Legal Docket - Discouraging frivolous lawsuits

NICK EICHER, HOST: It’s Monday morning and a brand new work week for The World and Everything in It. Today is the 6th of April, 2020. Good morning to you, I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. The Supreme Court is at a virtual standstill, just like much of the rest of the country. The justices still have 20 cases scheduled for argument but postponed because of coronavirus-related shut-downs.

In a press release on Friday, the court said it will consider rescheduling some cases to later this term, if circumstances allow. And one of those cases is a challenge to the way in which we elect our presidents. That is, whether presidential electors must vote for the candidate who won the popular vote in their states.

EICHER: I’ll mention we do expect rulings from the high court this morning: rulings from among cases already heard to this point, but no telling how many. So tomorrow we’ll plan to report and analyze those. 

And before we get to our case today, let’s run down our list of legal developments related to the coronavirus crisis.

REICHARD: Right, first one concerns vendors who jack up prices on essential goods. I’m talking about things like hand sanitizers and face masks. Attorneys general around the country are investigating complaints. 

Now, most states ban price gouging during emergency declarations. So when you see a convenience store in Massachusetts selling milk for $10 a gallon or a shop in Minnesota charging $80 for 36 rolls of toilet paper, that’s price gouging. 

Different states use different definitions, but a common one is a price spike about 20 percent above what’s typical.

EICHER: Here’s another: lawsuits asking courts to clarify what counts as “acts of God” in insurance policies. Boilerplate language in insurance contracts usually exclude coverage for these acts: defined as earthquakes, tornadoes, and flooding. Native American tribes that operate casinos want to know whether their insurance policies cover losses related to their closing during this pandemic crisis.

Another interesting development: a proposed class action lawsuit filed last month against the government of China by American small businesses. The group accuses Beijing of covering up the extent of COVID-19 that in turn led to their economic devastation.

REICHARD: A few others of interest: several lawsuits filed against politicians accused of selling off their stocks after receiving a confidential briefing about COVID-19. These were governmental briefings that the general investing public was not privy to.

And lawsuits by business owners whose operations were deemed nonessential and had to close. In essence, they argue the government took their property without just compensation.

EICHER: All right, well, we have covered all the argued cases at the Supreme Court so far, with the exception of just two. So we’ll do one this week and one next.

The legal question in today’s case is one in which the circuits are in disagreement. That’s one of the criteria by which the Supreme Court grants review of a dispute. 

REICHARD: Let’s begin with definitions of key terms. 

When courts dismiss lawsuits, they dismiss with prejudice or without. Strange phrase, but here’s what it means: If a court dismisses a case with prejudice, it means you can’t bring it back to court later. That’s it.

A case dismissed without prejudice means just the opposite. You retain the right to sue the same party on the same issue at another time. 

Changes in circumstances might lead courts to dismiss without prejudice. Example: Say someone beats up another person so the prosecutor charges assault. Suppose later the victim dies. The court may choose to dismiss the assault case without prejudice to allow the prosecutor to bring a murder charge instead.

EICHER: Something else you need to know: the Prison Litigation Reform Act. This 1996 law aimed to stop inmates from filing lawsuits that are frivolous or malicious, or that do not state a proper claim. Generally, prison inmates can sue without paying the filing fee. It’s a legal right called in forma pauperis. That’s Latin for “in the manner of a pauper.” The doctrine protects the right of indigent persons to proceed in court when they have no money.

REICHARD: But the Prison Litigation Reform Act says that if a prisoner files three lawsuits that courts dismiss, then that inmate doesn’t get to continue to file additional cases for free. Three strikes, you’re out.

But the question is, what’s a strike? 

In this case pending before the Supreme Court, the inmate argued that some of his cases were dismissed without prejudice. So, they ought not to count as strikes under the law.

Here’s how U.S. Deputy Attorney General Jeffrey Rosen put it: the law makes no distinction between cases dismissed with or without prejudice. “Dismissed” is the only part that matters. 

And, he added, even though different circuit courts of appeal have taken different positions, the majority of them take the government’s view.

ROSEN: At its zenith, 25 percent of the civil docket of the federal courts were prisoner filings, and it is now down to about 10 percent. It’s still  a very large number, approximately 29,000 a year ago, but it’s from… 25 percent to 10 percent. And in the majority of circuits, I think it’s six of eight that have ruled on this, the rule is both with and without prejudice count.

This case comes from Colorado, so the state solicitor general, Eric Olson, argued for a bright line rule to strike a balance between reducing inmate litigation and making it easy to manage.

OLSEN: The text is straightforward. If a case was dismissed for failure to state a claim, it meets the statutory definition regardless of whether that dismissal was with or without prejudice because, in either circumstance, that case was dismissed, which is what the statute looks to.

But Justice Brett Kavanaugh could see a scenario that would be unjust to inmates.

KAVANAUGH: Suppose a prisoner files a suit and the district judge … dismisses without prejudice; the prisoner corrects the error, fixes the defect, files a suit and prevails. Not only is it sufficient to state a claim, prevails in the case. You would still say that that prisoner has a strike even though they won the case?

OLSEN: Well, if it was — we look at the statutory text, which says an action was dismissed. 

KAVANAUGH: … Doesn’t that strike you as odd, that you have a winning case and you get a strike under the PLRA?

What he means by that is a strike under the Prisoner Litigation Reform Act.

Lawyer for the inmate, Brian Burgess, agreed with Kavanaugh’s skepticism, that we shouldn’t restrict meritorious claims from inmates. That would be unjust for sure.

It’s hard to read how this one’ll turn out. The chief justice was worried about overwhelming the courts with inmate litigation. But the tenor of most questions leaned in favor of the inmate. 

And that’s this week’s Legal Docket.

(AP Photo/Patrick Semansky) In this March 16, 2020 photo, people walk outside the Supreme Court in Washington.

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