Winning Less May Mean More to Your Client in the End
Due to the rising costs of time and other expenses associated with litigation, a realistic approach to attacking lawsuits is required more than ever. Complaints often are littered with causes of action that are repetitive (e.g., the number of complaints that alleged fraud and breach of contract based upon the same facts), are so arcane that they are never developed through discovery, are (at best) tangential to the real harm the plaintiff may have experienced, and/or totally lack merit.
In addition, the damages alleged for each claim often are identical in amount, even though damages are an essential element of most claims and are supposed to be quantified in good faith, because no real effort was made to quantify the harm attributable to each claim at the time the complaint was drafted. Even more disturbing, the damages sought can be wildly disproportionate to any reasonable compensable harm associated with any properly pled claim. Why is this? Because the plaintiff wants to unnerve the defendant, make the playing field uneven at the start, and increase the defendants workload to enhance his interest in settling at a high price.
When served with such a complaint, the client often is incensed, understandably. Not only is the complaint wrong legally and factually, but the client realizes it must pay an attorney to prove it, and must experience the disruption to his business that every litigation causes. Those emotions may cause the client, and its attorneys, reflexively to make a decision to seek dismissal of all claims. However, that strategy may not be the most effective approach because even the most bloated of complaints are to be presumed made in good faith, which means some claims may have merit.
If the defense seeks dismissal of all claims, it is possible that the court will not dissect the complaint but, instead, will deny the motion in toto if it finds some claims were properly pled. That would mean the defendant will have to defend all of the claims, even the dubious ones, which will only increase its future costs. To avoid this outcome, the attorney should make a more targeted/less ambitious motion, focusing on dismissing as many claims as possible, without seeking dismissal of them all, and then consider ways to settle the matter thereafter.
Successfully dismissing most claims, while leaving properly pled ones alone, serves to narrow the dispute, give momentum back to the defense, and allow a greater opportunity to seek alternative dispute methods to resolve the remainder. Such a two-pronged battle plan can be very effective and can reduce the clients overall risk and financial exposure.
To succeed with this battle plan, the attorney must think critically, make judgment calls concerning the merits of each claim asserted, have the resolve to advance this two-pronged strategy to an angry client who understandably wants all claims dismissed ASAP, and be able to explain to the client that the end goal is not complete dismissal. Rather, the goal is to minimize the amount it will have to pay the plaintiff in settlement and reduce as much as possible the time, costs, and disruption associated with concluding the case.
With respect to alternative dispute resolution methods, courts are keenly interested in ordering mediation, which is a very effective tool for this two-pronged approach. In fact, a program exists at the Commercial Division of New York Supreme Court that provides the first four hours of the mediators time free to the parties, and the mediators are required to charge the parties reduced hourly rates going forward thereafter. Any time charges that are incurred due to the use of the mediator are then split by the parties 50/50.
As a tangential benefit, in the event mediation or any other dispute resolution efforts fail and the case returns to court, the defense may have gained the appreciation of the court by preparing targeted motions. Courts prefer to deal with less paperwork, especially when that paperwork is thoughtful and incisive. Conversely, as it presides over the remainder of the case, the court may take a dimmer view of the plaintiffs position (and of its attorney) after having dismissed those incredible claims and outrageous damages requests. Courts do not easily forget poorly pled complaints or poorly argued cases. Accordingly, this two-pronged attack, though supposedly promising less in terms of what it appears to seek, may in the end achieve much more of the clients overall goals.
Dominic J. Picca is a member of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, and is the head of and assigning partner for the New York office's litigation practice. He is also co-founder of Mintz Levins distressed debt and claims trading practice. Dominic is a general commercial litigator who concentrates his practice in complex contract, partnership, securities, and real estate disputes. He also has extensive experience litigating and advising clients with respect to disputes involving distressed debt transactions. Dominic has been involved in a number of litigations involving bankruptcy, intellectual property, and biotechnology.