We are all too familiar with the banking industry phenomenon of “Too Big to Fail”. I wonder now whether the legal industry may be at risk of developing a corollary notion – “Too Small to Succeed”?
Two recent actions of the Minnesota Supreme Court may raise this possibility, depending upon how the bar and lower courts choose to respond to them. In two separate and unrelated actions, the Supreme Court recently affirmed the importance of considering “proportionality” when conducting civil litigation. By “proportionality”, I refer to the idea that efforts to win a small case (discovery, motion practice, expert use, etc.), should be scaled to assure the level of effort bears a relationship to the amount in dispute. The Court’s actions raise the question, when is a case too small to warrant the litigation effort needed to bring it to a successful conclusion?
One of the Court’s recent actions was to amend the Minnesota Rules of Civil Procedure to highlight this notion of proportionality in litigation management. In an amendment to the Rule 1, the new Rule includes a statement that “It is the responsibility of the court and the parties to examine each civil action to assure that the process and the costs are proportionate to the amount in controversy . . . “. Additionally, the court included the notion in an amendment to Rule 26.02, describing and limiting the scope of permissable discovery. In another recent Court decision, they ruled in Green v. BMW, a case brought under Minnesota’s “Lemon Law”, that statutory attorney fee cases also require consideration of the size of the claim when awarding attorney’s fees to the successful claimant.
All is not lost for the plaintiff with the small claim. There are things that their lawyers can do to reduce the risk that these actions by the Supreme Court will undermine the prospects for such plaintiffs to obtain justice in the future.
While there is certainly a common sense and apple pie aspect to the proposition that proportionality should guide the conduct of litigation, this consideration also invites a degree of subjectivity in applying and defining proportionality that will tempt abuse by those who defend smaller claims. Injudicious application of the concern for “proportionality” can lead to denial of equal justice to folks with smaller claims. I have represented wealthy people, and I have represented poor people. After helping all sorts of people for thirty years now, I have seen countless examples of one person’s “small potatoes” being another person’s “big deal”. The difference in perspective is often very reasonably rooted in the difference in the circumstances and experiences of the individuals involved.
There are signs to suggest that the Supreme Court is aware of the dangers of overemphasis on this notion of proportionality. For example, in the Green v. BMW case, the court specifically rejected the notion that consideration of the size of a damage award, in connection with an attorneys fee award, should result in a “dollar value proportionality rule”. The Green decision specifically acknowledged that a “cap on fees or an examination of proportionality between the amount of recovery and the fees expended could hamper the ability of consumers to vindicate their rights relative to inexpensive products.” By recognizing this danger, the court implicitly rejected an application of proportionality that would be unfair to the consumer with a “small” claim. Any future litigant that argues a “small” damage award should serve to cap an otherwise reasonably calculated claim for attorney’s fees, will find little support for this type of argument in the Green case rightly understood.
Undoubtedly, future litigants will aggressively argue for “proportionality” in fee and discovery disputes when that argument serves their interest in the particular case. Let’s hope the courts stay vigilant to assure that proportionality doesn’t become an excuse to limit the access to justice of those whose damage claims are more limited.
To my fellow plaintiff lawyers, I say we have an important role to play in assuring this “proportionality” concept does not go awry. It begins by acting reasonably ourselves, and adopting an understanding that the choices we make in pursuing and conducting litigation, should be mindful of the size and scope of the litigation. Usually, the contingent fee system works well to provide an incentive that we do just that. No experienced contingent fee lawyer is going to want to make a piece of litigation into a great deal of work when the realistic prospect for compensation does not match the effort. But, alas, our bar is populated by the inexperienced (and sometimes overzealous) types, who may not yet have learned to regulate themselves in this area. For them, I suggest that you take this “lemon” and make “lemonade”.
In other words, use the notion of “proportionality” to the advantage of your client. There are some strategies we can employ for our clients with modest claims, to help assure they get a full and fair day in court.
Here are a couple ideas.
The new amendments to the General Rules of Practice allow for use of an informal method for resolution of discovery disputes through an addition to Rule 115.04. Take advantage of that and try to get your discovery problems solved through this less burdensome route. If the defendants don’t cooperate (which of course may violate their duty under the new version of Minnesota Rule of Civil Procedure 1), and you are forced to litigate, then go for it. By trying to do the right thing first, and making a record of it, you have likely made yourself bullet-proof later. At the end of the case when you win and submit your attorney fee petition, remind the court of your efforts to deescalate the litigation (which should all be on the record). Point out to the court how those efforts were thwarted by the defendant. The same defendant who now claims, during your fee petition, that you churned the file in a small case that didn’t warrant the size of the fee claim you now make!
Another idea. If you have a case with an attorney fee claim, you will be able to instantly recognize when the damage potential is likely to be limited to four or five figures. If so, make a formal written proposal to resolve the claim prior to starting litigation. Point out to the defendant, in your letter, that the liability exposure only gets worse for them by delaying, due to the operation of the attorney fee part of the claim. Invite the defendant to settle now for the modest value of the claim and thereby avoid their potential exposure to your eventual six figure attorney fee claim. (I know, that is hard to do because you are counting on that big attorney fee claim. But suck it up. It is not about you, it is about your client.) Don’t let the attorney fee part of the claim get in the way of a meaningful effort to get an early resolution. Offer to resolve the attorney fee claim separately by application to the court or a private arbitrator, and make a reasonable offer to resolve the claim. Be open to a slight discount, since your client will likely find that a small price to pay to avoid extended litigation. Document your efforts and, if they prove unsuccessful, renew them in writing at various appropriate points throughout the course of the litigation. Give the defendant repeated opportunities to dodge the fee claim bullet! This strategy will make clear to the court, following the mandate of Green to consider the size of the claim, that plaintiff’s fee application is indeed reasonable because of the many initiatives taken on plaintiff’s behalf, to achieve an early and inexpensive resolution.
By Michael W. Unger.
Mr. Unger, of Unger Law Office in Minneapolis, is a certified civil trial specialist who represents plaintiffs in personal injury, wrongful death and medical malpractice cases.