Articles Posted in Litigation Strategies

photo - injuction by Clover AutreyLegal actions can result in one party paying the other for damages, but a judge can also order a party to do, or not do, something to protect the plaintiff’s rights and interests. This can be accomplished through an injunction or restraining order, which can be temporary or permanent.

A judge can issue an injunction pursuant to a statute of through his or her equitable powers when not specifically authorized by statute. Equitable powers of a judge allow a decision based on the overall fairness of the situation. Given how broad this could be and the potential for abuse, judges are normally not eager to exercise equitable powers.

A party wanting a temporary restraining order or preliminary injunction must show that the relief sought in an underlying lawsuit depends on preventing the occurrence or continuance of an act that would result in waste or irreparable injury.

An injunction can be granted on a showing of,

  • An inadequate remedy at law, meaning compensation would be insufficient,
  • A serious risk of irreparable harm without injunctive relief,
  • A likelihood the plaintiff will prevail on the merits of the underlying lawsuit, and
  • When balancing the harm to the defendant in issuing an injunction against the harm to the plaintiff without the injunction, fairness shows it should be issued.

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photo - atty. client privilege by Chris PotterThis is the story of Maritza Munich and the tangled tale of WalMart, alleged bribes, Mexico, an Indiana pension trust fund, a Delaware court and the attorney client privilege. It plays out on a very large stage and could impact many shareholder lawsuits.

Ms. Munich was an in house attorney working for Walmart, according to a New York Times article. She advocated an aggressive response to investigating a scandal that the company has largely kept from public view. One way that it’s done that is invoking the attorney-client privilege to keep her from speaking publically or to law enforcement officials.

That privilege is the general rule that the conversations and communications between a client and his/her/its attorney shouldn’t be disclosed through litigation or to the public. The idea is to encourage an open conversation between the parties so the attorney can get a full picture of what the client has done and the attorney can freely advise the client. There are exceptions to this rule so there’s no total guaranty to this silence.

Ms. Munich was the general counsel of Walmart’s international division when the company found its employees might have bribed a number of Mexican officials in order to speed up the construction of some of its stores. She lead an investigation and appears to have sought to widen that investigation, but was unable to do so.

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photo - contract signers by Dan MoyleAn easy way to get sued is to violate a contract. That can be very easy if you sign a contract without reading or understanding it, making it that much more likely you won’t comply with its terms. If you agree to a contract you don’t understand, you could commit your company to spending all kinds of resources in ways you never imagined.

In a piece on LinkedIn Maryland author and real estate attorney Jack Garson described a meeting he had with one of his clients, one who is normally confident but that day appeared to be near tears and panic stricken. He brought with him a copy of a contract and a copy of a lawsuit, one in which he was the defendant. Garson read the lawsuit.

Next, I reviewed the contract. Now I understood my client’s new emotional state — especially the panic part.

“Did you read this contract?” I asked, ever so gently, as my Humpty-Dumpty client teetered in front of me.

“No,” he replied.

“I’m just curious. Why didn’t you read the contract?”

“The other side said it was standard. Plus, I was in a hurry.”

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Photo by Earl37a

Photo by Earl37a

If you have a right to sue someone, because of something the other party did or didn’t do, unless you act upon it in a timely manner, you can lose that right.  The right to sue is not like a piece of granite, solid and everlasting.  It’s more like a piece of fruit that ripens (“ripe” is actually a legal term). Like any fruit, you need to enjoy your legal rights while they’re ripe.  If you don’t and enough time passes (the statute of limitations), all you’ll have is a rotten piece of fruit you can’t use.

It’s not just the uneducated, unsophisticated and those without attorneys who make this mistake.  Big businesses get caught too.  Apex Digital v. Sears is one example that made its way to the U.S. Court of Appeals for the Seventh Circuit.

Apex claimed they were cheated out of millions of dollars

Apex buys consumer electronics made by others, puts their name on them and sells them to retailers.  One of those retailers was Sears.  They entered into an agreement in September 2003. Apex sent Sears products and after they were received, Apex would send an invoice.  There was a ‘net 60’ payment term, meaning Apex wanted to get paid within 60 days of the date of the invoice.

Sears didn’t always pay the whole amount invoiced. It took deductions for expected returns and other costs it felt it was entitled to. The last invoice with an outstanding balance was dated November 9, 2004. It should’ve been paid in full by January 8, 2005.

Apex’ allegations didn’t mean anything because their lawsuit was filed too late

The lower court decided a four year statute of limitations applied, which gave Apex no later than January 8, 2009 to sue Sears for money owed. Apex’ suit, claiming Sears shorted it nearly $15 million, was actually filed March 6, 2009.

Apex argued Sears wasn’t really paying for the items on the invoices. Sears was advancing payments on its debt to Apex. That amount wouldn’t be determined until their relationship ended and Apex performed a full accounting.  Like those of us who purchased Sony, Samsung and Sharp products in Sears’ electronics department, the court wasn’t buying what Apex was selling.

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Legal DocsWhen Aaron Kushner acquired the O.C. Register last year Kushner claims that the Register’s former owners, Angelo Gordon, withheld the true value of the company. Now, the former owners are suing Kushner for $17.45 million.

The lawsuit began when Kushner’s holding company, 2100 Trust accused the previous owners of the O.C. Register of intentionally misinforming Kushner’s company by failing to give a complete assessment of pension obligations, credit card debt, overhead, and several other indicators of financial stability. As a result, 2100 Trust said that the remaining funds from the deal would not be released from escrow because the price of the register was grossly overinflated and will lead to liabilities of $62.3 million for Freedom Communications.

Angelo Gordon balked at the allegations of misrepresentation by filing a lawsuit earlier this month demanding full payment of the remainder of the escrow funds that Kushner ordered back. The lawsuit was filed in Delaware, where both companies are based.

OLYMPUS DIGITAL CAMERAAlthough Michael Jackson died in 2009, new lawsuits against the deceased international pop star’s estate continue to come forward in light of Jackson’s continued strong record sales. In October one of Jackson’s most famous producers, Quincy Jones, sued Jackson’s estate and Sony Music for $10 million alleging a breach of contract and breach of the covenant of good faith and fair dealing.

The lawsuit arose from the use of Jackson’s work after his death. Jackson’s estate allegedly entered into contracts to allow several republications of works that Jones had originally produced. The works were authorized for Cirque du Soleil productions and several soundtracks and albums.

Jones alleges that his contract with Jackson’s production company, now MJJ, in 1978 and 1985 provided him with the right to be the first to remix or re-edit the recordings and also required that any use of the master recordings required his consent and a certain percentage of the royalties from the remixes.

Jones’ lawsuit states that he was denied his right to remix or re-edit the recordings, and also denied additional compensation when MJJ entered into an agreement with Sony to share profits of the master recordings and divert revenues as profits instead of royalties to deny Quincy payment. The lawsuit alleges that this attempt to avoid paying Quincy proper royalties violated the covenant of good faith and fair dealing.

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Reading ContractA local Fashion School is defending itself against current and former teachers in a class action lawsuit for unpaid wages. The lawsuit was filed against the Fashion Institute of Design & Merchandising, FIDM, on October 28. The teachers in this class action claim that FIDM did not pay overtime and did not reimburse them for expenses.

FIDM is a fashion school with branch campuses in Irvine, Los Angeles, San Diego, and San Francisco. The lawsuit’s lead plaintiff is Amanda Ferguson. Ferguson alleges that certain teachers at FIDM were not properly paid overtime, although they regularly worked more than 8 hours a day and worked for more than 40 hours a week. The lawsuit also claims that the teachers were not reimbursed for travel and business expenses. The lead plaintiff also claims that she was fired without being paid the wages that she had earned.  The lawsuit was filed in Los Angeles Superior Court. Ferguson is a former faculty member of FIDM’s Los Angeles branch.

California Overtime Law for Post-Secondary Teachers and Professors

The Industrial Welfare Commission specifies in wage order 4-2001 that certain professional employees are not entitled to overtime wages, if the professional meets the following criteria:
1.    They are licensed or certified by the State of California to engage in a listed profession, which includes teaching;
2.    The professional uses independent judgment  and discretion in performing their duties;
3.    The professional earns no less than twice the minimum wage for full-time work (currently $33,280);

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Photo by Robb Sutton

Photo by Robb Sutton

In my many years of practicing law, I’ve had to deal with a number of difficult lawyers.

Most lawyers, while doing their best to represent their clients’ interests, are generally professional and considerate of each other.  Though our clients have opposing interests, it’s in the attorneys’ interests to maintain a professional relationship because we both have work that needs to get done.  We may meet again on opposing sides in another case, so creating animosity may not only impact the current case but future ones as well.

There are a minority of attorneys who are genuinely difficult to work with.  Over the years I’ve learned to effectively and professionally deal with them while shielding my clients from them as much as possible.  Emotion and frustration is what the difficult attorneys want to see and I won’t give it to them.

Here are some types of difficult attorneys:

  • The Bully: He (or she) is rude, makes threats and tries to control the case. This lawyer will shout at my staff and me over the phone if he doesn’t get his way. In court this lawyer will try to divert the court’s attention by accusing me and my client of every misdeed. This lawyer will muddy the judicial waters at the expense of everyone, including himself and his Continue reading

file00064248474(1)I’ve been blogging quite a bit lately about how to bypass a trial in your business litigation matter. By building a solid case early on that can lead to a successful early settlement conference, eliminating issues through California’s ADR methods, and other effective litigation strategies, it is possible to evade the challenges of a full business trial.

That said, trial cannot always be avoided, and sometimes it shouldn’t be anyway. Some cases warrant the full litigation process, and it can be for a number of reasons. At times, the most basic facts of the case are in question and the only solution is to move forward with the full discovery process and then have your day in court. Other times, the adverse party is unwilling to settle – at least on an arrangement that seems acceptable or fair. Still, at other times, a trial before a judge and jury is the only way to seek true justice on a business investment that’s been sabotaged.

Whatever the reason may be some business issues simply need to go to court. If yours is such a case, it will be critical to your success to follow the rules of the California court room. I don’t mean the written rules. I mean the unwritten ones. These are the nuances your California business litigation attorney should train you on before you ever even think about entering a court room. Some of these items are about fundamental legal strategy. Others are just plain common sense.

Avoid Weak Trial Strategies

This probably seems obvious, but it’s easier said than done. That’s why you’ll never hear a legal professional say that you should represent yourself – or your company – in court.

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Case ManagementBusiness litigation is about more than just going to trial. In fact, if all goes well, you won’t go to trial at all. That’s because with the help of an experienced business litigation attorney, you can build your case by deploying proven strategies and cost-effective tactics from early on in the process in order to possibly settle your legal dispute and avoid the high cost of a full case trial.

The key is in knowing how to build your case at each phase of the litigation process by implementing relevant and timely strategies. This allows your team to be ready for a settlement no matter how far along you are in the litigation process, while still preparing you for a full trial if your case necessitates it.

As you consider your pending case with your attorney, make sure that he or she is covering the following phases individually and helping you to build your case strategy piece-by-piece through the pleading phase, discovery phase, settlement phase and trial phase.

While it may appear to be uncomplicated, your initial pleading needs to be carefully considered prior to being submitted to the courts. If you’re the Plaintiff filing a Complaint, you need to be careful of the accusations you’re making. Are they grounded in law and backed by proof? Are you familiar with the burden of proof? Do you have an understanding of the elements required to prove your claim? And if you’re the Defendant, your Answers need to be equally well thought-out. Make sure you’re addressing each of the accusations independently and providing some legal foundation for your response.

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