Our Underfunded State Courts - An Issue That Urgently Needs Attention

Tuesday, April 1, 2008 - 01:00

Editor: Is the fact that so few cases are resolved at trial indicative of uncertainty as to the outcome if the matter is taken to that stage?

Quinn: I think two major factors come into play in avoiding a trial in large commercial complex litigation situations: one obviously is the cost of waiting years for the trial. Secondly, in cases which involve tens of millions, hundreds of millions or perhaps billions of dollars, companies do not wish to expose themselves to the risk of an unexpectedly large judgment due to the uncertainties inherent in a trial even though the chance of such a judgment being sustained on appeal is frequently quite remote.

Editor: In many U.S. jurisdictions judges carry too large a case load as a result of clogged dockets. How does that affect the cost of litigation?

Quinn: It greatly magnifies the cost of litigation because the inability to get things resolved quickly often means that motions are left undecided and discovery goes on almost untethered. Depriving courts of the funds needed to hire additional judges is false economy because it results in immensely greater litigation expense to the economy as a whole.

Editor: To what extent does merit selection improve the quality of judges and contribute to judicial independence?

Quinn: Merit is a factor in certain state court systems and as well as with appointments to the federal bench. This is far more desirable than elective systems where judges have to seek campaign contributions and then go on the stump to get elected.

Editor: Do you see an effect on the outcome and cost of litigation where judges are not adequately staffed, such as not having clerks to do research?

Quinn: It is a huge problem. There are more and more large cases that end up being litigated in state courts here in New York and all around the country. If the judge lacks staff to do research, it often means that needed research, motions and other important matters get delayed for long periods of time. This hurts the litigants and undermines respect for the judicial system. The Delaware state court system, which is typically well funded, is a model for other states to emulate

Editor: Does inadequate court funding result in clogged dockets that lead to courts not taking the time to consider motions for summary judgments? How does this affect costs and outcomes?

Quinn: I think it is symptomatic of the same problem, which is that you have too few judges working too hard and being asked to do too many things. The easiest default in that circumstance in the case of summary judgment motions is for the judge just to say denied and let even unmeritorious cases proceed often leading to settlements that do not make sense.

Editor: Do you see the same problem with respect to implementing something comparable to the Daubert process in the state courts?

Quinn: One of the things you always hope for is that the judge is not going to allow certain kinds of expert testimony, which is obviously bogus, to go forward and actually be heard by the jury. Courts need to take time to examine the qualifications of expert witnesses. If the judges are overburdened, they may not have time to do this. Certainly those states that have essentially adopted either by rule or by case law the Daubert process have improved the quality of expert testimony.

Editor: Do you find that underfunding results in not enough time being spent by the judge to monitor e-discovery?

Quinn: E-discovery has added a whole new dimension to the complexities that exist already in complex cases, particularly for the state courts. As you know, the federal rules have created a way to go about dealing with e-discovery. While some state courts have adopted similar procedures, the vast majority have not. The problem is only going to get worse over time and is greatly aggravated when judges lack the time to give e-discovery proper consideration. The threat of unbridled e-discovery can all too often be a factor in the settlement of cases that lack merit. The problem is relieved in some state courts by the appointment of a discovery master paid for by the litigants, which of course contributes to increasing the costs of litigation.

Editor: Does the clogged docket issue situation also affect appellate courts?

Quinn: Yes. We find that in many state court systems, it takes much longer for the appellate courts to deal with appeals. This too increases the expenses that are borne by our clients.

Editor: It has been suggested that because of inadequate compensation more judges are being drawn from the public sector and fewer from the private bar. It has also been suggested that this leads to less attention being given to business cases.

Quinn: I don't think that there is any question that judges, both at the state and the federal court level, are by today's standards vastly underpaid. This has affected the pool of people that are willing to serve. Not only are they younger and less experienced, but also more people from the public sector are becoming judges and fewer from private practice. It seems to me that the public deserves to have their judges drawn from the broadest possible pool of experienced candidates with a variety of legal backgrounds - and the fact that economics has now become a larger factor is a real negative.

Judges from the public sector sometimes bring less experience and knowledge to complex commercial disputes. Also, some judges may be less interested in handling business cases and give priority to cases they consider more important like those dealing with criminal or family law. This is not a problem here in New York City and other parts of the State because we now have a Commercial Division of the Supreme Court. There is no question that having a business court, as is true here and in a number of other states, is a significant positive. You have judges who are dealing with similar kinds of commercial cases on a regular basis and therefore get to know the issues and can deal with them in a much more effective and expeditious way.

Editor: It has also been suggested that more experienced judges are leaving to join law firms or pursue careers as arbitrators. How does this affect costs and outcomes?

Quinn: That certainly is a trend that has been increasing over the last 5 to 10 years. You see more and more judges, both at the federal and state levels, stepping down either to become partners or counsel of firms or arbitrators or mediators. This is an unfortunate development because veteran judges are people with a passion for their role. To have to renounce their mission in life in order to put their kids through college is a true tragedy both for them and for society.

Editor: New York and London compete as venues for international litigation. Do you feel that the issues we have discussed put New York at a competitive disadvantage?

Quinn: It is an interesting point. Clearly the UK system seems to value their judiciary more. International disputes are on the rise, which is in large part attributable to the enormous globalization that has occurred in the last two decades - and it is important that courts in the U.S. be in a position to compete. As far as the competition between New York and London as venues for litigation is concerned, the most fundamental concern is what the law is. There are pluses and minuses to both systems. One big plus for London is that extensive discovery is not a feature of the UK system. We should not shoot ourselves in the foot by underfunding our court systems or underpaying our judges. It is appalling that cost of living increases for New York State judges have been held hostage for nine years to political issues in which they are not involved.

Editor: How do you see the future? It seems inevitable that as state tax revenues decrease as a result of the economic downturn the budgets for state court systems will be reduced, as is already being proposed in a number of states.

Quinn: I think that it is very shortsighted. The reality is that we as a country have by far the best legal system in the world. People fight to try to get cases here before our courts, and the judicial budgets of most states are hardly a major part of their budget. Furthermore, in an economic downturn, states will be competing to attract businesses to their state and to retain businesses already located there. It would be foolish for states to assume that those considering a business location do not look at information about the legal climate, including the state of their court systems. The U.S. Chamber's ranking of each state's legal climate is readily available.

Editor: How do you feel about DRI taking a lead in this?

Quinn: Yes it is a useful activity, but I don't think that it is something that is limited to the defense side of the bar. This is something that affects all litigants on either side. It is something of broader concern.

Editor: It has been said that one of the reasons why judges don't get the time of day when it comes to state budget allocations is that they don't have a lobby. Do you feel that the issues that we have been discussing are of sufficient importance to justify the attention of your clients?

Quinn: Many of our clients recognize that these are serious problems that eventually end up costing them money, so the answer is yes. I think that business groups whether it is the chamber of commerce or other groups that represent corporations should be, and in many instances are, actively involved in trying to address the problems we have discussed.

Please email the interviewee at james.quinn@weil.com with questions about this interview.