Collusion in Lawsuits - why not?
November 10, 2011 11:23 AM Subscribe
What, in the United States, prevents two companies from colluding to create a legal precedent?
I understand that the rules governing lawyer behavior exist to address some of this issue, but outside of that, what keeps two companies from working together to set up a sham lawsuit to create a mutually beneficial legal precedent?
I understand that the rules governing lawyer behavior exist to address some of this issue, but outside of that, what keeps two companies from working together to set up a sham lawsuit to create a mutually beneficial legal precedent?
The fact that the case could go against them? You propose some situation in which A sues B and the judge rules," tsk tsk, A, B is clearly in the right" and thus a valuable precedent is created. But the judge could just as easily say, "psssssh, whatever B, what A's doing is fine."
Also, unlike say with Judge John Hodgeman, in real court you pretty much always have to allege concrete harm that the court can remedy. Sometimes the harm can be ambiguous to a degree --- emotional distress, damaging reputation --- but you have to provide some evidence. Why would a company permit a competitor to damage them in a verifiable way that would stand up in court?
posted by Diablevert at 11:36 AM on November 10, 2011
Also, unlike say with Judge John Hodgeman, in real court you pretty much always have to allege concrete harm that the court can remedy. Sometimes the harm can be ambiguous to a degree --- emotional distress, damaging reputation --- but you have to provide some evidence. Why would a company permit a competitor to damage them in a verifiable way that would stand up in court?
posted by Diablevert at 11:36 AM on November 10, 2011
If it was a federal case ... if the court caught on, the case could be dismissed by the court sua sponte for lack of jurisdiction, because there is no "case or controversy."
I have heard the conservative criticism that in some public interest class actions against the government (e.g., a lawsuit against a prison for overcrowding, or against a child welfare agency for substandard care), sometimes the two sides of the lawsuit sort of collude to settle the case as a way to pry additional public funding for the institution. So, for example, if the prison warden sees that he has a problem with overcrowding, but doesn't have the budget to fix it, then he might "collude" with the plaintiffs' lawyers to settle the case in a way that essentially forces funds to be allocated to the prison.
posted by yarly at 11:49 AM on November 10, 2011
I have heard the conservative criticism that in some public interest class actions against the government (e.g., a lawsuit against a prison for overcrowding, or against a child welfare agency for substandard care), sometimes the two sides of the lawsuit sort of collude to settle the case as a way to pry additional public funding for the institution. So, for example, if the prison warden sees that he has a problem with overcrowding, but doesn't have the budget to fix it, then he might "collude" with the plaintiffs' lawyers to settle the case in a way that essentially forces funds to be allocated to the prison.
posted by yarly at 11:49 AM on November 10, 2011
This would require having a lot of people at the corporations and law firms working on this project. Many of them would need to be in the know. One of them could blow the whistle, and there are laws protecting whistle-blowers.
As to your point about creating precedent, that implies that the precedent isn't clear already, which means it wouldn't be clear to the parties and lawyers which way the judge would rule. I understand why genuinely opposing parties litigate to try to create a favorable precedent, when the parties disagree on what the precedent should and would be. They have an honest disagreement and they're fighting to get the law to go their way. I don't see how it could ever happen that two parties who are actually on the same side would find it worthwhile to litigate over this, both hoping for the same outcome. Remember, litigation is very expensive. Wouldn't their resources always be better spent waiting till a genuine opportunity to apply the precedent actually arises? You might reply, "Yeah, but that case might turn out to be very difficult and might not go the way they wanted it," which is true ... but you can say the same thing of the sham suit.
posted by John Cohen at 11:50 AM on November 10, 2011
As to your point about creating precedent, that implies that the precedent isn't clear already, which means it wouldn't be clear to the parties and lawyers which way the judge would rule. I understand why genuinely opposing parties litigate to try to create a favorable precedent, when the parties disagree on what the precedent should and would be. They have an honest disagreement and they're fighting to get the law to go their way. I don't see how it could ever happen that two parties who are actually on the same side would find it worthwhile to litigate over this, both hoping for the same outcome. Remember, litigation is very expensive. Wouldn't their resources always be better spent waiting till a genuine opportunity to apply the precedent actually arises? You might reply, "Yeah, but that case might turn out to be very difficult and might not go the way they wanted it," which is true ... but you can say the same thing of the sham suit.
posted by John Cohen at 11:50 AM on November 10, 2011
The fact that the case could go against them?
Well, if the parties wanted to collude on the factual determination rather than the law, then they could probably rig up the record to do so by submitting clearly better evidence on one side, and so forth.
posted by yarly at 11:51 AM on November 10, 2011
Well, if the parties wanted to collude on the factual determination rather than the law, then they could probably rig up the record to do so by submitting clearly better evidence on one side, and so forth.
posted by yarly at 11:51 AM on November 10, 2011
Expanding on yarly's point, check out 28 U.S.C. § 1359.
Also, lawyers who collude may very well get disbarred and face severe sanctions. There had better be a hell of a golden parachute.
posted by Sticherbeast at 11:52 AM on November 10, 2011
Also, lawyers who collude may very well get disbarred and face severe sanctions. There had better be a hell of a golden parachute.
posted by Sticherbeast at 11:52 AM on November 10, 2011
Another thing: if the anticipated, genuine lawsuit would be so much more difficult to litigate (hence the desire to preemptively lock in the favorable precedent), that implies that there would be very adept lawyers litigating the future suit. And what are very adept lawyers good at doing? Distinguishing precedent! In other words, good lawyers are good at explaining why a seemingly applicable precedent doesn't actually apply to their particular case, or perhaps yields the opposite outcome than one might expect. So after going through all that trouble to collude to create a precedent, and even assuming (foolishly) that the precedent would definitely come out the way they had planned, it's anyone guess whether the precedent would even apply in future litigation the way the original parties would like.
posted by John Cohen at 11:55 AM on November 10, 2011 [1 favorite]
posted by John Cohen at 11:55 AM on November 10, 2011 [1 favorite]
I don't see how it could ever happen that two parties who are actually on the same side would find it worthwhile to litigate over this, both hoping for the same outcome.
Happens all the time in insurance fraud cases. I can also imagine all kinds of settings where two parties want to make a certain fact res judicata and collude to do so. Like ... maybe they want to establish that there is no agency between two individuals in order to avoid liability in a different setting ...
posted by yarly at 11:56 AM on November 10, 2011
Happens all the time in insurance fraud cases. I can also imagine all kinds of settings where two parties want to make a certain fact res judicata and collude to do so. Like ... maybe they want to establish that there is no agency between two individuals in order to avoid liability in a different setting ...
posted by yarly at 11:56 AM on November 10, 2011
The law is a pretty blunt instrument. A single case, unless it's a Supreme Court case, or something, is not reliably going to create a favorable legal precedent. Here are just some of the potential outcomes that would get in the way of the parties colluding successfully:
*Some judges force parties to settle, avoiding issuing an opinion --> no precedent.
*Some judges sit on cases forever or issue one word opinions -> no precedent.
*The judge decides it on a different basis than that presented by the parties -> no precedent.
*The case is not published in a reporter -> weak or no precedent.
*Other comparable courts have decided the issue the other way -> weak precedent (or may get overturned if a higher court decides to resolve the split against the colluding parties)
Also relevant: litigating to make precedent (or for any other reason) is expensive. Given the uncertainty in the legal process, it simply isn't worth it much of the time, which is why many people settle out of court.
posted by *s at 12:11 PM on November 10, 2011 [2 favorites]
*Some judges force parties to settle, avoiding issuing an opinion --> no precedent.
*Some judges sit on cases forever or issue one word opinions -> no precedent.
*The judge decides it on a different basis than that presented by the parties -> no precedent.
*The case is not published in a reporter -> weak or no precedent.
*Other comparable courts have decided the issue the other way -> weak precedent (or may get overturned if a higher court decides to resolve the split against the colluding parties)
Also relevant: litigating to make precedent (or for any other reason) is expensive. Given the uncertainty in the legal process, it simply isn't worth it much of the time, which is why many people settle out of court.
posted by *s at 12:11 PM on November 10, 2011 [2 favorites]
Fake facts don't establish precedent; legal reasoning and legal conclusions do. So if two business fake some spectacular set of facts which causes Plaintiff Corporation A to win in the sort of suit which is usually decided in favor of Defendant Corporation B (because, say, the test for harm is weighted in favor of the defense, or the burden of proving fault is weighted against the plaintiff, or whatever), it wouldn't have any significant effect unless you managed to have the same facts don't the road in a legitimate case. Litigants can't collude to create the law (either the Law or the legal reasoning or legal tests) which apply in their case. That's on the courts. Their attorneys can argue that a particular test should apply or a new test should be created, but they can't make that happen. The judge or judicial panel does.
yarly makes the good point that sometimes both the plaintiff and defendant want the same outcome (the recent California prison overcrowding cases, for instance, had people on both sides who wanted the same outcome), but they're not really colluding as much as relying on the court and the law to get them where they both want to be with as little damage to their institutions or as little personal responsibility as possible.
posted by crush-onastick at 12:14 PM on November 10, 2011
yarly makes the good point that sometimes both the plaintiff and defendant want the same outcome (the recent California prison overcrowding cases, for instance, had people on both sides who wanted the same outcome), but they're not really colluding as much as relying on the court and the law to get them where they both want to be with as little damage to their institutions or as little personal responsibility as possible.
posted by crush-onastick at 12:14 PM on November 10, 2011
Also, the answer to this question is one of those things that you do actually learn in law school. It's a little hard to articulate in an ask.me answer, but the answer is basically "lawsuits and the courts and the law and legal precedent just don't work in a way that would make this possible or practicable."
posted by crush-onastick at 12:27 PM on November 10, 2011
posted by crush-onastick at 12:27 PM on November 10, 2011
*The judge decides it on a different basis than that presented by the parties -> no precedent.
Reminds me of the George Carlin "7 Words" obscenity suit where someone successfully lodged a suit that the radio station was breaking obscenity laws by broadcasting the routine. However, the court ruled in a way that basically the opposite of the expected precedent was formed, that is, other than the very specific circumstance of broadcast channels during primetime, broadcasters could air whatever they wanted.
I know the plantiff and the radio station weren't colluding, but say they had, and they were trying to get the plantiff's stance that you can't air dirty words on the radio or tv enshrined in precedent and the station tried to lose, even though they did lose the decision the wrong precedent was set up.
Also, I never went to law school, so I am essentially speaking out of my ass.
posted by midmarch snowman at 12:35 PM on November 10, 2011
Reminds me of the George Carlin "7 Words" obscenity suit where someone successfully lodged a suit that the radio station was breaking obscenity laws by broadcasting the routine. However, the court ruled in a way that basically the opposite of the expected precedent was formed, that is, other than the very specific circumstance of broadcast channels during primetime, broadcasters could air whatever they wanted.
I know the plantiff and the radio station weren't colluding, but say they had, and they were trying to get the plantiff's stance that you can't air dirty words on the radio or tv enshrined in precedent and the station tried to lose, even though they did lose the decision the wrong precedent was set up.
Also, I never went to law school, so I am essentially speaking out of my ass.
posted by midmarch snowman at 12:35 PM on November 10, 2011
Y'all are pretty sanguine on the matter of fraud on the court via collusion! There are all sorts of ways lawsuits could be used strategically by both parties. For example, there have been claims that pharma companies engage in collusive suits in order to extend patent lives:
"Bristol has done everything possible—regardless of legality or the public interest—to extend its monopoly for Taxol,” the company charged in a court filing. (Bristol denied the charges, but declined to comment for this story.) “Under federal drug laws, the mere existence of Bristol’s patents, however invalid, caused the extension of Bristol’s monopoly by delaying the introduction of generic competition.”
Thirty months passed. What happened then became the subject of protracted lawsuits in four states and an ongoing government investigation. On Aug. 11, 2000, ABI filed suit against Bristol in California for patent infringement. Six days later the parties settled, and Bristol agreed to list ABI’s patent under Taxol in an FDA record known as the “Orange Book.” With its patent listed, ABI could sue Ivax for patent infringement and (in theory) trigger another automatic 30-month delay for the generic drug.
Ivax claimed that Bristol and ABI staged a “sham” lawsuit and settlement. “Bristol and ABI agreed to participate in the litigation disguised as adversaries when, in fact, the lawsuit was a collusive effort intended to extend Bristol’s monopoly over Taxol still further,” the company charged. Bristol and ABI were “make-believe adversaries, secretly conspiring.”"
posted by yarly at 1:21 PM on November 10, 2011 [2 favorites]
"Bristol has done everything possible—regardless of legality or the public interest—to extend its monopoly for Taxol,” the company charged in a court filing. (Bristol denied the charges, but declined to comment for this story.) “Under federal drug laws, the mere existence of Bristol’s patents, however invalid, caused the extension of Bristol’s monopoly by delaying the introduction of generic competition.”
Thirty months passed. What happened then became the subject of protracted lawsuits in four states and an ongoing government investigation. On Aug. 11, 2000, ABI filed suit against Bristol in California for patent infringement. Six days later the parties settled, and Bristol agreed to list ABI’s patent under Taxol in an FDA record known as the “Orange Book.” With its patent listed, ABI could sue Ivax for patent infringement and (in theory) trigger another automatic 30-month delay for the generic drug.
Ivax claimed that Bristol and ABI staged a “sham” lawsuit and settlement. “Bristol and ABI agreed to participate in the litigation disguised as adversaries when, in fact, the lawsuit was a collusive effort intended to extend Bristol’s monopoly over Taxol still further,” the company charged. Bristol and ABI were “make-believe adversaries, secretly conspiring.”"
posted by yarly at 1:21 PM on November 10, 2011 [2 favorites]
An entirely different venue in which you can occasionally see a similar process is prosecutors charging someone with a crime as part of an effort to get what they view as an unconstitutional law overturned.
posted by ROU_Xenophobe at 1:40 PM on November 10, 2011
posted by ROU_Xenophobe at 1:40 PM on November 10, 2011
I can also imagine all kinds of settings where two parties want to make a certain fact res judicata and collude to do so.
You mean collateral estoppel or issue preclusion.
An entirely different venue in which you can occasionally see a similar process is prosecutors charging someone with a crime as part of an effort to get what they view as an unconstitutional law overturned.
That's not collusion. That's a straightforwardly adversial case in which one side might be more interested in creating a favorable precedent than in winning that particular judgment. It's still the prosecutor and defendant each genuinely trying to win. No one questions that parties are sometimes motivated to litigate by a desire to create a certain precedent. For instance, this is standard practice with issues of constitutional rights.
posted by John Cohen at 1:45 PM on November 10, 2011 [1 favorite]
You mean collateral estoppel or issue preclusion.
An entirely different venue in which you can occasionally see a similar process is prosecutors charging someone with a crime as part of an effort to get what they view as an unconstitutional law overturned.
That's not collusion. That's a straightforwardly adversial case in which one side might be more interested in creating a favorable precedent than in winning that particular judgment. It's still the prosecutor and defendant each genuinely trying to win. No one questions that parties are sometimes motivated to litigate by a desire to create a certain precedent. For instance, this is standard practice with issues of constitutional rights.
posted by John Cohen at 1:45 PM on November 10, 2011 [1 favorite]
It's rumored that there have been cases where corporations facing massive liability claims will collude with plaintiff attorneys to get a class action suit decided on terms less unfavorable to the corporation, so as to close off all future individual suits by those considered part of the class. (That's one consequence of a class action settlement. If you don't opt out of the class in time, you lose your right to sue in future.)
The plaintiff attorneys get a huge fee. The corporation pays less than it would for dozens of individual cases. And as is usual in class action suits, the injured individuals get the shaft. A lot of them don't even know the class action happened until too late.
posted by Chocolate Pickle at 2:32 PM on November 10, 2011
The plaintiff attorneys get a huge fee. The corporation pays less than it would for dozens of individual cases. And as is usual in class action suits, the injured individuals get the shaft. A lot of them don't even know the class action happened until too late.
posted by Chocolate Pickle at 2:32 PM on November 10, 2011
It's pretty well known that many of the cases that ended up creating Supreme Court precedent, like Griswold v. Connecticut, were "contrived" in the sense that someone went out and deliberately broke the law, expecting to be arrested and expected to use that as the vehicle to challenge the law. That again is not collusion, because the case was clearly contested.
There have been some suggestions that the scenario that led to the 2003 decision in Lawrence v. Texas, with two men engaged in a sex act when a police officer came into the home, was contrived.
posted by megatherium at 2:39 PM on November 10, 2011
There have been some suggestions that the scenario that led to the 2003 decision in Lawrence v. Texas, with two men engaged in a sex act when a police officer came into the home, was contrived.
posted by megatherium at 2:39 PM on November 10, 2011
This thread is closed to new comments.
posted by jon1270 at 11:34 AM on November 10, 2011