The U.S. Supreme Court on Tuesday will hear a case that, even by law standards, seems technical and arcane. But the case is notable because it embodies much of what’s wrong with how we as a society talk about, and our elected leaders debate, the role of lawyers and litigation in our system of government. It also points to some possible fixes.
First, the case itself. You may not know it, but the False Claims Act empowers you and me to bring lawsuits on behalf of the United States against persons or companies who defraud the government in connection with federal spending, such as Medicare or defense contracts. If we prove that the hospital or military contractor ripped off the government, we earn a cut of the money returned to the federal fisc. We get to be, in the lingo, “private attorneys general” for the United States.
In Tuesday’s case, Universal Health Services v. Escobar, a private plaintiff sued a clinic that sought payment from the government for psychological counseling performed by untrained, uncertified therapists, with tragic consequences for patients. The puzzle is that regulations governing federal spending are vast. Does a hospital’s violation of any Medicare regulation, big or small, make its reimbursement claim fraudulent, or should only certain violations count? Some cases allege minor, technical infractions. Plenty more allege severe failings, as in the case set for argument Tuesday. But because it can be hard to tell which violations matter, the cases pose, as lawyers say, tough line-drawing problems.
More interesting is what the case reveals about the state of public debate about litigation. Tuesday’s case, as with many others in the Supreme Court, drew a swarm of amicus briefs from corporate interests like the Chamber of Commerce preaching about the evils of litigation. False Claims Act litigation, they charge, has “wildly expanded” and “exploded,” especially cases raising the same legal issue as in Universal Health Services v. Escobar. Particular ire was aimed at the U.S. Department of Justice, which the briefs complain too rarely uses its power to take control of such cases, leaving “thousands” in which private plaintiffs go it alone and win unjust awards.
What makes Tuesday’s case unique is the ability to test these claims. Because False Claims Act plaintiffs sue on the government’s behalf, the Justice Department must, by law, track the lawsuits. This means that a researcher like me can get a list of the cases and then marry it to information downloaded from the nation’s 94 district courts. Unlike in many other litigation areas, I was able to build a dataset out of the whole iceberg, not just its publicly visible tip.
What did I learn from all this data spadework? The main lesson is: Don’t trust what the Chamber and its corporate allies tell you about litigation. An “explosion” of lawsuits like Universal Health Services? The data say the opposite. The Justice Department as a lax enforcer? Not so. They actually do a surprisingly good job. The “thousands” of cases in which private plaintiffs persist even after the Justice Department declines to join the case? Most disappear in a matter of weeks, usually without so much as a filing by defendants.
All of this is important on two counts. First, the stark contrast between the data findings and the overheated claims advanced in the briefs is a microcosm of the long-running litigation wars. For decades, pro- and anti-litigation forces have engaged in trench warfare on a pair of basic questions. Is private litigation efficient and even necessary given the finite resources of prosecutors and enforcement agencies? Or are profit-minded private enforcers overzealous and incapable of exercising wise prosecutorial discretion, imposing substantial costs on society?
Corporate interests have become adept at arguing the latter position, asserting that this or that litigation regime has run amok. Similar claims have moved state legislatures to enact “tort reforms” that limit the ability of individuals who have been hurt to win redress. And claims about litigation costs and runaway juries have fueled the move to arbitration, which often leaves the injured with no remedies at all.
And yet, the best research finds that most claims in support of “litigation reforms” are wrong, often badly so.
As one notable example, two of my Stanford colleagues did rigorous research on medical malpractice litigation—the type of case at the center of tort reform efforts—and found that panels of doctors agreed with case outcomes most of the time. Cases where outcomes and experts did not match up, they further learned, tended to favor doctors, not patients. Even the McDonald’s “hot coffee” case—often Exhibit A when corporate interests inveigh against litigation—has been grotesquely misrepresented. In a nutshell, the lesson in Tuesday’s case is just a cleaner, more data-rich version of what we’ve seen across many other litigation areas.
Second, this matters because, though this is the “big data” era, the availability of litigation data that can discipline public debate may be getting worse, not better.
At a recent conference at the University of Pennsylvania Law School, law professors like me—most of us lawyers who also have doctorates—denounced tightening restrictions in the approval process necessary to access case data. Other participants asked why the federal agencies that maintain such data no longer even try to track class actions, despite their salience in legal and policy debate.
Still others complained that the documents federal litigants file, though nominally public, can only be accessed for fees that easily hit tens of thousands of dollars for projects like mine, and that many chief district judges won’t waive fees for scholarly work despite regulations allowing it. Finally, many decried scanty agency responses to Freedom of Information Act requests, which sometimes take years to fulfill or go unanswered.
We should demand better from all the actors in this drama: litigants like the Chamber, the elected officials who mindlessly repeat their claims and the judges and agencies who hold the keys to critical data. Healthy democratic debate in an American system of government that relies on private litigation to do some of its most important work depends on it.
In the meantime, when the Chamber or a candidate for office says something about litigation, be wary. Ask lots of questions. If Tuesday’s case is any indication, they may be making false claims of their own.
This piece was originally published by The National Law Journal on April 18, 2016.