By E. Job Seese
The following is the first in a forthcoming series of blog posts looking at the CAPP Rules and their practical impact on litigation strategy.
Effective January 2012, the Colorado Supreme Court authorized a pilot program to test a new set of pretrial procedures for civil business cases. The pilot program—known as CAPP (Colorado Civil Access Pilot Project)—was implemented in state district courts for five counties in the Metro Denver area (Denver, Adams, Jefferson, Arapahoe and Gilpin Counties). CAPP’s modified rules automatically apply to certain business and medical malpractice cases including cases involving the following: breach of contract, business torts, commercial real property, and transactions with financial institutions.
The CAPP modifications are part of a broader attempt by certain states, primarily Western jurisdictions, to experiment with procedures designed to increase access to the justice system by reducing costs and delays. CAPP’s guiding objective is—through innovations to the procedures governing pleadings, disclosures, discovery, and case management—to flush out all relevant information at the earliest possible juncture in the litigation, to increase judicial monitoring of cases at an early point in time, and to limit the pleading and discovery abuses that tend to create delays and escalate costs. As explained in the CAPP Rules themselves (also known as the Pilot Project Rules or “PPR”), their aim is “assure that the process and the costs are proportionate to the needs of the case.” (PPR 1.2).
INITIAL CAPP RESULTS
In October 2014, IAALS (Institute for the Advancement of the American Legal System at the University of Denver), which has independently overseen implementation of the new rules, issued a report evaluating the results of CAPP over the first two years of its implementation, 2012-2013. The report—titled “Momentum for Change: The Impact of the Colorado Civil Access Pilot Project” (“IAALS Report”) was based on a systematic data collection using three separate inputs: (1) a docket study assessing 840 cases, (2) a practitioner survey evaluating 693 responses from attorneys in closed cases, and (3) a judge survey evaluating responses from 86 pilot court judges.
Among other conclusions, the IAALS Report found that CAPP, as hoped, reduces the time it takes for a case to reach resolution as well as reduces motions practice. The IAALS Report’s further findings will be addressed in more detail below and in future posts on this blog.
PPR 4.1 AND MOTIONS TO DISMISS
Among the changes introduced by CAPP is PPR 4.1, which significantly alters the interplay of the timing of a defendant’s motion to dismiss and his Answer. Specifically, PPR 4.1 provides, “[u]nless otherwise prohibited by statute, the filing of a motion to dismiss shall not disrupt or interfere with the pleading and disclosure requirements of PPR 3 and the scheduling of the initial case management conference under PPR 7.” The practical effect of PPR 4.1 is that a motion to dismiss no longer stays a defendant’s deadline to answer or his initial disclosure and case management obligations. See CRCP 12(a). (Also, less significantly, the CAPP Rules shorten by six days the time for filing a motion to dismiss, or other responsive pleading).
Consistent with CAPP’s broader objective of streamlining litigation, PPR 4.1’s purpose was twofold: (1) reduce unmeritorious motions to dismiss by eliminating the incentive to file such motions simply to toll the deadline for filing an answer, and (2) even when a motion to dismiss (meritorious or not) is filed, permit other deadlines to proceed as if no motion were filed. Under the traditional rules, a motion to dismiss frequently delayed a lawsuit’s progress for the several months that are usually required for the parties to brief, and the court to resolve, a motion to dismiss. PPR 4.1, by requiring defendants to answer even if they are filing a motion to dismiss, is thus in line with CAPP’s objective of speeding up the pleading phase and eliminating the incentive to use motions to dismiss as solely as a stalling tactic.
The IAALS Report provides only limited insight into whether PPR 4.1 is proving effective in advancing these objectives. With respect to the first aim—reducing the number of motions to dismiss—PPR 4.1 does not appear to have “had a measurable effect on the number of motions to dismiss filed during the pleadings stage.” IAALS Report at 1. As for the second objective—streamlining litigation, the IAALS Report found that, “applying the CAPP rules increases the probability of an earlier resolution by 69% over the standard procedure.” (Id. at 12). While the IAALS Report does not identify the specific CAPP modifications contributing to this expedited resolution process, it is likely that at least some of the result is attributable to PPR 4.1’s elimination of the months-long delay consistently caused by the filing of a motion to dismiss.
Despite PPR 4.1’s laudable goals, some practitioners—including this author—have encountered unintended consequences. For example, under CAPP, defendants with meritorious grounds for immediate dismissal are put to the considerable expense of filing an otherwise unnecessary Answer. Under the traditional rules, such a defendant would simply file a motion to dismiss and could await the court’s order thereon until being forced to participate further in the litigation.
Under CAPP, however, even a defendant with meritorious grounds for dismissal is forced to litigate while his motion to dismiss is pending, a process that frequently lasts for months. In the meantime—unless the court quickly rules on the motion—such a defendant is not only required to file his Answer, but also to make his initial disclosures under PPR 3.3 (due within 21 days of plaintiff serving his own initial disclosures under PPR 3.1), to participate in the initial case management conference required by PPR 7.1, and to assist in drafting the case management joint report required by PPR 7.1.
The author recently defended a party who was belatedly brought into a CAPP case as a third-party plaintiff. The lawsuit involves parties and alleged conduct spanning four continents, and our client, a Swiss businessman with no connection whatsoever to Colorado, filed a motion to dismiss for lack of personal jurisdiction. Thanks to PPR 4.1, the client was required to file his Answers (there were two parallel complaints naming him as a defendant) and his initial disclosures, resulting substantial defense costs that a similarly-situated defendant would not incur under the pre-existing rules.
Theoretically, should the client prevail (his motion to dismiss is pending), he will be entitled to mandatory attorney’s fees under C.R.S. § 13-17-201, since the allegations against him include tort claims. But this potential recovery of attorney’s fees provides faint hope for this client, or any similarly-situated defendant, as there is always the inevitable fight over the reasonableness of the fees incurred and the possibility of recovering far less than actual fees and costs incurred, whether due to judicial reduction or due to collectability issues. This client’s situation illustrates one of the unfortunate consequences of the CAPP rules.