Yesterday, a number of outlets reported on the fact that the federal judiciary is–like many other government agencies–bracing for budget cuts. In the short term, the Judicial Conference is talking about curtailing services for probation and pretrial services. But in the long term, these cuts may also affect the ways in which class action lawyers litigate.
After all, if we’re all legal strategists, the courts are the terrain in which we operate. So we have to pay attention to how it’s shaped in any given year. And cutting funding to the judiciary can have two larger effects on how we litigate class actions. First, it means courts will have fewer resources with which to address any cases before them. But second, because judges are themselves strategic actors who worry about their backlogs, funding cuts may very well affect how judges handle complex cases like class actions. So what effects might we see? Off the top of my head:
- Fewer complaint filings. In the long terms, budget cuts might lead to fewer complaint filings. How? If the budget cuts are longer-term, we might expect to see judges employ more scrutiny at early stages in the litigation, say granting more motions to dismiss or entertaining more motions to strike class allegations. After all, cutting cases from the docket early beats monitoring them for several years. Assuming the cuts last long enough, we might see plaintiffs begin to pull back from less-meritorious filings because they know they’ll be dismissed.
- Less supervision of discovery. If I were a betting man, I’d guess that a cash-strapped judiciary may actually lead to more intensive discovery. Why? Because (especially in the age renewed "rigorous analysis" under Dukes), we can expect that judges will put plaintiffs to their proof when certifying class actions. And that means plaintiffs will press harder on pre-certification discovery. And that greater effort is likely to combine with courts that are less inclined to hear discovery disputes. I’d say that bodes for a small edge for plaintiffs in the asymmetric world of class-action discovery.
- A defense edge in merits arguments. In general, time favors the defense in class actions. (Often because it proves apocalyptic rhetoric from plaintiffs to be wrong.) To the extent less funds mean larger backlogs, which in turn mean longer waits, defendants may enjoy a small edge in merits arguments when they finally arrive.
- Less reliable superiority arguments. Federal budget cuts present a double-edged sword for class-action defendants. On the one hand, the more strapped federal judges feel, the more attractive manageability arguments look to them. On the other, judges may be more likely to believe plaintiffs’ counter to some superiority arguments that cash-strapped agencies don’t have the resources to provide viable alternatives. Adjust your rhetoric accordingly.
These are, of course, all fairly off-the-cuff reactions to a single news item. But I find it’s often worthwhile to think through what the possible effects may be of larger events like these.
So what’s the bottom line to all this gazing at the bottom line? Just that it’s worthwhile to pay attention to shifts in the strategic environment that may not seem to have immediate impact. Smart lawyers take account of lots of different factors, not all of which are the latest Supreme Court cert grant.