Recently, almost unnoticed, the Supreme Court repudiated a 1957 ruling, Conley v. Gibson, which opened the floodgates to abusive litigation. Now the Court needs to figure out how to put the lawsuit genie back in its bottle.

In Conley, the Supreme Court had instructed judges to almost never dismiss a claim. Cited in an amazing 40,000 decisions over the past 50 years, Conley gave lawyers carte blanche to sue for almost anything: “A complaint should not be dismissed … unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”

Conley and its progeny changed American culture. With judges unable to dismiss claims, suing for the moon became standard practice. Justice became a weapon for extortion. The effects rippled through daily dealings. Spontaneity was replaced by legal fear.

In a 2005 Harris poll, only 16% of Americans said they would trust our system of law if someone brought a baseless claim. Distrust of justice directly correlates to the loss of freedom in daily choices.

Conley v. Gibson is no longer the law of the land. Justice David Souter, writing for a 7-2 majority in an important antitrust case, Bell Atlantic v. Twombly, held that the “famous observation” in Conley “has earned its retirement.”

Overruling a distant decision, now obscured by 50 years of practice, does not go far enough. Generations of judges have been trained to let litigants argue almost anything. Judges don’t even have the idea that they can draw boundaries of reasonable claims.

What’s needed is a basic shift in the role of the judge. Judges must act as gatekeepers, dismissing unreasonable claims and arguments. The goal is not just rebalancing the scales of justice, but repairing the damage to the fabric of freedom. Until Americans trust justice to keep claims reasonable, they won’t feel free in daily dealings.

Recently, a story broke about a lawyer in Washington, D.C., — actually an administrative law judge — who sued his dry cleaners for $65 million because they lost a pair of pants. Even in the Land of the Lawsuit, that claim is extreme. What is most shocking, however, is that the case has gone on for two years. Lest anyone doubt the extortive factor of American civil justice, the defendants, a family of Korean immigrants, offered to settle for $12,000. Twelve thousand dollars for a pair of pants. Even the Tripoli pirates did not have a racket this good.

Where’s the judge? He was wringing his hands about “breathtaking” claims, but he apparently didn’t feel he had the authority to dismiss the basic complaint. After all, there’s no rule that says no one can sue for $65 million. Nor is there a rule that says you can’t sue the dry cleaners. Dismissing the claim as unreasonable would require the judge to make — hold tight, this will be radical — a value judgment.

For judges in America today, making a value judgment is the ultimate taboo. Judges prove their purity by aggressively avoiding the obvious. That’s what we constantly admonish judges to do. Liberals tell judges not to interfere with anyone’s “right to sue.” Conservatives tell judges just to apply the law, and never be “activist.” No wonder judges sit on their hands.

How’s a judge supposed to know what’s reasonable? There’s only one way. The judge must assert community norms of what’s reasonable. A $65 million claim for lost pants is absurd. Everyone knows it. The ruling should go as such: “Maybe you have a claim in small claims court for a few hundred dollars, but I’m not allowing my courtroom to be used for extortion, or to become the laughingstock of the world. Case dismissed.”

Values aren’t the enemy of the law. The law is nothing but a bundle of values. To quote one of America’s greatest common law judges, Justice Benjamin Cardozo, “The judge is under a duty … to maintain a relation between law and morals, between the precepts of jurisprudence and those of reason and good conscience.”

Legal principles are just dry bones unless judges apply them by reference to reasonable community norms. Here’s the logic of the $65 million dry cleaner claim: A large sign, “Satisfaction Guaranteed,” was misleading; a consumer statute provides for $1,500 fine for consumer fraud; the fine should be levied for each day over a three year period; the emotional distress is worth millions … you get the point. Anyone can argue anything.

Drawing the legal boundaries of reasonable claims requires application of prevailing values, as a matter of law. That’s not the job of the jury, which has no ability to make legal precedent and only makes a decision at the end of the case. To protect the freedom of people to act reasonably, judges must constantly draw boundaries based on precedent and reasonable norms of right and wrong.

The fact that judges are human, and will make a certain number of mistakes, is just a critique applicable to all human endeavor. Mistakes can be fixed by an appeal. Letting claimants sue for anything is like having a perfect track record of mistakes. “You may say that there is no assurance that judges will interpret the mores of their day more wisely and truly than other men,” Justice Cardozo observed: “I am not disposed to deny this, but in my view it is quite beside the point. The point is rather that this power of interpretation must be lodged somewhere.”

Getting judges to act as gatekeepers, defending society against abusive claims, will not come easily. Generations of judges have been trained to believe that their role is only as neutral referees. What’s needed is not just Supreme Court rulings that signal a course correction, but a dramatic declaration of a shift in judicial approach towards affirmative assertion of values of reasonableness.

The Supreme Court, aided perhaps by the American Law Institute, must take this responsibility. The Court has acknowledged the mistake. Now it must bring order to the free-for-all.

Mr. Howard, a lawyer and an author, is the chairman of Common Good, cgood.org.