Opening the Floodgates of Litigation and Civil Rights Litigation

Floodgate_clamshell.JPGFor employee benefits law geeks like myself, the decision in LaRue v. DeWolff, Boberg, and Assocs. was a watershed moment for a Supreme Court that had been reluctant to grant private rights of action to employee participants under ERISA. Although advocates for employees have celebrated the arrival of 401(k) breach of fiduciary claims, there have been many more commentaries around the internet about how LaRue will likely “open the floodgates of litigation” and overwhelm federal courts with frivolous ERISA class actions. Some examples:

Employers with defined contribution plans will likely face increased fiduciary liability exposures after the U.S. Supreme Court ruled last week that plan participants can sue to recover individual account losses as a result of a fiduciary breach, attorneys say. – Business Insurance Magazine, Feb. 25, 2008

“It will open the door to a lot more litigation. I don’t think it will be an avalanche, but plan sponsors are definitely looking at death by a thousand cuts,” said Stephen Rosenberg, an attorney with The McCormack Firm in Boston, who blogs on ERISA issues. – Lawyers USA, March 10, 2008

Press coverage of the LaRue case has suggested ( for example, here) that the decision may trigger “a raft of lawsuits by employees, particularly as stock market volatility once again is causing havoc with investment accounts.” – Kevin LaCroix, D&O Diary, Feb. 21, 2008

Of course, this is not the first time we have heard business interests and conservative members of the Court invoke the “floodgate of litigation” argument. It seems that nearly every time an additional civil right is recognized, or the scope of an existing civil rights provision is broadened, we inevitably hear the dire warning about the doom of federal courts because of litigation. One recent example in the Bivens civil rights context:

For at this high level of generality, a Bivens action to redress retaliation against those who resist Government impositions on their property rights would invite claims in every sphere of legitimate governmental action affecting property interests, from negotiating tax claim settlements to enforcing Occupational Safety and Health Administration regulations. Exercising any governmental authority affecting the value or enjoyment of property interests would fall within the Bivens regime, and across this enormous swath of potential litigation would hover the difficulty of devising a “too much” standard that could guide an employee’s conduct and a judicial factfinder’s conclusion. – Wilkie v. Robbins (U.S. 2007)

This is not a phenomenon of just this past decade. When private rights of action were recognized under Section 1983, opponents in the early 1980s were claiming that such civil rights litigation would overwhelm courts. However, as Ted Eisenberg and Stewart Schwab ably demonstrated twenty years ago, no flood was forthcoming.

Why not? Well, even if theoretically it becomes easier to bring a Title VII discrimination or retaliation claim or an ERISA breach of fiduciary duty claim, under a plaintiff-friendly standard adopted by the Court, the fact of the matter is that bringing such a case, not to mention succeeding on it, is a daunting task on a practical level. There are many procedural potholes along the way (think exhaustion of remedies here in a dual federal-state system), not to mention that many employees cannot find an attorney or are scared to do so for fear of retribution and ruining their careers. Even making it to litigation in these cases only leads to a 50% success rate in the best of times as predicted under the Priest-Klein model.

So, I believe that it is inevitable that there will be another labor and employment case this term or next in which the Court will find for a plaintiff under a standard that seems to promise more litigation or like in LaRue, finds that a cause of action exists where none did before. And just as inevitably, one of the conservative justices on the Court will claim that the majority’s holding will open the floodgates of litigation.

But, brothers and sisters, the federal court apocalypse continuously predicted is not upon us. It never has been and I don’t see one in the near future. Civil rights litigation is a risky, perilous undertaking and there does not appear to be any evidence that courts are being overwhelmed by these types of lawsuits. Rather than continuing its anti-litigation posture (Andy Siegel has described it well in his recent paper in the Texas Law Review), the Court needs to be expanding civil rights protection in this age of warrantless wiretaps and surveillance, not contracting it through empirically unsound premises.

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2 Responses

  1. John C says:

    I’m sure someone has written about this before, but why is the “flood of litigation” a legitimate argument? It seems to me that, given Congress’s role over the scope of federal court’s jurisdiction, Congress is the one who determines whether courts should have to put up with a flood of litigation. If the reading of a statute gives forth a result that will produce a flood of litigation, why should courts stop that? It just seems that Congress, not the courts, is the determiner of how many cases we can expect to see filed.

    I’m sure there are arguments against this; is there a difference between determinance of jurisdiction versus determinance of docket? A separation of powers argument based on institutional self-preservation?

    I know I’m not saying this well, but maybe someone out there gets what I’m saying and will enunciate it better.