An Alternative to Iqbal: A Commitment Not to Settle
This Essay was prepared for a symposium to recognize the fifteenth anniversary of Ashcroft v. Iqbal. It examines the plausibility standard developed in Iqbal and first articulated in Bell Atlantic Corp. v. Twombly, specifically its objective of discouraging nuisance or in terrorem lawsuits. This Essay explores methods other than heightened pleading to address the problem of nuisance suits and makes the case for one alternative: defendants committing not to settle.
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Introduction
This symposium uses the fifteenth anniversary of Ashcroft v. Iqbal[1] to reflect on its significance. The decision has special significance for me and my academic career. Iqbal was decided during the last months of my clerkship and required some revisions to an opinion the chambers was preparing at the time.[2] Shortly after my clerkship, I began my academic career at the University of Miami School of Law, where I had to incorporate the new decision into my teaching notes on civil procedure. Those notes have evolved over time and are now a mainstay in the first-year civil procedure course I teach at Boston College Law School. The decision and I have thus grown up together, so to speak, with its fifteen-year history mapping neatly onto my roughly fifteen-year academic career.
In this brief Essay, I want to focus on one aspect of the decision that I have taught for many years and which, in my view, is useful for thinking about the policy implications of the heightened pleading regime that Iqbal and its predecessor, Bell Atlantic Corp. v. Twombly,[3] introduced: the goal of deterring nuisance suits. My views on Iqbal with respect to this issue have been refined over the years, benefiting from experience, the explosion in scholarship that the decision inspired,[4] and the views of my brilliant students.
Both Iqbal and Twombly famously changed the standard of fact pleading for nonfraud claims.[5] They shifted the standard from the “possibility” regime suggested by the “no set of facts” language of Conley v. Gibson[6] to one of “plausibility,” where the factual allegations must be nonconclusory and have some “heft.”[7] Much has been written about just what plausibility means and whether it changed anything, either in theory[8] or in practice.[9]
Here, I want to focus on the motivation for the change in pleading standards, specifically the strain and expenditures put on defendants in civil litigation. That motivation was first articulated in Twombly, where the Court remarked that the early vetting of claims is necessary “lest a plaintiff with a largely groundless claim be allowed to take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value.”[10] This motivation of addressing in terrorem lawsuits, presumably brought only to compel a settlement, was also present in Iqbal and amplified by the 9/11 context. In Iqbal the concern became one of avoiding the “costs of diversion” that may interfere with “[g]overnment officials . . . charged with responding to . . . ‘a national and international security emergency unprecedented in the history of the American Republic.’”[11]
Taken together, Twombly and Iqbal can be read as changing the pleading standard to address the problem of nuisance suits: suits that lack merit but are filed to extract settlements from the defendant.[12] Using heightened pleading standards like plausibility as a gatekeeping device has an intuitive appeal, as nuisance suits can be dismissed “at the point of minimum expenditure of time and money by the parties and the court.”[13]
As I have taught Twombly and Iqbal over the years, I have used a simple model of nuisance suits, one borrowed from the literature,[14] to understand not only the efficacy of the plausibility standard in dealing with nuisance suits but also the costs and whether alternatives exist. The costs of Twombly and Iqbal are by now well known, as the plausibility standard can put plaintiffs with potentially meritorious claims into a catch-22 scenario. You need a plausible claim to survive a motion to dismiss and obtain discovery, but you may need discovery to allege a plausible claim in the first place.[15]
In this Essay, which is derived from my teaching notes, I lay out a simple model of nuisance suits both to understand why nuisance suits are a problem and to understand how Iqbal and Twombly discourage nuisance suits. But thanks to many years of teaching, the views of my students, and conversations with my colleagues and mentors, the model also reveals alternatives to the problem of nuisance suits that avoid some of the well-recognized costs of the plausibility standard. One can view this Essay as a vivid example of the power of simple models in clarifying thinking.
One alternative I emphasize here, which I find normatively appealing, is for defendants in nuisance-suit situations to simply commit to not settling. As I show below, communicating and exercising a commitment not to settle can remove the allure of a nuisance suit for would-be bad-faith plaintiffs and discourage such suits from being filed. Moreover, such a commitment does not have the costs of heightened pleading, particularly in discouraging good-faith catch-22 suits that lack the discovery necessary to be plausible. And, as I discuss below, a commitment not to settle can be seen—counterintuitively—as a more satisfying strategy to protect the government from unjustified litigation costs.
This Essay proceeds as follows. Part I provides important background on Iqbal and Twombly. Part II lays out a simple model of nuisance suits. Part III then uses the model to explore solutions to the problem of nuisance suits, with an emphasis on a commitment not to settle. This Essay then concludes.
I. (Twombly and) Iqbal
A. Twombly
Let me begin chronologically with the standard articulated in Iqbal’s predecessor, Bell Atlantic Corp. v. Twombly.[16] The case involved a class action brought by telecommunications consumers against the legacy “Baby Bells,” incumbent local exchange carriers (ILECs) who were vestiges of the original AT&T monopoly on phone services.[17] The Telecommunications Act of 1996 required ILECs to share their networks with competitive local exchange carriers (CLECs) as well as compete with each other.[18] The class alleged that the ILECs did neither, imposing barriers to entry on CLECs and refusing to encroach on each other’s turf, all in violation of section 1 of the Sherman Act.[19] Although our “notice pleading” regime does not require a showing of evidence for each element of a claim, the class did allege some basic facts in support of their conclusion that the defendant ILECs were in an agreement to restrain trade. Specifically, the class alleged that the ILECs engaged in a “parallel course of conduct” that supported an inference of agreement.[20]
At issue was whether the allegations of parallel conduct were sufficient to survive a motion to dismiss for failure to state a claim. The lower court concluded that parallel conduct was sufficient because, under Conley v. Gibson, the class only had to allege sufficient facts to support the possibility that they will prevail on their Sherman Act claim.[21] The Supreme Court, however, concluded otherwise, ruling that the possibility standard of Conley should be retired.[22] The Court instead articulated a “plausibility” standard that required a court to determine whether there was “a reasonable expectation that discovery will reveal evidence of illegal agreement.”[23]
The Supreme Court used Twombly to explain the importance of imposing a plausibility standard for fact pleading:
We alluded to the practical significance of the Rule 8 entitlement requirement in Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005), when we explained that something beyond the mere possibility of loss causation must be alleged, lest a plaintiff with “a largely groundless claim” be allowed to “take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value.” Id., at 347 (quoting Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 741 (1975)). So, when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, “this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.”[24]
Here, the Court offered the plausibility standard as a solution to the problem of in terrorem, or nuisance, suits. In the Court’s view, district courts must vet the factual sufficiency of claims at the motion to dismiss phase before a case “should be permitted to go into [the] inevitably costly and protracted discovery phase.”[25] Otherwise, an unscrupulous plaintiff can use a “largely groundless claim”[26] to extract a settlement, one that would be less than the costs of discovery for the defendant. Indeed, the Court emphasized that “proceeding to antitrust discovery can be expensive”[27] and quoted a study concluding that “discovery accounts for as much as 90 percent of litigation costs when discovery is actively employed.”[28]
Interestingly enough, the Court used similar reasoning in support of strengthening the motion for summary judgment standard about twenty years before in Celotex Corp. v. Catrett,[29] a case that was part of a trilogy of decisions concerning summary judgment.[30] There, the Court permitted a defendant to move for summary judgment on a plaintiff’s claim if a plaintiff could not show that its evidence would permit a reasonable jury to find in its favor.[31] The Court concluded that broadening the summary judgment standard in this way was necessary because the motion to dismiss under “notice pleading” could no longer be relied upon as the tool “by which factually insufficient claims or defenses could be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources.”[32]
Twombly also invoked another case from the summary judgment trilogy, Matsushita Electric Industrial Co. v. Zenith Radio Corp.[33] There, the Court reviewed a grant of summary judgment entered in an antitrust case in which the principal evidence in support of an antitrust conspiracy was parallel conduct.[34] The Court reversed the grant of summary judgment, concluding that the parallel conduct evidence was insufficient to support a conspiracy because the lower court failed to determine whether “[the defendants’] conduct [was] consistent with other, equally plausible explanations.”[35]
One can read Twombly as importing the cost-consciousness of Celotex and the plausibility reasoning of Matsushita from the summary judgment context, which is after discovery,[36] into the motion to dismiss context, which is before discovery.[37] Indeed, providing a mode of early factual vetting before discovery would give a court the opportunity to scrutinize claims before any discovery costs were imposed, something a summary judgment motion cannot achieve. Thus, the concerns the Court articulated in Celotex, Matsushita, and Twombly foreshadowed Iqbal.
B. Iqbal
After Twombly was decided, two questions remained. First, to what extent did the plausibility standard, which has its origins in antitrust law, apply outside of the antitrust context? Second, how should a judge apply the plausibility standard? The Supreme Court addressed both questions, among others, in Ashcroft v. Iqbal.[38]
Iqbal concerned a noncitizen from Pakistan who was arrested on a charge of falsifying immigration documents shortly after the terrorist attacks of 9/11.[39] The plaintiff Javeed Iqbal was designated a person “‘of high interest’ to the September 11 investigation,”[40] detained at the Metropolitan Detention Center (MDC) in Brooklyn, and then subjected to a number of violations of his constitutional rights under the First and Fifth Amendments.[41] He asserted Bivens[42] claims against his detainers, including both John Ashcroft, the Attorney General at the time of the arrest, and Robert Mueller, the then-director of the Federal Bureau of Investigation.[43] Iqbal alleged, in particular, that his arrest was the result of a discriminatory policy to target men of Middle Eastern descent after the 9/11 attacks, that Ashcroft was the “principal architect of the policies and practices challenged,” and that Mueller “was instrumental in the adoption, promulgation, and implementation of the policies and practices challenged.”[44]
Among other things,[45] the Iqbal Court clarified the plausibility standard set forth in Twombly. It first made clear that the plausibility standard applied across the board—outside of the antitrust context—to all cases governed by Rule 8(a)(2).[46] It then set forth “[t]wo working principles” to assist courts with application of the new standard.[47] First, all conclusory allegations should be discarded. Second, the remaining nonconclusory allegations should be examined to see if they set forth a plausible claim. The Court finally opened up the information upon which a judge may rely in determining plausibility.[48] Although a judge in evaluating a motion to dismiss for failure to state a claim is normally limited to the “four corners of [the] complaint,”[49] the Court stated that a court may also “draw on its judicial experience and common sense.”[50]
Like in Twombly, the Court emphasized the importance of vetting claims at an early stage to avoid imposing costs on the defendant. However, Iqbal arose out of constitutional challenges to the government’s response to the 9/11 terrorist attacks, all within the context of an assertion of qualified immunity. Given this context, the Court observed that:
Litigation, though necessary to ensure that officials comply with the law, exacts heavy costs in terms of efficiency and expenditure of valuable time and resources that might otherwise be directed to the proper execution of the work of the Government. The costs of diversion are only magnified when Government officials are charged with responding to, as Judge Cabranes aptly put it, “a national and international security emergency unprecedented in the history of the American Republic.”[51]
The Court went on to say that “we are impelled to give real content to the concept of qualified immunity for high-level officials who must be neither deterred nor detracted from the vigorous performance of their duties.”[52]
This language went beyond policing nuisance suits. It suggests that a heightened pleading standard is important not only to determine whether to “put[] the defendant to the expense of discovery” but also to shut down litigation in situations where litigation may “burden[] a defense of immunity.”[53] Nevertheless, the concern with preventing groundless cases from imposing costs on defendants is shared by both cases, and thus both can be seen as addressing the problem of nuisance suits.
There is one other difference that will become important later in the analysis. Unlike in Twombly, the Iqbal Court did not presume that the “groundless” case is being brought in bad faith to extract a settlement. In fact, the plaintiff’s motive was never really discussed in Iqbal, nor could it be, as the verified complaint filed in the action spoke to a number of horrors committed against Iqbal at the MDC.[54] In the context of governmental enforcement, it was enough for the Court that the case, even a good faith one, was interfering with the government and its task of addressing the war on terror.
II. A Simple Model of Nuisance Lawsuits
If the plausibility pleading standard at the heart of Iqbal (and Twombly) can be understood as a rule to address nuisance suits, then it would be useful to determine whether the rule is effective in doing so. We first would need to agree that nuisance suits are a problem at all,[55] and even if they are, it may turn out that pleading standards do nothing to deal with them. The effect of legal rules on costly behavior is often difficult to assess. For example, a strict-liability rule may decrease litigation costs relative to a negligence rule because strict liability is easier to assess than negligence, but it may also increase litigation costs relative to a negligence rule because it induces more plaintiffs to file suit.[56]
One method of gauging a rule’s effectiveness is through economic modeling. By making simplifying assumptions, one can at least get a sense of how a rule operates on behavior. Moreover, a model can clarify one’s thoughts and clear away what may turn out to be incorrect intuitions. Finally, a good model can inform further research.
Here, I want to set forth a simple model of nuisance suits, one I have borrowed from the literature.[57] I will proceed by introducing my modeling assumptions, followed by analysis of the defendant’s and plaintiff’s payoffs, respectively. As shown below, the model confirms some of the Supreme Court’s intuitions in Iqbal and Twombly about handling nuisance suits, but it also helps to show the well-recognized costs of Iqbal and Twombly in using motions to dismiss to gatekeep discovery.
A. Background Assumptions
In general, a rational plaintiff (π)[58] has the following payoff from litigating a civil action:
PL − Cπ
where
· P is the probability, or likelihood, that π will recover;
· L is the amount that π seeks to recover; and
· Cπ is π’s total litigation costs.
This equation represents the plaintiff’s net expected recovery, and we assume that a rational plaintiffseeks to maximize their net expected recovery. Admittedly, the word “rational” is doing a lot of work here. Here, we can assume that the plaintiff is rational insofar as they seek to maximize their payoffs net of costs. We can also assume, to simplify things, that the plaintiff is risk neutral, and thus has a linear payoff curve. Reality, of course, would suggest a mix of both risk-seeking and risk-avoiding behavior. Finally, again for purposes of simplicity and clarity, we will assume that the plaintiff has perfect information about the merits of the case, including the probability of nonrecovery.
In contrast, a defendant does not necessarily seek a remedy, and thus a rational defendant (Δ) not asserting a counterclaim has the following costs from litigating a civil action:
PL + CΔ
where P and L retain the same value as set forth above, but CΔ is the defendant’s litigation costs.[59] This simple setup demonstrates that litigation is often zero sum. Whatever the plaintiffgains, the defendant loses. One important exception to this is settlement, which can allow both parties to achieve gains from avoiding the costs of litigation.[60]
Imagine that the plaintiff is thinking about filing a nuisance lawsuit in which the probability of recovering is zero.[61] Please note that, consistent with Iqbal, the definition of nuisance suit that I am using here is overinclusive. The model does not take into account the plaintiff’s motivation, so it includes both good faith[62] and bad faith lawsuits. Moreover, consistent with the practice of federal courts, assume that the American Rule, in which the parties bear their own costs, applies.[63] Finally, as will become important later, assume that the cost of filing a complaint, Ccomplaint, is small relative to the discovery costs of either party.[64]
B. The Defendant’s Payoffs
With the above background in mind, consider the parties’ payoffs. For the sake of clarity, let us start with the defendant’s payoffs and assume that the plaintiff decides to file the nuisance suit. We do not know yet if the plaintiff will do so, but examining the defendant’s payoffs first will help clarify the plaintiff’s decision-making.
If the lawsuit is a nuisance lawsuit as described above, then P is equal to zero and therefore the gross expected liability PL of the defendant is also equal to zero. This leaves the defendant with the following options:
· If Δ defends the lawsuit, then Δ’s total litigation costs will be PL + CΔ. Because PL = 0, Δ’s total litigation costs will simply be CΔ.
· If Δ defaults, then defense costs are zero, but the probability of recovery becomes 1. Thus, the total costs to Δ will be (1)L + 0, or simply L.
· If Δ settles, then Δ will avoid all litigation costs and only pay settlement offer S.
Defaulting is not a realistic option because we can assume that L is greater than either the costs of defense, CΔ, or any settlement offer, S.[65] The real choice for the defendant is between defending the lawsuit, which is costly but guarantees a win, CΔ, and settling, S. Here, a rational defendant will only settle if it costs less than defending, or S < CΔ.
C. The Plaintiff’s Payoffs
With the defendant’s payoffs in mind, let us turn to the plaintiff’s payoffs. At first glance, one would think that the plaintiffhas no incentive to file the lawsuit at all. If the probability of recovering P is zero, then the gross expected recovery PL is also zero. Thus, litigation is all cost for the plaintiff, −Cπ, with no positive payoff.
But the plaintiff’s decision-making is not done in isolation. The plaintiff knows that the defendantis willing to settle so long as the cost is less than defending, or S < CΔ. The plaintiff also knows that any settlement offer will probably come shortly after filing the complaint, which would allow the defendant to avoid any defense costs. If the plaintiffsimply files a complaint, then they would be happy to accept any settlement, S, that is greater than the costs of the complaint, or S > Ccomplaint.[66]
Assuming, again, that the costs of filing the complaint are less than the costs for the defendant of defending the action, then a deal can be struck. As long as CΔ > S > Ccomplaint then the defendant would be willing to make a settlement offer, S, that the plaintiff would be willing to accept. By settling at S, the defendant can avoid the costs of defending, CΔ. More importantly, the plaintiffcan earn a positive payoff, S − Ccomplaint, from filing a nuisance suit. As this simple model demonstrates, there is always a payoff to filing nuisance suits “whenever the cost of filing is less than the defendant’s cost of defense.”[67]
III. Approaches to Discouraging Nuisance Suits
The above model shows how a plaintiff can file a nuisance suit with zero probability of success and still obtain a positive payoff. This is because the plaintiff can leverage the costliness of litigation defense, including discovery costs, to extract a settlement from the defendant.
The model also suggests a number of intuitive approaches to discourage the filing of nuisance suits. Again, the potential for filing a nuisance suit occurs when CΔ > S > Ccomplaint. Below, I will discuss three approaches to discouraging nuisance suits that would disrupt the above inequality: (1) decreasing defense costs, (2) shifting defense costs, and (3) eliminating settlement. [68]
A. Decreasing Defense Costs: Heightened Pleading Standards
One intuitive way to discourage nuisance suits is to decrease the costs of defense CΔ. This is the approach taken by the Supreme Court in Twombly and Iqbal. By imposing a heightened “plausibility” pleading standard prior to discovery, a nuisance suit can “be exposed at the point of minimum expenditure of time and money by the parties and the court.”[69] If a nuisance suit can be dismissed early, it lowers the cost to defend, CΔ, perhaps to something similar to or even lower than the cost of the complaint.[70]
But this approach also carries with it an obvious cost. As I observed earlier, neither the model nor the Court in Iqbal distinguished between good and bad faith nuisance suits. Imagine that a plaintiff files a lawsuit that has a probability of prevailing, P, of zero upon filing, but that the plaintiff has strong reason to believe it will have a positive probability of prevailing once the plaintiff obtains discovery.[71] One justification for discovery is to eliminate asymmetric information, particularly in situations where a party has material evidence that cannot otherwise be obtained through other methods.[72] I do not think it is a coincidence that both Twombly and Iqbal concerned such evidence—evidence of an illegal conspiracy among the codefendants in the case of Twombly and state of mind evidence in the case of Iqbal––neither of which the plaintiffs could produce at the pleading stage.
If this hypothetical good faith plaintiff files a claim, then arguably the plaintiff’s case will be dismissed as implausible and not proceed to discovery.[73] But the plaintiff could make their claim plausible if they were allowed to obtain discovery. Thus, the heightened pleading approach has the cost of putting good faith plaintiffs in a catch-22 situation. This catch-22 problem was identified fairly early after the decision was issued,[74] but it also follows from the model’s inclusion of good faith claims.
I would note that there are alternatives to reducing defense costs without the same catch-22 costs of heightened pleading. One such approach is for summary judgment to occur earlier in the litigation, to both reduce defense costs and permit targeted discovery going forward.[75] This could involve the use of “pleading reports,” more affirmative disclosure obligations, and earlier judicial review of the evidence, all done at an early point in the litigation when defense costs are low.[76] At the same time, a court could permit early, targeted discovery to prevent plaintiffs from being put into a catch-22 situation.[77]
Another approach can be found in multidistrict litigation (MDL), where Lone Pine orders are often used to reduce defense costs.[78] A Lone Pine order typically requires a plaintiff to do more than plead a claim but “to supply prima facie evidence of injury, exposure, and causation—all by a set date, under penalty of dismissal.”[79] Lone Pine orders generally require a plaintiff to prove the aspects of their claim that they have control over, such as proof of injury. The orders therefore have the potential to reduce defense costs when a plaintiff cannot even produce basic information about their own claim.
B. Shifting Defense Costs: The English Rule
A second way to discourage nuisance suits is to jettison the American Rule, whereby the parties bear their own costs, and adopt the English Rule, whereby the loser pays the winner’s defense costs.[80] Given that, in a nuisance-suit situation, the plaintiff is filing a nonmeritorious suit, the effect of the English Rule is to render the defendant’s litigation costs, CΔ, to be zero at the end of the case. This approach was recognized fairly early on as a solution to nuisance suits, even prior to Iqbal, as it eliminates defense costs and thus the defendant’s need to avoid these costs by settling.[81]
One limitation of this approach is that it is not American. Despite studies confirming the effectiveness of the English Rule with respect to discouraging nuisance suits,[82] few U.S. jurisdictions have experimented with the approach.[83] Moreover, in Alaska, the one jurisdiction that has fully adopted this rule, effects on litigant behavior are unclear.[84]
Similar to the heightened pleading approach, the English Rule also discourages good faith lawsuits because fee shifting requires good faith plaintiffs to weigh the potential burden of paying the defendant’s costs.[85] Alaska had addressed this concern by providing an exception to the English Rule for public interest litigation, an exception that is no longer available.[86]
C. Eliminating Settlement: Commitment Not to Settle
A third way to deter nuisance suits, and my own personal favorite in part due to its simplicity, involves eliminating the option to settle. As the model shows, the only way for the plaintiff to receive a payoff is through a settlement offer. If the defendant chooses to simply commit to defending the litigation, then the plaintiff will not have a positive payoff, either from the defendant or the court. The plaintiff, after all, is going to lose.
I am partial to this approach because it leaves the solution to discouraging nuisance suits in the defendant’s own hands. Unlike the other solutions, this would not require any legal reform. For example, there would be no need to change pleading standards or litigation cost allocations. The solution also has the added bonus of not discouraging good faith lawsuits, a cost shared by both the heightened pleading and fee-shifting approaches. Without settlement, the plaintiff’s expected value from litigation would be PL – Cπ; whether a rational actor would file a suit would hinge on the suit’s merits alone. If the plaintiff has a low-probability suit but faith that discovery will reveal evidence in their favor, then the plaintiff can suffer the consequences if discovery is not successful. Costs would be imposed on the defendant, of course, but those costs would have the social benefit of discouraging other bad faith lawsuits. And as a societal matter, we would want those good faith lawsuits to be filed.[87]
For the solution to work, the defendant must make a credible commitment not to settle, which may be difficult.[88] Such a commitment would be difficult to establish and communicate if the defendant is a private party who only litigates infrequently or has settled nuisance suits in the past.[89] There is also the temptation of settling to reduce litigation costs, a temptation from which even governmental entities are not immune.
But a commitment not to settle may be more credible if the party is large, say a corporate defendant who tends to draw a lot of nuisance litigation or a governmental entity. The federal government, for example, can adopt such a policy and make it known at a very low cost. Although this approach would apply better to some defendants than others (governments and other frequent litigants), so too does the heightened-pleading-standard approach apply better to some parties than others (effectively deterring good as well as bad faith suits).
I want to conclude by turning back to my personal history to show how all of these considerations have helped me to revise and improve my own understanding of the legal system. Prior to clerking on the First Circuit, I had the great fortune of clerking on the district court for the Honorable Patti B. Saris, who, in my mind, is the very model of a wonderful trial court judge. One case that came up during my clerkship year was Kennedyv.Town of Billerica, a police misconduct lawsuit brought by a family who alleged that the Billerica Police Department engaged in a reign of terror on the family for many years.[90] Leonard Kesten, a former corrections official and special education teacher with a practice of representing cities and towns in Massachusetts, represented the town.[91]
During preparation for trial, I learned that Kesten had a reputation in the Boston area—he was known for never settling.[92] I was curious about that reputation and, at the time, tried to understand why anyone would take such an approach. As I noted earlier, settling is one of the few situations in litigation that is not zero sum—both parties win by avoiding litigation costs. But as I entered my academic career and started teaching Iqbal, my own views changed.
As an initial matter, one can see Kesten as a proof of concept of the commitment-not-to-settle approach for deterring nuisance suits.[93] Although I cannot verify empirically that his reputation discouraged nuisance suits, I would imagine that he could not have developed such a reputation and successful practice without some success in doing so.
But Kesten is also proof of how the commitment not to settle can help achieve some of the normative aims of civil litigation, especially in the context of government misconduct. As I mentioned earlier, Iqbal does not distinguish between good and bad faith lawsuits in the way that Twombly does. In part, I think this was motivated by the specific context of the case, in which the Court was very self-conscious about interfering with the war on terror. But even outside the 9/11 context, the Court has been especially concerned in its qualified immunity jurisprudence with protecting law enforcement from the costs of litigation. However, avoiding imposing litigation costs on law enforcement comes with social costs when potential claims are not explored and potential misconduct is not scrutinized.
Accordingly, I have come to admire Kesten’s willingness to advise his clients to be scrutinized and suffer the costs of the litigation process. Not only does a commitment to not settle discourage nuisance suits, but it also allows breathing room for good faith suits to be brought. Having government entities defend their cases also allows for the proper functioning of civil liability through Bivens and § 1983. And it allows for other social benefits, such as legal and factual development in the context of claims of government misconduct.[94]
Conclusion
In this brief Essay, I have shared my own thinking about Iqbal, hoping to show the power of economic modeling and, ultimately, the power of reflection. My hope is that my small contribution helps this symposium assess the impact of Iqbal in its fifteen years of existence.
Copyright © 2026 Sergio J. Campos, Professor of Law, Boston College Law School. Email: sergio.campos@bc.edu. Phone: (617) 552-4387. This Essay benefited greatly from comments I received at the “Iqbal at 15” Symposium hosted by the University of California, Berkeley, School of Law, and I am grateful to Andrew Bradt and Jonah Gelbach for allowing me to participate. I also want to thank Andrew, Jonah, Mark Brodin, Howie Erichson, William Hubbard, Dexter Lim, and David Rosenberg for their comments. Emma Guérin provided excellent research assistance. All errors are mine.
[1]. 556 U.S. 662 (2009).
[2]. See United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 579 F.3d 13, 28 (1st Cir. 2009) (citing Iqbal only for the proposition that “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions”).
[3]. 550 U.S. 544 (2007).
[4]. By 2011, only two years after the decision, “Iqbal alone” was “cited by more than 26,000 courts, more than 500 law review articles, and innumerable briefs and motions.” Alex Reinert, Pleading as Information-Forcing, 75 L. & Contemp. Probs. 1, 1 (2012). I will highlight some of this literature throughout this Essay. I will self-servingly note that I have written one article on Iqbal that used a simple game-theoretic model to examine the effects of the decision on deterrence and welfare. See Sergio J. Campos, Christopher S. Cotton & Cheng Li, Deterrence Effects Under Twombly: On the Costs of Increasing Pleading Standards in Litigation, 44 Int’l Rev. L. & Econ. 61, 62 (2015). For a more comprehensive treatment of the scholarship inspired by Iqbal, see generally Brooke D. Coleman, Iqbal & the Evolution of Procedural Scholarship, 114 Calif. L. Rev. 1009 (2026).
[5]. Fraud claims are governed by the special pleading requirements of Federal Rule of Civil Procedure 9(b). For nonfraud claims, parties only have to satisfy Rule 8(a)(2), which only requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The issue is just what “showing” is required with respect to factual allegations.
[6]. 355 U.S. 41, 45–46 (1957) (“[W]e follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”). There is some question just what this “accepted rule” actually means, although it can be interpreted as accepting any statement of the claim “unless its factual impossibility may be shown from the face of the pleadings.” See Twombly, 550 U.S. at 561. The Supreme Court would later conclude that the Conley rule “is best forgotten as an incomplete, negative gloss on an accepted pleading standard: once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Id. at 563. I would only note that a possibility interpretation accords with the intent of the original drafters of Rule 8. See David Marcus, Institutions and an Interpretive Methodology for the Federal Rules of Civil Procedure, 2011 Utah L. Rev. 927, 977–78 (2011) (reviewing the 1938 notes of the Rules Advisory Committee).
[7]. Ashcroft v. Iqbal, 556 U.S. 662, 674 (2009) (quoting Twombly, 550 U.S. at 557).
[8]. See, e.g., Edward A. Hartnett, Taming Twombly,Even After Iqbal, 158 U. Pa. L. Rev. 473, 485 (2010) (suggesting that the plausibility standard “is equivalent to the traditional insistence that an inference be ‘reasonable’”).
[9]. See, e.g., Alexander A. Reinert, Measuring the Impact of Plausibility Pleading, 101 Va. L. Rev. 2117, 2122 (2015) (using empirical data to show “that dismissals of employment discrimination and civil rights cases have risen significantly in the wake of Iqbal”); Adam Liptak, Supreme Court Ruling Altered Civil Suits, to Detriment of Individuals, N.Y. Times (May 18, 2015), https://www.nytimes.com/2015/05/19/us/9-11-ruling-by-supreme-court-has-transformed-civil-lawsuits.html [https://perma.cc/2E6P-97SW] (describing the results of Reinert’s study). Prior to becoming a law professor, Reinert represented the plaintiff Javaid Iqbal both at the trial and appellate levels and thus has an even closer personal connection to the case. For a study suggesting that the results are inconclusive, see Jonah B. Gelbach, Material Facts in the Debate over Twombly and Iqbal, 68 Stan. L. Rev. 369, 376–77 (2016). For a more recent study focusing on the effect of Iqbal on conclusory pleading, see generally Sean Farhang, Conclusory Pleading on the U.S. Court of Appeals After Iqbal: An Empirical Study, 114 Calif. L. Rev. 1077 (2026).
[10]. Twombly, 550 U.S. at 557–58 (quoting Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 347 (2005) (internal quotation marks omitted)).
[11]. Iqbal, 556 U.S. at 685 (quoting Iqbal v. Hasty, 490 F.3d 143, 179 (2d Cir. 2007) (Cabranes, J., concurring)).
[12]. See David Rosenberg & Steven Shavell, A Model in Which Suits Are Brought for Their Nuisance Value, 5 Int’l Rev. L. & Econ. 3, 3 (1985) (defining nuisance suits as “a suit in which the plaintiff is able to obtain a positive settlement from the defendant even though the defendant knows the plaintiff’s case is sufficiently weak that he would be unwilling or unlikely actually to pursue his case to trial”).
[13]. See Twombly, 550 U.S. at 558 (quoting 5 Wright & Miller’s Federal Practice & Procedure § 1216 (3d ed. 2004)).
[14]. The model I use is borrowed from Rosenberg & Shavell, supra note 12, which remains the gold standard in the literature, see A. Mitchell Polinsky & Daniel L. Rubinfeld, Does the English Rule Discourage Low-Probability-of-Prevailing Plaintiffs, 27 J. Leg. Stud. 141, 141 n.1 (1998) (citing the model); see also William H.J. Hubbard, Sinking Costs to Force or Deter Settlement, 32 J.L. Econ. & Org. 545, 546 (2015) (observing that “[a] series of papers beginning with Rosenberg and Shavell (1985) has developed models” in which nuisance suits take “advantage of the defendant’s costs of defending the suit”).
[15]. See David L. Noll, The Indeterminacy of Iqbal, 99 Geo. L.J. 117, 120 (2010) (collecting early sources, including hearing testimony before Congress, for the argument that “when the defendant controls critical private information, Iqbal creates an apparent Catch-22 for plaintiffs, requiring them to plead information they do not know but denying them a means of discovering that information”).
[16]. 550 U.S. 544 (2007).
[17]. Id. at 549–50.
[18]. Id. at 549.
[19]. Id. at 550–51. Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations.” 15 U.S.C. § 1.
[20]. Twombly, 550 U.S. at 551 (quoting Consol. Amended Class Action Complaint ¶ 51, Twombly v. Bell Atl. Corp., 313 F. Supp. 2d 174 (S.D.N.Y. 2003) (No. 02 Civ. 10220 (GEL))). The complaint also alleged a statement from Richard Notebaert, the CEO of defendant ILEC Qwest, in which he stated that “competing in the territory of another ILEC ‘might be a good way to turn a quick dollar but that doesn’t make it right.’” Id. (quoting Consol. Amended Class Action Complaint ¶ 42, Twombly v. Bell Atl. Corp., 313 F. Supp. 2d 174 (S.D.N.Y. 2003) (No. 02 Civ. 10220 (GEL))).
[21]. Id. at 552–53 (although the district court granted the defendants’ motion to dismiss, the Second Circuit reversed on appeal).
[22]. Id. at 563.
[23]. Id. at 556.
[24]. Twombly, 550 U.S.at 557–58.
[25]. Id. at 558 (quoting Asahi Glass Co. v. Pentech Pharms., Inc., 289 F. Supp. 2d 986, 995 (N.D. Ill. 2003) (Posner, J., sitting by designation)).
[26]. Id. at 558 (quoting Dura Pharms., Inc. v. Broudo, 554 U.S. 336, 347 (2005)).
[27]. Id. at 558.
[28]. Id. at 559 (quoting Memorandum from Paul V. Niemeyer, Chair, Advisory Comm. on Civ. Rules, to Hon. Anthony J. Scirica, Chair, Comm. on Rules of Prac. and Proc. (May 11, 1999), 192 F.R.D. 354, 357 (2000)).
[29]. 477 U.S. 317 (1986).
[30]. The other two cases from that trilogy were Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986), and Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).
[31]. Celotex,477 U.S. at 322–23.
[32]. Id. at 327.
[33]. 475 U.S. 574.
[34]. Id. at 579.
[35]. Id. at 596–98 (emphasis added).
[36]. See Fed. R. Civ. P. 56(d) (permitting a party, in response to a motion for summary judgment, to file a declaration stating that “it cannot present facts essential to justify its opposition,” and thus permitting a court to give the nonmoving party “time to obtain affidavits or declarations or to take discovery”).
[37]. Seeid. 26(f)(1) (requiring the parties to “confer” to develop a joint discovery plan “at least 21 days before a scheduling conference is to be held or a scheduling order is due under Rule 16(b)”). Such a scheduling conference or order is usually scheduled shortly after the parties have completed pleading, at least “within the earlier of 90 days after any defendant has been served with the complaint or 60 days after any defendant has appeared” unless there is “good cause for delay.” See id. 16(b)(2).
[38]. 556 U.S. 662 (2009).
[39]. Id. at 667–68.
[40]. Id. at 667.
[41]. Id. at 695 (Souter, J., dissenting); id. at 667–69 (majority opinion). The complaint, which is verified, described his treatment in great detail. I continue to assign it in my civil procedure course as an example of an exemplary complaint. See generally First Amended Complaint and Jury Demand, Elmaghraby v. Ashcroft, No. 04-CV-1809 (E.D.N.Y. Sept. 30, 2004).
[42]. Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971).
[43]. Iqbal, 556 U.S. at 666, 668–69.
[44]. Id. at 695 (Souter, J., dissenting) (quoting First Amended Complaint and Jury Demand ¶¶ 10–11, Elmaghraby v. Ashcroft, No. 04-CV-1809 (E.D.N.Y. Sept. 30, 2004)).
[45]. The Court also addressed the appropriate liability rule to apply to supervisors, concluding that liability under Bivens attaches only when the course of action is “because of” race rather than on a deliberate indifference standard. Id. at 675–77. This drew a sharp dissent by Twombly’s author, Justice Souter, who observed that, along with the majority’s erroneous application of the plausibility standard, the change in liability rule conflicted with Ashcroft and Mueller’s “explicit concession . . . that an officer may be subject to Bivens liability as a supervisor on grounds other than respondeat superior.” Id. at 687–88 (Souter, J., dissenting).
[46]. Id. at 684.
[47]. Id. at 678.
[48]. Id. at 678–79
[49]. Id. at 674.
[50]. Id. at 679.
[51]. Id. at 685 (citations omitted).
[52]. Id. at 686.
[53]. Atkins v. City of Chicago, 631 F.3d 823, 832 (7th Cir. 2011) (Posner, J.).
[54]. In fact, after the dismissal of Ashcroft and Mueller as defendants, the case proceeded against the lower-level prison guards, which ultimately settled. See Shirin Sinnar, The Lost Story of Iqbal, 105 Geo. L.J. 379, 406–09 (2017) (describing this history).
[55]. See Robert G. Bone, Modeling Frivolous Suits, 145 U. Pa. L. Rev. 519, 579 (1997) (noting that, in the absence of empirical information, “we cannot rule out the desirability of regulation altogether, but neither can we be confident that extensive regulation is warranted”).
[56]. See Steven Shavell, Economic Analysis of Accident Law 264 (1987).
[57]. See generally Rosenberg & Shavell, supra note 12 (modeling costs and payoffs of non-meritorious claims).
[58]. π is a common Greek letter to denote a plaintiff. Δ is a common Greek letter to denote a defendant. The use of these letters for the parties predates law and economics itself.
[59]. See Steven Shavell, Foundations of Economic Analysis of Law 389–418 (2004) (analyzing basic party incentives throughout all stages of litigation).
[60]. Id. at402 (“It is clear that if the plaintiff and the defendant have the same beliefs about the trial outcome, then there should always exist mutually beneficial settlements, because they can each escape trial costs by settling.”).
[61]. This is an oversimplification. The Rosenberg and Shavell model only assumes that “the plaintiff’s case is sufficiently weak that he would be unwilling or unlikely actually to pursue his case to trial.” Rosenberg & Shavell, supra note 12, at 3.
[62]. A lawsuit may be a loser but still filed in good faith for a variety of reasons, including efforts to change the underlying law. Compare Bell v. Hood, 327 U.S. 678, 683–85 (1946) (acknowledging, without deciding, that there is legal support for a private right of action against federal officers for violating constitutional rights), with Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971) (recognizing such a right of action).
[63]. See, e.g., Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247 (1975) (discussing the “American Rule,” in which “the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys’ fee from the loser”).
[64]. See Rosenberg & Shavell, supra note 12, at 9 (noting that “[t]he feature of the model of primary interest was the ability of the plaintiff cheaply to place the defendant in a position where he would lose unless he engaged in a costly defense”). The cost for filing a complaint in federal court is $405. SeeFees, Payments, and Interest Rates, D. Mass., https://www.mad.uscourts.gov/finance/fees.htm [https://perma.cc/2FH6-8CBZ].
[65]. There are exotic counterexamples. For example, a party may default to secure a final judgment for purposes of appealing an otherwise interlocutory issue. Cf. Microsoft Corp. v. Baker, 582 U.S. 23, 41 (2017) (concluding that voluntary dismissal did not permit the Court to have jurisdiction over the denial of class certification). Moreover, a defendant may want to default as a pick-off strategy to moot the claim of a class representative and thus destroy a class action. See Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 166 (2016) (leaving open the possibility of that pick-off strategy “if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount”). For a discussion of “strategic default” as an option in a wider range of situations than the narrow situation discussed here, see Hubbard, supra note 14, at 560–64 (noting that “[t]his option to default is most valuable when the stakes are low but defense costs are high”).
[66]. As noted earlier, the filing fee in federal district court in the District of Massachusetts is $405. SeeFees, Payments, and Interest Rates, supra note 64. Thus, the plaintiff filing a nuisance suit in Massachusetts federal court would be willing to accept any offer above the $405 filing fee. See Bone, supra note 55, at 537–38 (discussing an example where the filing cost is $500, the suit seeks $50,000 in damages, and the costs of defending $1,000, such that “the frivolous plaintiff will file suit, since he expects a settlement ($1,000) in excess of his filing cost ($500)”).
[67]. Rosenberg & Shavell, supra note 12, at 4 (emphasis removed). Rosenberg & Shavell consider other negative expected value situations that produce the same result. Id. at 5. For now, it is enough to show how a suit with no probability of success can still have a positive payoff.
[68]. Here I focus on three obvious ways to disrupt the inequality. Others exist. For example, a defendant could use retainers to pre-invest in litigation and treat such costs as sunk. See Hubbard, supra note 14, at 568–69 (discussing “front-loading of costs”). Moreover, one could imagine a district court increasing the filing fee of a complaint to an astronomical amount, such as $1 million. There are obvious disadvantages to this latter strategy, as it would discourage many socially beneficial lawsuits. In fact, as discussed below, heightened pleading standards share some of these same disadvantages.
[69]. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558 (2007) (quoting 5 Wright & Miller’s Federal Practice and Procedure § 1216 (3d ed. 2004)).
[70]. Some have argued that the costs of defending are already low, as all a defendant has to do is answer the complaint, thus causing a dismissal for lack of prosecution. See Bone, supra note 55, at 538 n.69. But after an answer, the plaintiff has the opportunity during discovery to impose significant costs on the defendant because the costs of a discovery request are much lower than the costs of responding to the request. See Frank H. Easterbrook, Discovery as Abuse, 69 B.U. L. Rev. 635, 636 (1989) (“Litigants with weak cases have little use for bringing facts to light and every reason to heap costs on the adverse party.”); see also Lucian Arye Bebchuk, A New Theory Concerning the Credibility and Success of Threats to Sue, 25 J. Legal Stud. 1, 20–22 (1996) (suggesting that a plaintiff with a nuisance suit can force litigation if there are stages that involve asymmetric imposition of costs).
[71]. See David Rosenberg & Steven Shavell, A Solution to the Problem of Nuisance Suits: The Option to Have the Court Bar Settlement, 26 Int’l Rev. L. & Econ. 42, 50 n.14 (2006) (noting that a nuisance suit may be socially desirable if, for example, the suit “would not be won because of problems of proof”).
[72]. See Shavell, supra note 58, at410 (acknowledging that simple models of litigation incentives do not account for information asymmetry).
[73]. A good argument can be made that such a good faith filing would not be dismissed as implausible because there would be, in fact, “a reasonable expectation that discovery will reveal evidence” of the material fact. Twombly, 550 U.S. at 556. I have taught this interpretation of “plausibility” as involving a balancing test concerning the costs and benefits of proceeding to discovery. This interpretation is borrowed from Louis Kaplow, Multistage Adjudication, 126 Harv. L. Rev. 1179, 1258 (2013) (concluding that “the plausibility requirement is some sort of reasonableness or balancing test that attends to likelihoods and costs”). Subsequent cases have suggested this approach. See, e.g., Atkins v. City of Chicago, 631 F.3d 823, 832 (7th Cir. 2011) (Posner, J.) (concluding that plausibility requires “deciding whether the complaint has enough substance to warrant putting the defendant to the expense of discovery”).
[74]. See Noll, supra note 15, at 119 n.12 (collecting early sources including hearing testimony before Congress shortly after the Iqbal decision).
[75]. This approach is supported by the existing Rules, as Rule 56(b) allows a party to file for summary judgment “at any time,” and Rule 56(d) allows a party to file a declaration if they require discovery to oppose a motion for summary judgment. See Fed. R. Civ. P. 56(b) & (d).
[76]. For example, David Rosenberg has advocated for the use of “pleading reports,” understood as pleadings supplemented by “unfavorable as well as favorable” law and facts, more affirmative disclosure obligations, and the early use of summary judgment for pretrial screening purposes and to inform “targeted discovery.” See David Rosenberg, Anne Brown, Jaehyun Oh & Benjamin Taylor, A Plan for Reforming Federal Pleading, Discovery, and Pretrial Merits Review, 71 Vand. L. Rev. 2059, 2066–69 (2018); see also Randy J. Kozel & David Rosenberg, Solving the Nuisance-Value Settlement Problem: Mandatory Summary Judgment, 90 Va. L. Rev. 1849, 1853 (2004) (suggesting an approach that “preclud[es] judicial enforcement of any settlement agreement entered into before the relevant claim or defense has been submitted for merits review on summary judgment”).
[77]. See generally Scott Dodson, New Pleading, New Discovery, 109 Mich. L. Rev. 53 (2010) (proposing limited presuit or predismissal “New Discovery” allowing plaintiffs access to necessary facts so that cases with merit can survive the standards of “New Pleading”); Jonah B. Gelbach, Codifying Plausibility Discovery: A Proposal to Amend Rule 12, 114 Calif. L. Rev. 1029 (2026) (proposing an amendment to Rule 12 to allow for discovery in service of meeting the plausibility standard); cf. Menard v. CSX Transp., Inc., 698 F.3d 40 (1st Cir. 2012) (reversing dismissal order and directing district court to consider ordering limited discovery on element of claim).
[78]. For a comprehensive discussion, see generally Nora Freeman Engstrom, The Lessons of Lone Pine, 129 Yale L.J. 2 (2019) (assessing the influence of, efficacy of, and issues with Lone Pine orders, especially in multidistrict litigation involving mass torts).
[79]. Id. at 5.
[80]. See Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247 (1975) (defining the “American Rule”).
[81]. See Rosenberg & Shavell, supra note 12, at 5 (“[U]nder the British system the willingness of the plaintiff to litigate and to file a claim will be less than under the usual American system if the likelihood of prevailing is low” (emphasis removed)); see also Polinsky & Rubinfeld, supra note 14 (“One of the principal results in the economic theory of litigation is that the English rule of fee allocation (in which the loser pays the winner’s litigation costs) is better at discouraging suits by low-probability-of-prevailing plaintiffs than the American rule (in which each side bears its own costs).”).
[82]. See, e.g., James W. Hughes & Edward A. Snyder, Litigation and Settlement under the English and American Rules: Theory and Evidence, 38 J. L. & Econ. 225, 249 (1995) (concluding that “[t]he English rule likely reduces the frequency of low-merit claims”).
[83]. Other instances of American fee shifting include limited statutory exceptions for prevailing plaintiffs in civil rights cases or a prevailing party in a contract enforcement action. For a discussion of federal fee-shifting statutes, see generally Cong. Rsch. Serv., 94-970, Awards of Attorneys’ Fees by Federal Courts and Federal Agencies (2009).
[84]. See Susanne Di Pietro, Teresa W. Carns & Pamela Kelley, Alaska Jud. Council, Alaska’s English Rule: Attorney’s Fee Shifting in Civil Cases 14–15, 79–90, 138–42 (1995), https://www.ajc.state.ak.us/publications/docs/research/AtyFEE10-95.pdf [https://perma.cc/RUA5-2HXP] (finding that fee shifting has had no clear or singular effect on litigant behavior in Alaska).
[85]. See Theodore Eisenberg & Geoffrey P. Miller, The English versus the American Rule on Attorney Fees: An Empirical Study of Public Company Contracts, 98 Corn. L. Rev. 327, 336 (2013) (“This risk would appear to be wealth reducing from a social standpoint because most litigants can be assumed to be risk averse, and the risk is a cost both parties must bear.”).
[86]. Gordon Sommers, The End of the Public Interest Exception: Preventing the Deterrence of Future Litigants with Rule 82(b)(3)(I), 31 Alaska L. Rev. 131, 133 (2014) (“One of the most significant remedies created to address the possibility of deterrence was the public interest exception, which exempted qualifying plaintiffs from paying their opponents’ attorneys’ fees if they lost, but awarded the plaintiffs full (rather than partial) attorneys’ fees from the other side if they won.”). The exception was repealed by the Alaska state legislature in 2003. Id.
[87]. Arguably procedural devices like statutory damages and class actions are designed to encourage socially desirable litigation.
[88]. Some have argued that this would not be difficult, and that because defendants can commit to not settling, “nuisance suits are not possible.” See Hubbard, supra note 14, at 549–50 (citing sources, but concluding that “[t]his insight, though, fails to resolve either theoretical or empirical assertions about nuisance claims”).
[89]. One suggested method that may work for private parties and infrequent litigants is for the defendant to file a stipulation with the court asking the court not to enforce any settlement agreement. See Rosenberg & Shavell, supra note 71 (making such a proposal). Other ways that a client could commit not to settle may include via contract, or by using insurance that covers defense costs. I thank Jonah Gelbach and William Hubbard for these insights.
[90]. For a brief summary of the facts of the case, see generally Kennedy v. Town of Billerica, 617 F.3d 520, 524–26 (1st Cir. 2010).
[91]. Leonard H. Kesten, Brody Hardoon Perkins & Kesten LLP, https://www.bhpklaw.com/team/leonard-h-kesten/ [https://perma.cc/U4H7-EDD7] (noting that “[h]e is regarded as one of the state’s leading authorities on alleged police misconduct, having represented hundreds of municipal and state law enforcement officials and departments against claims of excessive force and violations of constitutional rights”). Kesten was recently honored and inducted into the Massachusetts Lawyers Weekly Hall of Fame, where he was recognized for his “three decades of exemplary service.” SeeLeonard H. Kesten, Massachusetts Lawyers Weekly Hall of Fame 2025, Mass. Laws. Wkly., Sept. 2025, at B16 (profile generated by AI and reviewed by Massachusetts Lawyers Weekly editorial staff).
[92]. Of course, the settlement decision rests with the client. See Model Rules of Pro. Conduct r. 1.2(a) (A.B.A. 1983) (“A lawyer shall abide by a client’s decision whether to settle a matter.”). In a phone call, Kesten stressed to me that he would advise his clients to pay if they were in the wrong, but not to settle when the client did not do anything wrong. See Telephone Interview with Leonard H. Kesten, Partner, Brody Hardoon Perkins & Kesten, LLP (Dec. 9, 2025). He would advise his clients not to settle for the same reasons discussed in this Essay, that refusing to settle would discourage nonmeritorious claims from being filed. Id.
[93]. Further empirical support for this is actually quite hard to find “because of the problems with measuring frivolous suits directly,” although one could rely upon “widely-shared experience in practice communities.” See Bone, supra note 55, at 579. This anecdote can serve as one such “widely-shared” experience.
[94]. See Owen M. Fiss, Against Settlement, 93 Yale L.J. 1073, 1085 (1984) (arguing that settlement undermines the function of litigation, which is “to explicate and give force to the values embodied in authoritative texts such as the Constitution and statutes: to interpret those values and to bring reality into accord with them”);Shavell, supra note 59, at 412–13 (noting that two social benefits to litigation undermined by settlement are the production of information and the development of law). This is particularly important to the functioning of qualified immunity itself, particularly the development of law to establish when rights are “clearly established.” But see Pearson v. Callahan, 555 U.S. 223, 236 (2009) (noting that a court need not determine whether the right was “clearly established” first to determine qualified immunity).
