All About Motions To Dismiss

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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 judgment 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 motion 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-
discovery and trial.                                     ticle reviews the tactical considerations that

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

18     The Practical Litigator                                                                March 2006

should be factored into deciding whether or not       • Failure to join an indispensable party.
to make a motion to dismiss.                             State court 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 Civil Procedure pro-       tional grounds including:
vide for the making of motions to dismiss, for        • Lack of capacity to sue;
judgment on the pleadings, and for summary            • Documentary evidence;
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 estoppel, arbitration and
courts and individual judges. Generally speak-        award, release, payment, discharge in bank-
ing, a motion to dismiss is addressed to a pro-       ruptcy, statute of limitations, or the statute of
cedural or substantive defect in the plaintiff’s      frauds.
case that entitles the defendant to a judgment in         In federal court, although not specifically ad-
its favor. The plaintiff’s factual allegations 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 defense appears on the face of the complaint
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 summary judgment.
   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.
                                                      TO MOVE OR NOT TO MOVE? • When
• Improper venue;
                                                      your defense on the merits is an open-and-
• Insufficient process or service of process;         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. Choice of law principles
well as the controversy. Others, like those chal-    may call for the application of the law of that
lenging personal jurisdiction, 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.
                                                     The Local Jury 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 answer 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 Filing Elsewhere                       may serve to dramatically limit discovery and
   Will the lawsuit 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
                                                      about the gaps in his or her case so early in the
Dismiss On Substantive Grounds
                                                      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 Pleading 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 cause of action? 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 Statutes                                       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 sanctions.
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 personal jurisdiction 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 precedent          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       Settlement 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 notice 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 in personam 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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