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Early dismissal: the Supreme Court's further tightening of procedural rules means that corporate defendants may secure early dismissal of lawsuits.

Publication: Directors & Boards
Publication Date: 22-SEP-09
Format: Online
Delivery: Immediate Online Access
Full Article Title: Early dismissal: the Supreme Court's further tightening of procedural rules means that corporate defendants may secure early dismissal of lawsuits.(Case overview)

Article Excerpt
You're the CEO or director of finance for a publicly-traded company. You receive a call from your General Counsel, who reports that the company has been sued and that the plaintiff is seeking to take very expensive discovery of the company's electronic information, including your emails. From your General Counsel's description of the case, it sounds like another fishing expedition in which the plaintiff has raised very general factual allegations and recited only the basic elements of a claim. You believe that the case has no merit but, nonetheless, the company will need to weigh two equally-unappetizing choices: the costs of defense (including the substantial costs of discovery) against the costs of entering into an early "nuisance value" settlement and the payment of some funds to plaintiff's counsel.

Now there is a viable third option. In two recent cases, including one decided earlier this year, the Supreme Court has given new "teeth" to the procedural rules governing what facts a plaintiff must allege to gain access to the courts, giving defendant much greater prospects of an early dismissal. In the past, a plaintiff could proceed with litigation so long as the complaint placed...

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