Neel Sukhatme, Economics

Forum Shopping and Settlement Rates

Date: 
Wed, 02/20/2013
Location: 
Noon, 438 Robertson Hall
Event Category: 
Seminar
Audience: 
Graduate Students

Please join us for a discussion with Neel Sukhatme, graduate student in Economics, to discuss "Forum Shopping and Settlement Rates." 

Abstract:  "The first part of this article presents a general model for studying forum shopping, which is the process by which a plaintiff decides where to file a lawsuit. The model uses heterogeneous costs and varying expectations of trial outcomes across different forums. These features enable the model to generate two testable predictions: (1) defendants who are sued away from their home state settle cases at a higher rate than defendants who are sued at home; and (2) plaintiffs who sue outside of their home state settle at a higher rate than plaintiffs who sue at home. The article also suggests that this forum selection effect should be stronger for defendants than plaintiffs.  The second part of the article tests this model using case data on approximately 600,000 federal diversity jurisdiction cases that terminated between 1979 and 2002. The article constructs two different measures of settlement rates and regresses them on litigants' home/away status. The subsequent analysis con firms the model's predictions -- that "away" litigants are more likely to settle cases than "home" litigants, with the effect more pronounced for defendants. This conclusion is robust to the inclusion of many controls, including fixed effects for plaintiff home state, year of suit filing, year of suit termination, forum, and case type, and dummy variables indicating whether the parties are individuals or corporations. The article concludes with a discussion of the results and suggests potential avenues for future research."

LEGS, or "Law-Engaged Graduate Students," meets during the academic year to discuss a work in progress by one of our Graduate Associates. Academic papers, dissertation proposals, and dissertation chapters have been presented at these meetings, to an audience of fellow graduate students.