Civ
Pro 2 Notes
We
hope to get to, and through, the pleading burden issues in the Gomez case, which also ties into heightened
pleading. It appears that notice
pleading applies for everything except for a certain small subset. Recall that courts have required
particularity in pleading for fraud allegations in a variety of ways. Fairman thinks that Rule 9(b) doesn’t make
much sense! We wrapped up by asking
whether Rule 9(b) is justified by deterrence of frivolous strike suits. Fairman says that only a small subset of all
frivolous claims are fraud claims or fraud-like.
What’s
docket control? It has to do with giving
judges the power to dismiss lawsuits based on their belief that certain cases
are more likely to be frivolous. But
Fairman fears that this will cause suits that are truly meritorious to be dismissed
at an early stage. He says it goes
against the preference built into the Federal Rules for trying cases on the
merits.
The
only rationale for heightened pleading for fraud is “heightened notice”. What did I, the alleged fraudster, say that
misrepresented a material fact? I need
to know the specific statement so I know the specific allegation. But then Fairman says that this simply
reduces to notice pleading. If you need
more information for notice, then you need to articulate more facts in the
pleading.
Let
us return to the case. What’s missing
from the insurance company’s allegations?
What is Stradford’s fraudulent conduct?
The insurance company believes that he lied about when his pipes froze,
saying that it happened while he was covered when it really happened after his
coverage lapsed. He would have gotten
away with it, too, if he hadn’t gotten greedy!
We can figure out when the fraud occurs from the complaint. Where did the fraud occur? It most likely occurred at the office. Would it be hard to restate this claim to
meet the particularity requirement that the court wants? No way!
So why bother? The plaintiff wins
on the small point, but the defendant wins out in the end because they’re
allowed to move for summary judgment.
The motion to dismiss based on Rule 9(b) is granted, so the claim fails
to meet heightened pleading under the Rule.
But the amended complaint is immediately accepted. The remedy, typically, is that the insurance
company gets the right to replead, or, in other words, to try again. As a general rule, the courts will give you a
second chance and sometimes more at getting the pleadings right. Here it will be pretty easy.
It
looks like the judge has taken a peek at the merits and found that Stradford is
a liar and will get booted. So the question
of who wins here is both easy and difficult. There will be zero damages for the plaintiff. Why did the insurance company counterclaim
for fraud? It’s all about the punitive
damages!!! They want to do more than win. They want to win and beat the guy down by
getting punitive damages. This case will
actually make money for the insurance company (if the dentist has any money).
As
to common law fraud, heightened pleading doesn’t do a whole lot of mischief or
havoc. These claims are tried and
resolved on a daily basis. But heightened
pleading doesn’t keep itself neatly contained to where the rules provide for
it. Yeazell mentions two other big
areas: the first is civil rights cases, like Leatherman and Swierkiewicz. So in Leatherman,
it was a Monell action against the
cops and the city. Cities used to have
immunity until the Supreme Court decided Monell:
cities can be liable if they have a policy or practice of unconstitutional
violations. But in the Fifth Circuit and
many others, courts required heightened pleading for civil rights cases even
though the Rules have no provision for that whatsoever. The city in Leatherman filed a 12(b)(6) motion for failure to meet the heightened
pleading standard. That created a
circuit split, because the Ninth Circuit disagreed. In a really short decision by Rehnquist, they
said: “Look at the rules! Heightened
pleading for fraud and mistake, not civil rights! You’re wrong!” So Fairman came along in the aftermath of Leatherman. He wrote a note on the circuit split before Leatherman…and of course, now the question
is answered, so he didn’t get published.
Undeterred, he eventually got his big article published in the Texas Law
Review. So there you go.
There’s
a whole bunch of stuff that’s requiring heightened pleading even though they
shouldn’t! There’s this slim comment
from Rehnquist saying that heightened pleading might be okay with civil rights
cases against “individual government actors” who are entitled to qualified
immunity. So much law was made from that
sentence. There was another circuit
split! The Seventh and Tenth Circuits
said: “Leatherman says what it says”. The Fifth and Eleventh Circuits said: “Heightened
pleading okay in everything but Monell.” The Ninth and D.C. Circuits said heightened
pleading is okay if intent is an element of the constitutional tort.
Say
there’s a police officer using excessive force.
Actually, intent doesn’t matter.
In the Ninth Circuit, notice pleading would rule. But if you allege judicial deception by an
officer in obtaining a search warrant, for example, the officer’s intent is an
element of the offense. The Ninth and
D.C. Circuits say that in this case you should have heightened pleading. The Rules explicitly say that intent can be
pled generally! How do you plead facts
about the defendant’s intent? Only the defendant
knows what was intended!
The
Fifth Circuit is even weirder! They hate
to be reversed! They sort of reverse the
Supreme Court! They come up with this
alternative system using Rule 7 and replies to answers. Here we have Schultea v. Wood, where the Fifth Circuit cleverly decides that
they will require notice pleading for civil rights cases, an answer, and then,
if there is qualified immunity involved, a heightened
reply from the plaintiff! The Rules don’t
seem to explicitly prohibit this. The Supreme
Court actually approves of this in a later case! Unbelievable!
Because
of the confusion and resistance that resulted from Leatherman, the Court had to revisit the issue in Swierkiewicz, which dealt with an unpublished
Second Circuit opinion. The court
basically refuses to accept Leatherman! The court grants cert on the issue of whether
an employee suing his employer must do anything more than put the employer on
notice. The court reverses with the
exact same rationale! You’d think this
would be the end of the story, but it’s not!
Then we get the