The idea of using litigation as economic leverage is as old as the court system itself. The idea has been perfected under the American system of justice. Blogs such as Overlawyered chronicle the excesses of litigation, primarily focused on personal injury cases which the author believes are unfounded. Rarely does anyone take large corporations to task, however.
We were recently retained to handle trademark infringement litigation in the California Federal District Court which fits this profile. The large corporation attempts to obtain what it can’t have by threat letter because the merits don’t back up the muscle. Knowing they are a megacorporation with virtually unlimited funds, they then file a complaint in court assuming that the defendants will simply roll over and give them what they wish for. Their strategic analysis is little more than “we can pay lawyers until the end of time and you can’t.” With all the momentum of tort reform and, from my point of view, unsubstantiated rhetoric about out of control injury litigation, I have to wonder whether or not the economic collapse will cause the pendulum to swing back. Will large corporations get called on the carpet for their abuse of the litigation system, both as plaintiffs and, more commonly, as defendants?