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Date: November 2007
Prepared by:
Frank J. Costello
Charles J. Simpson
Malcolm L. Benge
Zuckert, Scoutt & Rasenberger L.L.P.
888 17th Street N.W.
Washington, D.C. 20006
Tel.: +1 (202) 298-8660
E-Mail: fjcostello@zsrlaw.com
The United States is a nation of lawyers and lawsuits. Lawyers play a much more active role in the business process in the U.S. than they do anywhere else in the world. For companies with substantial business in the U.S., litigation usually is not a "once in a lifetime" occurrence. Rather, it is a part of doing business. When a business dispute arises which cannot be resolved amicably (either with or without the involvement of attorneys), the threat of litigation or litigation itself usually follows. In the vast majority of disputes, the threat of litigation is enough to produce a resolution. Yet a substantial number of such disputes do result in litigation being initiated. Even in such cases, the overwhelming majority are settled or otherwise disposed of before a trial, so that a judge or jury never has an opportunity to decide the cases on the merits.

The U.S. legal system for resolving business disputes often is a surprise, if not a rude shock, to non-U.S. companies facing it for the first time. This article takes a look at that system from the viewpoint of a "first-timer" and addresses, in non-legal terms, some of the more important aspects of that system. We begin with a brief overview of the judicial setting and the principal players in that setting, American lawyers. Next, we examine the broad bases for U.S. jurisdiction over non-U.S. persons. We then take a look at the process itself, including the peculiarly American phenomena of varying and variable legal fees, pretrial discovery and punitive damages. Finally, we look at alternatives to formal litigation. The emphasis is on the practical. It is not our purpose to defend or criticize the system. Whatever is said, it is certain that the American legal system functions best when all participants fully understand its benefits and limitations.
Applicable Law
  • Federal Rules of Civil Procedure, contained at Title 28-Appendix of the U.S. CodeState rules, for example: California Code of Civil Procedure (§§ 2019-34 contain the rules pertaining to discovery) and New York Civil Practice Law and Rules (Rule 31 pertains to discovery).Federal Arbitration Act, Title 9 of the U.S. Code.
  • Convention On the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Service Convention).
  • Convention On the Taking of Evidence Abroad in Civil or Commercial Matters (Hague Evidence Convention), reproduced at 28 U.S.C. § 1781 nt.
  • Convention of the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).
  • Foreign Sovereign Immunities Act, 28 U.S.C. § 1605.
    Detailed Information
    The setting
    The courts

    Governmental power in the U.S. is dispersed in accordance with the principle of federalism - largely autonomous state governments operate under the umbrella of an equally autonomous national or "federal" government. The judicial system in the U.S. reflects this federalism and includes both state courts and federal courts. There also are a wide variety of federal and state administrative courts and tribunals that resolve disputes through non-jury trials. Litigation before administrative courts and tribunals is important and can involve non-U.S. participants. While administrative litigation is not the focus of this article, much of what is said in this article is equally applicable to such litigation. In the case of a business dispute between an U.S. company and a non-U.S. company, there usually is no single court in which a lawsuit must be brought. At the very least, as long as the matter in controversy exceeds the jurisdictional minimum for federal court, there likely is proper jurisdiction in at least one state court and one federal court. If companies with multi-state operations in the U.S. are involved in the lawsuit, there may be a number of state and federal courts in which the suit could properly be filed.

    For a non-U.S. litigant, federal courts traditionally have been preferable to state courts. Federal courts tend to be less parochial than state courts, they are used to dealing with out-of-state parties, and the backlog of cases generally is smaller than in state courts. However, in some localities, particularly commercial centers, there is no practical difference between the quality and experience of federal and state courts. Moreover, in the federal district courts located in the major urban areas, rapidly expanding criminal dockets and shortages of federal judges have adversely impacted the time and attention that federal judges are willing and able to devote to purely commercial disputes. This unfortunate trend is largely the result of increasing "federalization" of crimes that would otherwise have been handled in state courts. A non-U.S. litigant must carefully evaluate the choice of federal versus state court.

    There is no separate career track for judges in the U.S. system. Judges are, for the most part, selected from the ranks of practicing attorneys. At the federal level, judges are appointed for life by the President and confirmed by the Senate. At the state level, judges either are appointed or elected.

    The federal judiciary is divided at the trial court level into 94 federal districts, none of which covers more than one state, but many of which comprise only part of a state. The federal district courts interpret and apply the U.S. Constitution, laws passed by the U.S. Congress, the regulations promulgated by the agencies of the federal government, and treaties between the U.S. and other nations. The federal courts also have "diversity" jurisdiction over disputes between citizens of the U.S. and citizens of other nations, and over disputes between citizens of different states, provided that the matter in controversy meets the jurisdictional minimum value (presently $75,000). In such "diversity" cases, the federal courts may apply and decide issues of state law. There also are specialty federal courts, such as the Court of International Trade (dealing primarily with customs disputes), the U.S. Court of Federal Claims (primarily for taxpayer disputes with the Internal Revenue Service and disputes between the federal government and public contractors), and the Bankruptcy Courts (which are subsidiary to the district courts).

    Each of the fifty states, the District of Columbia, Puerto Rico and the Pacific territories has its own state court system, consisting of trial and appellate courts. The state courts interpret and apply the common law of the respective states, and state common law governs most of the fundamental legal relationships between businesses and individuals, such as contracts, property rights, and torts. While there are many unifying themes in the common law of the various states, and while the common law of the states on commercial matters in particular has become increasingly homogeneous, there still are many significant substantive and procedural differences among the states. State courts also interpret and apply state statutes and regulations as well as the state and federal constitutions.

    A non-U.S. party sued in the U.S. is not necessarily bound by its adversary's selection of a particular court as the forum for the action. For example, if the plaintiff initiates the suit in a state court, the non-U.S. defendant may be entitled to "remove" the action to a federal court. Similarly, if the action is initiated in a federal district court that is particularly inappropriate for the case or inconvenient for the non-U.S. defendant, the defendant may be able to obtain transfer of the action to a more appropriate or convenient federal judicial district in the U.S. If numerous individual actions are brought in multiple jurisdictions based on the same set of facts, it is possible to consolidate those cases in a single federal district court for pre-trial purposes.

    The state and federal judicial systems have separate routes for appeals. In the federal system, district court judgments may be appealed to the Circuit Courts of Appeals. There are thirteen federal circuits. Except for the District of Columbia Circuit (which, by virtue of its location, handles a large proportion of civil cases in which the federal government is a party), and the Federal Circuit (which has jurisdiction over appeals from a number of specialty federal courts and federal administrative bodies), each circuit encompasses federal districts in several states. An appeal is decided on the basis of written briefs and, generally, a relatively short oral argument before the court. The facts of the case are not retried. Once a case is decided by a Court of Appeals, a party may petition the U.S. Supreme Court to review the decision (this is called a petition for a "writ of certiorari"). However, the U. S. Supreme Court grants such petitions in a very small proportion of cases, so that the Court of Appeals is frequently the court of last resort in federal cases. On questions of federal law, a federal district trial court is obligated to follow the precedents of the federal circuit in which it is located, which may differ to some extent from the precedents in other federal circuits. Resolving significant conflicts between and among federal circuits on important issues of federal law is an area where the U.S. Supreme Court does regularly assert its jurisdiction in an effort to maintain a high level of consistency in federal law.

    Each state court system also consists of trial courts and intermediate and senior courts of appeal. The names of these courts differ from state to state, as do the rules regarding the jurisdiction of the appellate courts. A party aggrieved by a trial court judgment generally will have a right to appeal to the intermediate appellate court, whose decisions generally may be appealed to the state's highest court. The decisions of the appellate courts of a state are the "last word" on issues of state common law or state statutory law. However, cases decided by the state appellate courts involving rights under the U.S. Constitution, the validity of federal statutes or treaties, or the validity of state statutes under the U.S. Constitution or federal laws, may be reviewed by the U.S. Supreme Court. Only a small percentage of such petitions for review are granted.

    Appeals in either the federal or state system are time-consuming. The appellate process easily can take years.

    American Attorneys

    According to the American Bar Association, as of December 31, 2006, there were 1,143,358 licensed and active lawyers in the U.S., most in private or corporate practice. The U.S. legal system does not separately license litigators, as do some systems. In theory, any licensed U.S. attorney can represent a party in court proceedings. However, litigation is a sufficiently specialized practice area so that only attorneys with litigation experience (or attorneys in association with litigators) should properly take on such representation. An attorney in the U.S. is admitted to practice, in the first instance, by the licensing authorities in an individual state. An attorney may thereafter seek admission to the bars of other states, but examination requirements, costs, and/or business situs requirements of state bar licensing authorities generally discourage U.S. attorneys from becoming fully licensed to practice law in more than one or two states. By contrast, once an attorney is licensed to practice by the authority of a state, it is very easy for that attorney to obtain admission to practice in the federal court(s) located in that state and in other states. Additionally, while an attorney must be admitted to practice in the particular state or federal court in which a particular case is being litigated, state and federal courts routinely grant permission for out-of-state or out-of-district attorneys to represent a client in a particular case, provided that the attorney does so in association with a local attorney. Many law firms in the U.S., by working with local lawyers as needed, now have national litigation practices.

    A U.S. lawyer-litigator typically works on the basis of either (i) an hourly fee plus reimbursable expenses or (ii) a contingency based on a percentage of the recovery (if any) or (iii) some combination of both. Hourly fees depend on experience, location and specialty. The variety of fees suggests, correctly, that fee setting is something less than a scientific process. Contingent fees can range from 10% to 40% of the recovery, again depending on a variety of factors including the length of the matter and the amount of work that is required. High legal fees are a source of concern, and not just for clients. The U.S. legal profession, as a whole, is concerned about the perception that only lawyers benefit from litigation.

    The "American Rule" with respect to recovery of legal fees compounds the concern. As a general matter, in U.S. litigation each party bears its own fees, win or lose. This means that a party may successfully defend a meritless lawsuit and yet suffer the out-of-pocket cost of paying lawyers to defend it. It also means that a plaintiff prevailing in a completely meritorious action still will have to absorb the cost of its attorney's fees. There are some statutory causes of action that expressly alter the American Rule and permit recovery of attorney's fees by the prevailing party, but those are exceptional circumstances. Similarly, the American Rule can be waived if there is malicious conduct on the part of the other party, but those situations also are few and far between.
    The broad reach of U.S. jurisdiction
    Non-U.S. companies doing business in the U.S., selling products that will be used in the U.S., or engaging in transactions with U.S. companies, are likely to find themselves subject to the jurisdiction of the U.S. courts. This particularly is true if the non-U.S. company actually has offices and/or employees in the U.S., but also may be the case for a non-U.S. company with absolutely no physical presence in the U.S. Through the operation of "long-arm statutes," U.S. courts may exercise broad jurisdiction over entities located outside of a particular state or federal district. Such long-arm jurisdiction is tempered by constitutional principles of "due process"; these principles prevent a party from being hauled into court in a forum with which it lacks certain minimum contacts.

    A civil action in the U.S. typically is initiated by the plaintiff filing a Complaint with the court, and the plaintiff then is obligated to serve a Summons and the Complaint upon the defendant. The U.S. is a signatory to the "Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters," commonly known as the "Hague Service Convention." For the signatory nations, the Hague Service Convention provides a mechanism that helps ensure the ability of civil litigants to effect service of process upon each other. A party initiating an action in a U.S. federal court is obligated to utilize a method of service authorized by the Hague Service Convention when serving process upon a party located in a nation that is a signatory to the Convention. Some of the methods authorized by the Hague Service Convention can be rather cumbersome, however, and U.S. litigants are apt to try to avoid its use if possible. Thus, a U.S. plaintiff will prefer to effect service upon a defendant in the U.S. In the case of a non-U.S. company which has an office in the U.S. or which has a U.S. subsidiary, service of process is likely to be made upon the company through its U.S. office or subsidiary. Even where process cannot be served in the U.S., plaintiffs from the U.S. will try to use the least cumbersome method of service outside of the country. In situations in which the law of the other nation does not prevent it, service of process may be accomplished by mail pursuant to various state and federal rules. Under the Federal Rules of Civil Procedure, a plaintiff can request that a defendant waive formal service of a summons and complaint. This mechanism can be particularly attractive to a plaintiff initiating an action against a non-U.S. company located outside of the U.S., because it can, if agreed to by the defendant, relieve such a plaintiff of the burden it would otherwise bear of effecting service of process outside of the U.S. through the use of the Hague Service Convention or other cumbersome and possibly expensive means. A request for waiver of formal service of process need only be transmitted by mail or "other reliable means" (perhaps even by facsimile transmission). A party located outside of the U.S. is under no obligation to agree to such a request, and is not subject to any penalty or sanction for refusing to so agree. In any particular case, there may be certain advantages or disadvantages to agreeing to a request for waiver of service, so a non-U.S. company receiving a request for waiver of service should consult with U.S. counsel before taking any action on the request. By the same token, this procedure can also be a useful tool for a non-U.S. company initiating an action in federal court in the U.S.

    Non-U.S. companies which are directly and majority-owned by another nation or political subdivision of a nation, or which constitute an organ of such nation or political subdivision, may be immune from the jurisdiction of U.S. federal and state courts under the principle of "sovereign immunity." There are several exceptions to this principle, however. For example, immunity does not apply if the civil action is based upon (a) commercial activity carried on in the U.S. by the non-U.S. entity, (b) an act performed in the U.S. in connection with a commercial activity of the non-U.S. entity elsewhere, or (c) an act outside the territory of the U.S. in connection with a commercial activity of the non-U.S. entity elsewhere and that act causes a direct effect in the U.S. Sovereign immunity will not apply if it has been waived explicitly (e.g., by an express provision in a contract) or by implication. Even in those cases in which a non-U.S. entity that is owned or is the instrumentality of a foreign state is not protected from suit by sovereign immunity, the company may have the benefit of special procedural protections under the Foreign Sovereign Immunities Act when it is sued in the U.S. These protections include special requirements for service of initial process upon the entity, an enlarged time period for the entity to respond to the Complaint, and limitations on the plaintiff's ability to obtain a jury trial.
    The process
    Pre-trial discovery

    An important feature of the U.S. civil justice system is pre-trial discovery. Discovery is a process through which each party to a lawsuit gets an opportunity to learn about the evidence that will be relied upon by the opposing parties and to try to uncover relevant evidence in the possession of its opponents or third persons. The theory behind discovery is that complete disclosure facilitates settlement and makes the actual trials fairer and more efficient. In practice, discovery does often achieve those goals but at a high cost in terms of money and time.

    Discovery is of three basic types – initial disclosure, written discovery (consisting of interrogatories and requests for documents) and depositions. Other forms of discovery, e.g., physical inspection and requests for admission, also are available. In the federal courts and some state courts, the Plaintiff (without any request from the other party and relatively soon after the litigation is commenced) must disclose a substantial amount of information relevant to the contested issues in the case, and to make such disclosure soon after the case is initiated. Among other things, the required disclosure must include identities of all relevant witnesses, production of all documents you consider relevant to contested issues, and information regarding opinions of expert witnesses.

    A party is given broad authority to request the production of documents by opposing parties. A party has very limited ability to resist such requests. You should assume, at least for planning purposes, that every document in your files, including your electronic files, of even tangential relevance to the case will be produced to your opponent. You may be able to obtain confidential treatment for some of your documents, meaning that opposing parties will not disclose them to others outside the lawsuit, but this will not prevent the opposing party from seeing and relying on them. Interrogatories are written questions propounded by one party to another party in a lawsuit. Among other things, these questions may seek evidentiary information, may seek the identity of witnesses, and may seek explication of the factual bases for causes of action.

    A deposition is the oral cross-examination of a witness under oath outside of court. Depositions are conducted by the attorneys for the parties and the proceedings are recorded by a court reporter. If you are a litigant in a U.S. action, your officers and employees may be deposed by opposing counsel in circumstances where there is little restriction as to relevancy and materiality of the questions. While your officers and employees outside of the U.S. generally may not be compelled to travel to the U.S. to submit to deposition, they may be required pursuant to letters rogatory or the law of the nation in which they are found to submit to a deposition or examination (orally or in writing) in their own nation. Apart from serving as a vehicle for discovering information, a deposition may be introduced at trial if the witness is not available or to contradict the testimony of a witness appearing at trial.

    Parties to a lawsuit in the U.S. also may direct discovery to persons who are not plaintiffs or defendants but who may have information bearing on the subject matter of the litigation. This third-party discovery can be particularly vexing to a non-U.S. person. If that person does business in the U.S. sufficient to convey jurisdiction on the U.S. courts, it may be the target of subpoenas for both documents and witnesses, including those located outside the U.S. Even if that person has no contact with the U.S., third-party discovery still may be available through the more formal and cumbersome letters of request and letters rogatory procedures of the Convention On the Taking of Evidence Abroad in Civil or Commercial Matters (“Hague Evidence Convention”). Thus, even though the person has no direct interest in the U.S. litigation, it may be compelled to seek U.S. counsel to resist or restrict third-party discovery in order to reduce or eliminate the considerable burden, to maintain confidentiality or to protect proprietary rights.

    Much of the expense associated with litigation in the U.S. - and expense includes lost time and inconvenience to company officers and employees as well as direct costs - is created by the discovery process, a process that can consume many months and often years.

    Measures of Damages and Causes of Action

    In an ordinary commercial dispute, one would think that the damages would be those losses incurred by the other party's failure to honor its business obligation. Those damages are at the base of every lawsuit, and most commercial lawsuits have at their core some sort of contractual obligation. But as U.S. law has developed, the measures of damages as well as the potential causes of action have multiplied to the point where a basic breach of contract action limited to the actual damages incurred often is the exception rather than the rule.

    A peculiarity of Anglo-American law is the theory of punitive or exemplary damages. Under this theory, a court or jury can award a plaintiff damages over and above, indeed in many multiples of, the actual damages incurred in those types of actions which involve a high degree of culpability, negligence or other willful misconduct on the part of the defendant. A breach of contract action would not support punitive damages, but an action maintaining fraud on the part of the defendant would. Since most U.S. courts allow plaintiffs to plead different, and even inconsistent, theories of liability in a single action, simple commercial disputes often find themselves cast as matters of fraud or other so-called "tort" causes that would support a claim for punitive damages.

    The issue of punitive damages is very visible in the U.S. at the present time, primarily because of large jury verdicts in product liability and medical malpractice cases, and is the subject of substantial criticism. But absent legislative action at the federal and state levels, there is likely to be little change. As one justice of the U.S. Supreme Court stated (in an opinion upholding the award of punitive damages against an incidental party to the transaction in an amount four times the actual damages incurred), a "harsh or unwise procedure is not necessarily unconstitutional."

    Punitive damages also are allowed under a number of statutes on the "private attorney general" theory. Under this theory, if a plaintiff enforces a public policy at his or her own expense, that plaintiff should be entitled to a bonus - typically, three times the actual damages - for taking that risk. What this means is that our basic breach of contract action, with a fraud count added, now has counts added for such things as violations of the U.S. antitrust (competition) laws or the most decidedly American of all causes of action, a "RICO" claim. "RICO" is the Racketeering Influenced and Corrupt Organizations Act, a federal statute intended to reach the otherwise lawful commercial activities of organized crime. RICO permits a civil litigant to seek triple damages for a "pattern of racketeering activity," with the latter defined in such a way that it encompasses many allegations of fraud. More than one non-U.S. person has been surprised to see a complaint in an otherwise unremarkable commercial dispute that alleges that the person is a "racketeer" (or “monopolist” or “conspirator”), but such are the opportunities and risks of the U.S. legal system.

    Trial by Jury

    Jury trials are available for most civil actions if either party so requests. The unpredictability of U.S. juries is perhaps the greatest weapon of a plaintiff. Americans from all walks of life are summoned for jury service. Court clerks generally rely on voter registration rolls, motor vehicle licensing lists, and/or tax rolls to obtain names and addresses of potential jurors. Trial juries are selected in court by the attorneys for the parties from an array of potential jurors. The attorneys may challenge potential jurors for good cause and may exercise a limited number of discretionary challenges. While jury selection has become more sophisticated in recent years, and some attorneys retain professional consultants (often psychologists) to help screen potential jurors, the process still is more of an art than a science.

    Although statistics indicate that relatively few cases reach trial, those that do reach trial are increasingly decided by juries. Nonetheless, a trial by jury may have more value as a threat than as a reality. A substantial number of cases still are tried in front of a judge, and even in cases where trial by jury is authorized, the final decision in the case is often made by a judge. For example, when there are no material issues of fact in a case, so that the dispute is solely one of legal interpretation, a judge may decide the merits of the case on summary judgment before trial. Similarly, if a judge determines during the course of a trial that there are no material facts in dispute, or that the evidence adduced by a party is legally insufficient to support a claim, the judge may direct a verdict. Even after a jury renders a verdict, it is subject to modification or vacation by the trial judge if it is clearly contrary to the weight of the evidence or is legally insupportable. The experience of the federal district courts is instructive. For the twelve months ended September 30, 2006, 273,000 civil cases were terminated in those courts: 76% were dismissed by the court without a trial; 22% were settled or otherwise voluntarily dismissed; and fewer than 2% were decided by a trial. Of the 3,555 cases that went to trial, two-thirds were before a jury, but this still means that fewer than one in every one hundred cases ended in a jury trial.


    While the rules of discovery, as described above, are quite broad, a party may prevent certain information classified as privileged from being discovered by the opposing party. In the litigation context, the attorney-client privilege is particularly important. The advice, recommendations and opinions communicated to a client by its attorney generally are considered privileged and need not be disclosed to opposing litigants in discovery. However, documents prepared by or for an attorney in anticipation of litigation are considered attorney "work product," and such documents may in certain limited instances be subject to discovery by an opposing party to the extent that such documents do not disclose the impressions, conclusions, opinions, or legal theories of the attorney. In particular, factual material collected by an attorney or for an attorney in anticipation of litigation may be discoverable if such material cannot otherwise be obtained without "undue hardship."
    Alternatives to a formal litigation
    For purely commercial disputes, the chief alternative to a lawsuit is binding arbitration. Arbitration is not as quick or inexpensive as many believe, but it often is preferable to the courts. In a binding arbitration, the parties present their evidence and legal arguments to an arbitrator or panel of arbitrators, much as they would present such evidence and arguments to a judge and/or jury. The difference is that the deciders-of-fact are chosen by the parties pursuant to a previously agreed upon procedure. Parties may provide in their contracts and agreements that disputes arising will be resolved by arbitration, or they may agree later to arbitrate a dispute that has arisen under a contract which does not have an arbitration clause. Parties can utilize one of several arbitration services, such as the American Arbitration Association and the International Chamber of Commerce International Court of Arbitration, or the parties can select their own panel of arbitrators. Arbitration agreements are in great favor in the courts of the U.S. (since they help reduce court congestion), and the courts construe such agreements liberally. Arbitration generally cuts down on the scope and length of pre-trial discovery and is not subject to court calendar congestion problems. It also is very difficult to appeal from an arbitral award, a factor that lessens the time and expense of litigation. Additionally, the parties usually can select arbitrators who are attorneys or other professionals with relevant technical experience. An increasingly available option for arbitration is the use of former judges as arbitrators. The judges generally are former state court judges, though some former federal court and federal administrative law judges also participate. Several organizations have been created to market the services of these former judges and, if the parties desire, to administer the dispute resolution proceedings in which they preside.

    Even in cases in which the parties have not provided for arbitration, there are other alternative dispute resolution (ADR) methods that may help shorten the litigation process. Many state and federal courts are experimenting with or have adopted ADR as a formal part of the pre-trial process for civil actions. Parties can agree to utilize these methods in the absence of an established court program. ADR methods include mediation (a trained mediator attempts to work with the parties to negotiate a settlement of the case), non-binding arbitration (the result of the arbitration is not legally enforceable, but is used by the parties as an advisory opinion to help determine the contours of a settlement), and mini-trials (the parties make a summary presentation of their respective cases to a trier of fact selected by the court, with the verdict then to be used by the parties to help guide a settlement).
    A non-U.S. company whose business dealings will put it into a position to sue or be sued in the U.S. should either be prepared to deal with the U.S. system of civil justice or should provide for arbitration in its underlying contracts and agreements.

    A lawsuit in the U.S. can take on a life of its own, ebbing and flowing at the various stages. It can and will engage the precious time and energies of management personnel. Because of its adversarial nature, it can become an emotional matter, a contest of wills, a "grudge match." It can endanger or destroy long-standing commercial and, perhaps, personal relationships.

    This is no more than fair warning. The challenge for parties to such litigation is to stay on an even course and recognize that the lawsuit really is a commercial matter. In its own way, the U.S. legal system is designed to encourage or force a commercial resolution of disputes that is as fair as possible to both sides. If litigation is approached on an informed basis, a fair resolution of the dispute will be the result more often than not.
    Frequently Asked Questions
    Doesn’t arbitration generally result in a “splitting of the baby?”
    Not in our experience, and not in the experience of most attorneys familiar with commercial arbitration. A study by the American Arbitration Association in 2000 showed that in at least 75% of the cases surveyed, the result clearly favored one side.

    Is mediation an effective use of resources?
    It can be, and that chance alone often will justify taking advantage of the process. Mandatory, court-ordered mediation has a much lower settlement rate than consensual mediation, for obvious reasons, but any opportunity to get the two (or more) sides together outside a courtroom generally is an opportunity that should be pursued.

    Does discovery reach email and other electronically stored files?
    Yes, to the point where you should assume that all of your email and other electronically stored files, even if deleted, may be seen by the other side. The proliferation of emailing as a means of communication has made the discovery process a more potent litigation weapon than ever before. The Federal Rules of Civil Procedure now resolve any doubts about the scope of electronic discovery (it covers virtually everything) and establish specific procedures for conducting such discovery.

    What is a class action?
    When there are numerous individuals with claims against a single defendant and those claims arise out of a common set of facts, the federal courts and most state courts allow a single action to be brought on behalf of the entire class of potential claimants. These are most common in product liability and consumer cases. Because a class typically will have thousands or tens of thousands of potential members, class actions tend to involve very substantial damages. Most of the criticism of class actions has focused on high legal fees for plaintiffs’ attorneys.

    Can judgments or awards obtained in the U.S. be enforced outside the U.S.?
    For the most part, judgments and awards can be enforced against a non-U.S. person outside the U.S. Judicial judgments are enforced on the basis of comity, namely, does the other nation expect the U.S. to enforce its judgments. If the answer is “yes,” and it typically is, the judgment is enforceable. Arbitration awards are somewhat easier to enforce because the U.S. is a party to Convention on the Enforcement of International Arbitral Awards (the “New York Convention”).

    What should I do if I learn that a Complaint or Demand for Arbitration has been received at one of my offices?
    Advise your U.S. attorney as soon as possible. Complaints and demands have deadlines for responding, usually no more than 30 to 60 days, and much of the confusion at the start of the litigation process can be avoided if those deadlines are addressed by counsel on a timely basis.
    Useful Links
  • American Bar Association
  • Administrative Office of the U.S. Courts
  • Judicial Arbitration & Mediation Services (JAMS)