Law: Why Those Big Cases Drag On

Judges are learning to deal with delay—but slowly

To Federal Judge Charles Renfrew, it amounts to “a war of attrition.” U.S. Court of Appeals Judge Irving Kaufman says it reminds him of “the duels of young gentlemen of San Francisco in the last century, who matched each other tossing gold coins into the bay until one cried, ‘Enough!’ ”

Both are referring, with unconcealed dread and awe, to the lawyer’s equivalent of the Serbonian bog in Milton’s Paradise Lost, “where armies whole have sunk.” Most lawyers call it simply the “Big Case”: the massive, sprawling suit that involves huge stakes, provides employment for legions of attorneys and drones on for years. The quintessential Big Case is U.S. vs. International Business Machines Corp., an antitrust suit by the Government charging the company with monopolizing the computer industry. Before the parties went to trial, they deluged each other with 30 million pages of documents. The actual trial, now in its fourth year, has produced a transcript of more than 86,000 pages. Brought by the Government in 1969, the suit has dragged on so long that the opposing lawyers have argued over what to do should the judge, 68-year-old David Edelstein, die before it is over. The Government wants an agreement that would allow a new judge to pick up the trial where the old judge left off. But IBM has so far refused, which might mean starting virtually all over again.

What keeps such cases droning on is that the lawyers on both sides, trained in caution to begin with, “run an enormous risk by not touching every base,” says Yale Law School Professor Geoffrey Hazard. “Look at IBM. If the Government wins, it’ll be like dismantling a political state.” With the stakes high and their meters running, lawyers are in no rush to judgment, he explains. “Many antitrust counsel make a professional specialty out of procedural maneuver,” states a draft of the final report of the National Commission for the Review of Antitrust Laws and Procedures. “Many others, while lacking ulterior motives, are nonetheless too cautious or timid to face the merits of a lawsuit quickly and directly.” Delay can be used as a weapon, says the report, wearing down opponents to force a favorable settlement, or prolonging a profitable activity while its legality is interminably tested in court. When the Federal Trade Commission charged eight oil companies with stifling competition, the companies made more than 400 motions opposing FTC demands for documents. First filed in 1973, the case is still at least three years away from trial. Meantime, the companies continue to do business as usual.

The Government shares some of the blame for delay. “Like the Vatican,” says Hazard, “federal agencies have a certain timeless interest.” A Wall Street Journal editorial charged that in the IBM case the Government spent 5½ years in preparation and took three more years to present its case at trial.

Ironically, the good intentions of past reformers are partly responsible. Until the late 1930s, pleadings were laden with traps for the unwary. “If you didn’t dot every i and cross every t,” says Phoenix Lawyer John P. Frank, “you were thrown out of court.” Since neither side knew much about the other’s case, trials could be full of surprises. To eliminate this “sporting theory of justice,” as Legal Philosopher Roscoe Pound once termed it, reformers revamped the rules. Pleading was made simple. Basically, says Frank, one person can now sue another by claiming, “You have hurt me, and I want some of your money.” Under the rules of discovery, each side now has a chance to see what evidence the other side has and to dig for all the facts. Only when the parties are ready do they go to trial. And judges traditionally, by and large, have let the lawyers set their own time schedules.

The rules still work well for most cases—perhaps as many as 85%, according to estimates by lawyers and academics. In the ordinary car crash or breach of contract case, abuse of discovery procedures or other delaying tactics remain only sporadic. But the rulemakers did not foresee the copying machine. Nor did they envision both the growth of Government regulatory schemes and the protection of individual rights. According to Harvard Law School Professor Arthur Miller, these two areas have spawned huge, high-stakes cases in areas like antitrust, environment, securities and employment discrimination. It is in these areas that the new rules on pleading and discovery, designed to eliminate “trial by ambush,” have been exploited to create what Judge Renfrew calls “trial by avalanche.”

A typical practice is “pushing,” tying up opponents with months of deposition taking, and harassing the other side with “interrogatories” and requests for documents that are repetitious, irrelevant, intrusive and sometimes nonsensical (lawyers joke about interrogatories that ask five-year-olds if they are married). Another practice is “tripping,” responding with too little (vague and evasive answers) or too much (a morass of mostly worthless information that tends to obscure important items). “In effect,” says Frank, “you just give them the Atlantic Ocean and tell them to go swimming.”

Nowhere has the use and abuse of liberal pleading and discovery stirred greater furor than class actions. Designed to save courts time by consolidating many claims into one big case, class actions permit a large group of people to sue a corporation for an illegal act, like price fixing, that has harmed them. Though the harm may be measured by only a few dollars per person, class actions are widely considered to be good policy because they force corporations to “disgorge ill-gotten gains” and make them obey the law. But corporate executives and attorneys bitterly attack these suits as Frankenstein monsters that are usually created by lawyers who are only out to serve themselves.

By holding the threat of protracted litigation (and the risk of losing a huge judgment) over a corporation, the lawyer can pressure a company to buy him off with a settlement. “It’s legalized extortion,” says San Francisco Lawyer Francis Kirkham. In some cases, each class member gets a pittance, but the lawyer gets a good-size fee. In one 1970 price-fixing case, lawyers representing a class of retail grocers got a fee of $125,000, amounting to $310 an hour, out of a $475,000 settlement that left just under $500 for each class member.

Other lawyers, including the new Senate Judiciary Committee chairman, Edward Kennedy, argue that the abuse mostly cuts the other way, as big corporations frustrate legitimate claims with delaying tactics. “The real problem is not harassment of Standard Oil,” says Charles Halpern, director of Georgetown University’s Institute for Public Representation. “It’s harassment of the poor plaintiffs who get ‘discovered’ to death.” The Justice Department has tried to find a way to weed out nuisance suits from legitimate class actions. Legislation now before Congress would give the Government control over cases in which each class member stands to win no more than $300, the kinds of suits that are most likely to be brought principally for the benefit of private lawyers.

There is a growing consensus that judges are the answers to controlling discovery abuse and other deliberate delaying tactics in big cases. “The key is getting judges to ride herd,” says Hazard. “There has been a slow but important change in attitude by the bench, from judges as ‘passive umpires’ to judges getting involved actively from the beginning.” Says Miller: “It’s now perfectly clear that we can process dinosaur cases if we can persuade judges to seize control from the lawyers and manage those cases.”

The first step is for judges to sit down with the opposing lawyers and work out a blueprint before discovery begins. That is what Judge Harold H. Greene did in the Government’s antitrust suit against A T & T. When Greene took on the case last summer, it had already been enmeshed in jurisdictional disputes and countercharges of delay for almost four years. So Greene, faced with a case that is potentially bigger than IBM, ordered the lawyers in September to narrow the issues and focus discovery on specific questions rather than open the door to unlimited discovery. Equally important, the judge also imposed an April 1980 deadline on discovery. That seems a long way off, but for a Big Case, it is the day after tomorrow.

Judges could stand some self-imposed deadlines; in the Revlon vs. U.S. case, the judge’s decision was not handed down until 1975, nine years after trial. But even the most skillful and best-intentioned judges may be thwarted by the complexity and sheer size of some cases. “How much can you narrow the issues when the question is, ‘Did a two-decade course of conduct in an industry amount to willful monopolization?’ ” asks Judge Jon O. Newman, who presided over the SCM Corp.’s $1.5 billion antitrust suit against Xerox. Pretrial discovery took 3½ years (“Not bad, considering,” says Newman), during which the judge had to write 46 separate opinions on procedural motions alone; such motions can be another delaying tactic that, in the words of Miller, is “limited only by a lawyer’s demonic imagination.” When the case got to trial, each side estimated it would take three or four months to present their cases. But after three months, SCM was nowhere near finished, so Newman set a time limit of six more months. After a yearlong trial, it took a weary jury two months to answer 54 questions of fact. Last week Judge Newman ruled that Xerox did not have to pay SCM any damages.

Other members of bench and bar fear that judges might overdo in their zeal to push a case along. “It’s a tough balancing act,” says John Frank, co-chairman of the National Conference on Discovery. “You don’t want to freeze the issues too soon. Take class actions. Generally speaking, the class has been hurt, but they don’t know what happened. All they know is that they’ve been wronged. So that’s all they claim, and then they use discovery to build their case. If you don’t have liberal discovery, justice could not be done. The plaintiffs face a blank wall.”

Intentional delay by lawyers is a different matter. Judges are beginning to use their power to penalize foot-dragging on legitimate discovery demands, and to protect parties from unreasonable ones. In a recent case, the accounting firm Arthur Andersen & Co. stalled the State of Ohio in its attempts to get at some records in Switzerland. A federal judge ordered the company to pay Ohio $60,000 in legal costs. Another judge, citing “flagrant bad faith,” simply threw out the antitrust claim of New York City’s Metropolitan Hockey Club Inc. (later Golden Blades) after it failed to respond to hundreds of interrogatories from the defendant, the National Hockey League, for 17 months. Upheld by the Supreme Court, the ruling has led to what University of Texas Law Professor Charles Alan Wright calls “a tougher attitude by lower courts.”

Miller cautions that “there is still a psychological reluctance to use these sanctions.” He adds that many judges “are not emotionally oriented toward seizing control—they were trained and practiced under a system that was not designed to make them managers.” But as court dockets back up, more judges are learning that they have to become good administrators to cut down on delay. “I’d say it’s a sizable minority by now,” says Judge Renfrew. Significantly, one of the guidelines suggested by the Carter Administration for choosing candidates to fill 152 new federal judgeships is “ability to manage complicated pretrial and trial proceedings.” That could prove to be one of the toughest criteria of all.