The Three Phases of Business Litigation in Los Angeles

If you are a Los Angeles entrepreneur, technology startup, or part of an established business, you may one day be involved in business litigation. Business litigation is an umbrella term that covers various types of legal disputes and lawsuits that a business may face. The two most common types of business litigation cases involve issues of breach of contract or intellectual property infringement law. In this blog we will discuss the three phases of business litigation, and how entrepreneurs, technology startups and established Los Angeles businesses should think about the trajectory of business litigation. 

Pleadings in Business Litigation

All lawsuits, whether they are in the realm of business litigation or a lawsuit between individuals breakdown into three main phases: 

• The Complaint and Answer (Pleadings)
• Discovery
• Trial

The complaint and answer phase, also called the pleading phase, is how a lawsuit is started. In the complaint, the plaintiff (the party initiating the lawsuit) asserts facts which, if proven to be true, result in a violation of law, whether that is contract law, intellectual property law, or some other law. In the complaint, no evidence is required. All a plaintiff has to do is properly allege facts which, if proven true, entitle the plaintiff to recovery of damages in some way. Once the complaint is filed, the defendant is formally served and then has a limited number of days to respond by way of an Answer. If the case is filed in a California state court, such as the Metropolitan Courthouse located at 1945 S Hill St, Los Angeles, CA 90007, the Answer is due within thirty (30) days. If, on the other hand, the complaint is filed in federal court, such as the | United States District Court, Central District of California, located at 50 W 1st Street, Suite 4311, Los Angeles, CA 90012, then the Answer is due within twenty-one (21) days. 

Discovery Phase

After the complaint is filed, the parties enter the discovery phase. The discovery phase is a crucial stage in a lawsuit, occurring after the initial pleadings (complaint and answer) have been filed and before the trial begins. Its primary purpose is to allow both parties to prepare for trial by obtaining evidence from each other and ensuring that both sides have access to the facts relevant to the case. This phase is designed to prevent “trial by ambush,” where one side is surprised by evidence introduced at the trial that they had no knowledge of beforehand. Here are the key components and processes involved in the discovery phase:

• Disclosure: Parties may be required to automatically exchange certain basic information relevant to the case, depending on the jurisdiction and specific court rules.
• Interrogatories: These are written questions that one party sends to the other, which must be answered in writing and under oath. Interrogatories are designed to gather facts about the case, the evidence the other side may have, and the legal theories they may be relying on.
• Depositions: A deposition is an out-of-court statement given under oath by any party or witness involved in the case. During a deposition, attorneys from both sides can ask questions, and the testimony is recorded for later use in court or for discovery purposes. Depositions help the parties understand what witnesses will say in their testimonies during the trial.
• Requests for Production of Documents: Parties can request the other side to produce documents that are relevant to the case, including electronic documents, emails, and other records. This process helps both sides gather evidence that is in the possession of the other party.
• Requests for Admissions: These are statements sent from one party to the other for the purpose of having the latter admit or deny the statements. This can help simplify the issues to be tried by eliminating matters that are not in dispute.
• Physical or Mental Examinations: In some cases, a party may request the court to order a physical or mental examination of the other party if their physical or mental condition is in controversy as part of the lawsuit.

The discovery phase can be lengthy and complex, depending on the nature of the case, the amount of evidence, and the willingness of the parties to cooperate. It is a critical time for gathering evidence, understanding the opponent’s case, and preparing for trial or settlement negotiations. The rules governing discovery are detailed in the procedural rules that apply to the court in which the lawsuit is filed, such as the Federal Rules of Civil Procedure for federal courts in the United States.

Pre-Trial and Trial Phase of Litigation Cases 

The trial phase is the stage in business litigation matters where the case is presented to a judge or a jury, and a final decision is made based on the evidence and arguments presented by both sides. This phase follows the discovery and pre-trial motions and is the culmination of the litigation process. The trial phase is structured to ensure that both parties have a fair opportunity to present their case in a formal setting.

Here’s an overview of the key components and processes involved in the trial phase:

• 

  Selection of the Jury (if applicable). In cases that go to trial before a jury, the first step is jury selection, known as “voir dire.” During this process, potential jurors are questioned by both the judge and the attorneys to determine if they have biases or connections to the case that would disqualify them from serving. The goal is to select an impartial jury.

• Opening Statements. Once the jury is selected, or if the trial is before a judge (bench trial), each side presents an opening statement. The plaintiff (or prosecution in criminal cases) goes first, outlining what they believe the evidence will show. The defendant follows with their opening statement, providing a preview of their defense and what they believe the evidence will or will not show.
• Presentation of Evidence. Plaintiff’s Case: The plaintiff presents their case first, calling witnesses and introducing evidence to support their claims. Witnesses are subject to direct examination by the plaintiff’s attorney and cross-examination by the defendant’s attorney.
• Defendant’s Case: After the plaintiff rests their case, the defendant has the opportunity to present their case, also calling witnesses and introducing evidence. Similarly, witnesses for the defendant are subject to direct and cross-examination.
• Closing Arguments. After both sides have presented their evidence, each side makes a closing argument. This is their last opportunity to summarize the evidence and persuade the jury (or judge) in their favor. The plaintiff or prosecution goes first, followed by the defendant, and sometimes, the plaintiff is allowed a rebuttal.
• Jury Instructions. In a jury trial, after closing arguments, the judge gives the jury instructions on the law that applies to the case and the standards they must use to decide the case. These instructions guide the jury on how to deliberate and reach a verdict.
• Jury Deliberation and Verdict. The jury then retires to deliberate privately. They discuss the case and attempt to reach a unanimous decision (though some jurisdictions allow non-unanimous verdicts in certain cases). Once a verdict is reached, it is announced in open court. In a bench trial, the judge will deliberate and then issue a verdict.
• Post-Trial Motions and Appeals. After a verdict is rendered, the losing party may file post-trial motions, such as a motion for a new trial or a motion for judgment notwithstanding the verdict. Depending on the outcome of these motions, either party may also appeal the verdict to a higher court.

The trial phase is the most dramatic and public aspect of the litigation process, where legal strategies are executed, and the merits of the case are finally judged. It requires careful preparation, presentation, and adherence to procedural rules to ensure a fair and just outcome.

Settlement in Business Litigation

Settlement is an important component of business litigation cases. Not all cases reach the trial phase, or even the discovery phase, and naturally the parties are interested in resolving the matter as quickly as possible as favorably as possible. The question of whether to settle will always be a case by case determination and will be informed on factors such as the strength of the case, the legal budget of each side, whether attorney’s fees are part of the damages requested, and terms being offered during negotiations. All things being equal, it is typically preferred to settle business litigation cases before discovery because the discovery phase is both highly time consuming and highly intrusive since parties typically request sensitive business documents which must be provided under the discovery rules. In some cases however, the parties cannot reach a settlement in which the matter will proceed to discovery and eventually trial. 

Business Litigation Lawyer

For entrepreneurs, technology startups, and established ventures involved in business litigation matters, consultation with an experienced business attorney like David Nima, Esq., principal attorney at L.A. Tech and Media Law Firm, is highly recommended.