Consumer Financial Services Litigation Series - Episode 1: Pro Se Plaintiffs

Joseph Schuster (0:07)

Hello, and welcome to the Ballard Spahr Consumer Finance Podcast. I'm Joseph Schuster, a partner at Ballard Spahr and our Consumer Financial Services Group. I spend much of my time advising financial institutions and other companies on consumer finance issues including litigation, enforcement matters, and regulatory risks that come to them. I'm joined today by my colleague, Matthew Morr, and we're going to talk about something that we're both seeing more of, how artificial intelligence is starting to change the economics of single plaintiff litigation.

On the plaintiff side, AI can make it much easier and less expensive to take a relatively straightforward claim and develop a much more comprehensive complaint, one that identifies more potential causes of action, better connects the facts to the elements of those claims, and anticipates some of the arguments a defendant might otherwise raise and a motion to dismiss.

But this is not just a plaintiff's story, the same technology can help defendants and law firms assess cases faster, organize the factual record, identify defenses, manage discovery, and ultimately handle litigation much more effectively and efficiently. So Matt and I are going to talk about what is changing, what it may mean for motions to dismiss and litigation strategy, some ethics considerations with respect to artificial intelligence, and also how both sides are thinking about and going to adopt as the tools become more and more capable. Matt, before we jump into the topic, why don't I turn over to you to introduce yourself and tell our listeners a little bit about your practice.

Matthew Morr (1:37)

Thanks, Joseph. Again, my name is Matt Morr. I'm a litigator in the Ballard's Denver office. I primarily do consumer finance litigation, and that's anywhere from defending large TCPA class actions to individual credit card disputes in arbitration. And over the last year, my practice has changed significantly with respect to defending pro se complaints because of their use of AI. And this is coming at the same time that we at Ballard are really leveraging our use of AI and using it for all facets of the case. And in particular, one of the most useful times is at the beginning of the case to plug it into one of our AI systems and to get a very quick analysis of the complaint, potential motions to dismiss, and the type of things that we'd want to pursue and discovery.

What we are seeing is that plaintiffs, pro se plaintiffs in particular, are also using AI. And so where we might have seen in the past, a handwritten complaint that just says breach of contract and doesn't provide any information, we are now seeing very long complaints that's generated by AI, oftentimes with completely irrelevant information, that the pro se plaintiff is able to develop in a matter of minutes and submit to the court.

And like everyone, this is new. It's new for the defense lawyers. It's also new for the judges, who I just had lunch with a judge, and she commented on how frustrating it was because she is getting flooded with pro se filings that are generated by AI. In a short amount of time, we have developed strategies to deal with these AI pro se plaintiffs, and we'd like to talk a little bit more about those today.

Joseph Schuster (3:52)

Thanks, Matt. And I will add, just as I set the topic that we're going to talk about during this podcast, that as a result of AI, like Matt was saying, it is leading to significant growth, like that judge said, in consumer litigation in particular, I would say. There are statistics out there that talk about some of the increases in various consumer finance laws that are being filed. Like the Fair Credit Reporting Act claims are up over 40% this year versus last year. The Fair Debt Collection Practices Act, the Telephone Consumer Protection Act, also up significantly this year over last year.

Like Matt was saying, what we're seeing with the use of AI is that it's lowering the cost of producing a complaint that has more information in it. You know, I would say, and it's for the pro se litigants, but also single plaintiff, even when a law firm is involved on the plaintiff side. You know, I think that where historically, you had to have substantial attorney time to review the record, develop the chronology, identify those possible causes of action, you know, researching the elements of all that. Matt was saying, the complaints now have a lot more causes of action. The factual record that's developed is much more comprehensive, you know, and it is anticipating defenses and motion to dismiss arguments.

AI is now accelerating all of that. And, you know, we are seeing specific platforms being developed for plaintiff side firms. And as Matt was saying, pro se litigants are using generally available large language models to develop complaints as well. So it's a very large shift, I'd say, and it's leading to a much larger volume of single plaintiff litigation, where a person may have had an issue with a financial institution or others, and they might have resolved it by contacting the call center previously. Now they're able to very easily generate a complaint, figure, find out the rules for filing that complaint. All those elements are much more accessible for people. Matt, I'd ask if there's anything you want to add there, but then I'm curious kind of if you could touch on whether we're seeing this make complaints more difficult to dismiss or kind of what the impact is of this.