Business Litigation

Business litigation or commercial litigation is the area of law relating to defending or resolving a legal dispute between a person or entity typically facing an accusation of wrongdoing in the line of business. Litigation commonly refers to a case going to trial in a court of law.

Much of commercial law relies on the 1958 Uniform Commercial Code (UCC), the set of laws that governs all commercial transactions in the United States that is not a federal law, but has uniform adoption by all 50 states, the District of Columbia, and the Virgin Islands. Anybody dealing with any kind of business dispute in Southern California will want to contact an experienced Los Angeles business litigation attorney for assistance navigating these very complex claims.

Business torts or economic torts are kinds of wrongful acts people commit against business entities. They may be intentional or could be the result of negligence or recklessness. Business torts typically result in some kind of financial loss. Types of business torts business attorneys handle may include tortious interference with contract or business relations, restraint of trade, theft of trade secrets, fraudulent or negligent misrepresentation, trade libel, commercial disparagement, injurious falsehood, unfair competition, and conspiracy.

Breach of contract involves a failure, without legal excuse, to perform any promise that forms all or part of a contract. The failure may be a failure to perform in a manner that meets the standards of an industry or the requirements of an express warranty or implied warranty. In a breach of contract claim, a judge will look to see that a contract exists, the contract requirements, modifications of the contract, the date of the alleged breach, whether the breach was material to the contract, whether the alleged breaching party has a legal defense to enforcement of the contract, and which damages were caused by the breach.

Conflicts often arise between partners or shareholders in most partnerships and corporations. Disagreements a business litigation law firm handles may relate to breach of contract claims involving ownership interests, management duties, compensation, decision making, profit allocation, dividends and compensation, admission of new partners or shareholders, or buy-sell agreements; fiduciary duties of loyalty, good faith and fair dealing, candor, refrain from self-dealing, or full disclosure; fraud, misrepresentation, fraudulent conveyance or transfer, misappropriation of trade secrets, patent infringement or trademark infringement, or embezzlement; tortious interference claims involving violating partnership or shareholder agreements, non-compete agreements, or confidentiality agreements, client poaching, fraud or misrepresentation, being forced, threatened, influenced, or coerced into violating a contract, or obstructing business relationships with third parties; or unjust enrichment claims.

The four main types of intellectual property cases that commercial litigation lawyers handle are copyright, trademark, patent, and trade secret. Copyrights protect either printed or digital creative works. Trademarks protect words, phrases, marks, symbols, or logos used to identify the source of goods as a particular company. Patents protect inventions. Trade secrets relate to the inner workings of a business, usually involving protection through nondisclosure agreements signed by employees. Intellectual property disputes may lead to copyright infringement, trademark infringement, or patent infringement claims.

The most common kinds of employment disputes a business dispute lawyer handles are wrongful termination claims in which an employee claims their termination was for an illegal reason such as discrimination or retaliation, wage disputes in which employees argue they did not receive proper compensation for their work, discrimination and harassment claims, or severance agreements in which employees expect compensation as part of their departures from companies.

As the United States Department of Labor notes, alternative dispute resolution (ADR) refers to any procedure that is agreed to by the parties of a dispute in which they use the services of a neutral party to help reach an agreement and avoid litigation. Common types of ADR include arbitration, mediation, negotiated rule making, neutral fact finding, and mini trials. Except for binding arbitration, the goal of ADR will be to provide a forum for parties to work toward a voluntary, consensual agreement without needing a judge or other authority to decide the case. ADR may be beneficial in preventing hostility, using more simplified procedures and rules of evidence, and being cheaper than litigation. Drawbacks might include perceived uneven playing fields, lack of transparency, and questionable objectivity.

Non-compete agreements refer to contracts signed between employers and employees at the beginning of their business relationships and prohibit employees from competing with the businesses directly or indirectly for a specific time duration after their employment ends. The typical non-compete may prevent an employee from working for a competitor company or a competing individual, starting their own company offering the same products or services, developing competing products or providing competing services, or recruiting former colleagues to join a new business. A court will typically look at a non-compete agreement to see if the agreement was necessary to protect an employer’s legitimate businesses interest, whether the time limit was reasonable, if there was a specific geographic limitation, and whether the employee receives any kind of consideration for signing the agreement, meaning they were given some kind of benefit.

The class action refers to a type of lawsuit in which a handful of people will represent the interest of many more individuals who all have similar harm claims relating to a company’s conduct. A class action will begin with a business lawyer drafting a complaint that details the facts of the case and the damages being sought, then the court must certify the class, meaning that a judge rules there are enough plaintiffs to qualify as a class action, and then the case moves toward discovery before reaching resolution through either a settlement or a trial.

California Business and Professions Code § 17200, otherwise known as the state’s Unfair Competition Law (UCL), is the law that prohibits unlawful, unfair, or fraudulent business acts or practices. The law also prohibits unfair, deceptive, untrue, or misleading advertising. Lawsuits may be brought by consumers or businesses adversely affected by unfair actions that include selling products or services at other prices in different geographic locations within California (also known as locality discrimination), the selling of a product or service below cost in an effort to destroy competition, offering secret rebates to certain customers but not others, or Bait-and-switch advertising and solicitation.

Statutory antitrust law in California is found under California Business and Professions Code § 16600. It consists of the Cartwright Act, the Unfair Practices Act (“UPA”), and the Unfair Competition Act (“UCL”), as well as many other statutory restrictions on covenants not to compete. The Cartwright Act prohibits trusts, generally defined as a combination of capital, skill, or acts by two or more persons to create or carry out restrictions in trade or commerce, and also prohibits sales or leases of products on the condition that the purchaser not deal in the goods of a competitor where the effect is to substantially lessen competition or tend to create a monopoly in any line of commerce. The UPA prohibits sales below cost, locality discrimination, and secret rebates or unearned discounts which injure competition. The UCL prohibits any unlawful, unfair, or fraudulent business act or practice, as well as deceptive or misleading advertising.