THOMPSON  THOMPSON

&  ALCANTARA

Guam Supreme Court Declines to Follow Federal Motion to Dismiss Standards

Over the years, one of the more frustrating aspects of defending local businesses in civil lawsuits has been having to tell a client that no matter how frivolous the allegations of a suit might seem, the court is unlikely to dismiss the case until entirely too much of the client’s time and money had been spent defending against it.

 Indeed, for over half a century the nation’s courts took an exceedingly liberal view towards plaintiffs’ complaints, holding that they could not be summarily dismissed “unless no set of facts (whether pleaded or not) could support the claim.”

That meant that motions to dismiss complaints were treated as “disfavored” and were “rarely granted.”  In economic terms, it meant that defendants had a very difficult time stopping a frivolous suit in its tracks, and that they would normally have to tough out the case--financially and emotionally--for many months or even years, at least until discovery had taken its course and a summary judgment motion could be brought. 

In 2007, however, the U.S. Supreme Court effectively “retooled” federal pleading standards.  As a result, federal courts today devote greater scrutiny to the sufficiency of a complaint’s allegations than was previously accorded.  In the case of Bell Atlantic Corp. v. Twombly, the court held that in order to survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.”

As the high court clarified in its 2009 ruling in the case of Ashcroft v. Iqbal, if “plaintiffs do not nudge their claims across the line from conceivable to plausible, their complaints must be dismissed.”

 The local courts of Guam and the Northern Mariana Islands were not strictly bound to adopt the new higher federal standard but, until recently, the Superior Court judges there tended to do so because, after all, their local procedural rules are substantially identical to the Federal Rules that the U.S. Supreme Court was interpreting. No more.

 In its May 2016 Opinion in the case Ukau v. Wang, the Guam Supreme Court—following the lead of several state supreme courts--expressly declined to adopt the heightened federal “plausibility” standard. The Guam high court simply found that the federal threshold was “at odds with” Guam’s traditional, liberal “notice pleading” standard. The CNMI Supreme Court had issued a similar ruling back in 2012. 

 As a result, the local courts of both Guam and the CNMI still consider motions to dismiss complaints as “disfavored.” Our local judges thus have less discretion to weed out feeble lawsuits at the onset of litigation than their federal counterparts.

 As a practical matter, this is likely to result in some “court shopping” on the part of would-be plaintiffs. Plaintiffs with weak evidence or undeveloped legal theories are more likely to file in local courts rather than in the federal system. It also means that more plaintiffs are likely to be accorded “their day in court,” even if they initially fail to well articulate their cases in their pleadings.

 Although one can debate whether the local or federal pleading standard is preferable from a public policy standpoint, in practical terms there can be little debate that local businesses will wind up spending more time and money defending against marginal lawsuits as a result of the local courts’ rejection of the federal “plausibility” standard.