You Can Cry Me a River but My Client’s Not Paying: The Non-Compensability of “Litigation-Induced” Stress
State and federal courts have consistently rejected plaintiffs’ claims for litigation-induced stress.[i]However, to date, no appellate court in the State of Wisconsin has ruled on this issue. The lack of controlling authority may lead (and has led) creative plaintiffs’ attorneys to seek these damages in lawsuits prosecuted in the State’s courts. The goals of this article, therefore, are two-fold: (1) to provide a comprehensive guide to the authority available to defeat plaintiffs’ claims for litigation-induced stress; and, (2) to briefly discuss the legal mechanisms through which such claims may be defeated. In the first section of this article, I outline the policies underlying the courts’ rejection of plaintiffs’ claims for litigation-induced stress. In the second section, I briefly discuss the legal mechanisms available to prevent recovery for such claims. Given the deferential standard of review afforded to trial courts’ rulings pertaining to evidence and jury instructions, the best opportunity to prevent plaintiffs from recovering for litigation-induced stress is at that level.
II. The Courts Have Rejected Plaintiffs’ Claims for Litigation-Induced Stress for Three Reasons.
The courts’ rejection of claims for litigation-induced stress began thirty-five years ago when the Supreme Court of Oregon issued its decision in School Dist. No. 1.[ii] In School Dist. No. 1, a probationary female teacher brought suit against the school district that employed her under the Oregon Fair Employment Practices Law, complaining that the district discriminated against her by “requiring . . . [that she] resign when her pregnancy had advanced to the point where she was no longer able to teach.”[iii] The hearing tribunal[iv] found in favor of the teacher, awarding her damages for “humiliation, frustration, anxiety and nervousness.”[v] The court of appeals affirmed this award.[vi] However, the Supreme Court of Oregon reversed, explaining:
[t]he . . . pressures of which she [i.e., the teacher] complains came about principally from the bringing of the legal proceedings and are the normal results of being a litigant . . . She did not suffer any anxiety or emotional distress for which the law usually allows damages, since these types of stress are inherent in most litigation. It can be argued that she should not have been placed in a position where she had to assert her rights, but the same can be said of the successful plaintiff in any case. Awards of damages of this kind are usually limited to malicious prosecution and similar actions.[vii]
Although School Dist. No. 1 represents the first judicial rejection of an award for litigation-induced stress, it has been rarely cited with respect to this issue.[viii]
Eight years after School Dist. No. 1, without referencing that decision, the Seventh Circuit rejected the award of damages for litigation-induced stress in Stoleson,[ix] albeit for a slightly different reason. In Stoleson, plaintiff, Helen Stoleson, “began working in a federal munitions plant . . . in 1967.”[x] A few months after she started, Mrs. Stoleson began to experience chest pains; she left her employment at the munitions plant in 1971.[xi] Convinced that her chest pains were caused by her handling of nitroglycerin at the munitions plant, “Mrs. Stoleson brought suit under the Federal Tort Claims Act in 1974, alleging that the government had been negligent in failing to protect the workers at the plant from excessive exposure to nitroglycerin.”[xii] The district court dismissed Mrs. Stoleson’s suit, holding that the statute of limitations had expired.[xiii] The Seventh Circuit reversed.[xiv]
Following a bench trial in 1981, “the district judge found that the government had been negligent and that its negligence had caused Mrs. Stoleson’s heart disease . . . he awarded her $53,000 in damages. But he declined to award any damages for her psychosomatic illness after she left the plant . . .”[xv] With respect to Mrs. Stoleson’s psychosomatic illness, the district court found that Mrs. Stoleson’s “symptoms had begun no earlier than November 1975, when the first trial had ended.”[xvi] Mrs. Stoleson appealed.[xvii] On review, the Seventh Circuit read the district court’s decision to mean that “he was unpersuaded that Mrs. Stoleson had established causation as a matter . . . of fact.”[xviii] In affirming the district court’s decision, the Seventh Circuit explained:
[t]he testimony of both experts was speculative, neither having examined her before 1980 – nine years after she left the munitions plant. Dr. Goldbloom . . . began by saying, ‘I think that the whole thing started with a heart attack that she suffered in 1968,’ but then he said that the onset of her hypochondriacal symptoms ‘probably began . . .’ in 1972. Dr. Goldbloom’s uncertainty about the date of the onset allowed the district court to conclude that Mrs. Stoleson had not proved that it preceded the end of the first trial in November 1975 . . . With the date of onset pushed forward to November 1975 or later it became a matter of conjecture whether Mrs. Stoleson’s hypochondriacal illness really was the delayed consequence of a ‘dynamite heart’ problem that ended in 1971 or whether it was the result of other stress factors, including the litigation itself, which Dr. Goldbloom testified had contributed to her continuing ill health. It would be strange if stress induced by litigation could be attributed in law to the tortfeasor. An alleged tortfeasor should have the right to defend himself in court . . .[xix]
For those attorneys practicing in the Seventh Circuit, it is noteworthy that Stoleson remains good law;[xx] the underscored portion of the excerpt has been regularly cited by courts rejecting claims for litigation-induced stress.[xxi] The decisions from other federal circuits are in accord.[xxii]
Whereas the Stoleson court focused on the defendant’s right to present his defense, the Supreme Court of New Jersey, reaching the same result, echoed the reasoning of the
School Dist. No. 1 court and focused its analysis on the voluntary nature of filing a lawsuit.[xxiii] In Picogna, following a bench trial, the court awarded Mr. Picogna “emotional distress damages of $560,000, which included recovery for Picogna’s litigation-induced stress.”[xxiv] Although the intermediate appellate court did not address the propriety of the award for litigation-induced stress, the Supreme Court of New Jersey “granted defendants’ petition for certification to address the appropriateness of” that award.[xxv]
On review, the defendants argued that Mr. Picogna was not entitled to compensation “for distress caused by the litigation itself.”[xxvi] Mr. Picogna, on the other hand, argued “that because the present litigation was engendered by defendants’ bad faith, any stress induced thereby should be compensable.”[xxvii]After noting that the question was one of first impression, the court explained: “[s]tress and anxiety normally attend the litigation process. For this reason, the majority of courts addressing litigation-induced stress have treated it as a non-compensable component of damages regardless of whose actions necessitate the litigation.”[xxviii] After providing a comprehensive overview of the pertinent state and federal decisions related to litigation-induced stress, the court continued:
[b]oth the state and federal cases reflect the view that because anxiety is an unavoidable consequence of the litigation process, it does not form a separate basis for recovery against one’s opponent. Although the damages caused by the wrongful conduct induce the litigation, and hence the attendant stress, a plaintiff chooses to pursue litigation cognizant of both the economic and emotional costs that it will entail. Some of the stress is caused by a plaintiff’s vigorous participation in the litigation process. Yet the substantial emotional investment made by a plaintiff in a case is merely the normal result of being a litigant.[xxix]
The decisions in School District No. 1, Stoleson, and Picogna highlight three separate-but-related reasons that courts have rejected claims for litigation-induced stress: (1) stress is an inherent aspect of litigation; (2) defendants should not be penalized for defending themselves; and, (3) a plaintiff’s decision to prosecute her claim is voluntary. Additionally, at least one federal court has expressed concern that allowing recovery for litigation-induced stress may lead the fact-finder to engage in wholesale speculation regarding the cause of plaintiffs’ injuries.[xxxii] For these reasons, the well-developed majority rule holds that plaintiffs’ may not recover damages for litigation-induced stress.[xxxiii] Knowing the rule is one thing. Knowing how to apply the rule to benefit your client is the other.
III. The Legal Mechanisms Through Which Defense Practitioners May Defeat Claims for
From the outset of litigation, the defense practitioner should recognize that the plaintiff may attempt to recover for litigation-induced stress. Although the weight of authority clearly rejects these claims, the mere possibility that a plaintiff recovered damages (for claims of this nature) does not merit automatic reversal. Therefore, given the deferential standard of review afforded to trial courts’ decisions pertaining to evidence and jury instructions, the two most relevant areas in this instance, defense practitioners should endeavor to identify potential claims for litigation-induced stress early in the litigation so that they may use all of the tools afforded to them to mitigate/eliminate the impact of same.
A plaintiff’s attempt to recover for litigation-induced stress implicates the issue of damages, which in turn implicates the rules of evidence and the courts’ instructions to the jury. Because it is unlikely that a plaintiff will file a lawsuit merely to seek recovery for damages allegedly caused by bringing that lawsuit, the pleadings may not provide a clearly defined claim for litigation-induced stress;[xxxiv] such a claim is more likely to become apparent during discovery. Whether or not the plaintiff may seek to recover for litigation-induced stress may become apparent from information provided directly by the plaintiff (e.g., deposition testimony, medical records) or through the parties’ respective experts (e.g., independent medical examination, medical records review).[xxxv] If there is a question that the plaintiff may attempt to recover for litigation-induced stress, then, rather than being caught unprepared at trial, this issue should be explored (if only briefly) during the plaintiff’s deposition and the deposition(s) of the plaintiff’s expert(s).[xxxvi] Likewise, if the defense practitioner believes that plaintiffs’ emotional damages are (at least potentially) attributable to the litigation itself, then she may wish to retain an expert to review (and opine regarding) same.
Given the potentially resource-intensive nature of uncovering this information, the defendant’s decision to proactively discover this information (early in the litigation) should likely be a function of whether or not the plaintiff has another basis for recovery. If the plaintiff cannot present an alternative basis for recovery, then, because the weight of authority holds such damages are unrecoverable, the defendant may reach an early resolution of plaintiff’s claim. However, if plaintiff is able to advance alternative causes (attributable to defendant’s conduct) for seeking recovery for emotional damages, the court may allow the introduction of evidence supporting the competing theories, considering that causation is an issue for the fact-finder to decide.[xxxvii] In that instance, the defendant may wish to merely limit the plaintiff’s theories of recovery by eliminating a potential claim for litigation-induced stress.[xxxviii]
Assuming that the litigation proceeds to trial, the defense practitioner should consider using several tools to protect her clients’ interests. For example, before trial commences, the defendant should move in limine for an order precluding the plaintiff from attempting to introduce evidence that her damages are attributable (in whole or in part) to the litigation itself.[xxxix] During trial, the defendant may wish to introduce evidence that the plaintiff’s emotional damages (if any) are attributable to the litigation itself, arguing that the defendant’s conduct is not the cause of plaintiff’s injuries.[xl] And, third, the defense practitioner should request that the jury be instructed not to award recovery for litigation-induced stress.[xli] Given the weight-of-authority, use of these tactics should be straight-forward. It is, however, important to remember that if the defense practitioner believes that plaintiff has impermissibly attempted to subvert the rule precluding recovery for litigation-induced damages, she should be certain to object to same or risk having waived this argument on appeal.[xlii]
The weight-of-authority, which in this instance establishes a clear majority rule, precludes plaintiffs’ from recovering damages for litigation-induced stress. However, in light of the fact that no State (reviewing) court has addressed this issue, plaintiffs’ attorneys may attempt to assert such a claim. Although, to date, the courts have focused on plaintiffs’ claims for litigation-induced stress, the state and federal jurisprudence discussed herein should apply equally to any other claims that plaintiffs’ may claim resulted from their participation in the litigation. Accordingly, the defense practitioner should keep this article close at hand, lest a plaintiff make a creative claim for (otherwise) non-compensable damages.
[i] The phrase “litigation-induced stress” refers to those damages that a plaintiff may seek to recover merely because she decided to litigate her (underlying) claim(s); this class of damages is distinct from those sought in a lawsuit based on a claim of malicious prosecution. See School Dist. No. 1 v. Nilsen, 534 P.2d 1135, 1146 (Or. 1975).
[ii] See id. at 1135.
[iii] Id. at 1137.
[iv] The initial hearing was an administrative proceeding convened by the State of Oregon’s Commissioner of Labor. See id.
[v] Id. at 1146.
[vi] See id.
[vii] Id. (underscores added). See also Aller v. Law Office of Carole C. Schriefer, PC, 140 P.3d 23, 28 (Col. Ct. App. 2006).
[viii] It appears that only two courts have cited the excerpted portion of School Dist. No. 1. See Knussman v. Maryland, 272 F.3d 625, 641 (4th Cir. 2001); Picogna v. Bd. of Educ., 671 A.2d 1035, 1038 (N.J. 1996).
[ix] See Stoleson v. United States, 708 F.2d 1217 (7th Cir. 1983).
[x] Id. at 1219.
[xi] See id.
[xii] Id. at 1220 (internal citation omitted).
[xiii] See id.
[xiv] See id.
[xvii] See id.
[xviii] Id. at 1221.
[xix] Id. at 1223 (underscore added).
[xx] Stoleson has been followed by federal district courts sitting in Indiana and Illinois. See Gastineau v. UMLIC VP LLC, 2008 WL 2498102, *4 (S.D. Ind. 2008) (unpublished); Thompson v. Altheimer & Gray, 2001 WL 1618717, * 3 (N.D. Ill. 2001) (unpublished).
[xxi] See, e.g., Flowers v. First Hawaiian Bank, 295 F. Supp. 2d 1130, 1140 (D. Haw. 2003); Park-Ohio Indus., Inc. v. Tucker Induction Sys., 1987 WL 1377908, *5 (E.D. Mich. 1987) (unpublished).
[xxii] In addition to the Seventh Circuit, the First Circuit and the Fourth Circuit have rejected claims for litigation-induced damages. See Soto-Lebrón v. Federal Express Corp., 538 F.3d 45, 60 n.15 (1st Cir. 2008); Knussman, 272 F.3d at 641-42; Zimmerman v. Direct Federal Credit Union, 262 F.3d 70, 79 (1st Cir. 2001).
[xxiii] See Picogna, 671 A.2d at 1035.
[xxiv] Id. at 1037.
[xxv] Id. (citation omitted).
[xxvii] Id. (italics original).
[xxviii] Id. (underscore added).
[xxix] Id. at 1039 (underscores added). See also Lopacich v. Falk, 1992 WL 402932, *7 (N.D. Ill. 1992) (unpublished) (“We believe it would be a dire mistake to allow causes of action based upon claims of considerable hardships, or for the stress attendant every legal proceeding, especially stress visited upon the party instigating the proceeding.”)
[xxx] See Picogna, 671 A.2d at 1039.
[xxxi] See Malhan v. Anthony Robbins Cos., 2006 WL 776778, *4 (D.N.J. 2006) (unpublished); Blakey v. Continental Airlines, Inc., 992 F. Supp. 731, 736 n.3 (D.N.J. 1998). Cf. Hill v. Fauver, 776 A.2d 828, 842 (N.J. Ct. App. 2001) (damages were properly awarded to plaintiff when defendant’s conduct (not the litigation) caused same); Hill v. New Jersey Dept. of Corrections Commissioner, 776 A.2d 828, 842 (N.J. Super. Ct. 2001) (recovery permitted for emotional distress caused by defendants’ conspiracy to file false charges).
[xxxii] See Timms v. Rosenblum, 713 F. Supp. 948, 954-55 (E.D. Va. 1989).
[xxxiii] Three courts have (arguably) allowed the plaintiff to recover for litigation-induced stress. See Radcliffe v. Radcliffe, 951 A.2d 575, 582 (Conn. Ct. App. 2008) (allowing time-limited damages for litigation-induced stress caused by divorce proceedings); Hughes v. Goodreau, 836 So. 2d 649, 666 (La. Ct. App. 2002) (2-1 decision) (allowing award of general damages for litigation-induced stress caused by contractual breach of fiduciary duty with one judge dissenting on this issue); Jarchow v. Transamerica Title Ins. Co., 122 Cal. Rptr. 470, 491-92 (Cal. Ct. App. 1975) (allowing award for litigation-induced mental distress caused in part by participation in litigation), overruled on other grounds, Soto v. Royal Globe Ins. Corp., 229 Cal. Rptr. 192 (Cal. Ct. App. 1986). Notably, in these cases, none of the policies or the cases cited herein were discussed; it appears that these awards were not seriously contested.
[xxxiv] On a least one occasion, the plaintiff stated a claim for litigation-induced stress in her complaint. See Enwere v. Terman Associates, L.P., 2008 WL 5146617 (N.D. Cal. 2008) (unpublished). If there is reason to believe that plaintiff’s damages are caused (at least in part) by the litigation, then that may be a sufficient basis upon which to request an independent medical examination. See id. at *4.
[xxxv] Although experts may provide insight about the cause(s) of the plaintiff’s emotional distress, expert testimony may not be required to recover for same. See Stabenow v. Jacobsen, 2000 WI App 71, ¶¶ 18-19, 234 Wis. 2d 151, 610 N.W.2d 512 (unpublished).
[xxxvi] The issue of whether or not the plaintiff can recover for litigation-induced stress presents a question of law that may be resolved on summary judgment. See Kaskin v. John Lynch Chevrolet-Pontiac Sales, Inc., 2009 WI App 65, ¶ 8, 318 Wis. 2d 802, 808, 767 N.W.2d 394, 397. Because no State (reviewing) court has provided any guidance with respect to how courts should handle claims for litigation-induced stress it may be advisable to address whether or not the plaintiff intends to seek such recovery during the depositions of plaintiff and her expert(s) before moving for summary judgment. See Yahnke v. Carson, 2000 WI 74, ¶ 20, 236 Wis. 2d 257, 270, 613 N.W.2d 102, 108 (adopting the “sham affidavit” rule).
[xxxvii] See Buoy, 771 P.2d at 445 (allowing defendant’s attempt to attribute cause of plaintiff’s injuries to the litigation).
[xxxviii] The most inexpensive way to eliminate a claim for litigation-induced stress may be requests for admission. See Wis. Stat. § 804.11. But cf. Luckett v. Bodner, 2009 WI 68, 318 Wis. 2d 423, 769 N.W.2d 504.
[xxxix] Cf. Equal Employment Opportunity Comm’n v. GLC Restaurants, Inc., 2007 WL 30269, *8 (D. Ariz. 2007) (denying defendant’s motion in limine to exclude damages for litigation-induced stress when plaintiff advanced theories of causation unrelated to litigation).
[xl] See Buoy, 771 P.2d at 445.
[xli] See Guslavage v. City of Elizabeth, 2009 WL 5125017, *20-*21 (N.J. Super. 2009) (unpublished). Cf. Zimmerman v. Direct Federal Credit Union, 262 F.3d 70, 78-80 (1st Cir. 2001) (no reversible error when court did not give specific instruction pertaining to litigation-induced damages; court repeatedly indicated that jury could only award recovery for damages caused by defendants).
[xlii] See Rose v. Jacques, 597 S.E.2d 64, 73-74 (Va. 2004).