Litigation is Good for Business

Do These Claims Have Merit?

The question most often considered in any litigation is whether or not the lawsuit has merit. Are these claims valid? The short answer is who cares. I have sued more people and entities then I can count, and in many cases I knew the claims were largely meritless. So what’s the point if you’re likely to lose or have the case dismissed?

Although perhaps counterintuitive to those of you without experience, it may not matter if you will prevail in trial. Litigating is extremely expensive, time-consuming, and emotionally draining for most parties. So it comes down to who can drain the other sides resources faster, and tire them to the point of wanting to settle and make it all go away. Most complex litigation settles before trial, and many times just before or even during. When you choose to sue a large corporation, for instance, they determine whether or not it’s easier to just pay you to go away. This is what we refer to as a nuisance settlement. Doesn’t always work, but again, strategy is key.

Who Runs the Show And Calls the Shots?

If you don’t live and breathe litigation as I do, listen to your lawyers. You cannot command a legal battalion if you’ve never been a General. The complexities of litigation are considerable, and you cannot direct the war effort if you're unaware of the ramifications of each decision. Your positioning can turn on a dime. You can blow a deposition being too too fast on the draw in getting your adversary in the hot seat, or file a motion for something prematurely that you lose. These mistakes give the other side a confidence boost, regardless of the impact. It is key to decide where and when you want to win battles throughout the war, and what advantage it will provide you short and long term. It is easy to get emotional as the dominos fall and pressure builds on both sides. So if you don’t have the experience and instincts to call the shots, let your lawyers weigh it for you. The only downside here is that legal bills rack up quickly, and many lawyers are happy to bill if you’re emphatic enough to take a bite out of the litigation apple at each turn.

What To Do If You Get Attacked?

People always ask me what’s the best strategy to get out of litigation if you don’t have the resources or the stomach for it. First, if you get sued and don’t want to fight, then you have two choices. Either settle or knock the complaint out early. Settling is simple, and if you think writing a check is worth not having to fight for years, do it. However, if that’s not an option, either because of pride or the payout is too high, then you need to get their case thrown out before it becomes a hornet's nest.

Your lawyers will likely file a motion to dismiss. This means that you’re telling the court that their lawsuit has procedural defects such as a lack of jurisdiction or a failure to state a claim, or that the claims are meritless and have no legal basis to continue with a lawsuit.

This is not easy by any means, and you'll need something factually potent that persuades the judge that the claims cannot hold water in a trial or the suit is fatally flawed. If that doesn’t work, you have to demurrer. This means that you have to contest each cause of action, where you object that an opponent's point is irrelevant or invalid while granting the factual basis of the point.

A few years ago I won a brutal three-year fight, where the other side filed a counterclaim with twenty-four causes of action. Nobody does that. Four to seven causes of action are about the average. In this case we ran the gauntlet on both sides in and out of court. At every turn it was a battle and a fight to the death. We demurred and knocked out twenty causes of action. Eventually, in the end, we again challenged the ones remaining, disqualified their lawyers, and killed the remaining causes of action after the court granted numerous leaves to amend, which means go back and fix it or it’s gone. The case concluded with the remaining causes of action thrown out without leave to amend, which means game over. More than 44% of the company was reclaimed, along with keeping a million dollars for a buck. Now that’s good business.