TorteDeForm

Justinian Lane

Frivolous lawsuit costs small business owner $300k in legal fees

Do frivolous lawsuits exist?  Absolutely.  And the best place to find them isn't in personal injury lawsuits, but in business v. business litigation.  For example:

Luxury handbag maker Louis Vuitton claimed a Las Vegas company infringed on its trademark with furry "Chewy Vuiton" dog toys, but a federal appeals court refused to bite....

Pamela Reeder, co-owner of Haute Diggity Dog, said she was relieved by the outcome of the case, which has cost more than $300,000 in legal fees for the company that started in her guest bedroom in August 2004.

Law.com - 'Chewy Vuiton' Wins Trademark Suit

Groups like the American Tort Reform Association and the U.S. Chamber of Commerce don't like to talk about frivolous business litigation, because they receive millions of dollars per year in funding from the businesses who routinely file these frivolous business lawsuits.

Justinian Lane: Author Bio | Other Posts
Posted at 10:29 AM, Nov 16, 2007 in Business Culture
Permalink | Email to Friend


Comments

Thank you!

A timely, sane reminder that all of this talk about frivolous lawsuits clogging the system (mwooohahaha) conveniently forgets to mention just where all the frivolity (is that a word?) comes from! And who benefits from not identifying the source but instead proposing so called "reforms" that only deform the public's protections and protect corporate profits? Hmmm...

But hey, it's not like we actually need to get at the root of a problem to figure out how to fix it. Whatevs.

Posted by: Kia | November 16, 2007 12:18 PM

I should point out that "loser pays" provisions would also serve to eliminate much of the frivilous business litigation as those awards would be (usually) be fully collectible

Posted by: Paul W Dennis | November 17, 2007 9:33 AM

The filing of a weak or frivolous case is legal malpractice. The land pirate doing so should pay in legal malpractice.

Posted by: Supremacy Claus | November 17, 2007 9:56 PM

Paul: Loser pays is only going to be a deterrent to those with limited financial means. For example, if Microsoft and Google decided to get into a legal pissing match, do you really think loser pays would be much of a deterrent? Compare that with say, Microsoft or Google suing a tiny competitor; the tiny competitor may decide to settle purely out of fear of having to pay the huge legal fees of the other side.

In order to prevent that, you'd need damage caps on loser pays. And I don't hear too many people advocating for that.

Posted by: Justinian Lane | November 21, 2007 1:52 PM

Microsoft v. Google is a bad example. The English rule, or loser pays levels the playing field for ordinary litigants. The plaintiff typically pays no legal fees in a tort litigation because his lawyer is working on a contingency fee. If the plaintiff loses, it's no big deal for him because he's out of pocket nothing. The defendant, on the other hand, has a hollow victory because he's stuck with the legal defense costs. It's even worse for the winning defendant in a contract case because he's even less likely to have an insurance company picking up the tab for the legal fees than the tort defendant. The best system to avoid frivolous lawsuits of any type is to have the loser pay the winner's costs. It makes people think twice about starting marginal lawsuts.

Posted by: nevasayneva | November 29, 2007 9:11 PM