Ted Frank analyzes the weird world of crazy lawsuits. An excerpt:
For a mom-and-pop immigrant dry-cleaner to defend against Roy Pearson’s consumer-fraud claim demanding tens of millions of dollars over an allegedly lost pair of pants cost nearly six figures and nearly drove the Chung family out of business, which is why they were willing to settle that meritless case for $12,000. And the case still isn’t over, even after a trial victory. A loser-pays rule would hypothetically compensate the Chungs, except it is unlikely Pearson could ever pay the $83,000. Judges need to do more to throw cases like this out early: there is no reason the Pearson case had to go to trial and run up the bill for the Chungs. A recent Supreme Court case, Bell Atlantic v. Twombly, gives more freedom to judges to discard cases without plausible theories of recovery earlier in the process.