Original post here: https://x.com/NuclearHerbs/status/1730635317856923755
Welcome to your first class at #PulseChainLawSchool
Today’s Topic: Basic Litigation Concepts
If you’ve never been sued or had to sue someone, if you live outside the US and don’t understand our byzantine and glacial-speed court system, or if you’ve watched too many episodes of Boston Legal and think that’s how cases actually go (sorry @WilliamShatner – and full disclosure: I may or may not sometimes make restaurant reservations in Vegas under the name Denny Crane), you’ve enrolled in the right class!
Lesson 1. Civil cases, an overview of the basic process.
A civil case is started by a Plaintiff filing a Complaint. The Complaint must state facts that support its claim for relief and must tell the Court and the Defendant what the Defendant supposedly did wrong. It must contain sufficient detail to put the Defendant on notice of why he’s being sued so he can prepare and assert appropriate Defenses in his Answer. For example, if a Plaintiff files a Complaint for breach of contract, it will state facts that showed there was a contract and how Defendant didn’t do his part, like “Plaintiff paid Defendant $1000 to paint his house green, but instead Defendant painted it Hello Kitty pink.”
At the same time the Complaint is filed, the Plaintiff prepares a summons, which must be served on the Defendant along with the Complaint. These are served by professional process servers in most cases. As we know serving someone overseas involves additional steps.
*This is where we are in the SEC v RH case*
Once the Defendant is served, the Plaintiff files a proof of service telling the Court that the Defendant was served and knows that he has a specific amount of time to appear and defend the claims. If the Defendant fails to file anything, the Plaintiff can move for a default judgment.
Usually, the first filing from a Defendant is either an Answer, admitting or denying the facts laid out in the Plaintiff’s Complaint, or a motion of some kind, often a motion to dismiss. If a fact is admitted in an Answer, it is usually deemed to be true for the entire life of the case. Plaintiff must prove facts that are denied if they are relevant to the relief they’re requesting.
Although there are different types of motions to dismiss, the most common type challenges the legal sufficiency of Plaintiff’s claims. We in the biz just call this a “12(b)(6)” so we sound cooler than you. That’s the reason we say a lot of things in Latin instead of English. Because writing “duces tecum” in a subpoena sounds better than “and bring this list of shit with you.” The more Latin you stuff into a filing, the smarter you sound to your client, and the happier they are to pay your exorbitant bill. And since opposing counsel has to translate it for his client, he gets to bill for that time as well. Win/Win.
Anyway, the number above refers to Rule 12(b)(6), which you can look up if the curiosity is killing you. You’ll see that other 12(b) motions are available (i.e. 1-5). Think of a 12(b)(6) as saying “even if Plaintiff proves everything they said in the Complaint, they still can’t win because all those facts aren’t enough to prove the legal elements in their claims.” I’ll cover motions to dismiss in more detail in a later class if/when one is filed in RH’s case.
So, what is a motion anyway? Motions are how parties ask the Court to do something. If I want an order issued, I have to file a motion (this is called moving, and if I file it I’m called the movant) and ask the Court to issue one. For example, if I file a motion to dismiss a case, I’m asking the Court to issue an order dismissing it. The other party gets a chance to file a Response, and then I get to file a Reply brief.
There are time deadlines and page limits and other things outlined in the Federal Rules of Civil Procedure. But for now, know that the basic process is: Motion, Response, Reply. You can see this process play out over and over in almost any random case you pick on http://Courtlistener.com or in any docket available online from your local county court. Courts can grant oral arguments on motions if requested or if they think arguments are unnecessary, they can simply rule on them. There can be hundreds of motions filed in a single case for hundreds of different reasons. Asking for a dismissal is one of a nearly infinite number of reasons motions are filed. Someone once filed a motion asking the court to let him punch opposing counsel: http://northernlawblog.com/2015/04/motion-for-fist-fight.html…
If a motion to dismiss is denied, the Defendant will file his Answer. If they have claims they want to assert against the Plaintiff, he will file those “counterclaims” and the Plaintiff will have to admit or deny the facts in a Reply to Counterclaim.
Once all parties have appeared before the court and the pleadings are closed (meaning that the Complaint, Answer, and sometimes counterclaims/Reply have all been filed), the next phase is Discovery. That is where documents are exchanged and depositions are taken. There are other tools in discovery such as requests for admission, interrogatories, and requests for production. You are required to disclose anything relevant to your claims or defenses so that there are no surprises at trial. Judges dislike surprises, and attorneys get in trouble all the time for failing to disclose things they should have.
Once discovery concludes, the case proceeds to trial or can be decided on summary judgment motions (another common type of motion). Technically, summary judgment motions can be filed earlier in the case, but most of the time it’s better to wait until you have everything in your possession before filing one.
A summary judgment motion tells the court essentially that there’s no dispute about the relevant material facts, so this case can be decided as a matter of law. Remember, in a jury trial, judges apply the facts to the law, but first the jury has to determine the facts. The Court reviews the facts and applies the relevant law, and either grants or denies summary judgment. If it’s denied, the parties go to trial.
Plaintiffs must prove every element of their claims to win. If a claim has 9 elements, Plaintiff must prove all 9. If he proves 8 and not the 9th, Defendant wins on that claim. Each claim Plaintiff makes will have specific elements Plaintiff needs to prove, and Plaintiff must prove all elements of each claim. The Defendant needs to prove nothing in order to prevail.
Let’s take a common example: Negligence. In order to prove negligence in Arizona, Plaintiff needs to prove (1) there was a duty owed to the Plaintiff, (2) that the defendant breached that duty, (3) the defendant’s breach caused the injury suffered (injury can be physical or economic), and (4) that the Plaintiff suffered damages as a result. Let’s analyze a car accident. Everyone operating a motor vehicle on a public street has a legal duty to follow posted traffic laws. If the Defendant runs a red light and drives over someone’s Grandma, Grandma can sue for negligence. She must prove all elements of her claim to recover. Witnesses will testify that they saw the driver blow the light because he was texting and that he was the driver that ran over Grandma. Grandma will have her doctor testify that the cause of Grandma’s injuries was the Defendant’s vehicle hitting her (as opposed to her falling down the stairs earlier that morning). And finally, Grandma’s medical bills will prove her damages, and her attorney will argue for additional pain and suffering compensation because he’s got to get a big award he can brag about on TV at 3am during re-runs of Three’s Company.
The standard of proof in civil trials is usually preponderance of the evidence, which is lawyer-speak for “more likely than not.” Think of it as 51% likely – just enough to tip the scale in Plaintiff’s favor. There are some civil claims which require “clear and convincing evidence,” which is lawyer-speak for “more than preponderance, but less than beyond a reasonable doubt, but we’re not sure exactly where in that spectrum it actually is and we’re just hoping a judge thinks whatever we’ve submitted is enough.”
The court finds for one side or the other on each individual claim, and a judgment is entered. Once the judgment is final and the entire case is concluded, the time to appeal starts. If the case is not appealed in time, it’s over forever (barring things like fraud, constitutional violations, etc).
But since most cases never go to trial, we should discuss what happens to them. They’re usually settled in mediation or by arbitration.
Mediation: This is normally a voluntary process where the parties agree on a mediator. Often these are retired judges or attorneys who do very little other than mediate cases. The costs are usually split between the parties, although one side can pay for the entire thing if they want (insurance companies sometimes do this because they know most cases settle). It’s generally more of an informal process, and often the mediator will separate the parties in different rooms so they can have a more open and honest discussion about the pros/cons of their case. Mediators will not disclose information to the other side if asked not to. There are usually no witnesses or evidence beyond what the parties give to the mediator.
Key takeaway about mediation: The parties do not have to come to an agreement. If they don’t, the case proceeds as before. I’d guess that a good mediator has a 90-95% success rate at settling cases, even though sometimes it takes more than one round to get it done. One of the mediators I’ve used in the past liked to tell the parties that in mediation, “everyone leaves a little bit unhappy.” But it’s often a good outcome and the parties can get on with their lives and leave the case behind them.
Arbitration: Often a mandatory process. For example, Maricopa County Superior Court requires all cases seeking under $50,000 to go to compulsory arbitration. Arbitration can also be mandatory because of an agreement between the parties. The next time you click “I accept” on a terms & conditions page, just know that in all likelihood, you agreed to some form of arbitration in the event of a dispute. If you did agree to arbitration this way, any lawsuit you file in a court will probably be dismissed and the parties will be sent off to arbitration. Arbitrator rulings are binding. In compulsory arbitration like the one described above for Maricopa County Superior Court, you can appeal an arbitration ruling and the case continues on towards trial.
Key takeaway about arbitration: The arbitrator will make a decision and the case will be over. That ruling is binding, although it can usually be appealed to the superior court if it was a court-ordered arbitration (i.e. not the court of appeals). Since I talked about Maricopa County’s arbitration program, I’ll include the link to it so you can see what the court has to say: https://superiorcourt.maricopa.gov/civil/arbitration/…
Finally, remember that civil cases are about money. And for that very reason, it often makes sense to throw money at the other party just to get them out of your life, even if you’re 100% right and you feel like you’re just being extorted. Settlements (at least ones between private parties, not government entities) are almost always confidential, with neither party allowed to discuss the terms (i.e. who paid who and how much). But in today’s world, nobody even remembers the headlines from last month, so who really cares who got what as long as it’s over.
That’s enough for today. Next week we’ll talk about when judges have to follow other court rulings and when they don’t.
Standard disclaimer: Nothing here is legal advice.
