New York is one of the world’s leading financial centers. In the global economy, most complicated transactions touch several countries. When a potential dispute arises, it is important to analyze which countries’ laws could apply, where a legal proceeding could be brought, and which court is most advantageous to our client. We work with attorneys from other countries to advise our clients on the best strategy for resolving their international disputes.
What to Expect During Litigation in the United States
The American legal system, and the practice of law in the United States, differs in many material respects from the legal systems and legal practices in other parts of the world. The following describes typical steps in commercial litigation in the state and federal courts of general jurisdiction of the United States.
Phase 1 – Drafting the Complaint Factual and Legal Analysis
The first, and often the most critical, phase of the lawsuit is the factual and legal analysis. In this phase, we analyze the facts relevant to the claims and the anticipated defenses, and prepare the complaint (the initial pleading that sets forth your claim), or the response to the complaint, if you are defendant.
Often the most important decision is the choice of forum. America has a federal system, with federal laws governing the entire country and state laws governing transactions that affect each state. Each state has its own substantive laws, which differ markedly from state to state. For example, some states have enacted laws that restrict the availability of punitive damages (it is important to know this if you are a plaintiff). In addition, federal courts in different circuits might apply the same federal law in slightly different ways. Upon being retained, we examine the laws of the jurisdictions in which an action could be brought, and suggest the best choice of forum.
Ideally, we fully analyze the damage issue before framing the complaint for several reasons:
- When the complaint sets forth a credible and logical claim for damages, early and successful settlement negotiations are more likely
- A well pleaded claim for damages is more resistant to a pre-answer motion to dismiss the complaint
- Courts are skeptical of large damage claims that appear to be unsupported.
When we have a realistic idea of the damages amount, you will be better able to determine how much time and resources you want to devote to the issue. The decisions that we make in this first phase of the case will have substantial impact on the total cost of the case.
Phase 2 – Responding to the Complaint
Answer or Motion; Reply to Counterclaims
Motion to Dismiss the Complaint
After service of the complaint, the defendant may serve an answer to the complaint or move to dismiss the complaint, or both. The defendant would typically move to dismiss the complaint on one of several grounds. “Failure to State a Claim for Relief” is the most common basis used in a motion to dismiss. This motion (called a demurrer at common law) tests the facial sufficiency of a complaint. The allegations of the complaint are accepted as true, and inferences are drawn in favor of the defendant. A defendant will often move against even a well pleaded complaint in order to obtain clarification of the claims and damages, learn more about the pleader’s theories, and delay the case.
Motions Regarding Venue
In addition, the initial choice of where to commence the action could lead to motion practice. For example, if we commenced the action in one of several courts which has jurisdiction over a defendant, but which is not the defendant’s principal residence, it is likely that the defendant would attempt to transfer the case to a different court, embroiling the plaintiff in complicated motion practice just to determine the appropriate forum.
Answer to the Complaint
In all likelihood, the defendant will answer the complaint, interpose affirmative defenses, and assert counterclaims. If the defendant does assert counterclaims, then the plaintiff is in the position of defendant with respect to those counterclaims, and has the choice of serving a reply to the counterclaims or making a motion to dismiss, or both. Finally, by availing yourself of the privilege of suing in the courts of a certain jurisdiction, you might be deemed to have submitted to the courts of that jurisdiction, even for claims that are unrelated to the subject of the lawsuit.
Phase 3 – Discovery
Providing and Obtaining Information
Once the pleadings are closed and the preliminary motions decided, the management of the case becomes somewhat more predictable, largely because the case will then come under closer direct supervision of a judge. In federal court cases, the judge to whom the case is assigned will typically meet with counsel early in the proceedings and set a discovery schedule.
Each side will serve document requests on the other side, and will request all material documents that relate to the various claims and defenses. Once documents are exchanged, the parties will engage in deposition discovery of each other and of third-parties with relevant knowledge. This aspect of American practice differs substantially from the practice in other countries, and it often seems odd that a litigant would have to provide an adversary with information against the interest of the litigant, but that is in fact the law.
Attorney Fees and Expenses Related to Discovery
The attorneys’ fees and expenses incurred in this phase of the litigation will be directly related to the amount of document discovery sought and the number of witnesses deposed.
Disputes Arising from Discovery Requests
In addition, parties occasionally have to resort to motion practice during this phase of the case to resolve discovery-related issues, such as claims that testimony is protected by the attorney-client or other testimonial privileges, and disputes concerning overly broad discovery demands or oppressive discovery tactics. The courts often deal with these issues in an expedited, and frequently informal, basis; often, a magistrate judge will be assigned to hear and decide discovery issues.
Phase 4 – Pre-trial Orders and Trial
After the close of discovery, the parties will file a detailed joint pre-trial order which governs the trial of the case. The form of the order is dictated by the rules of the particular judge before whom the case will be tried, but most pre-trial orders require the parties to indicate which claims and defenses they actually intend to try, designate their witnesses, designate any portions of deposition testimony to be used, list their trial exhibits, assert objections to the admissibility at trial of each others’ exhibits, and, in general, provide a detailed road map for the trial. Because some judges require very detailed pre-trial orders, this phase of the case is often quite time consuming and expensive. On the other hand, the major preparation for trial occurs in connection with preparing the pre-trial order, including honing the issues, selecting exhibits and witnesses, and marshaling the evidence in an orderly manner.
Summary Judgment Motions
At the close of discovery, parties frequently consider making a motion for summary judgment, a procedure for obtaining judgment without a trial, which is available for a party who can show that there are no disputed issues of material fact and the moving party is entitled to judgment in its favor as a matter of law. These motions tend to be quite complicated. Since the objective is to completely dispose of the case, each side typically introduces the best testimony and exhibits that it would introduce at trial. Many judges have developed procedures to streamline the determination of summary judgment motions, such as pre-motion conferences in which the court probes each side for the existence of factual issues that will require resolution, thereby mandating denial of summary judgment.
Scheduling Your Case for Trial
Upon the filing of the pre-trial order, the case will be scheduled for trial. Judges differ widely on their scheduling practices. Some judges will give the parties a firm trial date months in advance, and others will call a case on a few days’ notice. The length of trial itself is hard to predict. Typically, it takes longer to try a case to a jury than to a judge. The length of trial will be largely dependent on the breadth of the claims and defenses. Under certain circumstances, we suggest retaining expert witnesses to testify with respect to certain technical, economic, or other matters requiring special knowledge.
If a party is dissatisfied with the outcome of the trial, it can appeal to an appellate court for review of the substantive findings and procedures used by the trial court.
In the United States, the general rule is that each party bears its own legal fees unless a statute or contract provides that victorious parties can obtain a fee award. For example, under certain circumstances, victorious plaintiffs in copyright, trademark, and unfair competition cases can obtain an award of legal fees under the applicable statute. This differs from the laws of several countries, which provide that the winner can obtain its legal fees from the loser.
We have attempted to describe the normal course of litigation in a federal court, on the assumption that the judge who hears the case will apply typical procedures. However, any particular litigation could deviate in material respects, and the description above should be taken as a general guideline only.
Finding the right lawyer to handle your transnational litigation is an important matter. We welcome the opportunity to further discuss my qualifications to represent you. Contact us today.