“My company just got notice that we were sued by a party to our sales contract in a rural Texas county [or in downtown Dallas]. What should we do now?”
“My company has had enough of our business partner and is losing too much money because of him. We hate lawsuits, but we have to take action. What can we do?”
Holmes PLLC represents business people in and out of the courtroom. Frequently the firm must advise business people who are unfamiliar with the lawsuit process, but have just been sued or are needing to file suit. Most of the firm’s clients ask questions exactly like the two phrased above. This article covers the preliminary issues that arise in either scenario. This article surveys how Holmes PLLC advises its clients in either scenario.
First and foremost, with rare exception, business people do not like lawsuits and courtrooms. They perceive – with ample justification – that the civil justice system is fraught with unpredictability and expense. The national business community’s concern over the civil litigation system – and specifically, their concerted efforts to “reform” the system by making it more predictable and less expensive – has dramatically and permanently changed lawsuits and court procedures over the past 30 years.
In 1997, Texas state courts saw over 3,300 civil jury trials. By 2012, the number had fallen to less than 1,200, making for a 64% decline in the intervening 15 years. In 1997, federal courts in Texas saw 360 civil jury trials. By 2012, the number had fallen to 135, making for a 62% decline in the intervening 15 years. Since 2012, the number of jury trials in Texas state and federal courts has not risen significantly. Reform efforts in the civil justice system, both legislatively and judicially, constitute the primary reason for the decline in jury trials since the 1980s and 1990s.
Most of the reforms and their effects are beyond this article’s scope, but can be summarized as follows: The reforms have made lawsuits less threatening and less expensive than in the past, but lawsuits remain fairly unpredictable and quite expensive. And, although it can be expensive to do so, pursing a case all the way through the appellate process, or preparing the case for that eventuality, often is the only way to achieve outcome predictability.
The business community’s distaste for lawsuits – their concerns over unpredictability and costs – shapes greatly how they view being a defendant in a newly filed lawsuit or being a plaintiff in a lawsuit to come. Holmes PLLC takes great care in addressing upfront its business clients’ concerns over litigation costs and inefficiencies, and outcome predictability. To do this, the firm must address many factors. First, Holmes PLLC assesses the venue options.
Trial lawyers still tell the old joke: “The three most important ingredients to successful litigation are location, location, location.” The joke over-emphasizes the importance of the trial court in light of the enormous importance of appellate litigation in big cases (discussed below), but does express some wisdom: the trial court can affect greatly (i) the speed of a lawsuit’s progress towards trial, (ii) the expenses of discovery and motion practice necessary for getting to trial, and (iii) rulings before trial that shape the issues to be decided by the fact-finder (i.e., by a jury, or a judge, at the actual trial).
When a business client has been sued, the client didn’t select the venue (i.e., the place and the trial court for the lawsuit), but the client is beholden to the venue nonetheless. Each venue is (a) relatively far away or (b) relatively close; (c) rural or (d) urban; (e) potentially expensive or (f) potentially efficient; and (g) potentially harmful to the client’s interests or (h) potentially helpful (sympathetic) to those interests. The firm must assess the combination of factors (a) through (h) for each client-defendant. The assessment will determine whether the firm moves to change the venue (when a change of venue is possible) or to leave the lawsuit where it is – because it is more predictable and less costly where it is. The assessment will direct how the firm advises the client to make the litigation predictable as possible and efficient as possible.
When a business client needs to file the lawsuit, the client selects the venue and, consequently, can assess factors (a) through (h) before the litigation begins.
It is very difficult to prescribe a single rule for assessing and, when possible, selecting a lawsuit’s venue. Factors (a) through (h) and other client-specific issues are too multifaceted to make for one rule, or a few rules, to follow at all times. Nonetheless, Holmes PLLC does offer its clients some high-level guidance in light of the present civil justice system as it has existed since 2008 forward, and in light of the firm’s many high-stakes cases in during those years.
1) Rural venues in Texas and other southwestern states are bad for plaintiffs in personal injury and wrongful death cases, and good for defendants. (Reason? Rural jurors place a lot of personal responsibility for an accident, even a truly tragic accident, on the injured/dead plaintiff.)
2) Rural venues in Texas and other southwestern states are good for plaintiffs in commercial cases, and bad for defendants. (Reason? Rural jurors are distrustful of corporate business defendants and the trial judge will leave most decisions for the jury to decide.)
3) Urban venues in Texas and other southwestern states are neutral for plaintiffs and defendants in personal injury and wrongful death cases. (Reason? Urban jurors frequently elect a foreperson, or follow other leaders in the jury, who have plenty of secondary education and professional experiences, and those jurors assess each injury/death case according to the case’s specific circumstances.)
4) Urban venues in Texas and other southwestern states are bad plaintiffs in commercial cases, and good for defendants. (Reason? Urban jurors will follow the leaders in the jury with lots of secondary education and professional experiences, and those jurors will review critically all case facts. Well-educated, professional jurors see more gray in business transactions than they see black and white. Also, the trial judge may make many important decisions before trial, thereby leaving fewer decisions for the jury to make.)
5) Regardless of the venue, a great personal injury and wrongful death case will likely have a great payday for the plaintiff. (Reason? Defendants are fearful of facing a jury trial in a strong injury/death case, and many corporate defendants wish to avoid bad public relations that can result from not compensating a deserving plaintiff.)
6) A great commercial case can go wrong for the plaintiff in any venue. (Reason? Jurors can get confused over complex business facts, even when one side clearly has wronged the other.)
7) For large cases involving $1 million or more in controversy, a lengthy appeal likely will follow the trial if the case involves disputed legal standards or disputes over causation for the plaintiff’s injuries. (Reason? After a bad trial result, defendants have too many incentives to try to better their situation on appeal, and they would rather spend money on an appeal than pay a large settlement after trial.)
Every venue ultimately gives way to thorough appellate litigation if the case involves a large amount in controversy or threatens a significant business interests. Although Holmes PLLC is highly sensitive to trial-court venue issues, and thoroughly assesses venue issues as described above, the firm fully explains to each client (whether it was sued, or needs to sue) that an appellate odyssey may lie after the trial-court experience. While assessing venue, and while undertaking the many important steps up to and through trial, Holmes PLLC prepares the client’s case for the all-important appeal and usually serves as the client’s lead appellate counsel.