Ten Proposed Reforms Of Colorado and Federal Civil Procedure

There are some circumstances where a few bold but simple procedural rules could materially improve civil procedure.  Here are ten of my favorites:

Hearsay Evidence:

The following should be adopted for civil cases (where constitutional confrontation clause issues are absent) in addition to all other hearsay exceptions in case where a witness is available:

Evidence of a hearsay declaration is admissible if the judge finds that the declarant:
(a) is unavailable as a witness, or
(b) is present and subject to cross-examination.

This text with additional limitations that I would omit, was proposed as part of the Model Code of Evidence of the American Law Institute.

This would still preclude trial by affidavit in cases where witnesses are available, but would allow in lots of reliable information that is now excluded from evidence.  It would also greatly simplify an unnecessarily complex area of law that has been abandoned by our fellow common law legal system jurisdictions by statute.

Appellate Law:

In any case that is reversed on appeal for an abuse of discretion by the trial judge, on remand, the case shall be heard before a different judge.

This is the law in civil law practice, but the opposite of this rule is the current general rule in American practice and it is grossly unfair.

Federal Court Jurisdiction:

Repeal Sections 1331 and 1332(a)(1) of Title 28 of the United States Code.

Section 1331 gives U.S. District Courts jurisdiction over cases where the Complaint in the action arises under federal law and no other specific statute confers jurisdiction over the federal question involved.  Historically, this section has had a minimum monetary threshold for amount in controversy, but the current version of the statute does not.  Note that civil rights cases and intellectual property cases have an additional statutory basis for U.S. District Court jurisdiction in addition to Section 1331.

Section 1332(a)(1) gives U.S. District Courts jurisdiction over cases arising under state law where there is diversity of citizenship involving citizens of two different U.S. states and the amount in controversy exceeds $75,000.  Existing law would remain in place for diversity suits involving non-U.S. persons, and for large class action cases.

This would substantially reduce the role of the federal courts in ordinary civil litigation between private parties, in circumstances where the state courts have completely overlapping jurisdiction with the federal courts.

Limited Liability Company and Limited Partnership Domicile:

Apply the domicile rules for corporations to limited liability companies and other limited liability entities.  In cases of limited partnerships that are not limited liability limited partnership with both limited and general partners, the limited partnership should be treated as domiciled in its state of formation, the state where its principal offices are located, and in any state where a general partner is domiciled.

Existing law treats limited liability companies and other limited liability entities as general partnerships for domicile purposes, which means that they are deemed to be domiciled in every state where an owner resides.  In contrast, corporations are generally deemed to reside in their state of incorporation and the state in which their principal offices are located, subject to certain ad hoc exceptions for special kinds of corporations.  See 28 USC Section 1332(b).

Now that limited liability companies and other kinds of purely limited liability entities have become widespread, it has become clear that there is no good reason to distinguish them from corporations in the context of domicile for civil procedure purposes.

Existing law favors corporations over limited liability companies for no legitimate purpose related to civil procedure, and it makes domicile, venue and jurisdiction questions hinge on proprietary information that is not available to anyone other than members and managers of closely held limited liability companies.  The existing law is also very unfair to publicly held or widely held limited liability companies and limited partnership.

In contrast, in general partnerships or limited partnerships that are not limited liability limited partnerships that have general partners , treating the partnership as domiciled in every state where a general partner resides makes sense, however, because the partner is subject to personal liability in every partnership debt.

Personal Jurisdiction in Federal Court:

Evaluate whether a U.S. District Court has personal jurisdiction over a defendant based upon his contacts with the United States of America.

The current law is that the personal jurisdiction of a U.S. District Court has personal jurisdiction over a defendant based solely upon his contacts with the U.S. state in which the U.S. District Court is located.  A corresponding new rule would have to be adopted similar to Colorado Rule of Civil Procedure 98 governing venue in federal court which is now deemed to be proper in any state where a U.S. District Court has personal jurisdiction over a defendant.

Simply put, federal courts should have personal jurisdiction that is as great as the U.S. Constitution permits it to have, and there is no serious doubt that the proposal I suggest would be constitutional.

Declarations In State Court:

Allow Declarations made under penalty of perjury that are not notarized to be used with the same effect as an affidavit in state courts in Colorado to the same extent as they are allowed in federal court under Section 1746 of Title 28 of the United States Code.

Requiring court filings regarding statements of fact in federal court to be notarized in archaic, creates a trap for the unwary, and is unnecessary as shown by the success of this reform in the federal courts (since 1976 when it was adopted) and in many state court systems, such as the state courts of Utah since 2007.

The ongoing active involvement of litigants and lawyers in lawsuits make the protections offered by affidavits largely superfluous in court proceedings (unlike real estate matters and wills where notarization is also used).  The requirement of notarization more often does injustice by excluding valuable evidence for logistical reasons, than it does justice by excluding unreliable testimony.  The threat of prosecution for perjury remains in both circumstances.

Motions to Dismiss For Failure To State A Claim in Civil Actions:

Repeal Federal Rule of Civil Procedure 12(b)(6) and Colorado Rule of Civil Procedure 12(b)(5).

These rules authorize motions to dismiss for failure to state a claim upon which relief can be granted on the case of a complaint or counterclaim or cross-claim in a civil lawsuit, without consideration of any evidence.

In layman's terms, this is a "so what?" motion, that states that even if everything said in the complaint is true, you lose.

Historically, filing one of these motions would delay the time period in which a person would be required to file a substantive response in the form of an "Answer" or "Reply" to a claim, although Colorado is on the verge of eliminating that requirement, because it unnecessarily adds delay to a case.

In federal court, a motion to dismiss delays the deadline for filing an Answer or Reply, but does not delay the pre-trial discovery process absent exceptional circumstances that could also be invoked if an early Motion for Summary Judgment is filed (in Colorado's federal practice these motions are call "String Cheese Motions" after the case that sets forth the relevant legal standard).

The legal doctrines involved in evaluating these motions is quite obscure and elaborate, and nothing in the existing rules of civil procedure prevent someone from instead filing a Motion for Summary Judgment, possibly supported by affidavits and documents, to dismiss a case at the same early stage of the proceeding, but without delaying the time frame for filing an Answer or participating in discovery regarding the evidence in a case.

The main reason that we have both Federal Rule of Civil Procedure 12(b)(6) (motions to dismiss for failure to state a claim) and Federal Rule of Civil Procedure 56 (motions for summary judgment), boils down to historical accident.  Federal Rule of Civil Procedure 12(b)(6) is a residual remnant of what was called "Code Pleading" which was in effect before the Federal Rules of Civil Procedure were adopted in 1938.  Apart from this residual feature and a couple of other minor anomalies, the Federal Rules of Civil Procedure operate on a different legal theory known as "Notice Pleading".

There are some circumstances where a motion to dismiss would result in someone losing a case where a motion for summary judgment would not, primarily involving cases where incriminating evidence is in the sole possession of the person being sued or a third party, and can only be obtained via court ordered discovery.  But, those cases largely argue in favor of reform, rather than against it.

This would also alter a fee shifting rule in certain Colorado cases, but there are other ways to amend that shifting rule to accomplish the same purpose, and perhaps do a better job of screening frivolous lawsuits that should be sanctioned from potentially meritorious ones.

Simplified Procedure For Civil Actions:

Repeal Colorado Rule of Civil Procedure 16.1

One of the problems with existing civil procedure rules is that they do a poor job of meeting the needs of people with medium sized cases with amounts in controversy between about $15,000 and $100,000 or simply title disputes.

Colorado Rule of Civil Procedure 16.1 entitled "Simplified Procedure For Civil Actions" was adopted as a reform to address this need by replacing discovery with pre-trial disclosure of what amount to scripts of what witnesses are expected to say at trial that limits witness testimony to what is disclosed prior to trial.  It also allows certain kinds of testimony to be received in the form of preservation depositions rather than live trial testimony.

For a variety of reasons, Colorado Rule of Civil Procedure 16.1 has been a flop.  For example, it is very unfriendly to parties to lawsuits who don't have lawyers (which parties in small cases in general jurisdiction district courts often don't).  It is highly prone to manipulation by lawyers who want to play hardball.  And, judges have been reluctant to exclude testimony for non-disclosure because the rules are unclear regarding the amount of detail that must be contained in pretrial disclosures.

Colorado Rule of Civil Procedure also greatly complicates law office management because it creates a class of civil lawsuits that don't follow the ordinary sets of deadlines used in other civil cases.

Overall, this deserves to be repealed.

Jury Trials In State Court Civil Actions:

Eliminate the right to a trial by jury in civil actions except in cases where (1) non-economic damages are available, (2) exemplary (i.e. punitive) damages are available, (3) money damages are sought by some party from or by a governmental entity or officer or agent, (4) there are allegations of intentional fraud, whether or not punitive damages are sought, or (5) a written contract expressly preserves a right to a trial by jury.

In Colorado, there is no right to a jury trial in a civil case under the United States Constitution, the Colorado Constitution, or any statute.  The right to a jury trial in civil cases in Colorado arises solely under the Colorado Rules of Civil Procedure which basically incorporate by reference the standard for entitlement to a civil jury trial under the 7th Amendment to the United States Constitution (which relies on a historical distinction between law and equity prior to the merger of the two court systems in the late 19th century and early 20th century) as a matter of court rule, for no really compelling reason.

Most written leases and contracts expressly waive the right to a jury trial.  About 75% of jury trials involve cases for personal injury or defamation, where non-economic damages are available.  Most of the rest involve some sort of intentional conduct or fraud, eminent domain cases, or governmental liability, all of which retain the right to a jury trial under this reform.

Basically, we have civil juries to ascertain damages in situations where a judge has little guidance or an appearance of a conflict of interest (because he is a governmental employee), or where the collective judgment of a jury is deemed a better way to determine credibility than a judge's determination where credibility is always a core issue (in fraud cases).

Jury trial are generally slower and more costly than non-jury trials, which is why they are overwhelmingly opted out of in lawyer drafted contracts.  This makes the most commonly adopted provision the default rule, rather than the exception.

Certificates of Service:

Eliminate the requirement of a certificate of service on any pleading that is electronically filed and served where all parties who are entitled to service have an e-filing account.

There is no reason that pleadings should contain a certificate of service when there is a third party electronic record of the same thing.