The newest online debate pits the class action defense lawyers at Drug & Device Law against University of Pennsylvania Law School Professor Stephen Burbank at PENNumbra, the online supplement to UPenn’s Law Review.
Beck and Herrmann open with a defense of Iqbal on several grounds, including:
[C]ourts have no legitimate basis for favoring plaintiffs when interpreting pleading standards. A just system does not pick sides in advance, but instead establishes neutral rules. We reject the normative view that it is somehow “better” to let unmeritorious cases proceed than to risk that meritorious cases will be dismissed. Either way represents error, and neither error is inherently better than the other. Indeed, given the enormous transaction costs that litigation entails, Type II errors (false negatives) are probably preferable to Type I errors (false positives) from a purely economic perspective.
From a "purely economic perspective" it is better if corporations stop wrongfully causing damage in the first place, which they will only do if they have an economic incentive like the threat of legal liability.
But there’s a bigger problem with Beck and Herrmann’s argument.
It is an "error" when a court dismisses a meritorious case. It is a particularly unjust, unfair, and avoidable "error" when a court dismisses a meritorious case prior to any discovery.
It is not, however, an "error" for a court to refuse to dismiss a case that may be unmeritorious.
Why not? Because the case may be meritorious and, if it is not, the defendant has four more opportunities to resolve the case favorably by testing the merits of plaintiff’s claim: judgment on the pleadings, summary judgment, trial, and post-trial relief. That is to say, even after the motion to dismiss, Plaintiff’s claims will be assessed, re-assessed, re-re-assessed, then re-re-re-assessed. Then there’s an appeal to re-re-re-re-assess each and every element of plaintiff’s claims and each and every element of plaintiff’s damages.
When a court declines to dismiss an unmeritorious case, there is ample room for error-correction down the road to ensure plaintiff’s claims have merit. It’s why we have a civil justice system: to provide a thorough airing and evaluation of disputes.
When a court dismisses a meritorious case, however, the only error-correction is a single appeal that will be evaluated under the same unfair anti-plaintiff standard established by Iqbal.
Beck and Herrmann have it exactly backwards: there is "no legitimate basis" for not favoring plaintiffs when interpreting pleading standards. Their "neutral" interpretation of pleading rules is not "neutral" at all, but rather a "normative view" that plaintiffs are not entitled to the same error-correcting procedures to which defendants are entitled.
A "just system" wouldn’t pick defendant’s side in advance.