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ABA Section of Business Law


Business Law Today

What to do? NOTHING
It can be as simple as that
By Stacie E. Tobin
Just do it. Nike used these words to propel countless would-be couch potatoes out of their living rooms and into health clubs, road races and, most important, expensive athletic footwear. The glossy advertising campaign that supported Nike's slogan made that simple three-word command into a national catch phrase that was co-opted by just about anyone, for any purpose. Surely, more than a few lawyers have used it as a mantra to combat procrastination or to advise a client reluctant to accept the inevitable. But are there times when business litigators should reject their instincts to just do it — and instead just do nothing?

Of course there are. The trick is knowing when to do something versus when to do nothing. If you can develop the judgment — and restraint — to do nothing at the right time, you might be the lawyer every client dreams of: a lawyer who is effective without needless billing. You might also impress a few judges and juries along the way, and even get home in time for dinner. Just do nothing indeed.

Lawyers are paid to be thorough, but we are also paid to exercise reasoned judgment, and we do not have carte blanche to engage in scorched earth tactics so that we can avoid making hard decisions about pleading, discovery and trial tactics. Asking every question, obtaining testimony from every witness, and filing every motion isn't zealous advocacy, it is abdicating judgment. We should recognize that exercising judgment requires consideration of all the options, including the option to do nothing.

Doing nothing might be unconventional in some contexts, but other situations warrant it. Lawyers who are open to all options and who avoid inflexible adherence to routines are more likely to make good decisions, and sometimes good decisions lie in deciding not to proceed. Take comfort in the fact that the option exists, and take advantage of the option when the time is right.

This article offers thoughts on when, and why, a business litigator might consider doing nothing, and addresses these choices in the order a lawyer and client might face them: pre-suit, during discovery, in the motions stage, and at trial. This article does not offer rules.

Any lawyer who has tried more than one case knows that every case is different, and that decisions effective in one case may not be wise in another. Some cases warrant claiming every injury, deposing every witness, and turning over every stone. But in most cases, there are snakes under some of the stones, and if you turn them over, your client may get bit. You can protect yourself and your client by thinking carefully, before entering an appearance, before filing a pleading, before completing discovery, and before trial, about which stones are best left unturned.

Before you enter an appearance, you have some important decisions to make, including what claims to plead and the nature and extent of relief to demand. And though many of us have been trained to plead alternative causes of action, pleading all claims and relief available may in fact compromise your client's ability to recover.

For example, if you are filing a complaint, you need to evaluate whether particular claims create statute of limitations problems for your client. Some states provide that once limitations have run on one claim, they are deemed to have run on all other claims arising out of the same event. If you include every conceivable claim in the complaint, are you creating a limitations argument for defendant? Similarly, if your client suffered a lesser injury earlier in time than the most serious injury, might you be creating limitations or superseding cause defense by including the earlier injury?

In Soliman v. Philip Morris, 311 Fed.3d 966 (9th Cir. 2002), for example, the court reviewed a trial court's decision to dismiss plaintiff's claims on limitations grounds. The plaintiff was a smoker who had been diagnosed with various respiratory diseases less than a year before filing suit. Had plaintiff restricted his claims to the respiratory diseases, his claim would have been timely.

The complaint also alleged, however, that plaintiff had been an addicted smoker for more than 30 years, and it sought damages for plaintiff's alleged addiction. The lower court determined, and the Ninth Circuit agreed, that by seeking damages for addiction, plaintiff had pled addiction as an injury. Because limitations begin to run when a plaintiff first becomes aware of any injury related to his claims, the court determined that Soliman's limitations had run years — if not decades — earlier.

The court dismissed all of plaintiff's disease claims. Less exhaustive pleading might have sacrificed a portion of Soliman's recovery, but the sacrifice might have salvaged the essence of the case.

The Soliman rationale has application beyond product liability claims. It should serve as a caution to business lawyers that overly inclusive claims can backfire and cause you to lose even valid claims.

The same might be said for requests for injunctive relief. A lawyer who seeks to enjoin an infringer from violating trademark rights may be legally entitled to relief, but if that lawyer seeks more relief than is necessary to prevent the "irreparable harm" caused by the infringement, the claimant runs the risk that the court will refuse to grant the relief as overly broad.

For example, assume a client has a state-registered trademark, but only uses the trademark in the eastern half of the state. Legally, the trademark owner may be entitled to bar the use of the trademark throughout the state. The equitable nature of an injunction, however, requires the court to consider how such an injunction would affect the alleged infringer.

If a statewide injunction would have the effect of putting the infringer out of business, that result must be considered by the court in an equitable proceeding and will weigh against granting the relief you've requested. If you can offer the court the option to bar use of the infringer's mark throughout the eastern half of the state but not in the western half, and still preserve your client's business interests, it allows the court to satisfy both parties, avoid lengthy (and expensive) litigation, and regard you and your client as reasonable. Sometimes less is more.

A defense lawyer should just as carefully consider the responsive pleading. Most jurisdictions provide for compulsory and permissive counterclaims, and a defense lawyer must consider whether there are compulsory claims to be filed. But when should a defense lawyer omit the permissive counter- or cross-claims? Again, limitations may be an important consideration.

In most states, limitations on indemnification and contribution claims do not begin to run until there has been a final judgment on the primary claim. Waiting to file such claims in a separate lawsuit or arbitration may increase litigation costs for your client, but if you improve your client's chances for a good outcome by avoiding distracting warfare between defendants in the plaintiff's case, putting off the indemnification claims may prove to be the winning decision.

Sound business judgment may also compel a lawyer to do nothing. The costs and burdens associated with litigation of course warrant consideration, but so do intangibles: employee morale, exposure of company business practices, negative publicity, business development and talent recruitment, to name a few. A company that has been sued may not have the practical opportunity to avoid litigation, and with effective management can minimize the litigation's effect on the intangibles.

If a company is considering whether to file suit, however, it can and should consider the effect on intangibles and determine whether waiting to file suit might reduce the effect on intangibles or avoid it altogether.

Consider, for example, whether to enforce the restrictive covenants that often are included in senior-level employee contracts. If you learn that a senior employee has accepted an offer of employment from a competitor, you may be able to bring a claim for violation of the covenant not to compete. You might also sue the competitor who induced the employee to breach the employment contract for tortious interference in contractual relations.

By bringing those claims, however, you should consider the effect that the litigation will have on existing employees, who may find themselves having to give evidence against their former colleague and, likely, friend. The discomfort will no doubt color their judgment of their employer and indirectly encourage them to seek employment elsewhere.

In the meantime, word of the litigation seeps out into the business community and those talented people whom you might have hoped to recruit will seek to avoid a company that sues its former employees. Investors and prospective clients hear of the litigation and decide not to do business with the company until the litigation is resolved, and employees who should be dedicated to generating revenue are instead reviewing documents, giving depositions and otherwise participating in litigation. Revenues fall.

That's not to say that a company should never seek to enforce its employment agreements, but a dose of "doing nothing" — at least for a while — might have produced a better result. The same company, concerned about the effect of losing a knowledgeable employee to a competitor, could have waited a bit and filed a different suit.

Virtually every state has adopted a version of the Uniform Trade Secrets Act, which allows an employer to collect damages for the disclosure of its confidential and proprietary material. Instead of suing its former employee and competitor for violation of the employment contract, why not sue for damages under the Trade Secrets Act? It allows the company to cast itself as a victim of theft, not an enslaver, and focuses the claim, and the public, on the employee's violation of state law, not a private contract.

By waiting to file until after there has been a theft, the company also restricts discovery to the subject of the theft, instead of opening the dispute to the breadth of prospective losses and contractual violations. One gives up the right to seek an injunction, and hopefully to prevent the loss from occurring, but if the company's losses are expected to be financial and calculable, most courts will not grant an injunction anyway.

Injunctions, of course, require proof of "irreparable harm." If a company can prove economic loss, its harm is by definition not irreparable. Before determining whether to seek an injunction or to file suit after damages have accrued, any lawyer should consult carefully with the company to determine whether there are aspects of harm that might not be compensable. If there are, seeking an injunction may be the necessary course of action.

If you choose not to pursue an injunction, however, you avoid an equitable proceeding — heard by a judge, not a jury — which may be the right thing if the equities of the situation do not favor a corporate client. Advising your client to do nothing until there is proof of a loss may be the best advice you can give.

A lawyer also should not overlook the option to "do nothing" during discovery. Though most lawyers are trained to use discovery to conduct zealous investigation of the adversary's case, zealous discovery without caution can result in a trial record that will damage your client's case, create unnecessary expense, and needlessly lengthen the trial and the time to trial. If you consider carefully whether there are witnesses whom you should not depose, questions you should not ask, and discovery requests you should not propound, you may give yourself greater control over the evidence at trial.

Consider, for example, witnesses who may be unavailable at trial because they live outside the jurisdiction. If you depose an unavailable witness, you create a record that your adversary may use at will. So, before you note that deposition, consider whether you can afford the risk of creating a record. Will your adversary's position be better or worse without the testimony? You may decide that the witness has information critical to your case, and no matter the risk, you must take the deposition.

Having made that decision, you will also have to decide whether to videotape the deposition — often more palatable to the jury — or to simply record it by stenography. Consider again: Will a videotape assist your adversary in presenting its case? If the information you need from the witness is simple — such as authentication of documents — you may not need to videotape, but if you note it as a videotaped deposition, you may create an opportunity for your opponent to conduct damaging cross-examination of an unavailable witness, "live" in front of the jury. The better judgment might be the simple, old-fashioned approach.

Simple caution in written discovery might also protect the record. In a simple two-party case, adversarial discovery is usually the rule. In multiple-party litigation, however, issuing discovery requests might actually impair your client's position. Assume that your client is a product manufacturer, and has been sued with the product supplier for injuries caused by the product. Both defendants file cross-claims against one another. Plaintiff issues poor discovery requests to the supplier that do little to inform you about the supplier's defenses, or the basis for the supplier's claims against your client.

Your "just do it" instincts tell you to issue properly worded, thorough discovery requests to the supplier that will enable you to prepare to defend the cross-claim, and perhaps the primary claim as well.

Consider whether to give yourself that advantage, however. Yes, issuing proper discovery will get you the information before trial, will impress opposing counsel, and will allow you to cross all your "t"s and dot your "i"s. But it will also inform an ill-prepared plaintiff's counsel who will be in better position to get a judgment on plaintiff's claims. Without having been prepared by you, that plaintiff's counsel may very well have failed to meet plaintiff's burden of proof, mooting the cross-claims. There might be something to this whole "just do nothing" concept.

When you have completed discovery and are preparing for trial, you'll have to decide whether to move for judgment before trial. If you file the motion and win, it will make you look like a genius in front of your client. If you file and lose, it may make your opponent look like a genius in front of your client. You might be better to just do nothing.

Too often, lawyers take a long shot at summary judgment because they believe they've got a winning case. They ignore the fact that most trial judges don't grant summary judgment for fear of reversal, and most cases are not truly without a genuine dispute of material fact. The "just do it" types file well-written, well-supported and expensive roadmaps of their case that are used very effectively by opposing counsel in preparing for trial after the judge has denied the motion. If you have to lay out your case to make a motion for judgment, first consider whether the free education you are providing to your opponent is a risk you can afford.

When you are trying a case to a jury, you'll have to decide whether to be the center of attention or whether to be the strong, silent type. Let's face it, most jurors don't like lawyers. They particularly don't like loud-mouthed, attention-grabbing lawyers. You will need to be a loud mouth from time to time to protect your witness, to protect the record, or to emphasize the importance of some evidence.

But sometimes, particularly in multiple-party cases, doing nothing (or at least looking like you're doing nothing) so that you do not appear to play a primary role in the case may be the best approach for your client. If you represent one of several defendants, you might consider letting other defense counsel take the lead so that your client looks less like a target by remaining less defensive. You can still protect your client by addressing only the evidence that affects your client directly.

You might also consider how to accomplish your client's objectives with as little interruption of the trial as possible. For example, if you anticipate a line of questioning that will be lengthy and moderately damaging to your client's case, consider whether to ask the court for a standing objection to that line. If the court intends to admit the evidence over objection, making objections after each question may only heighten the prejudicial nature of the testimony and annoy jurors.

A clear grant of a standing objection will preserve your grounds for appeal and accelerate the presentation of the evidence, while allowing you to minimize the perception that the evidence is damaging. By doing only a bit more than nothing, you've advanced your client's interests.

Whether to put a witness on the stand requires a similar balancing of risks and rewards. Any live witness is an exercise in risk, but witnesses that you do not represent create greater risks. As you prepare your trial strategy, consider putting those witnesses whom you cannot control toward the end of your list. If you can introduce the evidence they have to offer through more reliable witnesses, the risky witnesses become redundant and you can shorten the trial. Juries will love you. Lawyers who can restrain themselves from turning every stone at trial appear confident, prepared and respectful of the jury. It's a winning combination for juries and clients.

Consider carefully how to communicate the story that you want to tell the jury about your case. A good story has characters, plot, a dramatic climax and resolution. It has a beginning, a middle and an end. But a good story teller doesn't do all the work of a good story. A good story teller lets the listener reach some conclusions on her own because the story's power comes from the listener's realizations, not the teller's facts.

When you're preparing for trial, and particularly your closing argument, consider what conclusions you will not draw for the jury. Give the jurors the information they need to connect the dots, but let them make some of the connections on their own. If you do all the work for them, you'll take away their ability to be involved in the story and their exercise of the power they've been given to make decisions. Doing their job for them won't endear you to them, and will not help your client.

You don't have to do everything.

As doctors strive to do no harm, so should lawyers. That might mean leaving a stone alone from time to time so that you don't get snake bit. But doing nothing can be about more than avoiding harm. It may actually advance your client's position, improve your standing among those making decisions, and save time and money. It may be just the advantage that your client needs.

Besides, you'll get home in time for dinner.
Tobin is a partner with DLA Piper Rudnick Gray Cary US LLP, in Baltimore. Her e-mail is stacie.tobin@dlapiper.com.

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