What Happens During Commercial Litigation?

An estimated 40 to 70 million court cases and lawsuits are filed each year across the country. According to Pew, state courts handle the bulk of those cases, including 400,000 personal injury claims, 17,000 medical malpractice claims, and over 12 million lawsuits involving small businesses. Those are the lawsuits that would involve commercial litigation.

Commercial litigation involves a lawsuit where at least one party is a business. In such cases, the plaintiff is seeking some form of remedy for a wrongful action. And in almost every commercial case, the litigation is best handled by an experienced attorney.

If you’re entering a commercial litigation scenario, it will help to understand the scope of the process and what to expect.

What Are the Different Types of Commercial Litigation?

Commercial litigation is a specialized subset of civil litigation that deals exclusively with corporate and trade-related disputes, as opposed to personal or criminal matters.

These are some of the types of commercial litigation:

• Breach of Contract: When one party fails to follow the terms of a valid business agreement, they can be accused of a breach of contract. This is the most common type of commercial litigation.
• Partnership and Shareholder Disputes: Owners or partners can dispute how management operates or profits.
• Business Torts: These are claims involving fraud, misrepresentation, or interference with business relations that cause financial and reputational harm.
• Intellectual Property Violations: Unauthorized use of patents, trademarks, copyrights, or trade secrets. A recent example involves the mega gas station franchise Buc-ee’s suing a mini-mart in Beavercreek, Ohio, over logo branding.
• Employment Conflicts: When an employee and employer disagree over non-compete clauses, wage claims, or wrongful termination, the dispute can rise to the level of a commercial law complaint.

Often at the core of commercial litigation complaints are contracts that require a thorough review. This requires a deep understanding of business law. That is why enlisting an attorney skilled in commercial litigation is crucial to the outcome of the trial.

The Initial Phase: Filing the Complaint and Response

The commercial litigation process typically begins with initiating a lawsuit. This involves your attorney drafting a legal document called a complaint, which sets out what happened and how you are entitled to relief. It details the specific business dispute at the heart of the matter, such as a breach of contract or fiduciary duty. The complaint must also state the legal grounds for relief.

Once completed, your attorney needs to file the complaint with the appropriate court and pay the filing fees. After filing a summons is issued that compels the defendant to respond. The summons is delivered through authorized methods, such as personal service by a process server.

The defendant can respond by filing a motion to dismiss the lawsuit or by filing an answer that admits or denies each specific allegation the plaintiff makes in the complaint. At this time, the defendant may bring counterclaims against the plaintiff or add third-party defendants if others share liability. If a motion to dismiss is filed, the judge assigned to the case will decide whether to deny or grant that motion.

Navigating the Discovery Process and Evidence Exchange

After an answer is filed, the discovery process begins. This is where the parties exchange evidence. Unlike many courtroom television dramas, there should be no “surprise” evidence or witness. Each side is entitled to know exactly what will be presented to allow a chance to rebut it.

A typical discovery process will follow these steps:

Step 1: Initial Disclosures and Preservation

Lawyers from both sides will issue a spoliation letter to preserve all relevant physical and electronically stored information. The parties will also exchange basic information, such as witness names and document categories.

Step 2: Written Discovery Tools

Each side can issue interrogatories, which are written questions the opposing party must answer. There will also be Requests for Production, which demand specific categories of documents, emails, financial ledgers, and contracts. Additionally, there may be Requests for Admission in which one side asks the other side to admit the truth of specific facts.

Step 3: Depositions

Depositions are testimony provided by a witness before the trial. They put information on the record that will be used as the factual record for any pre-trial briefing and may also be presented to a jury. Attorneys will prepare corporate representatives and key personnel for the depositions. Depositions might also lead to additional motions where the parties ask the judge to issue rulings in their favor on particular claims or issues.

Step 4: Resolution of Disputes

After both sides have shared the potential evidence, attorneys will conduct mandatory good-faith discussions to resolve any evidence disputes before bringing them to a judge. If the opposing party fails to produce evidence, your attorney can file a motion to compel that requests the court to order compliance. The court may also issue protective orders to protect trade secrets or confidential business information from public disclosure.

After discovery, the parties can explore alternative dispute resolution or move forward to trial.

Exploring Mediation and Arbitration Alternatives

Mediation and arbitration are two examples of alternative dispute resolution methods that could be involved in your case. These are the primary alternative dispute resolution methods used to resolve commercial conflicts outside of the courtroom.

These are key differences between mediation and arbitration:

Mediation

This is a collaborative, non-binding process in which a neutral third party, the mediator, facilitates communication to help parties reach a mutually agreeable settlement. The mediator does not impose a decision; instead, they act as a kind of “go-between.”

Arbitration

This is a formal, binding process where a neutral third party or panel acts as the arbitrator. They hear evidence and arguments before making a legally enforceable ruling. This would be similar to having a private judge. Most often the parties have agreed to arbitration in some formal agreement before the litigation begins, but parties can also agree to arbitration after the dispute arises through a new agreement.

Mediation or arbitration is often more cost-effective than proceeding to a full trial. It can also be a faster process. These proceedings are private. That means sensitive business details, financial data, and trade disputes remain private, protecting corporate reputations and ensuring they are not made part of the public record.

Mediation can also reduce the adversarial hostility of litigation. That helps companies maintain ongoing commercial partnerships. It really comes down to “let’s fix this one problem and move on.”

What to Expect During the Commercial Trial Phase

If mediation does not produce a positive outcome and you don’t want to face legally binding arbitration, you will then take your complaint to trial. Your trial date depends on the court calendar.

A commercial trial includes the following stages:

• Jury Selection (Voir Dire)
• Opening Statements
• Plaintiff’s Case
• Defendant’s Case
• Rebuttal and Closing Arguments
• Jury Instructions and Deliberation

After deliberation, the jury will reach a verdict. In some instances, a commercial complaint can be a bench trial where the judge is the sole decision-maker. The judge is also afforded time to deliberate.

The Final Judgment and Post-Trial Appeals Process

Once the final judgment is issued, both parties may file an appeal. This is usually based on the belief that the court made a meaningful legal or procedural error. In nearly every circumstance, you are entitled to one appeal as of right. Subsequent appeals are discretionary, which means that the court must accept your appeal because it presents undecided questions or law or important constitutional issues.

If a financial award is part of the final judgment, you may try to settle for a different amount to avoid the appeal process. If an appeal moves forward, an appellate court will handle it. Appeals typically take a year or more.

In Ohio, a small claim is any matter with damages under $6,000. You may or may not need an attorney to represent you in small claims because these are simpler matters. When you get into complex commercial litigation involving contracts and company data, however, you will likely need an experienced attorney on your side.

At Troutman & Judge, LLC, our attorneys have decades of combined commercial litigation experience. We pride ourselves on clear, open communication with our clients so they can make informed decisions about what to do next. We’re upfront with the challenges you might face and all the possible outcomes.

If you think that another business has violated a contract, interfered with your business, or otherwise hurt you professionally you want to act quickly, call to schedule a free consultation, share your story, and get your questions answered. We can help.