managers, judges learn about cases much earlier than they have in the past, and they negotiate with parties about the course, timing, and scope of pretrial activities.

When acting as pretrial managers,judges typically initiate contact with the parties to a lawsuit. In federal courts, under ~e new amendments to Rule 16 of the Federal Rules of Civil Procedure, within 120 days of the filing of a com­plaint, judges are obliged to issue scheduling orders, detailing the timing for pretrial motions, amendment of pleadings, and discovery. Nearly all cases receive pretrial attention under Rule 16, and ·some judges have already adopted the supervisory stance contemplated by the recent amendments.

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598 6 • Questioning and Taming the Current System

Managerial meetings are usually informal and contrast sharply with the highly stylized structure of the courtroom. Pretrial conferences often occur in chambers; the participants may sit around tables, and the judge may wear business dress. The informal judge-litigant contact provides judges with infor­mation beyond that traditionally within their ken. Conference topics . are wide-ranging, the judges' concerns broad. The supposedly rigid structure of evidentiary rules, designed to insulate decision-makers from extraneous or impermissible information, is not relevant to case management. Managerial judges are not silent auditors of retrospective events told by witnesses; judges instead become part of the tales.

Pretrial supenision is also relatively private .... Many judges conduct pre­trials in chambers; generally, neither court reporters nor the public attend. Finally, the decisions reached at pretrial conferences are rarely reviewable until after (and if) a final judgment on the merits is rendered.

Federal judges' new managerial role has emerged for several reasons. The creation in 1938 of pretrial discovery rights generated some disputes that parties brought to court; trial judges undertook the task of resolving discovery disputes and, in the process, became mediators and negotiators. Once involved in pretrial discovery, many judges became convinced that their presence at other points in lawsuits' development would be beneficial; supervision of dis­covery became a conduit for judicial control over all phases oflitigation and thus infused lawsuits with.the continual presence ofthejudge-overseer.

In part because of their new oversight role, and in part because of increas­ing caseloads, many judges became concerned about the volume of their work. To reduce the pressure, judges turned to efficiency experts, who suggested judicial management as an important technique of calendar control. Under the experts' guidance, judges have increasing]y experimented with schemes for speeding the resolution of cases and for persuading litigants whenever pos­sible to settle rather than try cases. During the past decade, enthusiasm for the managerial movement has become widespread. What began as an experiment

. has become obligatory in virtually all cases~ federal courts and is increasingly common in state courts as well.

In the rush to conquer the mountain of work, few have considered whether reliance upon trial judges for infonnaldispute resolution and for case manage­ment is a positive step, and whether judicial management can accomplish the many goals set for it. Little empirical evidence exists to support the claim that judicial management works-either to settle cases or to provide cheaper, quicker, or fairer dispositions.

Proponents of judicial management have also failed to consider the systemic effects of the shi.fl; in the judicial role. Management is a new form. of judicial activism, a behavior that usually attracts substantial criticism. Judicial man­agement may be teaching judges to value their statistics, such as the number of case dispositions, more than they value the quality of those dispositions. Further, because managerial judging is less visible than traditional adjudication and is usually unreviewable un~il after final judgments have been tendered, manage­rial judging gives trial courts more authority and at the same time provides litigants with fewer procedural safeguards to protect them from abuse of that authority. In sum, judicial management merits our close attention and our study before we embrace it as the slogan for the courts of the 1980s.

c.· Managerial Judging and the Role of Courts· 599

. QUESTIONABLE BENEFITS '

. :Managerlalju~g'~ p~ponimts ooli~e. that th!')ir gys~Iii: of management improves the use of judicial resoqrees. Th~y af~~- that, With judges itl ~harge of the litigation system, court resources are better anocated, case diSpositions ~~ded. ~d. delay ~uced while the quality of_judicial decision-making is wililipirlred~ No one, can oppose. efforts to curtail exploitation of the judicial syStem and make dispute. resolution quick and in~xpensive. -r: do, however, question the exten.t to which IJlaru!.gerial judging contributes to these worthy mms an~ w:llether it is wise tO rely upon jud,ges to achieve these goals. .

. Proponents of mimagerial judging typically assume that management enhances effici~ncy in three respects. They claiin .. that c;ase nuin&gement de~eases delay, produce_s ~or!'l 4ispositions, and . reduces litigation costS. But close examination of the currently · avitilable information reveals little s~ppoit for a firm conclusion 'ihat j~dici81 rii;maie~ent is ~sponsible for effi~ ciency gains in federal district courts. . . . . . . . . · ·

Delay Rf!.duction. The first step is asse&Slng the question of delay reduction to decide whether there is. a "problem"' of delay in federal trial courts. This asses~e~t is not simple to'm8ke. rn appellate courts, we have shared perceP:, tion in the amoUllt of time it "should" tlike to prepare a brief, or the amount of time it "should" take to decide an appeal. In contrast, when we turn to trial rourts, it is more difficult u;~C;letermine the amount of thne that "should" be spen:t to prepare l:l case for triBI. 'J:be scope of issues ~d the number of actOrs vary ~atly aniorig cases as we,ll as througqout the evolution ~fa single ca.Se. Case com:P,Jexity at the trial level can reasonabJy require postponement of dead­lines not merely-by days or weeks (as in the' appellate ooujts) bu~ by ~on~ or ye~s. As ofY,et, w~ _d<,l 11~t have a substantive theory about the properirite~al at which cases should proceed_ through the trial courts. . .

Moreover, in 1980, the median time for a case to move from filing to dispo­sition in federal district court was only eight 'months. For cases thl;lt were tried, the interval was 20· months. I cannot with confidence asseit thB.t sucli data re~eals "delay" in the federal courts. Dlustrative .of the difficulty in deciding the,fquestion is a change in nomenclature. Maiiy :researchers who have studied "delay" now ~ddress-the question of"pace." Such researchers are tinable to agree on how to e:xpl~ why some courts :process cases more quickly than o~ers.

But if we were to assume that the pace of some civiLlitigation had been izhdUiy delayed, we would still encounter problems in assessing the claim that judicial management speeds case processing. Even when we find that some couits with managerial judges have faster diSposition rates than some oiher courts Without managerial judges, we have· great difficulty identifying tlie canses for the differences. Cases are filed, withdraWn, settled, or dismissed for a variety of reasons, including changes in legislation, new appeJktte deci­sions, shifts in business practices, and fluctuations in the availability of attor­neys. Although it is theoretically possible 'to ~ontrol for such variables, researchers are hampered by the absence of firsthand, UJ#iltered information aijout why cases conclude when they do ..•• ~~gement advocates rely inStead on anecdote and intuition to support their claims. . '

Increasing the Num_b~r_ of Dispf1SitifJns: In add.i:tion to not knowing what impact judicial management has on delay, we also do not know what imp~

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600 6 • Questioning and Taming the Current System

judicial management has on settlement rates. While proponents often claim increased settlement rates as a result of judicial management, most researchers have concluded that intensive judicial settlement efforts do not lead to more dispositions than would have otherwise occurred.

The claim of "the more dispositions the 'better" raises difficult valuation tasks; decision making must be assessed qualitatively as well as quantitatively. On any given day, are four judges, who speak with parties to 16 lawsuits and report that 12 of those cases ended without trial, more "productive" than four

- judges who preside at four trials? Is it relevant to an assessment of"productiv­ity" that three of those four trials are settled after ten days of testimony. Or that, in the one case tried to conclusion, the judge writes a 40-page opinion on a novel point of law that is subsequently affirmed by the Supreme Court and thereafter affects thousands of litigants? Measuring judicial accomplishments is complex. Scales designed to measure achievement in other institutions can­not simply be imported into the courtroom.

Reducing Costs. Management advocates assume that judicial supervision not only saves time and produces more dispositions but also limits the ability of litigants to impose unfair fmancial pressure on their opponents and limits the

. ability of attomeys to justify excessive billing. Proponents therefore conclude that managerial judges reduce courts' and litigants' costs. But no data exist to support this conclusion. And, if we rely instead on intuition, it is not obvious that judicial supervision averts costly adversarial decisions or attorney miscon­duct. First, some lawyers use every occasion for contact with judges to argue their clients' cases. Thus, supervision itself can present further opportunities for vigorous adversarial encounters and for more billable hours. Second, the line between attorney misconduct and aggressive but ethical representation is often difficult to discern. Third, even with judicial oversight, lawyers may be able to hide their misconduct; procedural innovations may simply force attor­neys to develop new techniques of obfuscation and avoidance.

Moreover, judicial management itself imposes costs. Judges' time is one of the most expensive resources in the courthouse. Rather than concentrate all of their energies on deciding motions, charging juries, and drafting opinions, man­agerial judges must meet with parties, develop litigation plans, and compel obedience to their new management rules. Managerial judges have more data sheets to complete, more conferences to attend, and ever more elaborate local procedural rules to draft and debate. Even when some of these tasks are delegated to staff, administrative structures must be put into place and then supervised. Although litigants and judges can contain some costs by relying on conference calls, and written exchanges, they still must spend substantial amounts of time and money. Further, because many cases settle without judi­cial intervention, management may require judges to supervise lawsuits that would not have consumed any judicial resources.

We are not yet able to reach any firm conclusions on whether and how management reduces costs. Until we have data on the number of judge­hours that management consumes and on its costs to the parties, we cannot calculate the net costs of managerial judging and thereby learn whether we have conserved resources. An«t if we include in our equation the additional costs discussed below-of the possible increase in erroneous decisions and the loss of public participation-our calculation becomes even more complex.

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C. Managerial Judging and the Role of Courts 601

In sum, I am skeptical of claims that judicial management increases court productivity at reduced costs. Data are not available to support most of these conclusions, and intuition does not compel them. Moreover, managerial propo­nents have rarely· addressed or included in their assessments the effects of judicial management on the nature of acljudication.

PossmLE RisKs

Transforming the judge from adjudicator to manager substantially expands the opportunities for judges to use -,or to abuse- their powers. When deciding how much time to allow parties to prepare their cases, when running·settlement conferences, when insisting, as some judges do, on ex parte meetings with each side,. the trial judge sits unsupervised, virtually beyond review. Judges can create rules for the pretrial phase of lawsuits that parties have no way of chal­lenging; with the individual calendar system in the federal courts, parties must be careful not to offend the one judge who is assigned a case at filing and pre­Rides .over it·until its disposition.

.rD addition to enhancing the power of judges, management tends to under­mine traditional constraints on the use of that power. Judges, when creating management rules, need not submit their ideas to the discipline of written Justification or to outside scrutiny. Many decisions are made privately; some ure off the record; virtually. all are beyond appellate review.

Furthermore, no explicit norms or standards guide judges in their decisions ubout what to demand of. litigants. What does "good," "skilled," or ''judicious" management entail? Other than their own intuitionS, judges have little. to Inform them. Few institutional constraints inhibit judges during the informal pretrial phase. During pretrial m!'D-agelll:ent, judges are restrained only by personal beliefs about the proper role of judge-managers ....

The Threat to Impartiality. A major technique of management is to rely on the private, informal ~eetings between judges and lawyers to discuss discovery !IChedules and to explore settlement proposals-meetings beyond the con­straints of the formal courtroom setting. But substantial risks inhere in the informality. The extensive information that judges receive during pretrial con­(orences ·is not filtered by the rules of evidence. Some of the information is 'oceived ex parte, a process that deprives the opposing party of the opportunity to contest the validity of the information received. Moreover,judges are often in c:lose contact with attorneys during the course of management. Such interac­i1ons may become occasions for the development of intense feelings about the c:use or the parties-feelings of admiration, kinahip, or antipathy. Manage-tnent may be a fertile field for the growth of personalbias. -

Moreover, judges with supervisory obligations may gain stakes in the ease they manage. Their prestige may ride on "efficien~ management, as calculated IJy the speed and number of dispositions. Competition and peer pressure may tclmptjudges to rush litigants because of reasons unrelated to the merits of the disputes: Reported opinio:D.s, as well as attorneys' anecdotes, sUbstantiate the rnct that some judges have elevated efficiency and management goals over considerations of fairness. . ·

Umevi~able powe'r, casual.contact, and interest in outcome (or in aggre­rate outcomes) have not 'traditionally been associated with the "due process"

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602 6 • Questioning and Taming the Current System

decision-making model. These features do not evoke images of reasoned adju­dication, images that form the very basis of both our faith in the judicial process and our enormous grant of power to judges ....

Case processing is no longer viewed as a means to an end; instead, it appears to have become the desired goal. Quantity has become all important; quality is occasionally mentione~ and then ignored ....

CONCLUSION

I argue for reflection before we plunge headlong into judicial management. I do not mean to suggest that adjudication must be frozen into earlier forms or that more efficient decision making is an unworthy aim. Rather, as we reorient the judicial system to accommodate contemporary demands, I believe that we should preserve the core of adjudication.

To help judges remain impartial, we should design rules to limit the flow of untested information to them. To ensure that judges have the patience for deliberation, we should refrain from giving them too many distracting new responsibilities. To hold judges accountable for the quality-not merely the quantity-of their actions, we should require them to act in public and to state reasons for· their decisions. In sum we should not simply embrace the new management ethic; we must think carefully about what role judges should take and then craft rules to enable judges to act accordingly .

• STEPHEN N. SUBRIN, A TRADITIONALIST LOOKS AT MEDIATION 3 Nev. L.J. 196, 226-227 (Winter BOOJ/2003)

[W)e now have a good deal of data that the best management technique for judges is to set and stick to firm trial dates, accompanied by discovery control in those cases in which the stakes drive lawyers to extensive discovery. There is data that judges who engage in active judicial management do not settle more cases than those who spend most of their time trying cases. Also, to the extent that judges engage in settlement discussions, receive information from those who are so engaged, and are told about failed mediations, they cannot help but hear inadmissible evidence. The management and settlement functions are somewhat different from, and can detract from, the judicial function.

The results of mediation are frequently- I actually believe usually­dependent upon the range of potential results that would come from formal adjudication. For this reason, in some cases the parties and their lawyers want to hear the trial judge's preliminary views of the case. And there are other instances when a trial judge or magistrate who is not assigned to the particular case may be in a good position to mediate. Lawyers have told me that clients like the formality of discussing settlement before one in a black robe; it makes them feel more like they are receiving official justice. Nonethe­less, in my view, the best way that judges can relate, to mediation is to make themselves available to try cases, and to decide pre-trial motions expeditiously and fairly. There are increasing numbers of capable mediators available.

C.--Managerial Judging and the Role of Courts 603

Lawyers increasingly know about· thein. Judges do not ordinarily have to fill that role. ·

· To the extent judges complmn that ADR has robbed them of hearing impor­tant cas_es, they often have themselves to blame. Some judges apparently think that if they can make clear to the lawyers and theil' clients an of the burdens that formal adjudication entails, including its expense, time, delays, unpredict­ability, and general obnoxiousness, then most ca.Ses will settle. They are right.