Eduardo Perazza, Débora Chaves Martines Fernandes, Bruna Godoy Marques das Neves and Danielle Siebra Pereira

Predatory litigation is a concept with many names and still without a clear definition. In a synthetic form, vexatious litigation, oppressive litigation or, in the expression of American law, sham litigation, is the behavior of the one who, using his legitimate right of action and access to justice, makes abusive use of it to make it difficult for third parties to exercise their rights, and not (or not only) in order to safeguard their own right.

Initially developed by U.S. doctrine and jurisprudence according to the logic of competition law, predatory litigation began to be mapped and defined in lawsuits filed without grounds and with the intention of harming the business of competitors. The criteria adopted by U.S. jurisprudence to detect this type of abuse of rights are mainly:

  • the purpose of the application of claims without legal grounds;
  • the action of actions with intent to harm competitors (anticompetitive purposes); and
  • the identification of a pattern of conduct of the author that litigated in a predatory way – since the analysis of an isolated demand may not let us see the anticompetitive character of a litigation strategy.[1]

The first two points are called the PRE test[2] and the last Posco test.[3] and [4]

Derived from the environment of competition law, the concept of predatory litigation was initially employed in Brazil in administrative decisions of the Administrative Council for Economic Defense (Cade), which first pointed to the abuse of procedural law for anticompetitive purposes in the judgment of the Sinpetro case in 2004[5]. Since then, the municipality has been applying the criteria established by the North American jurisprudence, duly formatted for the Brazilian legal landscape, to analyze this type of conduct – as in the case of the Union of Cargo Transport Companies of São Paulo and Region versus Brazilian Post and Telegraph Company (PA 08700.009588/2013-04).[6]

Although the origin of the concept and its first application in national territory took place in the context of competition law, the abuse of this prerogative may occur in other areas, because the right of action is constitutionally guaranteed to all (Article 5, XXXV of the Federal Constitution) in the most diverse situations of violation or threat to law. In Brazil, the concept of predatory litigation was dismayed from the abusive procedural practice directed against competitors, from a competitive perspective, and began to be adopted in other situations, due to the breadth of the right of action in the Brazilian legal system and the absence of clear mechanisms to control its abuse.

Brazilian courts have begun to come across practices such as:

  • the determination of numerous actions with the same request and the same cause of asking, in various regions, in order to hinder the defense of the defendant and / or constitute a threat to freedom of expression – consolidated, for example, in the massive determination of claims against journalists, for the purpose of intimidation;[7]
  • the purpose of shares with fractional applications, which could be gathered in a single demand, in order to multiply the payment of fees[8] (predatory advocacy); and
  • the management of actions to hinder the fulfillment of court orders and that third parties enjoy their rights, among other forms of abuse.

As the possibilities of abuse  – including of the right of action – are as numerous as human creativity allows, the jurisprudential and even legislative framework must be redesigned with more general contours, to prevent procedural fraud of this nature from finding room to develop.

It was exactly in this sense that the Superior Court of Justice (STJ) walked in judging special appeal 1,817,845/MS,[9] in a judgment reported by Minister Nancy Andrighi. In its decision, the court recognized the abuse of procedural law committed by individuals who, since the beginning of the 1980s, filed four lawsuits and an administrative proceeding to prevent the fulfillment of a court order and the enjoyment of the right to property by third parties, who filed an action seeking compensation for moral and material damages resulting from the unlawful conduct practiced by procedural means. In judging the case, the rapporteur minister defined the following thesis to recognize liability for damages arising from the abuse of procedural law: "The prosecution of successive lawsuits, devoid of proper reasoning and brought with a purpose of intent, may constitute an unlawful act of abuse of the right of action or defense, the so-called procedural harassment".

While the decision seems simple and straightforward – and not particularly innovative in relation to the criteria for the measurement of predatory litigation (or procedural harassment, as Defined by Minister Nancy Andrighi) – its importance is paramount. In considering predatory litigation as an unlawful act (Article 187 of the Civil Code), it remains unequivocal to indemnify the party for the resulting material and moral damages, in amounts that promote effective reparation and not limited to the penalties imposed on litigation in bad faith. The reasoning that associates procedural harassment with the litigation of bad faith was developed by Minister Paulo de Tarso Sanseverino, in the vote that diverged from the understanding of the majority in the judgment of this appeal. For the minister, procedural abuse would be determined only in the process in which it is practiced, and not from a macro view of several issues.

In parallel to the recognition of predatory litigation as an unlawful act by the Supreme Court, two bills on the subject are being processed, PL 90/21 and PL 3.818/20. The latter aims to characterize as an infringement of the economic order the act of exercising the right to petition or action in an anticompetitive manner, regardless of the determination of guilt. On the other hand, PL 90/21 proposes procedural mechanisms that allow the victim of predatory litigation to request the meeting of cases (with the same cause of request) filed against her in an abusive manner, for joint judgment. The measure aims to ensure the full exercise of the adversarial and broad defence (Article 2). This same PL, in addition to pointing out techniques to correct the distortions of the abuse of the right of action, establishes the duty to redress the damages caused by the oppressive litigation (Article 1, §1 and Article 5), in addition to providing for the conviction of the author of such demands in costs and attorneys' fees – even in actions filed in special civil proceedings.

In its efforts against the abuse of procedural law, the National Council of Justice (CNJ) also recommended that Brazilian courts take measures to curb predatory judicialization, a practice capable of ceding defense and limiting freedom of expression. Authored by Minister Luiz Fux, Normative Act 0000092-36.2022.2.00.0000 – approved on February 8 of this year – classifies as predatory judicialization the mass filing of actions in the national territory with similar claims and causes against a specific person or group of people, in order to inhibit full freedom of expression.

The CNJ guides the courts to adopt measures aimed at expediting the analysis of the occurrence of prevention, the connection between actions and possible bad faith of the plaintiffs – among other elements that allow the wide defense of the defendant – in terms analogous to those proposed in PL 90/21, which is cited by Minister Fux in justifying the recommendation. The cases that preceded the manifestation of the CNJ were presented within the framework of the Observatory of Human Rights of the Judiciary, based on a complaint filed by the Brazilian Press Association (ABI) on the filed against a journalist throughout Brazil due to publications on the social network Twitter.

The repression of predatory litigation is fundamental to ensure objective good faith in the civil process. By purging fraudulent behaviors, it seeks to reinforce the hygiene of the entire Brazilian procedural system. Moreover, from a managerial point of view, increased judicial surveillance of the abuse of the right of action is highly desirable in an environment of massive litigation such as the one that currently plagues our courts[10] and gives judges tools to reject frivolous claims – and adequately punish their perpetrators. Thus, magistrates will be able to focus on demands that effectively require judicial provision.

The concern with access to justice must continue to permeate all initiatives that, in some way, impose filters on the right of action. The concern of the Legislature and the Judiciary to curb predatory litigation in a firm, structured and joint manner is positive and relevant. The ultimate objective is to qualify access to courts and remove frivolous claims, which restrict the exercise of fundamental rights of procedural dimension – such as contradictory and broad defense – and material – as property and free expression.

 

[1] OAK, Angela Silver. "The abuse of the right of action in the Brazilian civil procedure - theoretical and practical contours of procedural harassment from the analysis of special appeal 1,817,845". Process ReviewVol. 319 p.339-357, Editora Revista dos Tribunais, 2021. p. 9.

[2] Real Estate Investors Inc. x Columbia Pictures Industries Inc.

[3] USS-Posco Industries vs. Costa County Building.

[4] The "tests", proper to the common law, are parameters standardized by the case-law to identify similar conducts and relate the specific case to the hypothesis already judged, in line with the precedents of a given court.

[5] A case in which Cade observed and considered illegal the coordinated action of gas stations in the city of Brasilia to try to prevent the Carrefour group from operating gas stations. This decision of Cade was later reformed by the Federal Court (TRF1) and the practice of gas stations was considered legitimate.

[6] All in all the main requirements adopted by Cade to characterize predatory litigation are (i) unjustified proceedings – with an anti-competitive purpose and result; (ii) the action against competitors with low probability of favorable provision – generating anticompetitive effects on the market; (iii) falsehood presented to the Judiciary or to some administrative agent in order to obtain state provision; and (iv) legal settlement or other actions aimed at causing anticompetitive practices.

[7] On the subject, see the mapping of the Brazilian Association of Investigative Journalism, available in https://www.abraji.org.br/entenda-o-que-e-assedio-judicial.

[8] On the subject, the following judgments of the Court of Justice of São Paulo: Civil Appeal 1010920 05.2021.8.26.0576, des. Rel. Maurício Campos da Silva Velho; Instrument Injury 2005467-91.2021.8.26.0000, des. Rel. Clara Maria Araújo Xavier.

[9] STJ, Resp 1.817.845, rapporteur for judgment min. Nancy Andrighi, Third Class j. 10.10.2019.

[10] As of December 2020, there were 75.4 million pending cases, down 2.7%, or 2.1 million fewer cases, compared to 2019, but it is still a very significant number (report Justice in Numbers, National Council of Justice, 2021, available in https://www.cnj.jus.br/wp-content/uploads/2021/09/relatorio-justica-em-numeros2021-12.pdf, consulted on 11.02.2022).