Being involved in commercial litigation is stressful for a company and its owners. Since 2006, I’ve served as a commercial litigation attorney to businesses throughout California including Los Angeles, San Diego, and Orange County. Please get in touch with me for a free consultation on commercial litigation.
What is Commercial Litigation?
Commercial litigation is civil litigation involving one or more businesses as parties. Commercial litigation involves businesses rather than individuals. Commercial litigation is civil litigation in any sort of business relationship.
To understand commercial litigation, we must first go over civil litigation. Civil litigation is when two or more parties are involved in a lawsuit that is non-criminal in nature. This is not like Law & Order where one individual is trying to send the other to jail. Normally, one party is suing the other for monetary compensation or to defend a legal right.
Commercial litigation, or lawsuits, work in much the same way, except one or more of the involved parties are businesses. The process of taking cases to court tends to be more expensive than non-commercial civil lawsuits. Like civil lawsuits, the goal of the suing party is to receive monetary damages. However, depending on the case, there may also be criminal charges filed. Commercial lawsuits typically proceed in the following pattern:
- The suing party hires an attorney
- The facts of the case are investigated
- Attorneys on both sides research the appropriate laws
- A settlement is negotiated
- The attorney for the plaintiff files the lawsuit
- The case is taken to court before a judge and jury
What Are Some Examples of Commercial Litigation?
- Breach of contract lawsuits. These occur when a person or company violates a contract made with another. Example: Restoration Hardware makes a deal with ShelfMaster, a company that produces quality wood furniture. Every month, Restoration Hardware is supposed to receive a shipment of shelves. However, for three months, the company does not receive its promised shipments of shelves. ShelfMaster has thereby violated the agreed contract and is sued.
- Class action lawsuits. These occur when a group of individuals sue a person or company that harmed them. Example: Gloria and Gerald buy a crib for their baby daughter, only to have the crib collapse, injuring the infant. While watching CNBC, Gloria listens to a report detailing other instances of injury resulting from this specific crib. The parents join with others who bought the defective crib to sue BabyBella, the company selling the product.
- Anti-trust lawsuit. These occur in response to allegations that a business is not complying with laws regulating competition. Example: AT&T attempts to acquire Verizon, resulting in a monopoly and reduced competition.
- Regulation lawsuits. These occur when a company violates its industry’s regulations. Example: The oil company Shell decides to dump thousands of tons of waste into a local river despite industry regulations against illegal dumping. After dead fish are found floating downstream, Shell is sued for violating environmental regulations.
- Unfair Competition. California’s unfair competition law prohibits any unlawful, unfair or fraudulent business practice, or any false, deceptive or misleading advertising.
- Trade Secret Lawsuit. The Uniform Trade Secrets Act (UTSA) allows lawsuits to penalize the unauthorized disclosure of trade secrets, or to enjoin potential disclosures.
- Shareholder Dispute. A shareholder dispute it is a disagreement amongst shareholders or between shareholders about the governance of the corporation or some other essential detail about the company’s operations, finances, etc.
- Employment Law Violations. Employment law violation may include: Failure to Pay Minimum Wages; Failure to Pay Overtime Wages; Failure to Pay for Nonproductive Time under Labor Code § 226.2; Failure to Provide Rest Periods and Meal Periods; Record Keeping Violations (Labor Code § 226)
- Fraud Lawsuit. A fraud lawsuit is a legal proceeding in court between the parties to prove or disprove the presence of all the required elements of the variety of fraud in question.
- Derivative Action. A shareholder (stockholder) derivative suit is a lawsuit brought by a shareholder or group of shareholders on behalf of the corporation against the corporation’s directors, officers, or other third parties who breach their duties.
How is Commercial Litigation Changing?
The practice of commercial litigation is often subject to change. Changes in political administrations, laws and regulations, court appointments, and the economy can affect the commercial landscape.
Let’s consider an example illustrating how the field of commercial litigation must routinely adapt. We live in an age of constantly evolving technology, and the law has been forced to change in order to regulate new frontiers such as the Internet. This means that lawyers in the commercial litigation practice are often approached about entirely new disputes. Often these disputes involve tech companies. The subsequent lawsuits often concern trade secrets and intellectual property.
In short, political and cultural trends directly affect the way commercial law is practiced, making it a highly dynamic field.