Contributed By Greenberg Traurig, LLP
The US has a common law system that relies on precedent established in formal proceedings, often culminating in a jury or bench trial at which adversaries present oral argument, documentary evidence and witness testimony, and written submissions. One of the defining principles of the US system is the principle of “stare decisis”, a requirement that courts follow prior decisions of higher-level courts within the same jurisdiction on similar legal questions. Another is the notion that legal disputes involve parties with a genuine interest in the outcome, which facilitates vigorous adversarial debate.
The US court system is comprised of federal and state courts. US federal courts consist of bankruptcy courts, courts of federal claims, immigration courts, administrative law courts, district courts (trial courts), appellate courts, and the Supreme Court. Federal courts are courts of limited jurisdiction, limited to decide cases that satisfy one or more of the following categories:
Occasionally, a plaintiff will file a case in state court that could have been filed in federal court. In such instances, the defendant may move the case from state court to federal district court through a process known as "removal". State courts retain jurisdiction over matters not specifically enumerated as exclusively federal.
The state system is generally three-tiered, with trial courts, appellate courts and a state supreme court (or other appellate court of last resort) serving as the final arbiter of the law. State courts handle the majority of civil and criminal cases in the USA as well as family law, probate, administrative law, and small claims cases below a certain threshold amount in controversy. Based on the specific state in question, there may be slight differences in the list of matters covered by a court or the structure employed.
US court proceedings, such as filings and hearings, are open to the public subject to limitations. The US Constitution mandates that justice shall be administered openly, and many states have provisions that protect the public’s access to official court proceedings (sunshine laws). In the interest of preserving justice, an individual’s right to privacy, as well as confidential and proprietary information of corporate litigants, such as trade secrets, courts will often grant motions to file documents under seal and motions for protective order to protect the dissemination of corporate trade secret and confidential financial information, protected personal identifying information, and protected health information. The Supreme Court has held that when a court denies a motion to seal, the movant may withdraw the documents and must be notified of the motion’s denial in advance of the documents being filed into the court record.
Legal representatives in the USA are known by a series of monikers that are used synonymously (eg, attorney, lawyer, counsel, advocate, etc). Legal representatives are subject to state licensing and ethical requirements to legally practise on behalf of another individual and/or entity in an adjudicatory proceeding. Legal representatives are required to be licensed in the state in which they practise, but may be admitted for a specific purpose or pro hac vice in another jurisdiction. Pro hac vice applications generally require graduation from an accredited law school, passing of at least one state’s administered Bar exam, a showing of formal admission to the practice of law by a state authority, good standing in the attorney’s home state of practice, and engagement of local counsel admitted in the jurisdiction where the application is made.
Generally, foreign lawyers that have not been admitted to the Bar of any US state cannot represent a party in litigation, although there are some exceptions. For example, in Georgia, foreign lawyers may consult in US litigation, limited to advisement on non-US law.
Third-party litigation funding (TPLF) is generally permitted in the USA, although at least ten US states have currently imposed some restrictions on TPLF, including caps, and licensure and disclosure requirements, and other states are considering similar proposals. Although there are no federal restrictions on the practice, attorneys must ensure that they are aligned with all state law restrictions and ensure compliance with ethical rules. While the US Chamber of Commerce is still lobbying for lawmakers and rule makers to implement mandatory disclosure requirements related to TPLF agreements, no such requirements have been instituted to date.
Parties may always avail themselves of the court’s power to compel disclosure of the TPLF agreements in litigation, as, in some cases, courts have mandated disclosure of the agreements to permit analysis of whether conflicts of interest exist. Some states’ laws specifically require disclosure of any TPLF agreements or arrangements as well.
TPLF is predominantly utilised in multi-plaintiff lawsuits (eg, class action litigation, intellectual property cases, antitrust, and mass torts). There are no federal restrictions on the types of cases that a third-party funder may fund; however, there are a mixture of state law restrictions and judicial decisions that may restrict third-party funding.
TPLF is available to both plaintiffs and defendants. However, plaintiffs more often than defendants avail themselves of this method of litigation funding. The fallout from the COVID-19 pandemic is likely to accelerate and expand the use of third-party funding worldwide because clients and law firms may be experiencing cash shortages or layoffs as a result of pandemic-related issues. Working with a litigation funding sources can ensure that law firms are paid in real time for their work and help ease the burdens on cash-poor clients.
In most states, there is no limitation on the amount a third-party funder can or will fund. However, TPLF agreements are subject to state usury and equitable common law principles as well as ethical rules to avoid predatory fee agreements, and some states have capped the interest rate that may be charged.
A third-party litigation funder can pay some of or all the costs/expenses associated with litigation, including out-of-pocket expenses, court costs, and attorneys' fees.
Contingency fees are permissible and frequently employed by plaintiffs’ firms in personal injury and tort cases. Contingency fees are commonly used where the case will go to trial, and not in matters where there is no "win" or "loss" at stake. Under contingency fee agreements, if there is a recovery, attorneys agree to accept a fixed percentage (often between 33% and 40%) of the client’s recovery. Under these agreements, a client need not pay their attorney’s fees unless the client recovers money for the case.
While contingent fee agreements are allowed under US law, they are subject to scrutiny under ethical rules. Model Rule of Professional Conduct 1.5(c) provides: “a fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited.” Contingent arrangements are prohibited in domestic relations and criminal cases.
Each TPLF transaction is structured on a case-by-case basis. In some instances, funding is secured at the litigation’s outset, in such a way that a plaintiff or defendant may draw funds over time or at specific benchmarks in the case. At other times, TPLF agreements are commenced later in the litigation when plaintiffs or defendants may confront financial difficulties in managing the perpetuity of their case.
A party may commence an action in federal or state court by filing a complaint. However, in some jurisdictions, a pre-lawsuit notice must be filed or served by the aggrieved party to bring certain types of claims. Failure to comply can subject a plaintiff’s claims to dismissal. The notice outlines what the lawsuit would be about and may also list a specific demand for relief.
A defendant’s failure to reply to a pre-lawsuit notice can result in legal action, often the filing of a lawsuit. While there is no strict requirement on a defendant to respond, doing so in a timely fashion can be offered as evidence of a good faith effort to resolve the alleged claims. Likewise, rejection of the response by the aggrieved party may be offered as evidence of the overall unreasonableness of the demand and limit damages awarded in official proceedings.
In civil suits, statutes of limitations can range from one to ten years. The statute of limitations for any civil suit commences when the alleged breach of duty that gave rise to the lawsuit occurred, or when the aggrieved party comes to know or should have known about the breach. In personal injury suits, the statute of limitations commences at the time of injury or when the plaintiff knows or should have known the injury occurred, and may be related to the defendant’s conduct.
In some states, there is a discovery rule that tolls the statute of limitations until an injury or alleged breach is or should have been discovered by the plaintiff. In some circumstances, a plaintiff may allege that a defendant engaged in conduct to conceal the alleged breach or injury. Under such circumstances, the court may find that the applicable statute of limitations should be tolled so that an otherwise barred claim or set of claims may be allowed to proceed.
Before a court can exercise jurisdiction, the US constitution requires that the defendant have certain minimum contacts with the forum state and legislation conferring jurisdiction over the defendant, irrespective of whether the lawsuit is filed in federal or state court. Federal Rule of Civil Procedure 4 confers personal jurisdiction in federal district courts based on jurisdiction-specific analysis. US jurisprudence has clarified that jurisdiction is not conferred merely because a defendant (domestic or foreign) has registered to do business or appointed an agent for service of process in a US state.
To establish jurisdiction consistent with US law, there must be a nexus between the forum and the claims asserted to confer jurisdiction. For example, no jurisdiction can be conferred over a foreign defendant with no US presence and no targeting of a forum US state. Third-party sales of the foreign defendant’s products are not attributable to the defendant and thus cannot establish jurisdiction.
In federal court, initial complaints must comport with Rule 8, which provides that a pleading stating a claim for relief must contain a short and plain statement of:
To pass muster, the complaint must contain sufficient factual allegations that, if these allegations are accepted as true, it can plausibly state a claim for relief and put the defendant on notice of the basis for the claim. Some state courts apply this same standard, but others have less stringent requirements.
Rule 15 allows a plaintiff to amend a complaint as a matter of right within 21 days after serving the complaint, or within 21 days after receiving service of a responsive pleading or motion under Rule 12(b), (e) or (f). The opposing party’s written consent or leave of court is required for additional amendments.
State court rules are similar, with some exceptions. Some states liberally permit amendment up to the time of trial, including amendments to conform to the evidence.
Service of process informs an adversary that a suit has been filed. Under Rule 4, to effect service of process in federal court, the service package must contain an official summons of the adjudicating court and a copy of the complaint. The following persons may effect service of process:
Service may be made on an individual or corporation by delivering the documents to the defendant personally, at the defendant’s home to an able-bodied adult of the home, to a corporate entity’s registered agent, or by any other means deemed appropriate under the applicable rules.
In state courts, rules for service of process may vary, with many substantially following Rule 4. However, some states allow service by certified mail or express so long as a signed delivery receipt is obtained.
An international party may be sued and served, consistent with the service requirements of the party’s home jurisdiction. Rule 4 provides for service by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorised by The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents. The Hague Convention, of which the US is a signatory, is an international treaty that establishes a process whereby documents can be served abroad in such a way as to ensure that defendants sued in foreign jurisdictions receive actual and timely notice of suit, and to facilitate proof of service abroad.
By failing to respond to a lawsuit, a defendant enters default (under Rule 55) and is then subjected to uncontested judgment. Once the opportunity for timely response has passed, the plaintiff may file a notice of default along with an affidavit itemising the alleged damages and the factual basis for those damages. The court will then enter judgment for that amount and associated costs against defendant. When the alleged damages cannot or have not been computed, the plaintiff must specifically file a motion for default judgment, which will be heard at a hearing to determine the damages.
Failing to respond in a timely manner often has irreversible consequences; however, with good cause shown, a defendant may apply for relief from default as explained in Rule 60. Various reasons include, but are not limited to, excusable neglect, and fraud/misconduct. Certain state courts have additional requirements (eg, payment of a fee) to reopen a case in default.
The US permits collective actions such as class actions, multi-district litigation (MDL), and multi-county litigation (MCL). Per Rule 23(a), class action suits may be an option when individual lawsuits would prove cumbersome. A class action is permitted when: “(1) the class must be so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interest of the class.” While Rule 23(a) states the prerequisites for bringing a class action, a plaintiff also must satisfy (b)(1), (b)(2), or, for damages class actions, (b)(3) in order to maintain the class action.
MDL proceedings, governed by 28 USC Section 1407, are most appropriate when civil actions involving one or more common questions of fact are pending in different district courts. The Judicial Panel on Multidistrict Litigation will decide whether the cases should be consolidated and in which district. The matters may be consolidated for pre-trial proceedings including fact and expert discovery and rulings on major legal issues and defences, but are generally returned to the transferor courts where they were filed for case-specific proceedings and trial.
MCL proceedings, like MDL proceedings, involve one or more common questions of fact, but typically are associated with a single product and are often consolidated in a state court.
There are no pre-determined requirements for disclosing potential costs. However, the attorney-client relationship is based on communication and management of expectations. Consequently, attorneys are encouraged to be forthcoming about unanticipated costs (eg, emergency motions, sanctions, further case investigation) and even anticipated costs (eg, expert witness discovery, dispositive motion practice, filing fees) to preserve the sanctity of the relationship and avoid undue burden on the client.
Interim motions are available to the parties and can provide remedies to the movant. Parties may make various applications to the court such as motions to dismiss (Rule 12), motions to quash (Rule 45), motions for judgment on the pleadings (Rule 12(c)), and motions for summary judgment (Rule 56 MSJ). The court may grant or deny any such application. To facilitate expeditious resolution of a given case, the court may order and/or the parties may move for a scheduling order or a pre-trial conference, which sets out deadlines and procedures applicable to the case at bar.
Motions to dismiss (Rule 12(b)) may be filed if, on the face of the complaint, plaintiff does not appear entitled to the relief sought, such as if the case is prohibited by the applicable statute of limitations or a legal defence bars the claim. Such motions are typically filed before any discovery has occurred and may be preliminarily denied, with the issue preserved for later resolution with the benefit of factual discovery. Certain defences that may be raised in a Rule 12(b) motion must be raised in defendant’s first filing, or they may be waived. If defendant seeks to attach facts not alleged in the complaint in a Rule 12(b) motion or attaches extraneous factual material in support of its motion, the court may convert the motion to an MSJ.
Motions to strike may challenge an insufficient defence, or a redundant or inappropriate matter from a pleading. Per Rule 12(f), a party must file this motion before its responsive pleading deadline or, if no response is allowed, the party must file this motion within 21 days of being served with the pleading.
A motion to quash (Rule 45) can be filed by either party, at any time. This motion can only be filed when:
A party may file a motion for judgment on the pleadings under Rule 12(c), or judgment solely on the pleading documents in the record. This may only be filed after the pleadings are closed. To the extent the movant wishes to rely on documents outside of the pleadings, such as investigative facts, inter-party correspondence, etc, such motion will be converted into an MSJ under Rule 56.
MSJs (Rule 56) are generally filed after discovery has occurred, and permit the party to argue either a legal issue may be determined by the court and is fully dispositive of the case, or to argue that no dispute of material fact remains an essential element of plaintiff’s claims, so judgment may be entered as a matter of law.
Dispositive motions are motions seeking a court order to dispose of all or part of the claims without need for further proceedings. A court can grant a motion to dismiss in full, dismissing the entire complaint, or grant it in part, dismissing some but not all the claims.
Motions to dismiss (Rule 12b) are one of the most common types of motions made before trial, based on one or more of the following grounds:
Motions to dismiss for failure to state a claim are frequently employed as an offensive strategy to dispose of all or some of the plaintiff’s claims. The legal standard for such a motion is whether the facts, if taken as true, legally support each claim alleged. Landmark US Supreme Court cases, Bell Atlantic Corporation v Twombly, 550 US 544 (2007) and Ashcroft v Iqbal, 556 US 662 (2009), substantively set out the legal standard for motions to dismiss, making it clear that baseless allegations without factual support will never support any claim for relief.
MSJs (Rule 56) may also be filed by one or both parties to a lawsuit. Like motions to dismiss, MSJs can dispose of all claims, but may do so much later in litigation once all the pertinent facts appear to be in evidence, as it pertains to one or more parties. MSJs generally allege that there are no genuine disputes of material fact on an essential element of plaintiff’s claims, such that judgment should be entered in the movant’s favour. MSJs are often supported by affidavits, and citations to the record, as further evidence of the movant’s position. In addition, some MSJs may assert pure legal defences that should be decided by the trial court prior to trial. Plaintiffs may also file motions for partial summary judgment on legal or factual issues they wish to have the court determine prior to trial.
State and local requirements for dispositive motions are generally similar to the federal rules.
Required joinder of parties (Rule 19) occurs in the following circumstances:
Permissive joinder of parties (Rule 20) may occur if the party:
A party who wishes to join a lawsuit may also file a motion to intervene (Rule 24). Intervention will be granted as of right if the intervening party either has a statutory right to intervene or if they claim an interest in property that is the subject of the action such that their interests may be affected by the outcome of the lawsuit, or permissive intervention may be granted if the intervening party has a claim or defence that shares a common question of law or fact with the lawsuit.
Defendants can apply for an order requesting security for defendant costs. Applications for security are often evaluated by the strength or weakness of plaintiff’s case and are most commonly awarded in relation to applications for injunctive relief. It should also be noted that defendant can apply for security against a non-party to the proceedings such as a third-party funder.
Security for costs is most commonly associated with injunctive relief (Rule 65) — temporary restraining orders (TROs), mandatory injunctions, and preliminary injunctions, which are made available where the movant demonstrates irreparable harm, likelihood of success on the merits of the underlying claim, or the balance of equities weighs in favour of the movant. The court issues a preliminary injunction or a TRO only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined. The USA, its officers, and its agencies are not required to give security. Injunctions either compel action or compel a party to refrain from certain behaviour until the court can make a final determination on the issues.
Preliminary injunctions may only be issued upon notice to the adverse party, whereas TROs require no such notice and may not exceed 14 days without court order or stipulation. State courts may enter the TRO until the motion for injunction is heard by the court. Every order granting an injunction and restraining order must:
Interim Attachment Orders
Likewise, interim attachment orders are typically available to ensure that a party does not otherwise dispose of or transfer funds that would otherwise satisfy a final judgment. Under Rule 64, state law will apply in the absence of a federal statute that pre-empts state law. Such orders are made available based on the likelihood of success of the movant’s claims.
Other Interim Remedies
Other interim remedies that may be made available to a movant are:
Emergency TROs are emergent requests for relief and must be accompanied by an affidavit explaining the request for relief and may require allegations that significant prejudice would occur if notice to the opposing party were mandated. Applicable rules require the courts to decide the motion as promptly as justice requires. Emergency TROs may be granted that same day and may be granted without notice where the party can establish a strong showing of need. Preliminary injunctions require notice to other parties to allow the party to submit filings in opposition to the injunction. With respect to other general motions, the timeframe for a court to rule is jurisdiction and judge-specific.
Discovery is available in civil cases. While state court rules may vary, they broadly track the federal rule requirements. Rule 26(b) contemplates the scope of permissible discovery. The parties may seek discovery regarding any non-privileged matter relevant and proportional to the scope of their claims or defences.
Courts can limit discovery that is unnecessary, redundant or overly burdensome, given its value in comparison to the case and issue. The parties may request a protective order to prevent full or partial discovery of certain information pursuant to Rule 26(c). Upon the commencement of discovery, the parties have an ongoing duty to supplement their responses to discovery and/or correct any incorrect information. Rule 26(f) requires parties to meet and confer to discuss and organise the parties’ discovery procedure.
Recent amendments to the federal rules also provide that the burdens imposed by discovery should be proportional to the needs of the case. In extreme scenarios where the costs imposed by discovery requests are substantial, courts have the authority to order cost-shifting to the requesting party.
Mechanisms of Discovery
Permissible mechanisms of discovery generally include: requests for admission, interrogatories (written questions), the production of documents, and the taking of deposition testimony. The Federal Rules of Civil Procedure (Rules 30 to 34, 36 and 37) set out the processes for discovery mechanisms. In addition, in some instances a medical examination of a plaintiff and/or an inspection or testing of a product may be sought by written request.
Discovery generally includes written questions and answers, the production of documents, and the taking of deposition testimony. Rules 30 and 31 set out the deposition rules and process. Parties may take up to ten depositions without leave of the court. Attendance of third parties at a deposition may be compelled by subpoena under Rule 45. Written notice of the deposition must be provided to the other parties, including the time and place of the deposition, the deponent’s name and address, and documents required to be produced at the deposition. Rule 30 also limits the length of time taken for the deposition (one day of seven hours). A party may file a motion to terminate or stop a deposition if the deposition is conducted in bad faith. Depositions may be taken of individual witnesses or topics directed to an entity.
Rules 33 to 37
Rule 33 permits a party to serve up to 25 interrogatories – written questions – on another party. The party receiving the interrogatories must answer and/or object to them within 30 days.
Rule 34 provides that a party may serve requests to produce relevant, non-privileged documents of any type, whether electronically stored or not, on another party. Responses and objections to the requests must be served within 30 days. Parties may also subpoena documents under Rule 45.
Rule 36 provides that a party may serve requests for admission on another party, requesting that a party admit or deny the truth of any matters relating to the facts of the case, the application of law to these facts, and the genuineness of certain documents. The receiving party has 30 days to answer and/or object to the requests.
Rule 37 allows a requesting party to file a motion to compel a non-complying party to produce documents, answer discovery requests, or inspect tangible items or documents. A party can request that the non-complying party be sanctioned by the court for failure to respond to discovery requests or to attend a deposition.
Discovery from third parties can only be satisfied via subpoena under Rule 45 or a non-party request issued through Rule 34(c).
Discovery in the USA is a broad concept that encourages free exchange of information and documents relevant to the lawsuit. Each state and local court has its own rules on discovery practices. In federal court, there are mandatory initial disclosures of the identity of persons with knowledge relevant to the subject matter of the lawsuit and documents relevant to the subject matter of the lawsuit, the existence of any necessary parties not named in the complaint, the general factual basis for the party’s claims and/or defences, and the existence of any potentially applicable insurance policies. Certain state courts also have mandatory disclosure requirements.
Discovery is the primary mechanism by which evidence is developed and admitted into the record. However, parties may request information and documents relevant to the claims and defences from federal government entities through the Freedom of Information Act (FOIA), which entitles the public to full or partial disclosure of previously unreleased information and documents controlled by the US government. Many states also have similar open-records laws.
Legal privilege in the US includes attorney-client privilege, which can only be waived by the client, and the work product doctrine, which covers the mental impressions, thoughts and observations of attorneys or their agents.
Attorney-client privilege attaches to communications with counsel made to seek legal advice and must be kept in confidence, except in the event of a waiver. The work product doctrine, on the other hand, attaches to documents prepared in anticipation of litigation and related to relevant claims and defences.
The rules differ by jurisdiction as to whether communications between in-house counsel and a corporation’s employees are covered by privilege, and whether privilege exists between outside counsel and a corporate client’s employees. In most instances, both scenarios may be covered by attorney-client privilege. Additionally, the privilege may attach to outside counsel and in-house counsel, as the two often exchange legal advisory information. The attorney-client privilege may also apply where a corporate employee and outside counsel interface to seek legal advice and in-house counsel or their representatives are also involved in the communications.
The attorney-work product privilege applies when a document is prepared either by or at the direction of counsel and/or is prepared in preparation for litigation or for trial, and the document is prepared by or for a party to the litigation, or by or for a party’s legal representative (eg, litigant’s counsel, paralegal, etc). A document is prepared in anticipation of litigation when there are actual or potential claims of litigation following an event or series of events that could potentially lead to litigation. The litigation need not be imminent or filed; it is enough that the primary purpose for creating the document is to assist in possible future litigation.
Generally, the parties must disclose all relevant, non-privileged information and documentation during the discovery period, in the absence of a legally sound objection to the information’s disclosure or the documents’ production. Such documentation may contain confidential information that may be redacted to protect personal identifying information, confidential business information or trade secrets, sensitive personal information protected from disclosure by state or federal law or a compelling privacy interest, and information subject to the Health Insurance Portability and Accountability Act, which restricts access to individual health information. Protective orders (Rule 26(c)) are then requested to prohibit or limit the opposing party’s ability to inspect and investigate documents or issues, commonly granted with good cause shown.
If motions for protective orders are granted, the non-movant must generally pay the reasonable expenses of the movant’s fees associated with drafting the motion. Similarly, motions to quash subpoenas for deposition testimony and/or production of documents (Rule 45), if granted, similarly limit or restrict the scope of discovery by disallowing the requested deposition or prohibiting the production of the requested documents.
Injunctive relief is most commonly awarded when a party has been deprived of rights and the relief sought typically restores those rights. Specific requirements for injunctive relief may vary by jurisdiction, but generally require that a movant show that:
Injunctive relief is commonly sought in the following circumstances:
Urgent injunctive relief takes the form of a preliminary injunction or a TRO. Rule 65 specifically advises that a party seeking a preliminary injunction or TRO must post security in an amount sufficient to cover the expected damage to the non-movant should the court find the relief requested was improperly instated.
Preliminary injunctive relief requires that a party make a showing that it is more than likely that the party will prevail on the merits. Such relief requires notice to the opposing party and the opportunity to be heard on the merits of the request.
TROs, on the other hand, are emergently instated measures where the threatened harm is so great that providing notice to the opposing party would be to the detriment of the movant (ex parte). TROs are typically employed in domestic violence, child custody and family court cases, but are available in other cases. Due to the ex parte nature, they are short in effect until formal proceedings can occur. The mechanisms for out-of-hours contact with the presiding judge, or clerks of court, vary by jurisdiction.
TROs can be obtained ex parte. See 6.2 Arrangements for Obtaining Urgent Injunctive Relief.
Rule 65 requires the movant to post security for the reasonable cost of improper enjoinment should the non-movant be found to have been inappropriately induced to act or refrain from action, irrespective of whether the motion is ex parte.
A court may exercise personal jurisdiction and equitable power over a party, including over actions or inactions committed elsewhere. However, as a matter of policy, courts are reluctant to do so, as infringing on the authority of a foreign jurisdiction violates traditional notions of state-separated powers, can muddle foreign relations, and the enforcement of compliance may be cumbersome.
Generally, a party whose rights have not been adjudicated cannot be subject to injunctive orders. Rule 65(d)(2) states that injunctions only cover “(A) the parties; (B) the parties’ officers, agents, servants, employees, and attorneys; and (C) other persons who are in active concert or participation with anyone described in Rule 65(d)(2)(A) or (B).”
Failure to comply with the terms of an injunction may subject the non-complying party to sanctions. In crafting the appropriate sanction, which can be enforced monetarily or through imprisonment, the court will consider the harm perpetuated by the continued non-compliance and the appropriateness of the sanction in bringing about the desired result. The specific analysis for failure to comply with injunctive relief is jurisdiction-specific and done on a case-by-case basis.
Trials in the US are either jury trials or bench trials. To receive a bench trial in front of a judge only, the parties must generally stipulate this, unless a statute, rule, or the court itself specifies that a trial of claims of a particular type must be tried and decided by a judge rather than a jury. Jury trials commence with voir dire, during which both sides have an opportunity to question and select a jury, and conclude with jury deliberations that result in a verdict or an inability to render a verdict (hung jury).
Trial is an opportunity for the parties to give opening statements, offer evidence through documentary and physical exhibits and/or through witness testimony, examine and cross-examine witnesses, and present closing arguments. In a bench trial, the judge may issue a written opinion explaining the ruling and reasoning, and may request the parties propose findings of fact and conclusions of law for the court to consider as it deliberates following the conclusion of the trial. The judge may also make a ruling on the record at the time of the trial and then issue a final judgment.
Many lawsuits in the USA reach resolution before trial through motion practice (written submissions) and oral argument on the motions, as parties frequently request to be heard on their briefing.
Case management conferences are an opportunity for the parties to confer and establish a timetable for the trial ahead. These conferences are often carried out in federal court through the exercise of Rule 16. Such conferences may also be used to discuss ongoing disputes/issues that have arisen in the case, so that the judge may advise the parties on the appropriate course of action.
To the extent a case management conference has not been ordered by the court, the parties can separately move to be heard by the court on action items, such as discovery disputes, individual motions, or requests for sanctions. The length of these hearings varies according to the volume and complexity of motions and the court’s preferences. Often, trial court judges will decide motions on the papers without oral argument, and the applicable rules may specify that oral argument is only permitted or necessary for certain types of motions.
Jury trials in civil cases are generally available upon request. Although jurisdictions vary, some jurisdictions require that requests for a jury trial be made by a separate written request, often accompanying the party’s initial pleading or made separately by a standalone submission. In the absence of prior stipulation, Rule 48 dictates that juries must be composed of six to 12 jurors to issue a verdict and requires the verdict to be unanimous. Not all jurisdictions across the USA have the same requirements for the number of jurors or a unanimous verdict.
Federal Rules of Evidence (FRE) contemplate the evidentiary requirements for federal court, with state courts modelling their procedures in a similar way. Admissibility of evidence in federal court is governed by the operation of three key rules: FRE 401, 402 and 403.
FREs not only advise on the standard for admissibility of evidence, but also contemplate the admissibility of different types of evidence typically relied upon in litigation, such as out-of-court statements, and expert and fact witness testimony:
Failure to object to the admission of evidence at all, or in a timely manner, can result in a complete waiver of any existing or future objection concerning that evidence, or the basis for an appeal on the grounds that the evidence should not have been admitted. Parties are advised to make timely and intentional objections to preserve the record in the event of a later appeal.
Expert testimony is permitted at trial and is utilised by the parties, as it relates to matters and issues that exceed the scope of common understanding. Since the judge is the gatekeeper of legal proceedings, the judge decides whether a given expert meets the applicable requirements. An expert must first be qualified before they can be permitted to offer any opinions or testimony on a given topic. The requirements for admission as an expert in federal court and in state courts that follow the federal standards are as follows:
Failure to satisfy one or more of the above factors may result in the exclusion of some or all of the expert’s opinions from trial.
When an expert’s qualifications are at issue, the parties will typically engage in Daubert briefing, which stems from the US Supreme Court decision, Daubert v Merrell Dow Pharmaceuticals, Inc, 509 US 579 (1993), which focused the inquiry on whether an expert’s methodology was reliable, supported by sufficient data, and accepted by others in the expert’s field. The Daubert standard is utilised in federal courts and many other courts in the US. Conversely, a minority of jurisdictions still rely on the much older standard as explained in Frye v US, 293 F 1013 (DC Cir 1923), which focuses on the expert’s qualifications and whether their methods are generally accepted. Some state courts employ a hybrid approach that is similar to both the Frye and Daubert standards.
Public policy weighs in favour of public adjudication, and many state courts have laws requiring that court proceedings be generally open to the public unless a party can show the need for the proceeding to be closed to the public. However, certain sensitive litigation matters may prompt the court to close all or part of a litigation’s proceedings to the public.
Judges are gatekeepers of all legal proceedings. While judges predominantly maintain courtroom decorum, they may question attorneys regarding the law or its application to the facts, and can question witnesses on the stand if the witnesses' veracity or the clarity of their testimony come into question. During a bench trial, the judge also serves as the finder of fact. Questions of law or in-court attorney petitions may be reserved for ruling by the court once both sides have had the opportunity to be heard. Conversely, other matters may be taken up by the court immediately from the bench to the extent that a contemporaneous ruling is appropriate.
In the absence of settlement or party withdrawal of asserted claims, commercial disputes disposed of through trial can take up to two years to resolve. Because various jurisdictions employ differing procedures and civil litigation suits vary in complexity, it is difficult to generalise about the timeframe for case resolution. In addition, holidays, long motion practice, and local administrative proceeding requirements can extend the time it takes to resolve a lawsuit.
Court approval is generally not required for a lawsuit to be settled, unless the claims are for a minor child or a class in the case of a class action, or are otherwise required to be approved by a court before settlement is complete. Where approval is required, the court must review the settlement agreement of the parties and ensure that the parties understand the terms, and that they are bound by the terms. Under Rule 23, in matters of equity, such as domestic relations, civil rights, and child custody/support, the court must approve the settlement package to ensure the settlement is fair and that it appropriately satisfies the receiving party.
Settlements can be executed with a confidentiality provision, which, at times, includes the fact of settlement itself not just the terms. Settlements with government entities may not be kept confidential if federal or state law requires their disclosure.
Settlement agreements per court order are enforceable by the court designated in the settlement agreement and/or the court where the lawsuit was filed, unless the parties specify otherwise. The court can issue sanctions to the non-complying party. When the settlement agreement is not pursuant to a court order, the non-complying party can face sanctions for non-compliance.
Settlement agreements may be dissolved where the party has proved fraud misrepresentation, illegality, mistake, or duress, such that the agreement cannot represent the true understanding of the parties and cannot be contractually enforced. A settlement may also be set aside when the financial conditions of one party have been materially misrepresented to secure a lower or higher settlement amount.
A successful litigant is eligible to receive a monetary award, categorised as compensatory and/or punitive damages. Punitive damages are designed to deter the losing party from engaging in future similar conduct. Conversely, compensatory damages are designed to “compensate” the prevailing party, placing a value on the asserted injuries.
Limitations on damages vary by jurisdiction, with some jurisdictions having no limit on damage awards. Jurisdictions may also limit the types of damages that may be awarded.
Parties are generally entitled to post-judgment interest in state and federal courts, yet requirements for pre-judgment interest vary by jurisdiction. Per 28 USC Section 1961, judgment interest in federal court cases begins to accrue from the date judgment was entered, and the applicable statute sets forth the method of calculation.
In the case of monetary awards, a writ of execution requires local law enforcement, typically the Sheriff’s Office, to seize property, sell the same, and deliver the proceeds to the prevailing party. Rule 69 authorises writs of execution in federal cases, but advises that the method of seizure must comport with state requirements. Where the prevailing party is entitled to specific conduct, Rule 70 affords the court authority to order a third party to perform the act at the expense of the non-complying party.
To effect enforcement of a foreign judgment, it must be domesticated prior to US enforcement. Most states have adopted the Uniform Foreign Money Judgments Recognition Act (UFMJRA), drafted by the National Conference on Uniform State Laws. The UFMJRA provides a standard framework by which courts can recognise and enforce non-US money judgments. The party seeking to enforce the judgment has the burden of proving the Uniform State Laws apply.
States that have not adopted the UFMJRA generally recognise foreign judgments under common law and principles of comity, reciprocity and res judicata. Likewise, non-money judgments ordering or prohibiting a specific act may also be recognised under state laws, with similar results.
The federal intermediate appellate courts are known as the US Courts of Appeals or circuit courts. There are 13 appellate circuits, including the DC Circuit, which cover the 94 district courts in the USA. Either party may appeal a judgment from the trial or district court in civil litigation. Should a party wish to appeal an appellate decision, the party may do so by applying for writ of certiorari to the US Supreme Court.
While appeals to the circuit courts are broadly a matter of right, appeals to the Supreme Court are rarely heard, as the Supreme Court only agrees to hear appeals when they involve an important legal principle or when two or more appellate courts are in conflict over interpretation of the law. Likewise, at state level, appeals are typically made to the intermediate appellate court, often referred to as the state’s court of appeals. Notably, there are still a number of states that have no intermediate appellate courts, and, in those circumstances, appeals are made to the state’s highest court.
For a party to avail itself of the appellate process, preservation of certain evidentiary and procedural issues must be satisfied. Federal appeals are sought when the losing party takes issue with the trial court’s application of the law or the proceedings themselves (eg, findings of fact, admission of evidence, or procedural applications). Attorneys are advised to be forward-thinking, as failure to adequately preserve the record can be fatal to a party’s motion for appeal. Appellate applications are submitted to the court from which the movant requests review.
Rule 4 of Appellate Procedure provides that a party has 30 days post-judgment to appeal the verdict. Additional time must be petitioned or may be given for good cause or excusable neglect. When the USA itself is a party, it has 60 days to file an appeal post-judgment. State court appellate time limitations vary and local rules should also be reviewed.
Appellate courts review the procedures and decisions of the trial courts to ensure that the proceedings were fair and the law was applied correctly. Appellate briefs are submitted to a panel of appellate judges who review the submitted briefs or host oral arguments from both sides on the issues. Appellate courts do not retry cases, hear new evidence, or hear witnesses testify. An appellate court will only review matters originally brought up at the trial court and will not consider an appellant’s argument if it is based on a theory that is first raised on appeal.
Appellate courts may impose certain conditions upon the appeals process. While court-imposed conditions vary by the type of court and local rules, such conditions can include limiting the issues that may be appealed, requiring a fee in advance of the appellate submission, refusal to hear oral argument, limitation of oral argument, or even a preference for oral argument by junior lawyers.
After an appellate hearing, the appellate court may rule to vacate, affirm, modify, reverse, or set aside the lower court’s judgment. It may also remand the case to the lower court with a specific order to direct the entry of judgment, decree, or order; or require that the trial court conduct further proceedings.
In the USA, parties are expected to incur their own legal costs (the American Rule). The losing party is not required to reimburse the prevailing party for attorney’s fees, except where provided otherwise by statute or contractual obligation. Many of the statutes providing fee-shifting are meant to promote public policy by increasing the likelihood that attorneys will agree to represent clients who may otherwise lack the resources to hire an attorney or to bring cases affecting the common good.
While Rule 54 states that a court “should” award costs other than an attorney’s fees to a prevailing party, these costs vary by jurisdiction and some are outlined in 28 USC Section 1920. Rule 54 also permits the recovery of attorney’s fees by motion.
The costs of litigation may equally be shifted by a motion or request for sanctions (Rule 11). State jurisdictions vary in granting such requests and often afford the non-movant an opportunity to be heard before granting the request.
Under Rule 54, the court will primarily consider whether the movant prevailed, assessing whether the movant prevailed on all or some of the alleged claims. However, indigent status and the reasonableness of the costs and fees sought are also considered in determining whether the costs are appropriate and what the monetary value will be.
Pre-judgment interest is dependent on jurisdiction-specific statutes, although Rule 54 does not contemplate pre-judgment interests on costs. Unless the award of costs is rendered alongside a judgment, an award for costs would not likely be eligible for interest under 28 USC Section 1961.
Alternative dispute resolution (ADR) is a favourable method of resolving disputes without litigation. In some instances, the court may require the parties to attempt resolution through this method and will rarely overturn ADR decisions and awards in the absence of sufficient reason to do so.
The most popular methods of ADR are mediation (a neutral third party facilitates resolution of the dispute) and arbitration (parties choose an arbitrator who makes a binding or non-binding decision for the parties). Because ADRs facilitate early neutral evaluation and negotiation of the dispute, the parties may view them favourably, as they can be less contentious and less costly than drawn-out litigation.
Many courts encourage or require the parties to make good faith attempts to resolve the dispute through arbitration and mediation; however, federal courts cannot require parties to use ADR to bind the parties to a result, since consent is needed from all parties involved. In the case of contract enforcement, often the parties have negotiated arbitration provisions, which may be binding. To date, there are no sanctions for refusing to engage in ADR, even if the failure is unreasonable.
Court systems that encourage and mandate ADR programmes are well organised and provide the parties with varying structures and programmes. The information made available will almost always include a list of mediators and/or arbitration agencies, with contact information to encourage the parties to make a meaningful effort to resolve the dispute in advance of drawn-out litigation. Numerous institutions in the USA offer ADR programmes and a full list of organisations can be found on the American Bar Association website.
The Federal Arbitration Act (FAA) governs arbitrations, with states having similar statutes, and it pre-empts any conflicting state provision. The USA is a member of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the New York Convention), which is the leading international instrument on arbitration.
While the parties typically decide for themselves whether to engage in ADR, some matters, including disputes surrounding criminal law and matrimonial law, are typically considered non-arbitrable.
Under the FAA, the parties may challenge any arbitration award by showing that the arbitration process was flawed. Arbitration awards are vacated when:
Under the FAA, a domestic arbitration award is enforced by filing a petition, confirming the award, and presenting a copy of the arbitration agreement and the award. Since the FAA mandates the enforcement of an award rendered in any of the 156 sovereign states that are parties to the New York Convention, foreign arbitration awards will be enforced (providing an original or certified copy of the award and the original arbitration agreement are presented). A sworn and verified English translation of the documents is also required. US courts will not, however, recognise arbitration awards where one of the parties was not given notice of the proceedings or was denied the chance to present its case.
The COVID-19 pandemic is bringing new changes and challenges to all aspects of life, and dispute resolution is no exception. Rather than indefinitely postpone legal proceedings, courts and attorneys are pushing pending cases forward by embracing videoconferencing and other virtual technologies. Specifically, in-person filings of legal documents have been discouraged or prohibited in favour of electronically available options and hearings are being conducted via videoconferencing or telephone. According to the National Center for State Courts, 35 states now operate under emergency COVID-19 response orders that direct trial courts to substitute virtual hearings for in-person proceedings wherever possible. Judicial authorities in many of these states were required to temporarily suspend conflicting court rules that called for in-person proceedings. The transition has not been seamless, however, as the legal profession has navigated the technical difficulties that often accompany technology amid this “new normal”.
Jury trials are changing as well. During the pandemic, several courts have conducted virtual jury trials with some judges acknowledging that the process was more efficient than in-person jury trials. Additionally, judicial officers are reinventing the jury trial so that it is not only a fair forum for the administration of justice, but also a safe experience for everyone in the courtroom.
Several courts have found that trials can be conducted safely by implementing protocols designed to protect health and safety. These protocols can include reconfiguring courtrooms and jury deliberation spaces to allow for social distancing, face shield and mask requirements, strategic placement of plexiglass barriers, vetting prospective jurors and attorneys for health vulnerabilities or extenuating circumstances, including fears of exposing loved ones, reliance on technology to present evidence, and the constant cleaning of furniture and surface areas.
While there does not appear to be uniform protocols that address the future of legal proceedings in the “new normal,” it is apparent that uniform reform is necessary to ensure consistency and efficiency among the courts to properly balance the administration of justice with keeping individuals safe.
Alternatives to In-Person Meetings
Courts are also utilising virtual platforms like Zoom, LiveLitigation, and Bluejeans as alternative options to in-person meetings for alternative dispute resolution (eg, mediations, arbitrations, settlement discussions). The health of dispute resolution program administrators and participants is a growing concern with shelter-in-place mandates and social distancing requirements. Because of the increased number of those impacted and potentially impacted by COVID-19, dispute resolution program administrators are concerned they will not have sufficient neutrals available to keep the current programs going. As a result, there is a growing need for chiefly virtual dispute resolution options.
Because information surrounding COVID-19 is changing so quickly and the need to maintain social distance remains paramount, it is likely that virtual dispute resolution programs will become the “new normal”. The implementation of such programs as a permanent fixture in the legal framework could require calculated reform to sustain what will certainly be an overhaul of the alternative dispute resolution process. For example, online platforms may become overburdened in transition; the parties may lack resources to utilise online dispute resolution options; and courts may lack sufficient neutrals to administer virtual dispute resolution processes.
While there does not appear to be uniform protocols that address the future of legal proceedings in the “new normal”, it is apparent that uniform reform is necessary to ensure consistency and efficiency among the courts to properly balance the administration of justice with keeping individuals safe.
Courts of all levels across the USA have seen their operations impacted by the COVID-19 pandemic. While courts have responded to the pandemic in varied ways, the emerging trend in civil litigation shows most courts are now requiring electronic case filings and court hearings to take place virtually, with electronic exchanges of court submissions, and judges, attorneys and most non-judicial staff participating remotely.
Many states have issued emergency orders suspending statutes of limitations and repose until the states of emergency declared by their governors expire. The tolling period varies widely from state to state, ranging from 30 days to an indefinite time period, and are generally updated as the pandemic continues.
The US government is considering, but has not passed, legislation to suspend federal statutes of limitations in criminal and civil actions during the time period from 31 January 2020 to 31 December 2020 (see Federal Emergency Judicial Tolling Act, H.R. 7305, 116th Congress (2019-2020)). Further information and updates regarding state emergency orders and court operations during the pandemic and court business are posted on the applicable state and court websites and should be consulted regularly, as the situation surrounding COVID-19 is rapidly evolving.