SETTLING LARGE CASE LITIGATION - AN ALTERNATE APPROACH

• NCJ Number: 55368
• Journal: Loyola of Los Angeles Law Review Volume: 11 Issue: 3 Dated: (JUNE 1978) Pages: 493-511
• Author(s): E D GREEN; J B MARKS; R L OLSON
• Date Published: 1978
• Length: 19 pages
• Corporate Author: Loyola University of Los Angeles
• Publication Format: Article
• Language: English
• Country: United States of America

Annotation

PROBLEMS INVOLVED IN COMPLEX CORPORATE LITIGATION ARE REVIEWED, AND AN INNOVATIVE APPROACH TO SETTLING CORPORATE DISPUTES OUTSIDE THE COURT IS ILLUSTRATED.

Abstract

SUING OR BEING SUED IS A MAJOR ECONOMIC EVENT FOR ANY CORPORATION, IN TERMS OF BOTH TANGIBLE AND INTANGIBLE COSTS. LARGE CORPORATE LITIGATION COMPRISES ONLY A SMALL PERCENTAGE OF CASES YET INCREASINGLY CONSUMES A DISPROPORTIONATE AMOUNT OF COURT RESOURCES. BOTH THE INTERESTS OF CORPORATE CLIENTS AND THE CASELOAD CRISIS IN AMERICAN CIVIL JUSTICE DEMAND THAT ATTORNEYS INVOLVED IN LARGE-CASE LITIGATION CONSIDER ALTERNATIVE MECHANISMS FOR REACHING FAIR SETTLEMENTS OF DISPUTES. ONE SUCH MECHANISM WAS USED TO SETTLE A MAJOR PATENT INFRINGEMENT ACTION INVOLVING TWO LARGE CALIFORNIA BUSINESSES. THE COMPLEX DISPUTE HAD DRAGGED ON FOR OVER 2 YEARS, WITH NO TRIAL OR PRETRIAL DATE IN SIGHT. BOTH PARTIES HAD SUFFERED ECONOMICALLY, AND THE FUTURE OF THEIR BUSINESSES WAS CLOUDED BY UNCERTAINTY OVER THE OUTCOME OF THE CASE. THROUGH A SERIES OF NEGOTIATIONS, THE PARTIES DECIDED ON A 6-WEEK SCHEDULE FOR EXPEDITED, LIMITED DISCOVERY AND EXCHANGE OF POSITION PAPERS AND EXHIBITS, CULMINATING IN A 2-DAY INFORMATION EXCHANGE--A NONBINDING 'MINITRIAL' MODERATED BY TOP CORPORATE MANAGEMENT AND BY A PRIVATELY HIRED, NEUTRAL ADVISOR (A FORMER FEDERAL CLAIMS COURT JUDGE). THE PROCEDURE TOOK SEVERAL MONTHS TO ORGANIZE BUT ONLY 2 DAYS OF PRESENTATION TIME, WAS CONDUCTED ENTIRELY OUTSIDE THE JUDICIAL SYSTEM, CONTAINED NO COERCIVE CHARACTERISTICS, AND BROUGHT A SETTLEMENT IN PRINCIPLE OF WHAT HAD BEEN A LONG AND BITTERLY CONTESTED MATTER. LITTLE MONEY WAS SPENT ON THE INFORMATION EXCHANGE THAT WOULD NOT HAVE BEEN SPENT IN CONTINUING THE LITIGATION. THE INFORMATION EXCHANGE PROVED ADVANTAGEOUS TO ATTORNEYS AND CLIENTS ALIKE, PRIMARILY BECAUSE IT FOCUSED THE ISSUES UNDER DEBATE. THE PROCEDURE, WHICH IS DESCRIBED IN SOME DETAIL, SEEM PARTICULARLY WELL SUITED TO CASES INVOLVING MIXED QUESTIONS OF LAW AND FACT. (LKM)