Student Blogger - The Optimal Use of Discretionary Review versus Direct Appeal

Federal courts in the United States hear over 50,000 appeals a year and state courts hear approximately 300,000. Over 250,000 of these appeals are duds. Certainly a great amount of resources are wasted in these losing appeals, many of which likely had little chance of success.

Professor Steven Shavell suggests that appellants should be provided with an additional method of appeal, as a way of alleviating these wasted costs in his paper “On the Design of the Appeals Process: The Optimal Use of Discretionary Review versus Direct Appeal”. Instead of being required to spend a large sum of money to prepare a full appeal, appellants should have the option to seek a less expensive form of discretionary review.

Most appeals systems require direct appeal while some supreme courts use discretionary review, like the Supreme Court’s petition for certiorari. It is hard to fundamentally reform these appellate systems in most countries because there are constitutional rights to appeal. Instead of changing the appeals system, Shavell proposes that appellants be given a choice: Pursue a costly full appeal, or get a cheaper, quick look at the case via discretionary review.

The benefit of such a system is that appellate judges have valuable information about how they will decide the case that appellants do not possess. The appellate judges can reveal that information to the appellants at a quick and relatively cheap discretionary review stage. This relieves the appellants of the wasted cost of preparing a thorough appeal when it has little chance of succeeding. It may also have other benefits like clarifying the issues on appeal. On the flip side, discretionary review may create needless costs if the chance of reversal is high. When reversal is almost a sure thing, there is no need for the intermediate step of direct appeal.

Shavell’s model affirms these intuitions, showing that there may be a range of probabilities under which discretionary review is efficient. If the probability of reversal is low (as estimated by the appellant), both discretionary review and direct appeal are wasteful and inefficient. In some middle ground of probability, discretionary review would be more efficient than direct appeal. And if the likelihood of reversal is high, direct appeal is more efficient than discretionary review. By giving the appellant an additional option—discretionary review—that is more efficient in some cases, the appeals system can be made more efficient.

This proposal raises two primary questions. What would a discretionary review system look like and would it be any different from current practice? And, could such a system actually turn out to be worse?

First,Shavell suggests that discretionary review would involve minimal briefing by the appellant, no appellee response, and no oral argument. This would save the appellant some resources, save the appellee all their costs, and perhaps decrease the effort expended by the court.

However, the time a judge saves by only evaluating a limited discretionary brief may be small. If the case has no merit, the judge can quickly throw it out. But a judge can do the same whether the appeal is limited discretionary review or direct appeal. If the case does have merit, then the court will actually waste time with the discretionary review stage. It will need to give it full consideration at the direct appeal stage, meaning some of the effort at the discretionary review state was wasted.  Finally, the court saves no resources by foregoing oral arguments at the discretionary review stage because courts may already do that in the direct appeal system.

Even if the court saves little to no resources, the appellant gains valuable information about the appeal at a low cost. It is better to find out the appeal is a loser before the direct appeal stage. How much the appellant saves depends on the difference in cost between discretionary review and direct appeal. Since many cases are not appealed (80 to 90 percent), the costs of direct appeal appear to be a significant bar. There may be much room for discretionary review to reduce those costs.

Second, if appellants are given an additional choice of discretionary review there is a chance they will make inefficient choices on when to use discretionary review. As previously noted, there are some cases where it is not efficient to appeal, some where it is efficient to have discretionary review, and some where it is efficient to have direct review. A dual discretionary/direct system would be inefficient if cases ended up in discretionary review, when it would be better for them to not be appealed at all, or if they should have been directly appealed.

Both of these scenarios would occur if the costs were relatively low to the appellant. The appellant will appeal cases that they would not have appealed before if it is cheaper (note, sometimes this may be desirable if the costs of appeal were greater than society’s expected benefits). Also, the appellant may favor the cheaper discretionary review option because it gives them better information about the chance of reversal for little cost. Either of these problems could be solved by imposing additional fees on the appellant.

A final problem mentioned by Shavell was that judges are reluctant to embrace this system. Discretionary review is not something they see as part of their job. Why should a judge, in effect, be giving free advice to appellants regarding their case? It could drastically increase their workload. Even if it may be “efficient” for society, the judges may feel differently. The judge would be serving more as counsel to the appellant and less as a judge. At that point, maybe the judge would prefer to just go into private practice and perform the same function for more money.

No one can definitively say whether Shavell’s proposal would help solve an overloaded, and perhaps inefficient, appellate system. But it shows some promise for weeding out cases before a large amount of money is invested. The previous assumption has always been that appellants would never prefer discretionary review. That may be incorrect to the extent it saves them money. And for that reason, maybe it would be worth some experimentation, especially when there is little harm to the appellants because the choice is left to them.