Observations About Medical Mistakes

Vox has a nice article on medical mistakes that cause harm.

Medical mistakes involve a nest of probabilities that have to be well understood to made good judgments about what to do about them.

1.  Most people who are experiencing medical conditions that put them at high risk of bad outcomes seek medical attention.

2.  The outcomes of people who are at high risk of bad outcomes who seek medical attention on average are much better than the outcomes of those who don't.  The sweet spot of people at high risk of bad outcomes who are better off not seeking medical attention has grown smaller and smaller.

3.  There is a great deal of overlap between the people most qualified to provide medical attention and the people who actually do provide medical attention.

4.  Almost all medical providers make medical mistakes that cause harm at some point during their careers and frequently, they do so repeatedly.

5.  The more often and more seriously a medical provider makes a medical mistake, the more likely that medical provider is to do so in the future.

6.  The vast majority of medical providers who make medical mistakes provide benefits from their medical treatment that exceed the harm that comes from their medical mistakes over the course of their careers.

7.  The rate of medical mistakes per provider is much more a function of the quality of the systems in the organization where the person provides medical care than it is a function of the quality of the mind or education of the provider.

8.  The article focuses on the fact that medical providers not only don't want to make medical mistakes that cause harm, but also feel very bad about it when it happens to the point that they suffer mental health consequences.

9.  A medical provider who has spent most of a career making few and minor medical mistakes can be at much greater risk of making major medical mistakes when impaired for some reason.

10. Fear of liability discourages organizations that provide medical care from identifying all medical mistakes when they happen and devising means of making them happen less often, even though this means that the total number of medical mistakes may be higher.  This is rational in many cases for the provider since it may minimize the number of medical mistakes giving rise to claims even though it doesn't minimize the number of medical mistakes.

11. Subtle errors in medical treatment that are easy to make in the absence of exemplary systems to prevent them, and hard for anyone but the person making them and their close associates, can still have grave consequences.  For example, transposing a number, misplacing a decimal point, or confusing two very similar looking bottles can result in a drug administration error with deadly consequences.

12. Unless a medical mistake is extremely obvious, it is unlikely to have consequences legally unless the outcome is very bad.  Yet, when the outcome is very bad, litigation is likely even when no medical mistakes were made.  And, a large share of the funds spend on the system for compensating victims of medical mistakes go to transaction costs.  But, few non-meritorious medical malpractice suits prevail in litigation and result in large dollar awards to victims of medical malpractice.

13. We want to compensate victims of medical mistakes appropriately.  And, we don't want to spent too much time and effort on transaction costs relative to compensation, if possible.

14. We don't want medical providers who aren't excessively likely to make medical mistakes to continue to provide medical services because they do more good than harm and the alternative of replacing them is worse.

15. We want a system in which mistakes are identified in a manner that causes organizations providing medical services to improve their systems to prevent them from happening in the future. This can only happen if the culture of medical professions is changed and the cultural change does not lead to net negative outcomes for the organizations that change their culture.

16. We want people to trust medical systems that on average make them better off even when medical treatment isn't zero risk.

17. Medical malpractice awards require proof of negligent conduct by a medical provider that causes harm.  But, proof of causation is difficult because even non-negligent conduct can lead to bad outcomes when someone has a medical conditions that requires treatment.  And, medical providers tend to think of negligence in terms of mistakes that a reasonable medical provider would never make in any entire career, while the law thinks of negligence in terms of something that a reasonable medical provider clearly wouldn't do if one was paying attention and mindful at that very moment. Also, unlike most litigants, medical providers, due to the long term reputational harms associated with settling a medical malpractice case are unlikely to settle in cases where they believe that they did not make a mistake. Thus, in this kind of litigation in particular, the least culpable providers are often the most likely to take a case to trial and even if they lose may be less culpable than those who settle promptly.

18. There are institutional barriers to proving medical malpractice because medical providers who testify as experts against other medical providers tend to be ostracized by their colleagues in all but the most obvious cases.

19. Medical technology is not so advanced that all treatments reliably work all of the time when used properly.  Many forms of medical treatment and diagnosis have error rates that cannot be eliminated with any amount of care using current technologies.  But, as medical technologies improve, a larger share of bad outcomes are due to medical mistakes and are preventable with exemplary care.

20. The threshold of care quality at which it is better to provide medical care than not to provide medical care is much lower than the state of the art medical care quality.

21. Some steps to prevent medical mistakes are cheap and easy, but are not implemented systematically.

22. Some steps to prevent medical mistakes are expensive and difficult, even to the point where the cost does not usually justify the precautions.  The best can be the enemy of the good.

23. It is often difficult to estimate the quality of an organization that provides medical care because organizations that do a better than average job in dire cases may still have higher rates of bad outcomes than organizations that do a below average job in dire cases but have fewer such cases.

24. For a patient, the experience of a bad outcome that is unavoidable even with mistake-free medical care is often virtually indistinguishable from a bad outcome that is caused by a medical mistake.

25. Bad outcomes often trigger grief on the part of both the patient, the patient's loved ones, and the medical provider, even when no medical mistake has been made and grief can lead to irrational or counterproductive action.

It is hard to devise a system for addressing medical mistakes that has the right incentives and produces the best possible outcome given this complex set of realities.

For example, one of the most common knee jerk tort reforms is to cap compensation for medical malpractice awards, even though, by definition, this reduces recovery from the people who actually are victims of medical mistake determined to the highest level of precision feasible in our system who suffer the most harm, rather than reducing transaction costs or costs associated with suits where there was a bad outcome but not medical mistake made.

Securities Class Actions Are As Targeted Or More So Than SEC Enforcement Actions

Tort reformers who dislike class action litigation and who, in particular, are skeptical of securities law class action litigation frequently argue that we should prefer administrative agency enforcement of the securities laws, on the theory that they are driven by the merit of the suit, over private class action litigation which is allegedly brought indiscriminately following a sudden plunge in the price of a company's shares.  The empirical evidence, however, does not support this claim.

Using actions with both an SEC investigation and a class action as our baseline, we compare the targeting of SEC-only investigations with class-action-only lawsuits. Looking at measures of information asymmetry, we find that investors in the market perceive greater information asymmetry following the public announcement of the underlying violation for class-action-only lawsuits compared with SEC-only investigations. Turning to sanctions, we find that the incidence of top officer resignation is greater for class-action-only lawsuits relative to SEC-only investigations. Our findings are consistent with the private enforcement targeting disclosure violations at least as precisely as (if not more so than) SEC enforcement.

Stephen J. Choi and A.C. Pritchard, "SEC Investigations and Securities Class Actions: An Empirical Comparison", Journal of Empirical Legal Studies (March 2016).

Arbitration And State Constitutional Rights To A Jury Trial And To Civil Remedies

Somehow, I missed the notably case of Atalese v. U.S. Legal Services Group, LP, decided by the New Jersey Supreme Court on September 23, 2014 (certiorari was denied by the U.S. Supreme Court). In that case, a consumer contract contained an arbitration provision, but failed to clearly state in language that "a reasonable consumer" would understand that the consumer "was having her statutory right to seek relief in a court of law," so it held that the provision was unenforceable.

While the ruling made little difference in the long term "war" to limit the pernicious effects of arbitration clauses in consumer contracts, because the objection raised by the New Jersey Constitution is simple enough to draft around, it did have the effect of invalidating many, probably thousands, of existing contractual arbitration clauses in New Jersey which lacked the requisite language - freeing consumers under these existing contracts which are often hard to renegotiate from its constraints in the event of a dispute.  And, it did create a trap for the unwary that could invalidate future arbitration contracts, particularly those written into national agreements by non-New Jersey counsel who are unaware of the new New Jersey rule.

The ruling was also colored by the existence of Article I, Paragraph 9 of the New Jersey Constitution, which guarantees that “[t]he right of trial by jury shall remain inviolate.”

A Long Digression On The Right To A Jury Trial With An Emphasis On Colorado

The 7th Amendment to the United States Constitution guarantees the right to a trial by jury in civil cases in federal court where the right to a jury trial existed at common law at the time that the Bill of Right was adopted (i.e. 1791) and in the case of causes of action that didn't exist then, if a right to a jury trial existed in analogous cases at the time. See, e.g., Chauffeurs, Teamsters, and Helpers Local No. 391 v. Terry, 494 U.S. 558 (1990).  But, the 7th Amendment is one of a handful of provisions of the Bill of Rights which does not apply to state and local governments for rather intricate reasons of constitutional law collectively known as the incorporation doctrine, see, e.g., Minneapolis & St. Louis R. Co. v. Bombolis, 241 U.S. 211 (1916), except that the scope of the right to a civil trial by jury (although not necessarily its existence) is controlled by the 7th Amendment in cases that are brought in state court under federal law, Dice v. Akron Canton & Youngstown R.R., 342 U.S. 359 (1952).

But, in practice, almost every U.S. state generally makes civil jury trials available to litigants in substantially the same circumstances in which they are available in federal court, except for Louisiana whose courts follow the French tradition established before the Louisiana Purchase of this territory from France in civil procedure and private law.  Many states do have isolated statutory carve outs from the general rule which most commonly include exceptions for small claims courts and courts of claims against state governments.  But, the general federal rule in the norm, despite its quirky, arbitrary, and sometimes hard to apply provisions.

No country in the world other than Canada makes such wide use of civil juries.  Countries outside the Anglo-American legal tradition never had them, and the United Kingdom and most other countries in the British Commonwealth have abolished them outside some very isolated circumstances (the few exceptions often include eminent domain condemnation cases and defamation cases).

In my home of Colorado, however, unlike New Jersey, the right to a civil jury isn't found in the state constitution. See, e.g. Continental Title Company v. District Court, 645 P.2d 1310 (Colo. 1982).  The right to a civil jury trial in Colorado used to be statutory, but that changed when the authority to make state court rule was (wisely) transferred to the Colorado Supreme Court.  See Miller v. District Court, 154 Colo. 125, 388 P.2d 763 (1964).

So, subject to a handful of isolated exceptions (e.g. in eminent domain cases), the right to a jury trial isn't a statutorily created right in Colorado either. Indeed, there are some classes of cases where jury trials are expressly prohibited by statute.

For example, in all cases arising under Colorado's dissolution of marriage act, "All issues raised by these proceedings shall be resolved by the court sitting without a jury." Section 14-10-107(6), Colorado Revised Statutes.  See also, e.g., In re Marriage of Lewis, 66 P.3d 204, 205 (Colo. App. 2003) ("All issues raised or presented in a dissolution proceeding are to be resolved by the court in equity sitting without a jury.").  Most issues is divorce cases wouldn't include a right to a jury anyway (even though judicial divorce didn't exist in Anglo-American jurisprudence in 1791), but some issues commonly decided in divorce cases might otherwise implicate a right to a jury trial.  For example, a request that a soon to be ex-spouse turn over a painting that is allegedly the separate property of the spouse requesting itwhere ownership of the item is disputed, looks a great deal like issues where there would ordinarily be a right to a jury trial outside of the divorce context.  But, in a divorce that issues would be decided by a judge instead.

Instead of arising via the state or federal constitution or a statute, in Colorado, the right to a civil jury trial in Colorado is almost exclusively a creature of Colorado Rules of Civil Procedure 38(a) (in District Court and Denver Probate Court) and 338(a) (in County Court where the jurisdictional limit in civil cases is $15,000 subject to some narrow exceptions for attorney' fees, costs and interest accruing after the case is filed). These rules are enacted by the Colorado Supreme Court and may be amended by it administratively without legislative or executive branch involvement.

By the terms of both of these rules, the right to a jury trial in Colorado exists in "actions for the recovery of specific real or personal property, with or without damages, or for money judgment claimed as due on contract, or as damages for breach of contract, or for injuries to person or property[.]"  C.R.C.P. 38(a) and C.R.C.P. 338(a).

In practice, however, the scope of the jury trial right in Colorado has been interpreted in Colorado to be essentially identical in broad outline to the 7th Amendments many esoteric provisions.  As under the 7th Amendment, the right to a civil jury trial in Colorado hinges on whether or not the claim asserted would have historically been brought in "courts of equity" or in "courts of law", even though Colorado had merged the two parallel English legal systems more than a century ago, as have the federal courts and all but a handful of state court systems (one notable exception is the State of Delaware).  See, e.g., Kaitz v. District Court, 650 P.2d 553 (Colo. 1982).

Similarly, as under the 7th Amendment, the right to a jury trial is determined on the face of the Complaint filed by the plaintiff (or third party plaintiff in the case of a third party complaint, or a cross claim filed by one defendant against another), without regard to any defenses or counterclaims brought by a defendant (or third party defendant or cross claim defendant). See Miller v. District Court, 154 Colo. 125, 388 P.2d 763 (1964) (complaints and cross claims) and Simpson v. Digiallonardo, 29 Colo. App. 556,. 488 P.2d 208 (1971) (third party complaints).

For example,  there is no right to a trial by jury in Colorado in a case to have a trust declared invalid. Ayres v. King, 665 P.2d 594 (Colo. 1983).  But, there is a right to a trial by jury in Colorado in a claim for personal injury arising out an automobile accident.  Suppose that Margaret wants to sue her uncle Fredrick to have a trust that he established that denies her a right to benefit if she marries a man who is not white (such as her current fiance) declared invalid, while Fredrick wants to sue Margaret for injuries he suffered when she carelessly backed into him while leaving his office a few months ago after discussing the trust issue.  Suppose further that Colorado's mandatory counterclaims statute (sometimes called the "entire controversy doctrine" when implemented via case law rather than by court rule) requires that if one of them sues the other, that any possible lawsuit that the person sued could bring against the person suing them is waived if not raised as a counterclaim.  Cf. Colorado Rule of Civil Procedure 13(a) (which might or might not actually apply to this fact pattern).  (Note, however, that, in part to preserve jury trial rights, the general rule that certain kinds of counterclaims are forever forfeited if they are not filed in a pending current lawsuit between two parties, does not apply to divorce actions in Colorado. Simmons v. Simmons, 773 P.2d 602, 605 (Colo. App. 1988)).

In this scenario, it Margaret files her lawsuit before Fredrick files his lawsuit, then Fredrick is not entitled to a jury trial on his counterclaim against Margaret for personal injuries arising from the car accident.  But, if Fredrick is the first to court and Margaret files her trust claims as a counterclaim, then Fredrick would be entitled to a trial by jury.

There is an exception to this general rule in the case of a fairly trivial loophole utilizing this rule under federal 7th Amendment law that threatened to swallow the rule, and has probably been adopted by many states facing the same issue.  While declaratory judgment actions were traditionally decided by courts of equity, and hence were not tried by juries, you cannot simply rush to court seeking declaratory judgment that you did not commit the federal tort for which there is a right to a trial by jury that someone else has threatened to sue you for, in order to turn their lawsuit into a counterclaim in an equitable action where a jury trial is not available.  Beacon Theaters, Inc. v. Westover, 359 U.S. 500 (1959).  The court reached its decision by relying on the doctrine that equitable remedies like declaratory judgments are not available as a remedy in cases that can be adequately and fully resolved in a court of law in a lawsuit over the underlying tort claim.

This is one the most odd and arbitrary rules of civil procedure that aptly illustrates the curious and problematic results of taking a quite strictly originalist approach to constitutional interpretation.  A well titled law review article on the subject, summed up the situation: Martin H. Redish, "Seventh Amendment Right To Jury Trial: A Study In The Irrationality Of Rational Decision Making", 70 Northwestern U. Law Rev. 486 (1976-1977).

But, despite the fact that states are under no legal obligation to follow the federal example in this situation, Colorado and almost every other state except Louisiana does just that.  It is a stunning example of how often state legislatures do not act as the "laboratories of democracy" that they are often described as in superficial civics class descriptions of federalism, and instead slavishly act based upon inertia and imitation of federal or uniform law models, even when they are under no obligation to do so and the status quo is one that no one would design if they were starting from scratch.

Some empirical data on civil jury trials in Colorado in 2014

While jury trials are legally available equally in district court and in county court, in practice, county court civil jury trials are extreme rare in Colorado. As of 2014, a jury trial is actually held in about one in 70 district court civil cases in which a jury trial is available, and in about one in 4,816 county court civil cases in which a jury trial is available.  In district court civil cases, 51.8% of trials are to a jury.  In contrast, in county court civil cases, 1.7% of trials are to a jury.  Thus, a jury trial is 69 times more likely to be held in a district court civil case than in a county court civil case, when one is available, and when a trial is actually held it is about 30 times more likely to be to a jury in a district court civil case than in a county court civil case.

There are no publicly available statistics on the sub-types of civil cases that lead to bench trials and jury trials respectively in Colorado's state courts.  But, national studies of trials in general jurisdiction courts (like Colorado's District Courts) in the 75 largest major metropolitan areas have found that about 75% of civil jury trials involve personal injury and wrongful death cases.  There were 4,414 such cases filed in Colorado's District Courts in 2014, and if Colorado is typical, about 198 of the civil jury trials conducted in Colorado each year are personal injury and wrongful death cases (implying that about 1 in 22 such cases is resolved through a jury trial).  My intuition is that percentage of personal injury and wrongful death cases that are resolved by jury trials relative to the percentage resolved in bench trials is somewhere in the middle of the range of 75%-95%.  About 98% of Colorado's criminal felony trials are jury trials, and I suspect that the percentage in personal injury and wrongful death cases is at least a little bit lower than that, but I don't know how much lower.

The remaining 66 civil jury trials in Colorado's state courts of general jurisdiction involve the other roughly 13,945 district court civil cases in which there is a right to a jury trial.  Thus, roughly one in 211 such cases are resolved with civil jury trials.  These cases are about 23 times more likely than county court civil cases to be resolved with a jury trial, but about 9 times less likely to be resolved through a jury trial than a personal injury case. There is insufficient data available to me to determine exactly the relative preference for jury and bench trials in personal injury and wrongful death cases as opposed to other cases, but at least 21% of district court civil cases that go to trial and are not personal injury or wrongful death cases are resolved through jury trials.  Thus, the relative preference for jury trials over bench trials is at least 12 times as great in these cases as it is in county court civil cases.

For example, in 2014 in Colorado's state courts, 97,728 civil cases were terminated and there were 264 civil jury trials (both of these statistics exclude quasi-criminal termination of parental rights cases and will contests).  By comparison, there were 244 district court civil bench trials.  But, the caseload figure is misleading for these purposes.  In fact, the disparity is really greater, because a jury may be demanded in almost every county court civil case, while this is not true in some kinds of district court civil cases that collectively make up a significant share of the total civil docket (e.g. 61,345 "distaint warrants" (i.e. state tax lien registrations), 11,211 summary "Rule 120" hearings that are the equivalent of a criminal preliminary hearing in an otherwise private foreclosure of a deed of trust, 3,459 petitions to seal criminal records, 571 county or municipal court appeals, 569 foreign judgment registrations, 414 out of state subpoena requests, 403 declaratory judgment actions, 356 injunctive relief cases, 329 name change petitions, 286 petitions to seal criminal convictions, 189 writs of habeas corpus, 130 mechanic's lien foreclosures, 49 confirmations of arbitration awards, 47 special district petitions, and 11 protection orders).  Only something on the order of 18,359 district court civil cases are "suits at law" in which jury trials are available (the "on the order of" disclaimer reflects the fact that the statistical classification of a case isn't a perfect measure of when a jury trial is actually available under the rules of the Court, the real figure is probably slightly smaller).

Meanwhile, there was 132,170 civil cases terminated in county court (excluding 6,710 small claims court cases that were terminated, in which there is no right to a jury trial under state court rules and state law), but this total includes a combined 12,697 foreign judgment registrations and protection order cases, in which there is no right to a jury, and 37,606 eviction cases in which a jury is not available at the eviction stage even though a jury could demanded and seated in a subsequent hearing to determine money damages once the eviction decision was made in the case.  Conservatively excluding both of these categories of cases there are 81,867 county court civil cases in which jury trials are available for the most important decision in the case.  There were just 17 civil jury trials (both of which are typical over statistics over the last decade or so) with only 8 counties having any county court civil jury trials.  By comparison, the were 976 county court bench trials in civil cases.

The county court statistics above are for 63 of Colorado's 64 counties, but excludes Denver County Court which is treated as a municipal court for statistical purposes.  Assuming the same mix of civil cases as found statewide, there are about 19,000 civil cases where there is a meaningful jury trial right in Denver each year, about 20% of the statewide total.  There were 525 bench trials and 226 jury trials for the court as a whole in Denver in 2014, compared to 3218 bench trials and 1286 jury trials total in the rest of the state in 2014, but there is no breakdown of trials by case type, for example, between criminal and civil cases, in its annual report.  Extrapolating based on the percentage of overall bench trials that a civil statewide, you would expect about 296 civil bench trials a year in Denver, while extrapolating based on the number of civil cases eligible for jury trials in which there are county court civil bench trials statewide, you would expect about 244 civil bench trials a year in Denver.  Using the same approach to estimate the number of civil jury trials in Denver you would expect 3-4 civil jury trials a year in Denver, but small numbers are notorious for not following the law of averages strictly and there are many reasons why Denver might be expected to be atypical in one direction or the other.

Municipal courts in Colorado other than the Denver County Court which is a consolidated municipal and county court have essentially no jurisdiction to hear civil lawsuits (other than quasi-criminal ordinance enforcement cases).

The will contests are the only kind of cases other than civil cases that are not criminal or quasi-criminal, in which there is a right to a jury trial.  There were 11 in Colorado, statewide plus 3 in Denver Probate Court, not broken down by bench trials and jury trials, in 2010 out of 425 formal probate of a will cases (on top of 5,600 informal probate of a will cases) and probably a minority of those fourteen will contests were jury trials.

The other court in Colorado that handles civil cases and sometimes conducts jury trials is the U.S. District Court for the District of Colorado.

Nationally, all of the U.S. District Courts combined conducted 943 bench trials and 2,157 jury trials in 2014.  The various kinds of civil rights and employment cases* produced 274 bench trials and 1,277 jury trials and there were 129 personal injury bench trials and 307 personal injury jury trials tried in federal court.  These two categories of cases accounted for roughly 44% of civil bench trials and 75% of civil jury trials in the federal district courts.  There were 206,616 cases terminated in U.S. District Courts nationwide in 2014, of which some involved a meaningful potential for a jury trial and others did not.

The District of Colorado has about 0.8% of the nation total raw civil caseload of all U.S. District Courts combined.

* A large share of all civil rights cases brought in the federal courts involve alleged discrimination on the basis of race or gender in employment under federal civil rights statutes, so it is natural to lump civil rights employment cases together with non-employment civil rights cases and non-civil rights employment cases.  I have often made the argument that there is no particularly compelling federalism reason other than historical accident for vesting jurisdiction in the federal courts rather than state courts, in personal injury lawsuits between private parties who happen to reside in different states, and in most employment litigation between private parties, even if they live in the same state.  Shifting these cases to state courts would only modestly increase the case loads of the state courts (which already have concurrent jurisdiction over these cases in any event), but would dramatically reducing the case loads of the federal courts.  Admittedly, historically, there was legitimate concern that state court judges in state courts in the South would not faithfully apply federal civil rights statutes barring discrimination on the basis of race, while federal judges would do so more faithfully. But, federal judges themselves have a track record of grudgingly interpreting these laws, and in states where urban areas are often majority-minority, federal courts often have less favorable jury pools for these cases.

Back To State Constitutional Rights To Jury Trials

As the recent Atalese case in New Jersey illustrates, state constitution protections of the right to a trial by jury, which are common (adopted in imitation of the federal bill of rights) but not ubiquitous, frequently end up doing much more than supplying a rule of civil procedure for cases pending in state courts.  Indeed, few kinds of state constitutional rights have a history of a more varied and creative mix of applications.

For example, quite a few state constitutional provisions were utilized by state appellate courts to invalidate state tort reform legislation imposing caps on money damage awards on the theory that a constitutional right to a jury trial makes it the prerogative of the jury to determine the amount of money damages that may be awards in cases in which there is a right to a jury trial, which state legislatures may not invade. See, e.g., Lucas v. United States, 757 S.W.2d 687 (Tex. 1988); Condemarin v. University Hosp., 775 P.2d 348 (Utah 1989); Sofie v. Fibreboard Corp., 771 P.2d 711 (Wash. 1989), modified, 780 P.2d 260 (Wash. App. 1989).  Other state courts with a state constitutional right to a jury trial, however, have concluded that their right to a civil trial by jury is procedural and does not extend to the substantive scope of the remedy. Jordan v. Long Beach Community Hosp., 248 Cal. Rptr. 651 (Cal. App. 1988) (review denied and ordered not to be officially published (Sept. 15, 1988)); Yates v. Pollock, 239 Cal. Rptr. 383 (Cal. App. 1987).

There are a number of law review articles by prominent law professors arguing that the 7th Amendment and parallel state constitutional provisions should greatly limit the permissible grounds upon which summary judgment motions may be granted in civil cases.  But, efforts to make these arguments in the courts, and on court ruling making bodies, have failed in every or almost every instance.

A handful of other states have gone even further, holding that a state constitutional right to a jury trial protects not just the procedural right of parties in certain kinds of cases to have their cases decided in a particular kind of way, but also the substantive right to a civil remedy in the form of a legally recognized cause of action for the kinds of injuries where there was historically a right to enforce though a lawsuit in which a civil jury had the power to authorize relief.

But, as often as not, these case actually hinge on one of the thirty-four or so state constitutional provisions which, in imitation of Section 29 of the Magna Carta, guarantee not just a procedural right to a jury trial, but a substantive right to seek redress through the civil courts for any injury of the type described. A typical example of such a provision states that:

Every person within this state ought to find a certain remedy, by having recourse to the laws, for all injuries or wrongs which he may receive in his person, property or character[.] 

Vermont Constitution, Chapter I, Article 4. See generally The Right of Access to Civil Courts under State Constitutional Law: "An Impediment to Modern Reforms, or a Receptacle of Important Substantive and Procedural Rights.", 13 Rutgers L.J. 399 (1982) (a "Note" authored by a law student on the staff of the law review without public acknowledgement of authorship).

These two kinds of provisions, combined, have been considered to be potential barriers to tort reforms and civil procedure reforms, such as no fault liability regimes, for example, in worker's compensation systems, for car accidents or for medical malpractice cases.

These state constitutional provisions are generally of little use in the context of arbitration, because the Federal Arbitration Act, 9 U.S.C. Sec. 1, et seq., because Section 2 of the Act pre-empts state law, including state constitutions, in circumstances, are prohibits states from invalidating arbitration clauses in circumstances where the FAA applies (which it does to any transaction involving interstate or international commerce, which is that term that has expansive scope, and to any maritime transaction).

But, Section 2 of the FAA does have an exception in cases where the arbitration clause would be invalid under generally applicable principles of state contract law such as those invoked by the New Jersey Supreme Court in Atalese.  There, while the state constitution colored how those state law contract principles were applied to a contract containing an arbitration clause, the contract law principles applied were sufficiently neutral and universally applicable to all contracts, that the decision to invalidate the arbitration clause escaped FAA preemption.

Odd And Untrue Anti-Udall Radio Ad

The U.S. Senate race in Colorado between Mark Udall and Cory Gardner is the closest in the country and could swing control of the U.S. Senate.

The latest ad I heard on the radio (this morning) was sponsored by Women for Cory Gardner or something like that.

It argued that choice of issues other than abortion (which Gardner wants to restrict in any manner possible, whether or not it is constitutional) and contraception (which Gardner has repeatedly supported "Personhood" measures to restrict despite a sudden about face arguing that oral contraception should be an over the counter drug, in part so it isn't provided via taxpayer subsidies for health insurance) was important to women.

The ad claimed that Udall wanted to take away at least three other kinds of choice for women in very non-specific language that was at best misleading and in most cases false.

1.  Udall wants to take away your choice of a doctor.  FALSE.

Presumably this is a reference to his support for Obamacare.

Despite the fact that Obamacare is not a single payer system, does not reduce choice of doctor in any way for people who have health insurance, and expands one's choice of doctors for the large number of people who couldn't previously afford health insurance.

Obamacare also greatly increases reproductive health and mental health options for large numbers of people who already had insurance, particularly in the individual and small business plan market.

2. Udall wants to limit choices about how to protect your family.  MISLEADING.

Presumably this is a reference to Udall's support for mild gun control measures.

If you are a woman who is also a felon, this is true.  If you think you need magazines with more than ten bullets to defend your family, this is also true.

In particular, Udall has not sought any new limitations on purchases of the ordinary handguns, rifles and shotguns usually used by families for self-defense, and has actually supported legislation to make it easier to carry firearms in checked luggage on Amtrak trips.  He has also supported legislation to limit tort liability for gun manufacturers when their products are used illegally or tortuously, as opposed to simply being defective.

If you are more concerned about making it easier for criminals to use their guns against you and your family, particularly criminals and impulsive men on the verge of having restraining orders entered against them, than about you having a military grade arsenal at your home, like most women, this isn't a big deal.

Notable facts: Criminals kill about 100 people with guns for every criminal killed by a law abiding person person with a gun.  Criminal commit a similar ratio of non-deadly crimes with guns for every non-deadly crime prevented with guns.

3. Udall wants to limit your energy choices.  FALSE.

Presumably this is a reference to Udall's support for various forms of regulation of fossil fuel extraction and combustion, and support for renewable energy measures.  At the level of ordinary voters, this simply isn't true, although he has supported some new regulation of air pollution and oil and gas production (an area OSHA and the EPA admit that they do not satisfactorily regulate) that impact utilities over whom consumers never had any choice or control in the first place.

Most Colorado voters have historically had one and only one choice when it comes to electricity and natural gas, because these are regulated monopolies.  In the Denver metropolitan area, you used to buy your electricity and natural gas from Xcel energy, the monopoly provider.  Gasoline and diesel fuel and propane, in contrast, have always been provided in highly competitive markets that Udall has done nothing to restrict.

Udall's support for renewable energy measures, however, such as alternative fuel vehicle credits and solar energy credits, have given people an alternative to gasoline and diesel in the transportation fuel market, and have given people an alternative choice to Xcel (or in conjunction with Xcel) for electrical and water heating energy.  Similar credits have also opened up additional conservation options, which is a choice to consume less money on energy.

Against Freedom of Contract

American law affords people great freedom to determine the nature of their legal liabilities to each other by entering into contracts.  Indeed, it very nearly approaches an ideal that is not just libertarian, but anarchist, despite the fact that neither of these political ideologies had wide political support in the general public.

Contracts can alter the extent to which liability is imposed as a consequence of negligent acts that caused injuries and can change the measure of damages that will be imposed upon them in the event of a breach of a legal duty or modify statutes of limitations to enforce rights.  They can determine whether or not a party will be entitled to attorneys' fees in the event of a dispute that is litigated.  They can eliminate a right to punitive damages, despite the fact that such damages can only be imposed in cases of the kind of misconduct for which liability itself cannot be waived as a matter of public policy.  Promissory notes routinely impose higher interest rates for the time value of money when the notes are in default than when they are not, and very little law limits the size of the penalty rate imposed after a default.  The parties to a contract can also agree to a great variety of matters concerning the manner in which disputes between the parties will be resolved - waiving a right to a civil jury trial, waiving access to the federal courts, waive a right to pursue a claim as part of a class in a class action, authorizing someone not involved in the underlying transaction to bring suit based upon it, or even waiving access to the court system entirely in lieu of only minimally regulated arbitration systems.

General Mills would like to impose an arbitration agreement on anyone who likes their Facebook page in the event of a lawsuit arising from a purchase of Cheerios or Chex.  Home inspectors routinely try to insist that a lawsuit against them for any harm suffered by their failure to do their job properly is limited to a refund of their fee and that even that remedy can be secured only in arbitration.

Freedom of contract is not absolute.  Statutes and public policy considerations impose certain limitations.  They generally prohibit waivers of liability for intentional misconduct, willful and wanton misconduct and gross negligence.  They prohibit liquidated damages clauses in circumstances when actual damages are easily determined or when the penalty is grossly disproportionate to a difficult to quantify harm.  They must afford some means of resort to a third party for dispute resolution or contract enforcement that meets certain minimum standards.  Interest rates cannot exceed rates defined as constituting usury.  Consumer defendants cannot be bound to respond to debt collection lawsuits in geographically distant venues.  Outside highly regulated sports and medical contexts, one cannot consent to not sue someone for intentionally causing you physical harm, for example, in the context of a duel.  Contractual limits on the grounds upon which a married couple may obtain a divorce are generally void, as are agreements in advance concerning post-separation or post-divorce parental responsibilities or child support payments, although there are only modest limitations on contractual agreements regarding property division and maintenance upon a divorce.

Closely akin to the issue of freedom of contract is the impact of disclosure on legal liability.  Products liability law is unduly focused on failure to warn, rather than on the merits of whether a product is dangerous or defective.  Medical malpractice litigation tends to focus on whether a patient was told that something really bad could happen even in the absence of negligence, rather than on whether the physician took appropriate steps to reduce the likelihood that those bad outcomes would actually occur. Securities fraud law permits firms to avoid liability by formally warning investors of risks that all of the other conduct of the sellers pushes buyers to ignore.

As an attorney, it is my stock in trade to draft contracts that do all of these things, and to litigate in light of these terms when they exist.

But, I am deeply skeptical of the proposition that freedom of contract with regard to the nature and extent of tort liability, or with regard to dispute resolution details and terms, does not do more harm than good.

The firms that are sophisticated enough to systemically enter into contracts that minimize their legal liability are often the very same firms that would be in the best position to take the necessary care to prevent negligent harms from occurring in the first place and to refrain from taking actions that would breach their contracts.

Provisions that inflate remedies for contractual defaults, like late fees and high default interest rates, usually have the practical effect of unfairly preferring those contractual debts vis-a-vis third parties who did not agree to that contract who have debts for the same principle and non-default interest amount in bankruptcy, rather than influencing how much is paid by the defaulting party to the contract who often can't pay the principal amount of the debt and non-default interest, let alone the late fees and default interest amounts that are owed.

The overwhelming majority of cases in which there is an arbitration clause is one in which the clause was included to discourage the non-drafting party from asserting that party's substantive rights in the event of a breach of contract or tort, or to otherwise provide an inferior forum to that party to obtain a fair remedy for wrongdoing by the drafting party, rather than out of any legitimate concerns regarding privacy, litigation costs, delay or a potentially unfair public court forum.

It is not at all obvious to me that our economy would be less healthy, or less efficient, if all contractual agreements provisions regarding tort liability, damages in the event of breach of contract or tort, or dispute resolution process were per se void as a matter of public policy.

An immense amount of dead weight loss transaction costs in our economy is devoted to paying people like me to game the system, that would be better spent on funding insurance purchases and reserves for contract liabilities when torts and breaches of contract inevitably happen.  The notion that securing express consent to contractual terms via shrink wrap agreements, liability waivers, terms of service, and the other pervasive contracts of adhesion that fill our lives is dubious at best and often outright absurd.

For example, even if it makes sense to hold swimming instructors liable only for willful and wanton misconduct, gross negligence or intentional conduct, rather than for mere negligence, there is no reason at all to believe that doing so on a transaction by transaction basis with non-negotiable liability waiver contracts signed by parents on behalf of their children is a more efficient way to address this issue than it is to address it with a generally applicable statute concerning swimming instructor liability or common law rule applicable to that situation.  Hundreds of thousands of dollars of liability for a personal injury sustained by a child learning to swim in connection with that student's instruction, should not primarily depend upon whether or not the administrative employee in the front office remembered to have that student's parent sign a form or not.  The amount of legal and administrative expense that goes into the process of preparing, executing, and maintaining records of those waivers of liability for negligence is not insubstantial and is wildly inefficient.

Of course, these terms are also found in vigorously negotiated, individualized contracts involving sophisticated commercial firms that are bargaining at arms length.  There is often no question in those cases that there has been the kind of meaningful and knowing consent to these terms that the legal theory of contract law contemplates when it justifies its freedom of contract principles.  But, even in these circumstances, the desirability of this freedom is questionable.

The transaction costs involved in this part of the negotiations relative to the stakes involved in the transaction are often much higher than the transaction costs involved in consumer contracts of adhesion.  The negotiation process over these terms inevitably prevents a not insignificant percentage of large scale economically valuable deals that would otherwise have been entered into from being concluded.  The way that issues addressed by these provisions are resolved when contracts contain provisions that differ greatly from the default rules of law are present are often unfair and create systemic incentives for misconduct by the party whom the negotiated contracts tend to favor (the notion that parties to a contract are economic equals is almost never true).  And, there is virtually no meaningful empirical evidence to show that business would not be capable of proceeding efficiently and productively in the absence of a decent set of universally applicable default rules.

Of course, to the extent that we have bad default rules of law, an inability of private parties to negotiate around them encourages legislators to fix the problems, which benefits not just those who would otherwise have put the changed new rules that apply in absence of an agreement into their contracts, but only benefits those who weren't savvy enough to draft contracts with better rules regarding how disputes regarding breaches of contact are resolved both in terms of process and substance.

Of course, given the race to the bottom federalism considerations involved, implementing such policies would require federal law intervention under the commerce clause power and/or bankruptcy power of Congress to be viable to implement without creating intense choice of law problems.

What would the rules look like?

* The prevailing party in disputes involving express contracts would have a right to recover their attorneys' fees and costs (something that is already a default rule as a matter of law in the case of leases in Colorado).

* Default interest rates in excess of the non-default rate would either be prohibited as a penalty against public policy.  An intermediate position would be to subordinate those debts in bankruptcy to all other debts, but that would still disadvantage third party creditors to the extent of pre-petition payments of default interest that reduce the size of the pie.  Another intermediate position would be to impose a certain interest rate in addition to the contract rate, for example, four percentage points per annum or the prime rate, in addition to the contract rate in the event a default.  Thus, the default interest rate on a contract with no stated interest rate would be 4%, while the default interest rate on a contract with a 5% stated interest rate would have a default interests rate of 9%.  If all creditors got the same default interest rate relative to the non-default status quo, in and out of bankruptcy, the prejudice to third party creditors would be eliminated.

* Late fees might be capped at a one time fee of 5% of the payment then due and would not apply to accelerated balances until their non-default due date.

* A variety of boilerplate terms might be implied as a matter of law into certain kinds of written agreements unless otherwise provided, e.g. regarding contract interpretation, definitions, etc.  Colorado does this already, for example, in the case of powers of attorney and other grants of fiduciary powers.

* The right to a civil jury might be eliminated in most breach of contract claims based upon written contracts that do not involve allegations of fraud.  (There is already rarely a right to a trial by jury for fact and credibility intensive rescission claims.) Common law already makes contract interpretation a matter of law in most cases, and breach is generally well defined in such cases, so the main shift would be in giving judges the more authority to determine contract damages.  Contract claims already make up only about 25% of civil jury trials despite the fact that the number of written contract claims litigated vastly outnumbers the number of personal injury tort claims litigated on court dockets.

* Statutory law would draw clearer lines regarding the measure of damages in a variety of particular industry contexts such as defective software, inaccurate home inspections, etc.

* The circumstances under which arbitration clauses would be permitted would be greatly narrowed, the conduct that could submit someone to an arbitration agreement would be greatly formalized along the lines of recent uniform legislation on marital agreements, and the occupational activity of arbitrating disputes would be much more heavily regulated to insure neutrality and fairness in the process.

* Waivers of liability for negligence would be void as against public policy, but a set of statutes would outline circumstances where there would not be liability for negligence (e.g. volunteer emergency assistance and inherently dangerous activities).

* Punitive damages waivers would be prohibited.  But, punitive damages and statutory damages ought to be subordinate to all other claims in a bankruptcy, or in the event of a dispute between judgment creditors over the same income or assets in bankruptcy.

* In some cases, like medical malpractice, a negligence based tort process could be replaced by a no fault regime of strict liability for bad outcomes with strictly compensatory damages and mandatory insurance to cover that liability, rather than a fault based regime that covers non-economic damages, with exceptions of willful and wanton or reckless or intentional misconduct, and with automatic referrals for disciplinary action on a license in cases of gross negligence.

* Contractual terms giving rise to a default in the absence of a breach of the substantive obligations of the parties to perform the contract ought to be disfavored.

* Failure to warn liability ought to be reformed, both to make unreasonable or unlikely to be read warnings ineffective particularly if rebutted by other communications or advertising, and to make warnings of obvious dangers unnecessary.

* Some minimum substantive securities regulation standards ought to be imposed, so that certain kinds of offerings are prohibited even if investors are warned about the risks in question.  Alternatively, a doctrine that subordinates formal written disclosures to other communications with investors might apply.

* In part to discourage venue shopping and in part out of the federalism notion of subsidiarity, I would favor the elimination of federal court jurisdiction in all ordinary diversity cases involving U.S. citizens (for diversity of citizenship jurisdiction purposes) (currently allowed when the amount in controversy exceeds $75,000 and the parties are diverse in state citizenship) and in all federal question cases involving private parties who are U.S. citizens (for diversity of citizenship jurisdiction purposes) (currently allowed in all cases with a federal question).  Thus, almost all employment litigation involving private parties (now federal question litigation), almost all contract disputes involving private parties, and almost all personal injury cases involving private parties would be limited to the state courts.  Cases with international diversity of citizenship (e.g. between a non-U.S. company and a U.S. company), special diversity of citizenship cases (e.g. multi-state class actions, and interstate interpleader cases), and special federal question cases that don't come under the general federal question statute (e.g. intellectual property and civil rights cases), as well as cases involve the U.S. government as a party, would remain in federal court.

Venues Insurance Defense Lawyers Hate

Almost every U.S. state determines general jurisdiction trial court venue for civil litigation on a county by county basis.  There are a few more than three thousand counties in the United States.  There are also almost a hundred United States District Courts.  Every state has at least one, but some states have more than one with groups of counties allocated to each judicial district.

Some venues are hated by insurance defense lawyers, and loved by trial lawyers representing plaintiffs, because the laws applicable in that forum, the typical makeup of a jury pool in that forum, and/or the judges in that forum tend to favor plaintiffs over defendants.

An Overview of the Concerns Of Tort Reformers

First and foremost, tort reform advocates dislike class action and mass tort litigation of all kinds, and qui tam suits in which private plaintiff's lawyers are empowered to bring suits on behalf of the general public as a private attorney general in exchange for a contingent fee.

Second, they indiscriminately oppose liability for medical providers for almost any reason, and also believe that damage awards in those cases are too large.

Third, they oppose legal liabilty, in general, for businesses and government for almost any reason, but particularly in strict liability claims of any kind.

They also express concern about judicial and jury bias in liberal jurisdictions and in the case of California, the delays caused by an underfunded judiciary.

A More Neutral Assessment

I am certainly not someone who claims that the unique American system of tort liability focused on the determination of trial juries is perfect.

Class action lawsuits, particularly under the lenient standards of California, can be used to bring large dollar lawsuits for seemingly trivial violations that provide only slight benefit to the victims of improper practices, and have largely failed at the task of causing large numbers of similar claims to be efficiently adjudicated on the merits.  On the other hand, these suits do discourage the routine petty cheating of firms with concentrated interests in breaking the rules from benefitting from their wrongdoing.  Likewise, it is hard to feel much sympathy for qui tam defendants who are determined in a legal process to have violated laws and to owe fines.

Medical malpractice suits are both overinclusive and underinclusive.  Too many suits are brought in which there is a bad outcome but weak evidence of negligence, although low success rates in medical malpractice cases suggest that this strategy isn't very fruitful.  But, the usually blameless people who experience bad outcomes from medical procedures have almost no public or private safety net to address the uninsurable losses that they experience, and far too many cases where there is solid evidence of negligence are never brought or dismissed by a process that often fails to reach the merits of the concerns raised.  The profession is also far too protective of bad doctors who commit a greatly disproportionate share of these claims, and has yet to come to terms with the idea that liability is appropriate for mistakes made by a doctor that are simple mistakes and not just for the kind of gross negligence that a good doctor will never ever make in an entire career.  Another problem with the medical malpractice system is that it fails to acknowledge that medical mistakes are frequently due to having bad systems in place, rather than due to the blameworthiness of a physician in a particular instance that causes harm in the context of weak systems to prevent mistakes.  The claim that medical malpractice liability drives rising health care costs is also bogus.  The notion that large damage awards against genuinely negligent physicians is a big problem is likewise questionable.

Governmental liabilty (raised by the ATRF only in the case of New York City, the largest city in the nation which consolidates functions found in separate governments in most cities, which hence has more incidents that give rise to more suits) presents issues entirely different from those associated with private tort liability.  In general, governments are (arguably unfairly) insulated from liability that comparable private entities would face on lines similar to a tort reformer's utopia.  Civil rights liability, in general, has poor incentives for reforming bad systems and also focuses far too much on the intent of the defendant as opposed to the harm suffered by the plaintiff.  I have long argued for a strict liability takings jurisprudence and vicarious liability, that deemphasizes intentional wrongdoing to people who are harmed in ways that they don't deserve by government action.

The basic problem with the claim that "Judicial Hellholes" are bad for business is that many of them are hubs of big business activity.  Tort liability be damned, the people of Chicago, New York, and California have managed to become global centers of business activity, while defense counsel friendly forums have not.  These supposed anti-business jurisdictions also manage to hold onto the crown jewels of the American economy despite high state and local taxes.  When large commercial banks, commodities traders and tech companies start relocating en masse to the less regulated, lower tax jurisdictions that conservatives claim are business friendly, their arguments will sound much more plausible.

American judges do have vast discretion, as do American juries, and as human beings, sometimes their own personal biases color their judgments in ways that no appeal can remedy.  Judicial elections do a particularly poor job of avoiding the appearance and fact of judicial bias, and starkly political federal judicial appointments have a similar flaw. 

It is also absolutely true that many U.S. states dramatically underfund court resources for civil litigation causing hard to measure, but substantial costs for the private sector economy.

The argument that opportunities for forum shopping should be diminished is a legitimate one, although tort reformers fail to acknowledge that forum shopping by defendants (usually by choice of place of organization or by contractual agreements) can be every bit as egregious.

In my experience, however, tort law is not a particularly problematic part of the American legal system.  Contigent fees provide a good system for screening claims for which legal involvement is merited for quality and seriousness to the average person without taxing the general public.  Casualty insurance provides counsel guided by an employer with an economic interest in a competent defense to accused tortfeasors, provides resources to compensate injured parties, and prevents people unlucky to be careless at the wrong time from being ruined by their unintentional mistakes.  The jury system mitigates the relevance of judicial bias in decision making on the merits in tort cases.  Discovery abuses are not a particularly serious problem in run of the mill negligence cases, which are rarely rich in documents and often have only a few witnesses with personal knowledge of the facts which usually arise out of quite temporally and geographically compact incidents.  It is also relatively hard to shut down a relatively routine negligence case with motion practice, a factor that also controls litigation costs.

The biggest flaws in the civil litigation process between strangers are instead in (1) in business and commercial disputes where motion practice and document discovery costs can grow very large relative to the stakes in the dispute when far less information is legitimately disputed, and (2) in small collection cases where pro se defendants who have legitimate defenses to evictions, foreclosures or contract suits or to specific collection techniques are not equipped to exercise their rights in a meaningful way to limit judgments to the amounts owed and to prevent harm to the defendant far in excess of the amounts not paid.

Tort Reformer's Specific Concerns

The American Tort Reform Foundation, a conservative special interest group that favors narrowing tort liability, calls these places "Judicial Hellholes" and makes an annual list of what it sees as the worst places to be a tort defendant.  This year's 2012-2013 report features two entire states (California and West Virginia), Madison County, Illinois, and the forums that include three U.S. cities: Albany, New York; New York City, New York; and Baltimore, Maryland.  

In California, their main grievances are laws and statutes that favor consumer class action lawsuits and insufficient judical branch budget resources, particularly in Los Angeles.

In West Virginia, concerns are cited about judicial bias against out of state business defendants, limited appellate rights, liberal personal injury liability, and outgoing Attorney General Darrell McGraw, Jr. whose collaborations with plaintiffs' lawyers in ways that the ATRF feels he has used for personal political advancement.  The ATRF similarly expresses lesser concerns about "the state attorney general’s aggressive use of contingent-fee lawyers to enforce state law" in Nevada who are "compensated based on the amount of the fines they impose on businesses," something that is called a qui tam lawsuit in formal legal language.

Madison County, Illinois has been home to many asbestos lawsuits (and other class action lawsuits) and the defense bar feels that local trial lawyers have captured the judiciary through the judicial election system and receive special treatment as a result.  They also state that "the election of a former head of the Illinois plaintiffs’ bar to the appellate bench overseeing its courts provides new reason for concern."

In the two New York State venues, they note large numbers of suits against the city for grounds from civil rights violations to medical malpractice to failure to maintain public works, "a unique state law that imposes liability on those who undertake construction projects, regardless of who is at fault," "more than its share of fraudulent claims," and strong support for trial lawyers in the legislature.

In Baltimore, Maryland, large awards to asbestos claimants and "a case before Maryland’s highest court, in which some plaintiffs’ lawyers – not elected state lawmakers – are seeking to end longstanding legal doctrine that bars recoveries by plaintiffs who are at fault for their own injuries," are cited as concerns.

It also cites lesser concerns.  The ATRF feels much better about Philadelphia, Pennsylvania in the wake a a plan "for mass tort cases handled by the Complex Litigation Center (CLC)" which is under new management. "A new state law now better aligns the liability of defendants with their share of responsibility."  They now urge "legislation that curbs forum shopping in personal injury cases, which allows so many lawsuits to flow to Philadelphia."

South Florida is a reduced concern for them because of "reform of the state’s no-fault auto insurance coverage law, which had led to an alliance between personal injury lawyers and fly-by-night clinics that milk the system and drive up Florida’s insurance rates."  But, they dislike Florida's liability regime for bad faith breaches of insurance contacts, and notes that there are "pending challenge to the state’s limit on noneconomic damages in medical malpractice cases."

The ATRF dislikes Cook County, Illinois (home of the City of Chicago), because "It remains the home of expansive liability and excessive verdicts," and because poorly rated judges have survived judicial retention elections. But, an absence of high profile cases kept it off the top of its lists.

The ATRF praised New Jersey for a "court decision that shields name-brand drug makers from unfair liability in claims involving generic drugs made by competitors, and with what may be a new trend toward fairness in other lawsuits against the state’s key pharmaceutical industry.  But, they claim that medical malpracitce cases are too common and that laywers "make outrageous claims against Little Leaguers, life-saving police officers and girlfriends who send their boyfriends text messages."

The ATRF faults Louisiana for "the state’s litigious environment, aggressive personal injury bar, excessive damage awards, and plaintiff-friendly judges. The state’s uniquely high monetary threshold for obtaining a jury trial ensures that plaintiff-friendly judges serve as juries, too, in many cases."  But, they praise legislative reform of “legacy lawsuits,” which they argue "have unfairly targeted the state’s oil and gas industry, costing thousands of jobs."

Judge Kane Skewers Righthaven In Colorado Suits

Colorado, issued another stinging rebuke to Righthaven. This time it was Judge Kane in Colorado, and his decision will lead to the end of all of Righthaven's pending cases in Colorado over the "TSA Pat Down" photo from the Denver Post. I assume Righthaven will appeal this ruling to the Tenth Circuit, but until then, it seems like its Colorado operations will be on hold.

Like other judges before him, Judge Kane dismisses Righthaven's case for lack of standing due to an inadequate copyright assignment. Unexpectedly, Judge Kane doesn't simply rely on the Ninth Circuit Silvers case or the other Righthaven precedent. Instead, because the case is in the 10th Circuit and not bound by the Silvers case, the court does a scholarly analysis of the standing issue from scratch. . . .

The judge orders Righthaven to pay Wolf's attorneys' fees. As I've mentioned before, with every fee award against it, Righthaven's profit meter keeps running in reverse. It wouldn't surprise me if judges eventually award more fees against it than Righthaven took in through its settlements in total. However, none of the fee awards will matter if Righthaven is inadequately capitalized and thus continues to plead poverty. . . I expect that angry defendants with sizable fee awards are going to look for other parties who might pay the fees. MediaNews, you're probably going to hear from some defendants; I hope you built that contingency into your budget. Wouldn't it be ironic if defendants started sniffing around Steve Gibson's home looking for assets to satisfy their fee awards?

As a final insult, Judge Kane makes it clear that Righthaven isn't going to win in his court, even if they can get a reversal of the standing issue on appeal (see, e.g., FN 2 of the opinion). While this opinion wasn't a flamboyant benchslap like Judge Hunt's opinion in the Democratic Underground case, it was a stern rebuke nonetheless. It's interesting how so many judges, effectively independently from each other, have each morally condemned Righthaven's campaign.

From here regarding a the linked ruling in 1:11-cv-00830-JLK (D. Colo. Sept. 27, 2011).

Footnote Two in Judge Kane's opinion states:

Although the institution of some third-party infringement suits may protect the interestof a copyright owner, not all infringement suits are meritorious or worthwhile. Divorcing the economically beneficial interest in copyright from the right to sue for infringement eliminates the exercise of “prosecutorial” discretion by the copyright owner. The party whose only interestis in the proceeds from an action for infringement has no incentive to refrain from filing suit. Furthermore, in light of the severe statutory damages for copyright infringement and the burdensome costs of litigation, a party sued for infringement, even a party with a meritorious defense, will often agree to settlement. Thus, a party with a bare right to sue may file numerous infringement actions of questionable merit with the intention of extorting settlement agreements from innocent users. This possibility becomes even more likely when the financial viability of the entity filing suit depends upon the proceeds from settlement agreements and infringement suits. Even though copyright law expressly provides for an award of costs and reasonable attorney fees to a party prevailing in its defense of a meritless infringement action, the economic realities of securing counsel and paying in advance the costs of litigation turns this remedy into a Potemkin Village. Both fundamentally and practically, the reality is at odds with the constitutional prioritization of public access to copyrighted works.

The footnote sounds a lot like the traditional tort reform analysis, but from a free speech orientation.

Few intellectual property business models have been so soundly condemned over a really rather modest failure to properly handle ownership issues related to the claims. This is in part because there is a deep underlying free speech values outrage at the enterprise of retail level petty copyright enforcement in arguably newsworth matters itself that Righthaven forced judges to aid and abet for a while that they are happy to distance themselves from and discredit.

SCOTUS Dislikes Class Actions

Today, a conservative majority of the U.S. Supreme Court in a 5-4 decision, held that a sex discrimination case against Wal-Mart on behalf of its 1.5 million female employees could not be certified as a class action lawsuit. (There was wide agreement that the backpay due in the case could not be handled on a class basis, but there was deep dispute over whether the existence of gender discrimination at the company could be litigated in that manner.)

This is the latest of a string of cases that have disfavored class actions, such another this term that held that the right to conduct a class action arbitration could not be implied from a simple arbitration clause and that the fact that an arbitration clause expressly prohibits class actions could never be sufficient to render it unconscionable under a provision of the federal arbitration act that allows arbitration clauses to be invalidated if they would be unconscionable under state law.   The rulings have largely been statutory or based on court rules, thus they are more easily overriden than rulings based on constitutional grounds, but the rulings are colored by a deep distrust of the class action generally.

Concerns about class actions have also been a central to the tort reform movement, and have been an area where the movement has achieved more than one significant victory, by imposing major procedural limitations on securities law class actions, and by giving the federal courts jurisdiction over many class actions arising under state law that would not qualify for diversity jurisdiction.  Today's ruling, interpreting the class action rule in the federal rules of civil procedure, thus, has wider implications for class actions generally, than it would have a couple of decades ago, because more kinds of class action lawsuits are confined to the federal courts.

To some extent, the distate of big businesses for class actions, and plaintiff friendly group's support for them is simply a matter of mathematics.  In a situation where there are many people with small claims against a single business or small group of businesses, large numbers of people with claims will never choose to bring valid lawsuits because the litigation cost economics don't make sense, and except in the very clearest cases, the verdicts will be a mixed bag.  In contrast, a win in a class action will afford a remedy to everyone with a claim (or a proxy for them) and a win on behalf of all claimants is possible even when a win on the liability issue isn't a sure thing in any given isolated case.

There is also considerable controversy over the fact that "coupon settlements" and contributions to non-profit caues often replace money awards as typical class action remedies, that class actions are expensive to litigate and rarely result in a resolution on the merits by a judge, that there are often multiple competing class actions that must be consolidated arising from single incidents, that forum shopping can be especially problematic in these cases, and that the cases can seem to be attorney driven rather than focused on providing a remedy for a client.  The high cost and long litigation times involve in class action litigation don't speak well for a process which was invented to reduce litigation costs and handle numerous related small claims more efficiently than traditional litigation efforts.

On the other hand, class actions can put pressure on big businesses to comply with the law even when the state regulators of an industry are asleep at the switch, underfunded, run by a political appointee hostile to the agency's purpose, or are the victim of capture by the regulated industry.  Class actions can close the gap between the laws on the books regulating an industry or practice,  and the law as actually enforced.  It can function as a remedy to corrupt administration of regulatory laws.  Class actions are also an arguable preferrable way to regulate industries through decisions by private individuals rather than actions by state officials whom many people who are inclined towards libertarian political ideologies may distrust.

In employment cases, the key attraction of a class action is the question of proof.  It may be much easier to establish discrimination on a statistical basis than it is to prove that it was present in an individual case, and it may be easier to fashion an affirmative action remedy in response to statistically proven discrimination than it is to wade through the details of a money damage remedy on a case by case basis.

But, class action cases can appear to grant legislative or regulatory type authority to courts whose procedures are primarily geared towards resolving disputes that involve only narrow disputes between small numbers of people.  This tendency is particularly apparent in false advertising claims where very large numbers of people are exposed to advertising claims and considerably numbers of people may buy products that are falsely advertised, but the individualized consumer harm may be modest.  Negotiations between alleged wrongdoers and alleged victim's representatives may also lead to court sanctioned remedies, such as certain forms of affirmative action, that could never be approved as legislation in the absence of a violation of the law that is never provided on the merits in court.

The trend seems contrary to the trends in our economy, in which big corporations whose mistakes routinely impact large numbers of people in incidents with a common source, rather than isolated incidents of wrongdoing, are increasingly the norm.  If a big money center bank calculated interest rates on loans, or forecloses on houses improperly, it will usually be because some system has gone wrong or some computer program had an incorrect rule, with the error affecting hundreds of thousands of people nationwide, rather than because there was some isolated defect in one customer's particular case.  Serious misrepresentations to consumers in commerce not infrequently involve massive advertising campaigns rather than an isolated vendor and purchasers in an open air marketplace.  Serious discrimination in employment practices frequently flows from bad leadership at the top of an organization that guides subordinate managers, rather than individualized misconduct by low level managers.  In our modern era of quality control systems in manufacturing, systemic defeats in mass manufactured products are more likely to cause harm than isolated duds that aren't successfully removed from the assembly line: most defective products are the result of a design defect, either in the product itself or the manufacturing process.  An inability to remedy systemic wrongdoing by a big business in a collective way is out of step with an economic reality in which a large share of all wrongdoing has a systemic source.  In the long run, it may be more important to the functioning of our economic to solve systemic problems than to remedy the one off screw ups that can never be completely eliminated.

For what it is worth, big government agencies, like the I.R.S., have many of the same weaknesses in offering remedies to systemic errors that put individuals in low stakes cases in bind, that big businesses do.

Some problems in the way that big businesses and big government operate, may be flaws in how they do justice between third parties who deal with them, rather than actually benefitting these entities themselves.  For example, most securities fraud involves cases where a misrepresentation by a business causes a stock price to fail to reflect the truth for some period of time, which benefits some secondary market stockholders to the deteriment of other secondary market stockholders, while having little or no direct economic impact on the company itself and where only a tiny part of the benefit or harm accrues to company insiders.  Often the beneficiaries and victims of the misrepresentation have no knowledge that they are acting in the basis of a misrepresentation until after the harm has been done. 

Yet, if misrepresentations with immense economic consequences for stock traders routinely lead to no repurcussions for the parties who make them, the soundness of our financial system is seriously undermined.  Some of the parties most responsible in fact for the financial crisis, the major credit rating companies, had very little other than their pitiful compared to the amount at stake in the economy fees, in their decisions, and will bear no consequences for their mistakes, and there is a movement in the securities law world to treat accountants the same way.  Yet, if the people whose observations drive the market have little stake in being accurate, the financial markets are certain to repeat its world economy shaking mistakes.  Millions of people are out of work and have been for many, many months, in substantial part because the tiny number of people on Wall Street who determined how creditworthy bond issuers were had an insufficiently compelling incentive to get their decisions right.

Part of the barrier to the problem is that power dynamics and self-interest driven policy stances are often so transparent in the tort reform area and in the area of class action litigation in particular, that it is hard to separate and address sincere and legitimate concerns from merely self-serving ones in the policy arena.  Also complicating the effort to find a fair way to deal with the cases that drive class action litigation is that extremely loose class action standards and substantive law claims that can be brought as class actions in a handful of states like California create extremes of the process that suggest solutions that aren't necessarily appropriate for the more strictly regulated federal courts or courts in states like Colorado where class action litigation isn't nearly so common.

Class Actions

Securities fraud class action lawsuist receive a lot of attention. But, there actually aren't very many of them. One blog devoted to the subject identified 189 of new securities fraud class action lawsuits in 2009, predominantly, although not exclusively, in federal court.

There were an average of about 618 class action lawsuits filed each year from 2000-2005 in California's state courts, the nation's largest state and one that has traditionally been friendly to class action lawsuits. The Class Action Fairness Act of 2005 probably curtailed this number significantly.

Employment cases represented a yearly average of 29.3% of all class action cases. Business Tort cases represented a yearly average of 27.4% of filings during the same period. . . . The percentage of contract class action cases declined during the study period. . . . with a six-year average representation of 10.3% of all cases filed. . . . Likewise, antitrust cases . . . with a six-year average of 5.9%.

Other case types include construction defects (5.4%), insurance coverage, mass torts, civil RICO, fraud (3.4%), product liability (3.5%) and civil rights cases.

The employment cases involved overtime and meal/break disputes. The anti-trust cases arose largely out of two events, profiteering in the utility industry during the 2000 energy crisis in California and a pricing dispute related to GM automobiles in 2003. The business tort cases are basically false advertising cases.

About half of the cases were resolved during the study period. Of those, just under a third (32%) settled, just over a third (34%) were dismissed in motion practice, and just under a third (33%) were transferred to another state or federal court or merged with another case. Nine out of 1294 cases (less than 0.1%) went to trial on the merits (compared to 8.6% of all general jurisdiction civil cases in the study period). A small number were stayed, on appeal of the class action determination, or in some other procedural situation.

About a sixth of the cases, or more, would be barred from state court under the Class Action Fairness Act of 2005.

Class Action Lawsuit Statistics For Colorado

How many Class Action lawsuits are filed each year in Colorado, and where are they filed?

I asked Paul Karlsgodt, a Colorado lawyer prominent in the Colorado Bar Association's Class Action circles who runs the blog ClassActionBlawg.com. He responded with an October 15, 2010 post detailing the best available data to date (this post has more detailed statistics).

How Many Class Action Lawsuits Are Filed In Colorado?

In the 46.5 month long period that he reviewed from January 1, 2007 to October 15, 2010:

The total number of lawsuits filed which were described as "class actions": 168

* Class Action Lawsuits In Federal District Court: 123

* Class Action Lawsuits in State District Court: 41

Class actions were filed at an annualized rate of 43 class actions in Colorado per year: an annualized rate of 32 class actions in federal court in Colorado per year, and an annualized rate of 11 class actions in state court in Colorado per year. Roughly speaking then, each month in Colorado, two or three federal class action lawsuits and one state class action lawsuit is filed. Combined, one class action lawsuit is filed in Colorado, most weeks, but not every week.

These Numbers Are Overstatements Of The Amount Of Judicial Burden They Impose

If Colorado resembles at all the experience of states known for large numbers of class action lawsuit filings, like California, and the experience of class action securities fraud lawsuits, the number of incidents giving rise to these lawsuits is probably quite a bit smaller than the number of lawsuits themselves. Generally speaking, when some big event or act that could give rise to a class action lawsuit arises it gives rise to multiple class action lawsuits, some virtually identical due to a race to the courthouse, and some with slightly different legal theories and purposed Plaintiff classes described in the complaints. As a result, an appreciable share of the litigation process in many class action litigations is devoted to the process of consolidating multiple lawsuits with the same subject matter.

Consolidation of cases, removal to federal court, bankruptcies by class action lawsuit defendants (effectively another form of removal to federal court for defendants who wouldn't otherwise qualify in many cases), swift dismissal of cases on motions to dismiss, early motions for summary judgment, and pre-arranged settlements of cases filed only after a settlement agreement has already been reached, mean that a significant share of the eleven or so class action lawsuits filed in state court in Colorado each year on average are probably swiftly removed from the court system with only modest judicial effort -- little more than an ordinary civil action.

Obviously, of course, class actions lawsuits that do make it beyond the preliminary stage of the civil litigation process in both federal and state courts do take considerable resources that are much greater than those in a run of the mill civil action.

Civil cases very rarely go to jury trials in the United States, with most being resolved by default judgment, in motion practice, in bench trials, or by settlement prior to trial. Class action lawsuits are typical in this regard. It is a fair guess that you can count on the fingers the number of class action lawsuits that have actually gone to a jury trial in the state of Colorado in the last four years.

Jury trials in class action lawsuits are as rare as penalty trials in death penalty cases outside the South. Each one is newsworthy and often receives attention as national or international news.

Class Actions As A Share of Colorado Court Dockets

For comparison's sake, there were 65,595 district court civil cases that were not appellate in nature (district courts hear appeals from inferior courts and quasi-judicial legislative bodies as well as state habeas corpus petitions) filed in Colorado's state district courts in 2009.

Many of these were summary proceedings (e.g. 34,832 foreclosure hearings, 3,514 petitions to seal criminal records, 1,825 state tax liens, 849 repossessions of personal property, 829 evictions, 564 foreign judgment registrations, 269 motions to enforce out of state subpoenas, 218 proceedings to confirm arbitration awards, 194 name change petitions, 176 motions to approve structured settlements and 58 petitions to form special districts).

But, 11,683 district court civil lawsuits filed in 2009 were lawsuits asserting tort or contract type claims of precisely the kind that often are the subject of class action lawsuits. So, class action lawsuits in state courts make up roughly 0.1% of the total docket of large dollar value tort and contract type claims in Colorado's state courts. The actual percentage is smaller, because some cases are successfully removed to federal court.

About 1.6% of traditional federal civil lawsuits in Colorado are class action lawsuits, a sixteen times larger share of the total than in state court. There were 2,877 federal civil cases filed in the U.S. District Court for the District of Colorado in 2008, the most recent year for which statistics are available. Almost a third of these cases are Social Security disability claims, SSI eligibility claims, student loan collection cases, and pro se prisoner's petitions (not that prisoner's petitions can never be class actions, indeed those class actions are highly relevant to the procedural tool), but the federal docket has a far largely share of individual civil lawsuits comparable in nature to class actions.

The Geography of Colorado Class Actions

In all about 73% of class actions were filed in the United States District Court for the District of Colorado (i.e. federal court). Thus, 27% of class actions filed in Colorado were filed in state court.

Karlsgodt has kindly broken the state district court class action data down by county. Over the 46.5 month time period the number of class action lawsuits filed in district courts in each county were: Denver 31, Boulder 6, Arapahoe 5, Douglas 1, Weld 1.

Of the total 18% were filed in Denver District Court (76% of class actions filed anywhere in the state courts courts), 4% were filed in Boulder District Court (15% of class actions filed in the state courts), 3% were filed in Arapahoe County District Court (12% of class actions filed in the state courts), and the remaining 1% were filed in other metro Denver counties (about 5% of class actions filed in the state courts).

Since Colorado's federal distinct court and the Denver District Court are both in zip code 80202 (downtown Denver), that zip code accounts for 91% of class action lawsuits in Colorado, as well as all appeals in those actions (the 10th Circuit Court of Appeals, the Colorado Court of Appeals and the Colorado Supreme Court are all in zip code 80202) other than discretionary appeals to the U.S. Supreme Court.

The other 9% of class actions in the database filed in Colorado were all filed in the greater Denver-Boulder metropolitan area, an easy morning drive for a Denver or Boulder attorney involved in litigating one of these cases.

Analysis

Class actions cases receive intense scrutiny in public policy circles, particularly as part of the tort reform debate. Their outcomes can often be on a greater scale than any individual lawsuit. These suits can make or break companies.

Of course, more often, the subject of class action lawsuits is banal. They are often brought because the harm to any one plaintiff is too small on its own to justify bringing a civil suit at all given the litigation costs involved, even if the likelihood of success on the merits is small. Most class members are almost completely unaware of the lawsuit until it settles, the attorneys for the class typically receive respectable fees, and the rewards to class members are often modest or produce no compensation at all, with a settlement paid to some putatively related good cause in an effort to prevent the defendant from being unjustly enriched, because the logistics of tracking down individual members of the class and providing them with a tiny money judgment aware are to unwieldy to be workable. Minor bureaucratic screw ups or deceptive advertising materials provided to large numbers of people are some of the typical scenarios.

The Scale of Regulatory Actions Relative To Class Actions

While people commonly perceive class actions as the American remedy of choice for wrongs done to large numbers of people, and suits by a state or federal regulatory agency or state attorney general as relatively less common, that isn't actually true, at least in Colorado.

The state attorney general litigates about many tens of times as many cases as their are class actions suits in state courts each year, involving harm to members of the general public, sometimes as civil actions and sometimes as white collar criminal cases, a large portion of which would have been class action lawsuits if filed by private individuals.

The Department of Regulatory Agencies in Colorado reaches settlement in hundreds of cases and handles thousands of cases, again, often in cases where the only practical private litigation alternative would have been a class action lawsuit or the threat of one.

All of this, of course, is in addition to action by federal regulatory agencies and the federal U.S. Attorney, who handles a significant share of all serious white collar crime cases. Collectively, the dollar amounts involved in these cases is very substantial, running to the hundreds of millions of dollars.

For example, year in and year out, the Colorado Department of Regulatory Agencies engages in never ending class action litigation-like enforcement actions against the state's insurance companies and public utilities, producing hundreds of millions of dollars of pro-consumer settlements and revisions each year.

All of this also ignores the modest, but real role played by local district attorneys and local government regulators in a consumer protection function, in addition to their primary role as prosecutors of "blue collar" crime.

Class Action Judges

State courts of inferior jurisdiction generally have no jurisdiction over class action cases at all.

Most of the 164 state court judges in courts of general jurisdiction in Colorado, particularly those who serve outside Denver, Boulder and Arapahoe County, will never handle a single class action lawsuit in their entire careers. Many of the state court judges who do handle a class action lawsuit will do so only once or twice in their careers. Even in Denver and Boulder, where the number of class action lawsuits filed per judge is highest and dockets are specialized so that only a subset of the total group of judges in the judicial district are handling civil cases at any one time, judges assigned to the civil docket for the year will typically handle only one class action lawsuit per year, a substantial subset of which can be disposed of quickly. In a few years, the judges handling civil cases will rotate, and those judges will not see any new civil cases, let alone class action cases, again for years. A Denver or Boulder District Court judge may handle a dozen class action lawsuits in a typical career (which tends to be shorter than the careers of federal judges due to the mandatory retirement age for state court judges and the reduced relevance of political balance in the judiciary under Colorado's merit system for appointing judges). In Arapahoe County, a typical District Court judge may handle half a dozen class action lawsuits in a typical career. In other large urban counties perhaps one in twenty state court general jurisdiction court trial judges will handle a class action lawsuit ever in an entire judicial career. In rural counties, it would be very exceptional for a state court general jurisdiction trial court judge to handle even one class action lawsuit in an entire career.

Federal district court judges, in contrast, handle class action lawsuits routinely. Colorado has five currently sitting U.S. District Court judges in active service, five senior judges, and eight magistrate judges, in addition to a number of bankruptcy judges. But, for the most part, the key decision points in a class action litigation need to be handled by a judge and not a magistrate, and senior judges carry lighter case loads than their active service peers on the bench. There are six class action lawsuits filed in federal court each year in Colorado, on average, per active U.S. District Court judge. If senior judges are assumed to have an average half time docket, that is still more than four class actions per year per active federal judge and two class actions per year per senior judge. The federal trial court bench does not specialize to the extent that Colorado's state court trial judges do, so that means active federal judges handle four class action lawsuits every year, year in and year out (on average) for their entire careers. A federal judge who has twenty years of active service and another ten as a senior judge (which would be fairly typical for a federal judicial career), will handle about a hundred class action lawsuits, even here in relatively provincial Colorado. Over the course of a career, there is a good chance that any given federal district court judge will actually preside over more than one jury trial in a class action lawsuit.

The diffuse nature of class action lawsuits in the state courts, and lack of judicial specialization in handling them (although there is some subject-matter specialization on a short term rotating basis in both the Denver and Boulder District Courts that handle most state court class action cases), and the undue influence that these suits give to the pools of juries in these counties who are unrepresentative of the state as a whole, also naturally gives rise to the question of whether some matters of particularly wide interest, should be handled by a single statewide court charged with handling the most potentially demanding and procedurally esoteric matters, or whether other justice system values make this inadvisable. A jack of all trades judiciary can protect that institution from the kind of regulatory capture that is the stock in trade of bureaucratic infighting and inside the beltway politics. But, this can come at the price of weak processes and insufficient procedural expertise.

Class Action Lawyers

I haven't reviewed the detailed data, but I suspect that it is safe to assume that the 168 class action lawsuits brought in the past four years in Colorado were brought by considerably fewer than 168 law firms, and probably fewer than 168 lawyers, in a state that has something on the order of 30,000 lawyers. The class action defense bar is probably a little bit more diffuse, but a few dozen specialists at large firms who represent mostly large and medium sized enterprises probably make up a large share of the total.

It is also a safe bet that the class action plaintiff's bar is not homogeneous. Employment discrimination and overtime class actions are often brought by an entirely different group of lawyers than those who bring class action lawsuits in cases involving large numbers of personal injuries from the same cause (e.g. train wrecks, airline crashes and defective products), who in turn probably have very little overlap with the group of attorneys who bring securities fraud cases.

Give the quite small number of lawyers who file class actions at all, the number of lawyers actively filing class action lawsuits of any given type of lawsuit in Colorado is small indeed. You can probably can't on your fingers the number of lawyers who have filed class action civil rights cases in the last four years, for example.

The class action defense bar is probably a little more homogeneous. They have a class of clients who collectively tend to get sued a lot, and get their cases from the ranks of the clients that they already have; clients who are served in other matters by other lawyers in the same firm. If a case puts the life of a firm at stake, the general counsel may go out and shop for a specialist in the field, but most of the time the firm that represents those large business clients tries to be a full service firm as much as possible.

In contrast, class action plaintiffs' lawyers look for incidents or clear wrongdoing, or clear harm through a wide variety of means, through a wide variety of means, including media accounts and complaints from individual prospective clients who suffer harm too modest to economically litigate on an individual basis, and then actively recruit or including by definition in a class clients on the receiving end of the wrongdoing or harm.

Caveats Regarding The Data

Karlsgodt's data come from the fee based Courthouse News Service database which includes a comprehensive list of federal class action lawsuits, as well as data from state trial courts of general jurisdiction (i.e. District Courts) from urban counties that include "a majority of the state population" in the time period from 2007 to 2010 (through October 15, a partial year).

The bias within large urban counties in favor of Denver and Boulder, which are the most liberal large urban counties in Colorado and had 91% of the state court class actions (despite making up only about about 11% of the Colorado's population), suggests that the exclusion of more rural Colorado probably didn't omit many cases. They omitted counties are not only low in population (making them less convenient for urban trial lawyers to utilize), they are also mostly much more conservative than Denver or Boulder, and hence not plaintiff friendly venues. Yet, class action plaintiffs often have a fair amount of flexibility in choosing a state court venue when a state court venue is available. My educated guess is that than no more than half a dozen class action lawsuits over the 46.5 month period (i.e. probably not more than one or two per year) that were outside the geographical scope of the database were omitted, and if those suits were repeatedly filed in a rural county known to be Plaintiff friendly, I am sure that class action attorney Paul Karlsgodt and other policy makers would have discussed this fact.

In addition to excluding class actions filed in more rural counties (which are probably disproportionately small in number relatively to the minority of the state's population that they include), the data come with a few other caveats.

They do not reflect removals of cases filed originally in state court. That analysis could be done using the CNS data because CNS tracks removals, but it would be fairly time consuming.

Moreover, the data also doesn’t provide any qualitative information about the cases included in the statistics. A pro se filing that uses the words “class action” in the civil cover sheet description would be treated the same as a real class action filed by a reputable firm.

Finally, many of the federal class action filings are employment cases, where federal question jurisdiction provides a jurisdictional basis independent of CAFA.

He also cautions that many class actions filed before the Class Action Fairness Act of 2005, which limited state jursidiction over class actions, are still pending in state courts.

Still, this is better direct data than is available from any other source and probably understates class action filings in Colorado only slightly.