Yesterday, the U.S. District Court for the Eastern District of North Carolina gave us a ruling effectively ending a 2.5-year lawsuit against one of our Oregon business clients, and our cross-country commute.
The line was cast when our client, through its North Carolina counsel, settled a disputed claim for unfair trade practices. Instead of ending litigation, our client reeled in a shark. Opposing counsel, a contingent-fee plaintiff’s attorney, found four other claimants, recycled his prior complaint, and sued our client again—this time as a class action.
We took over the defense and appeared in North Carolina pro hac vice, a process that allows an out-of-state attorney to appear in a local proceeding. Our first move was to have the case transferred from state to federal court, which plaintiffs unsuccessfully contested.
While both courthouses (state and federal) are located in Raleigh, North Carolina, we preferred the federal system. In federal court, the risk of being “hometowned” is reduced, state court “trial-by-ambush” is avoided, and federal judges tend to give more weight to summary judgment motions.
Through a summary judgment motion, we convinced the judge to dismiss one plaintiff completely and eliminate many remaining claims. Invaluable to our success were the depositions we had conducted.
An effective deposition can win a case. We traveled to Raleigh, sat across the table from each plaintiff, and asked specific questions about their claims. We are often surprised at how unprepared parties can be at their own depositions. As a result, we extracted key information and concessions from them.
Plaintiffs were likely recruited by their attorney, who was focused on recovering a large contingent fee from the case. He figured that each plaintiff had a claim of up to $750, multiplied this by 20,000 (the number of businesses with which my client had interacted), and then tripled the amount (per North Carolina law), to reach a total of $45 million. However, to obtain class action status, plaintiffs first had to convince the judge to certify the class.
We focused on defeating plaintiffs’ motion for class certification. With the help of the depositions and other discovery we conducted, we prevailed. We were able to show that the plaintiffs had inconsistent stories. By defeating plaintiffs' motion, we reduced our client's potential damages from $45 million to a few thousand dollars. We have not yet even addressed the merits of the underlying claims, which we have strong evidence to counter.
While you or your business might not be facing a $45 million lawsuit, a lawsuit for any amount can be consuming, disruptive and stressful. Please contact us if you need assistance.