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All About Motions To Dismiss

Edna Sussman

Motions to dismiss can be big winners—or big losers.

IT CAN BE one of the most satisfying experi- Motions to dismiss as well as motions for ences for a litigator. You pinpointed the fatal summary can win the case. But they flaw in your opponent’s case and moved to dis- also can pose risks or increase litigation costs and, in some cases, they can backfire to your miss. The judge agreed with your legal analysis. client’s detriment. The reflex reaction of some The case ended before it really began. Your litigators to make a to dismiss in virtu- client is delighted. Not only the right result, ally every case is a bad habit, but probably not your client thinks, but also without the costs of as bad as the habit of never making one. This ar- and . ticle reviews the tactical considerations that

Edna Sussman is of counsel to the New York City firm of Hoguet Newman & Regal LLP.

17 18 The Practical Litigator March 2006 should be factored into deciding whether or not • Failure to join an . to make a motion to dismiss. State rules generally provide analo- gous provisions, with some specifically provid- APPLICABLE RULES • Rules 12(b), 12(c), and ing for motions to dismiss on a variety of addi- 56 of the Federal Rules of pro- tional grounds including: vide for the making of motions to dismiss, for • Lack of capacity to sue; judgment on the , and for summary • Documentary ; judgment, respectively. Analogous provisions • A prior pending action; and are contained in state procedural rules. Forum- specific motion practice procedures are gov- • Various affirmative defenses including res erned by the various local rules of the trial judicata, collateral , and and individual judges. Generally speak- award, release, payment, discharge in bank- ing, a motion to dismiss is addressed to a pro- ruptcy, of limitations, or the statute of cedural or substantive defect in the ’s . case that entitles the to a judgment in In federal court, although not specifically ad- its favor. The plaintiff’s factual will dressed in Rule 12(b), these latter defenses gen- be taken as true for the purpose of the court’s erally may be asserted on a Rule 12(b) motion if ruling on the motion, because the motion is not the appears on the face of the to be a substitute for the trial of genuine factual itself, but if matters outside the complaint are issues and reasonable inferences will be drawn presented, the court may treat the motion as one in plaintiff’s favor. for . If the defendant presents facts outside the complaint’s allegations to support the motion, Judgment On The Pleadings which may then be characterized as a “speaking And Summary Judgment motion,” the court may treat the motion as one The essential prerequisite for a successful for summary judgment. To obtain a summary motion for judgment on the pleadings or for judgment, the defendant must generally show summary judgment by the defendant is that facts that either are not or cannot be disputed, there be no triable issue of any fact material to and which entitle the defendant to win as a mat- the motion. This is the first question that the ter of law. Again, the court will view the facts court will consider, and if there is a material fact most favorably to the plaintiff. in dispute, the case will proceed toward trial. Consequently, such motions generally rest on Rule 12 Basics some indisputable fact that is dispositive of the Under federal Rule 12(b) a defendant may plaintiff’s claim or on the more difficult propo- move to dismiss based on any of seven enu- sition that based on the facts as alleged by the merated defenses, including: plaintiff, taking into account whatever material facts are not in dispute, the plaintiff has failed to • Lack of subject matter or personal jurisdic- state a claim for relief. tion; TO MOVE OR NOT TO MOVE? • When • Improper ; your defense on the merits is an open-and- • Insufficient process or ; shut winner, you generally will move to dis- • Failure to state a claim upon which relief can miss in lieu of answering the complaint. If be granted; and you have no basis for outright dismissal or Motions To Dismiss 19

for summary judgment, obviously you will is important to the economy of the area or a per- not make the motion; if you do, you may well son well known and well loved in the commu- end up paying the plaintiff’s expense of op- nity? If so, consider whether and to what extent posing it. your client would likely be prejudiced by stay- It is in the cases in which you have a respec- ing in that forum. table motion, but not a clear winner, that you have to make difficult litigation judgments. In Applicable Law determining whether to make the motion, you Is the law of the forum favorable to your po- need to fully understand not only the facts and sition? Before making a motion to dismiss on the applicable law to assess the strength of the procedural grounds, care must be taken not to motion, but also have in mind your overall leave a forum with more favorable substantive pretrial strategy, a good sense of the judge’s law. If the case raises federal law issues, check tendencies, the likely course of discovery, and and see if the law in the forum’s circuit is more the dynamics of negotiating any ultimate set- favorable to you than it might be elsewhere. tlement. Also check on the forum’s state law (if state law claims are alleged) to see if that law is more fa- Considerations On Moving vorable to the defense than might govern else- To Dismiss On Procedural Grounds where. Forum law could well end up being the Some motions to dismiss may end the case as law applied in the case. principles well as the controversy. Others, like those chal- may call for the application of the law of that lenging personal , service of process, forum; if that law is favorable, it is generally or venue, may result only in the plaintiff bring- preferable to have a court in that forum apply ing suit again in another forum. There are sev- that law. Moreover, if no one raises a choice of eral factors to consider before making a motion law issue, forum law is generally applied. on procedural grounds. You may find, after con- sidering all the factors, that the forum chosen by The Judge Assigned To The Case the plaintiff may be the best one for you. What has the judge on your case previously held on the merits of similar cases? If there is a Convenience Of The Venue judge assigned to the case, as there always will Is the forum convenient for the defendant be in federal court and often will be in state and for you as counsel? If it is, you may well court, an assessment of the judge’s views in choose to forgo a procedural motion that may similar cases is essential. If you have a judge land you in a less convenient forum and may who has been favorable to the defense in simi- cause you to incur significant additional litiga- lar cases, you may not want to take a chance on tion expenses. Conversely, if the plaintiff’s cho- an unknown judge in another forum. On the sen forum is not convenient, then a motion on other hand, if the judge has not been sympa- procedural grounds may well be worthwhile thetic to your position in the past, that may be a absent a compelling reason to stay in that good reason to make the motion. forum. The Local Pool The Home Court Advantage Is there a reason to believe that a jury pool in Does the plaintiff have a home court advan- a different forum would be more advantageous tage? For example, is the plaintiff an entity that to the defense? Although this question may be 20 The Practical Litigator March 2006

related to the home court advantage, it focuses ing, there may be good reasons to make the mo- more on the likely composition of the jury and tion keeping in mind your overall strategy. how local jurors might view the case as op- posed to focusing on the stature or reputation of Narrowing The Issues the plaintiff. A careful review with expert jury Even if you cannot get rid of the whole case, consultants may be necessary to this will the motion narrow the issues? If so, it is question properly. often advisable to make a substantive motion to dismiss, because the narrowing of the issues Probability Of Elsewhere may serve to dramatically limit discovery and Will the just be refiled elsewhere? If all other aspects of the case. Moreover, if the dis- you believe that the plaintiff may not take the missed claim is the basis for a federal court’s trouble to refile in another forum, that is a com- subject matter jurisdiction, the plaintiff will lose pelling reason for making the motion. If you are its basis for being in federal court and will have quite certain that the plaintiff will refile, you to refile any remaining state law claims in state must think carefully about what you will be court. If you think a state court forum would be achieving by making the motion and may preferable, that could be a compelling reason to choose to just raise the procedural defenses in make the motion. the answer rather than moving to dismiss. Educating The Plaintiff Considerations On Moving To Is it in your interest to educate the plaintiff Dismiss On Substantive Grounds about the gaps in his or her case so early in the lawsuit? To persuade the court, your motion When you think you have a winning motion will lay out the case and identify the weakness- to dismiss on substantive grounds, the tempta- es in the plaintiff’s position. Consider whether it tion to make the motion is great. A motion may may be better to wait until the close of discov- well be the correct course but only after careful ery and then move for summary judgment in consideration of the possible consequences. the hope that plaintiff will not have pursued the development of the facts necessary to sustain Technical Defects some or all of the causes of action pleaded. Is the basis for your motion a technical defect in the pleading such as failure to plead an es- The Judge’s Attitude On Motions To Dismiss sential element of a ? If so, and if Is the judge likely to write a blueprint for the it would be easy to fix in an amended com- plaintiff? You must be wary of judges who, in plaint, consider how the motion really helps denying motions to dismiss for failure to state a you, even if you win. Chances are good that the claim, frequently appear to provide a road map court will grant leave to replead, because courts for plaintiffs to prove their claims. If you have almost always permit an amended complaint if such a judge, and do not have a clear winner, a it is the first version of the complaint that is motion may not be advisable. On the other being dismissed. Such a motion would certain- hand, if you have a judge who seems willing to ly make sense if you believe the plaintiff will not dismiss a claim that appears frivolous even be able to allege in good faith facts to support though the plaintiff’s allegations could be read the necessary additional pleading elements. to raise factual issues, then a motion may well However, even if you expect a corrective plead- be desirable. Motions To Dismiss 21

Considerations On All Motions To Dismiss Taking The Initiative Beyond the considerations discussed above Is there any downside to taking the initia- specific to the nature of the motion made, there tive? In some cases, particularly in more com- are factors that must be considered on all mo- plex litigation, you may benefit from gaining tions to dismiss. the court’s attention at an early time. You may expect the plaintiff to seek massive discovery Special and you foresee court involvement throughout Are there any special statutes or rules that the case. Although you have only a decent shot govern with respect to the lawsuit? It is impor- at getting one or more of the plaintiff’s claims tant to identify any specific statutes or rules that dismissed, you expect the court to be sympa- may be applicable to the case to determine thetic to your client because the merits appear whether moving to dismiss under those statutes clearly in your client’s favor. In a situation like or rules provides special benefits. For example, that, a strong presentation of your case in the under the Private Securities Litigation Reform context of a motion to dismiss may improve Act of 1995 the filing of a dispositive motion to your overall litigation posture. dismiss automatically stays discovery, except in special circumstances. Delay Will the motion delay the proceedings and is Waiver that to your advantage? Intentionally dilatory Will you be waiving any aspects of your de- frivolous motions are subject to court . fense by failing to move? It is important to re- But any reasonably supported motion to dis- member that if you do choose to make a motion miss is likely to delay litigation to some extent, to dismiss, any or insuffi- even if that is not the purpose for making the cient process defense must be raised in the mo- motion. Delay is generally thought to work to tion or else it may be waived. In addition, there the defendant’s advantage. However, that is not may be specific required conditions always the case. For example, if you have im- that have not been met, such as a requirement of portant witnesses that may not be available the exhaustion of administrative remedies, or later for trial or want an expeditious resolution other defenses to particular claims that must be to lift the specter of a large award from an on- raised at the start of the lawsuit or risk waiver. going business, delay may be damaging to your interests. Moreover, you cannot assume, espe- The Judge’s Attitude Toward Motions cially in federal court, that a motion to dismiss What is the judge’s attitude in general to- or for summary judgment will necessarily re- ward motions? If you have had a scheduling or sult in delay; in some circumstances, it may ac- pretrial conference with the court, you may celerate the litigation. have a sense of the judge’s reaction to the issues that will be raised. In federal court you should Impact also consider whether you are required to re- How will making the motion affect settle- quest a pretrial conference or obtain prior ap- ment possibilities? A well-drawn set of motion proval before making your motion. Some papers may give a tangible demonstration of judges may not even permit a dispositive mo- both the strength of your client’s defense and tion to be made without some to or invi- your determination to litigate vigorously. The tation by the court. plaintiff may respond more reasonably to your 22 The Practical Litigator March 2006 settlement proposals. On the other hand, in Timing smaller cases your ability to settle the case may When should the motion be made? Under be reduced by the costs incurred by both sides the federal rules and generally under state rules, in briefing the motion. any motion to dismiss must be made before an- You must also consider how the court’s deci- swering the complaint and the motion auto- sion will affect your ability to settle the case. For matically extends the time to answer. As dis- example, if the plaintiff’s claim rests on an un- cussed above, in some cases, there may be a certain legal question, the court’s adverse ruling good reason to hold off, answer the complaint, on your motion to dismiss may, in effect, and later move for summary judgment. For ex- strengthen plaintiff’s position in settlement ne- ample, you may conclude that an important fac- gotiations. Your settlement posture may be tual issue can be pinned down through deposi- stronger the greater the number of uncertainties tions and that a motion to dismiss would only in the case. alert the plaintiff to the issue and eliminate the element of surprise. You take the depositions Cost-Benefit Analysis and then move for summary judgment. Is the cost of the motion justifiable given the In other situations, however you may con- possible outcomes? If you will not be able to get clude that the motion to dismiss will more like- rid of the whole case for all time, you must con- ly assist your defense by forcing the opposing sider whether the cost of the motion is justifi- counsel to state his or her factual or legal theory, able given the likely results. The cost will, of or in getting the court to express its view of an course, depend on how complicated the motion issue. As a result, even if the motion is not suc- is to make. The cost of making a motion to dis- cessful, you may expect to be in a better position miss for lack of jurisdiction may be later to move for summary judgment. It is quite low, whereas the cost of a full-fledged mo- tempting to assume that by making a motion to tion to dismiss on substantive grounds, with dismiss, you will get two bites at the apple be- supporting affidavits, can be quite expensive. But in analyzing the situation you should con- cause, if you lose, you still can move later for sider the likelihood of an early settlement. If no summary judgment. This is not necessarily a such early resolution is likely, those costs may correct assumption, however, because the court go toward reducing other costs that would nec- may convert the motion to dismiss into one for essarily be incurred in any event in preparing summary judgment, may defer any determina- pleadings and developing your case for trial. tion until the trial, or may be unwilling later to It may be meaningful to estimate the costs entertain a summary judgment motion if a mo- and to place values on the benefits of the tion to dismiss has previously been denied. process, to apply probabilities to the various possible outcomes, and to determine whether CONCLUSION • In short, the question of the projected benefits exceed the costs. This type whether to make a motion to dismiss must be of cost-benefit analysis will be only as valuable made only after careful consideration of a vari- as the intuitive judgment behind it, but it may ety of factors. The answer may determine help structure and focus the decision-making whether or not you achieve the best result for effort in certain situations. your client. Motions To Dismiss 23

PRACTICE CHECKLIST FOR All About Motions To Dismiss

A motion to dismiss can save your client’s money, the court’s time, and keep a weak case out of the judicial system. But the success of such motions is by no means guaranteed, and if they don’t work, they’ll cause quite a few problems. • If you are moving to dismiss on procedural grounds, consider: __ The convenience of the forum. If you are in a favorable forum, don’t take chances that may land you in a less convenient forum and cost your client money. Conversely, if the forum is not conve- nient, then a motion on procedural grounds may well be worthwhile; __ Applicable law. If the law of the forum is favorable to your position, don’t risk winding up in a forum where it isn’t. If there are federal law issues, check and see if the law in the forum’s circuit is more favorable to you; __ The judge. How has the judge held on the merits of similar cases? If the judge has not been sym- pathetic to your position in the past, that may be a good reason to make the motion; __ The jury pool. Is there a reason to believe that a jury pool in a different forum would be advanta- geous? A careful review with expert jury consultants may be necessary to evaluate this question; __ Probability of filing elsewhere. If you believe that the plaintiff may not take the trouble to refile in another forum, that is a compelling reason for making the motion. • If you have a basis to dismiss on substantive grounds, consider: __ If the basis for your motion is a technical defect in the pleading, chances are good that the court will grant leave to replead. However, the motion would make sense if you believe the plaintiff will not be able to allege the necessary additional pleading elements; __ Will the motion narrow the issues? If so, it is often advisable to make a substantive motion to dis- miss as the narrowing of the issues may serve to dramatically limit discovery and all other aspects of the case; __ Is it in your interest to educate the plaintiff so early in the lawsuit about the gaps in his or her case? Consider whether it may be better to wait until the close of discovery and then move for summa- ry judgment; __ In deciding the motion, is the judge likely to write a blueprint for the plaintiff? If you have such a judge, and do not have a clear winner, a motion may not be advisable.

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