19 January 2010

Pre-Litigation Inquiry In Civil Actions

The Problem

Criminal prosecutors and most government agencies have broad subpeona power. They can demand documents, testimony and on premises inspections from people initially presumed innoccent in order to determine if a crime was committed, who committed the crime and how it was done. In the case of a physical search or phone tap, there must be probable cause that the search will produce evidence of a crime before the search is conducted (although the FBI has just revealed a massive violation of that legal principle). But, when the government requests only documents, or seeks testimony that will not be used to incriminate the person testifying, a very low standard of good faith and burdensomeness applies.

Private persons don't have subpeona power. But, they can bring lawsuits. In state lawsuits, and until recently in federal lawsuits, it was permissible to bring suit on mere information and belief that the law was violated, and then to get "discovery" during the lawsuit to determine if there really was a violation of the law.

The landmark Supreme Court cases of Twombly and Iqbal changed that rule. Now, for a private person to bring a lawsuit, that individual is expected to have knowledge of all facts necessary to establish that they are entitled to relief before the consideration of any affirmative defenses.

In most cases, this isn't a big problem. Facts in the possession of the person bringing the lawsuit, like contracts, payment records, goods provided, public (or inexpensively purchased) records and information from accident scenes that the person suing personally was involved in or obtained from police reports, establish a "prima facie" case that there is a basis for a lawsuit. FOIA laws and open records acts make many government documents into records that the public can access in this way, but private defendants are rarely subject to these laws.

But, some lawsuits, particularly civil conspiracy cases, civil rights lawsuits and employment lawsuits, which were both developed largely during a period when the distinction between a "prima facie" case and an affirmative defense was more or less irrelevant procedurally, allow a person bringing suit to make out a case (before the application of any affirmative defenses) only when information in the control of the person sued is known.

Under Twombly and Iqbal, it is conceptually impossible to bring a valid suit on these claims without inside information obtained without subpeona power. One needs a leak, a whistle blower or a spy to provide information before one can bring a valid lawsuit.

Defendants like the new rule, because many defendants brought suits that didn't actually have merit (often against big companies in areas where disclosure of evidence is very expensive like securities fraud and anti-trust cases), on that theory that there might have been secret illegal conduct. Spending large sums of money to defend yourself against a baseless lawsuit gets old fast, and tends to discourage completely legal activities like trading in stocks.

But, in cases where there actually is secret, illegal conduct that gives rise to a right to sue, the new rule appears patently unfair. Uncooperative defendants can break the law with impunity as long as they can maintain a united front. The highest profile example of this kind of activity is the tobacco industry, which concealed evidence that they had knowledge of cancer risks for decades without giving warnings to their customers (which is illegal). Only a leak by a junior law firm employee in violation of his professional ethical obligations broke the dam.

A similar issue comes up, increasingly commonly in internet cases, but also in other kinds of lawsuits, where the illegal activity is known, but the identity of the person who did it has been kept anonymous or is unknown to the person harmed. In these cases, there is a need for pre-lawsuit inquiry to determine the identity of the wrongdoer. A rather arcane body of law concerning suits against "John Doe" and unknown defendants. These include service of process via publication and other means (called substituted service) and heightened ethical responsibilities for the person bringing the suit has arisen to mostly resolve this problem in cases where rights to a particular item of property are concerned (in rem actions).


Multiple proposals have been put forth to resolve the legitimate interests of people who tend to be sued on meritless claims, and people who have been harmed by secret illegal conduct. One of the most common proposals (short of legislatively reversing Twombly and Iqbal) is to allow limited pre-litigation inquries with subpeona power, udner court supervision, by private persons who might have valid legal claims.

The question is how to make these pre-litigation inquiries narrow enough that they do not recreate the problem that Twombly and Iqbal were supposed to solve: costly discovery at defendants' expense in meritless lawsuits.

Precedents For Pre-Lawsuit Discovery

A number of states permit limited pre-lawsuit discovery in at least some kinds of cases.

Texas allows presuit discovery for the express purpose of investigating claims where justice or some other benefit outweighs the burden and expense of the discovery requested. The available empirical evidence suggests that presuit discovery is widely sought and usually allowed in Texas, though only rarely sought relative to the total number of cases filed in Texas. A recent survey found that presuit investigative discovery in Texas was used primarily to ensure that the complaint would be valid under the rules. In cases in which no lawsuit was filed after presuit discovery was allowed, the predominant reason was that the parties had settled. These data suggest that presuit investigative discovery is, at least in Texas, used properly and can be a net cost gain—early peeks at critical evidence may result in no lawsuit ever being filed, either because the evidence is too scanty to be worth anything other than a meager settlement, or because the evidence is substantial enough that the defendant wishes to settle rather than defend a lawsuit. . . .

Florida enacted a statutory requirement of presuit discovery in medical malpractice claims under a complicated procedural mechanism. The Florida rule is designed to deter meritless claims, as well as to facilitate the early resolution of them, by requiring the prospective plaintiff and defendant to share information under penalty of sanctions. . . .

Rule 4003.8 of the Pennsylvania Rules of Civil Procedure allows a plaintiff to “obtain pre-complaint discovery where the information sought is material and necessary to the filing of the complaint and the discovery will not cause unreasonable annoyance, embarrassment, oppression, burden or expense to any person or party.” Upon a defendant‟s objection, the court can require the plaintiff to “state with particularity how the discovery will materially advance the preparation of the complaint.”

Connecticut, which recognizes an independent equitable action for discovery, is similar. To be entitled to such discovery, the petitioner must demonstrate that what he seeks to discover is material and necessary for proof of, or is needed to aid in proof of, another action already brought or about to be brought. The plaintiff must describe with reasonable detail the material he seeks.

Alabama allows for preaction investigative discovery under its Rule 27160 and provides for similar showings. A petition for preaction discovery must show that the petitioner is presently unable to bring the cause of action and must identify the facts which the petitioner desires to establish by the proposed discovery. Other states [New York and Ohio] have similar requirements. These state analogues suggest that similar requirements in federal court should be adequate and workable[.]

Colorado law has pre-suit notice requirements that work in a similar way in construction defect litigation cases.

A Proposal For A Federal Solution

The scholar cited above (Professor Scott Dodson of William and Mary) suggests that pre-litigation inquiry (which he calls "New Discovery"): "(1) . . . should be used sparingly; (2) . . . should be narrowly focused and minimize undue cost; and (3) . . . should toll the running of any applicable limitations period."

How might this be done?

First, the plaintiff could be required to identify those facts needed to both state a claim and survive a motion to dismiss. To do so, the plaintiff would have to identify both the substantive claim and the missing facts, as well as the legal basis for the conclusion that existing facts are insufficient to state a claim.

Thus, a conspiracy plaintiff might petition for New Discovery on the grounds that he has only evidence of conscious parallel conduct and therefore, under Twombly, needs facts tending to show the existence of an agreement. A discrimination plaintiff might state that she has was fired from her job under conditions that do not give rise to an inference of discrimination and therefore, under Iqbal, needs facts tending to show or imply a discriminatory motive. Note that this requirement is unlikely to generate much controversy or satellite litigation. Defendants surely would contest a petition for New Discovery on these grounds only if it were clear that the plaintiff did in fact have sufficient information, for any contestation would be tantamount to a concession that any motion to dismiss on that basis should fail. . . .

Second, the plaintiff could be required to show that these facts either are likely to be in the hands of the defendant or are not otherwise available to the plaintiff. Nuances abound here. Plaintiffs might be required to make a showing that the information ought to be (if it exists at all) in the hands of the defendants and that the defendants have been asked informally for the information but have not provided it. More severely, a plaintiff might be required to affirm—under penalty of perjury, or perhaps under a sanction of evidentiary preclusion—that the information is not within her possession. Most restrictively, a plaintiff might be required to affirm—again under penalty of perjury or under a sanction of evidentiary preclusion—that the information is not otherwise available to the plaintiff through other means, such as through friendly third parties, costly expert analysis, or private investigation.

State presuit discovery mechanisms vary on this requirement. Pennsylvania law requires the plaintiff, upon the defendant‟s motion or objection, to “state with particularity how the discovery will materially advance the preparation of the complaint.” Connecticut courts require the petitioner to show that he has no other adequate means of enforcing discovery of the desired material. Ohio requires a petitioner to “make reasonable efforts to obtain voluntarily the information from the person from whom the discovery is sought.” . . .

Based on the plaintiff‟s representations in her petition for New Discovery, and with the defendant‟s input, the court could impose limits on the scope of discovery to better estimate what would be necessary. Limits would control costs, reduce delays, and force lawyers to focus their discovery on the information that really do need to plead their cases.

In Texas presuit discovery actions, for example, judges can, and do, impose limits on presuit discovery. In about 25% of presuit discovery depositions, the court limited the scope of the subject-matter of the deposition, and in about 11% of document requests, the court limited the scope of the documents requested.182 But, overall, the level of judicial oversight and limitation of presuit discovery in Texas is modest. . . .

The usual rule is that parties bear their own costs of requesting and producing discovery. New Discovery could include a presumptive rule that the plaintiff bears the burden of all New Discovery costs, perhaps enforced through a bond requirement. Such a rule will have two salutary benefits. The first is that it will force self-restraint by the plaintiff. A plaintiff faced with footing both parties‟ discovery costs will think long and hard before engaging in a fishing expedition or going well beyond what the plaintiff might otherwise need. The second is that it will protect defendants who knew the suit was meritless all along. Those defendants who lacked the discriminatory motive or knew an agreement never existed thus will be protected from unwarranted discovery costs. . . .

The presumptive rule ought to have two catches, though. First, it would be unfair for a culpable defendant to escape from the costs of discovery that uncovered evidence of culpability. Thus, the cost-shifting presumption should not apply if the plaintiff uncovers sufficient evidence of wrongdoing to survive a motion to dismiss. Instead, in such a case, both sides should bear their own costs of New Discovery, as is the normal rule for normal discovery. Second, cost-shifting should be avoided if the defendant stonewalls proper discovery requests. The discovery rules already allow cost-shifting as a sanction for obstructionist discovery tactics[.]

One way to bring this reform about in the federal courts would be through a new federal procedural rule for civil cases.


Professor Dodson's solution is obvious, sensible, and has precedents for success. It has the potential to squarely address the most valid grievences of the tort reform movement, without having any impact on the vast majority of litigation and without sacrificing the rights of people harmed in a narrow class of cases where existing rules for bringing complaints in federal court appear unfair.

By creating a safety valve for selected cases where it is really needed, the proposal also takes the pressure off judges to bend procedural rules on the facts that must be present to bring a valid lawsuit in recognition of the policy unfairness of the existing rule.

Under the rules, there are large classes of cases where narrow pre-lawsuit inquiries at Plaintiff expense would be more common than lawsuits are now, but actual lawsuits would be rare. Like the defense of third party subpeonas under existing law, it might become a frequently used little niche of litigation practice.

The proposal also captures in a minimalist way, an important piece of what those who have made the case for hands on court management of the discovery process, or a move towards the model of non-common law civil procedure (particularly the German model) have advocated. These scholars and reformers want to have the really critical information disclosed early, so that there can be a factual resolution of the case on the merits through preliminary proceedings, before undue expense is incurred for a full scale investigation of the facts in preparation for a one time only jury trial.

We worry less about discovery abuse in cases where we know that the person bringing suit has a prima facie case against the defendant (and the discovery is likely to be ulitmately at the defendant's expense) than we do in cases that might be meritless.


This is a minimialist solution. It addresses the problems specifically attributable to Twombly and Iqbal, which many observers feel would have been more legitimate if made through the normal rules amendent procedure rather than a court case, but only those problems.

Cases cursed with a genuine dispute of fact are still left with no way of having a third party resolve the central dispute short of a full trial on the merits, which leads to immense delays and expenses in civil litigation as lawyers address every conceiveable issue that could come up pending a final and absolute resolution of the case at trial, since findings of fact cannot be reversed on appeal except in extreme situations). One way to give the facts the priority they deserve in these cases would be to have early, evidentiary preliminary hearings in these cases to make non-binding findings of fact, similar to European first instance trials and preliminary hearings in American criminal cases. In practice, litigators would often agree to most of the facts found in this non-final hearing, narrowing the scope of the ultimate trial and the cost of the discovery leading up to that trial.

Of course, in many cases even a perfect knowledge of the facts isn't sufficient to determine whether there is legal liability or not, because the key questions are mixed questions of fact and law. For example, in accident cases, juries usually have to determine on a case by case basis if a defendant took reasonable care to prevent an accident, something that is inherently a judgment call. This is one reason that the common tort reform remedy of fee shifting for an entire case in these situations is unfair. Juries are unpredictable in close cases, and penalizing someone who was injured in an accident for bringing suit in a case that looked valid ex ante to trained professionals, because a jury ultimately disagreed about what level of care was reasonable, is harsh. But, these aren't the cases that turn out to involve massive amounts of unreasonable discovery in real life. Isolated slip and fall cases, car accidents, and other cases of physical mayhem involving small numbers of people rarely produce masively expensive discovery relative to the injuries involved.

More starkly, if someone bringing suit simply makes an untrue assertion to get over the barrier of stating a valid claim, something prohibited by Civil Procedure Rule 11, and perjury laws in the case of verified complaints, there are few effective remedies.

In practice, court sanctions rare for untruthful statements in litigation documents, especially those in the early stages of a case, and when awarded usually provide an incomplete remedy that compensates for only part of the attorneys' fees and costs incurred without regarding to the impact of the delay, uncertainty and in house effort defending the meritless case involved for the client. Many Plaintiffs aren't capable of paying a monetary sanction in any case and aren't usually bonded. Lawyers can insulate themselves from untruthful clients with affidavits from clients concerning the facts, unless the definitely known the truth themselves. And, criminal prosecutions for even blatant lies in court documents in civil litigation between private parties are almost never brought. Prejury prosecutions are extremely rare, arise out of litigation even less frequently, and where they do arise out of litigation, tend to arise out of litigation where one of the parties was a government agency.

From a practical perspective, it is hard enough for judges to determine what the true facts of a case actually are, and it is much harder still to resolve in collateral litigation the meta issue of whether the person making the assertions found to be incorrect knew that he or she was being untruthful. It is possible, but an early determination of factual disputes on the merits is usually a more workable approach to limit the harm that flows from an incorrect statement. Similar issues plague legal malpractice suits, which frequently involve a "trial without a trial" to see if the malpractice alleged was anything more than harmless error.


Anonymous said...

I'm in Florida which is currently undergoing a civil war of sorts in the Court system...junk debt buyers and mortgage servicers filing totally unsupported cases ( we're a judicial foreclosure state )which in most cases has inadmissable documentation in the way of copies attached to the complaints and down- the-road manufactured "evidence" shows up later produced by the Plaintiff or their counsel, and legitimate attorneys and judges who still believe in Due Process, civil procedure and Rules of Evidence being followed.

Perhaps as much as 80% of all Summary Judgments have fraud in them and are nullities under law.

One of our largest foreclosure mills goes by the name Default Law Group !

We are a state where documentation MUST accompany a complaint.

Requiring obtaining evidence pre-litigation is becoming increasingly necessary. We are moving towards bifurcating cases into liability and THEN damages..two distinct suits, as well.

Fortunately, civil actions can have preliminary discovery, however this strategy is still not commonplace and takes the form of extraordinary actions such as motions to compel, however my personal opinion is that causes of action for Declaratory Relief only, then rapid discovery might be more of a practical answer to placing some discovery before the final Complaint.

I reserve the right to amend as facts become known and build the suit as the case uncovers itself, so to speak.

What do you think...we have courts overwhelmed with filings and motions and it seems the system is creating more of it rather than reducing the labor of the bench..who often just stamp proposed orders without familiarity with the case - often by clerks just slipping orders in front of the judge at autograph time.

We have perfected the Art of the Sloppy Practice of Law down here.

TW said...

We should touch base. How ironic I investigate fraudclosure and litigate all my own cases. I'm a former real estate developer/ investor that had our $3M bus. wiped out by hurricane Katrina. That led to digging into what was going on. 6,000 hours later, starting to get the answers. I stumbled onto this post while researching pre-complaint discovery in fraudclosure cases. Ironic your comment is on that very topic. We are also using Declaratory judgments first then moving to pre-complaint discovery. Seems a killer one-two punch. You are dead on. We are working in a dozen states in state, fed and bk court. This is huge. Pass this on to every homeowner. The 12(b)(6) or it's state equivalent is used every time so we needed to step back for better strategy to get to the all important discovery. todd@surefirehomeretention.com. Will gladly share resources, wins, challenges, etc. Great post, dead on.

Unknown said...

What an interesting post. I have been doing research for a Civil Litigation lawyer in California for a case in my law class, when I came across your article. Thanks so much for this interesting article to read. I am glad I came across your post.