01 Mar Justice Delayed Justice Denied
Earlier this month, the Los Angeles Superior Court announced a new round of deep cuts in courtroom staffing, and the closing or consolidating of several courtrooms. Since the recession of 2008, this largest trial court in the nation has lost more than 500 of its staff to layoffs(and some to attrition).
Now, an additional 300-plus jobs will be on the chopping block this summer. These cuts translate to a total reduction
in force approaching 20% for the last two years alone. Meanwhile, caseloads have increased — by 20% over last decade — as more and more of society’s stakeholders find themselves in court, in part due to the bad economy.
This news does not bode well for the business community. Businesses depend on a functioning civil court system to enforce contracts and assure compliance with legal rules governing commercial transactions. When courts are overburdened, the justice system takes years to achieve what should ordinarily take only a few months. And during that time, rights are lost, with some litigants finding they can violate business contracts and ignore the law with relative impunity. Society loses too: it has been estimated that the loss to California’s economy associated with delays in civil litigation will approach tens of billions of dollars — translating to a loss of tax revenue exceeding a billion dollars.
Civil Cases – The Bottom Rung of the Ladder
Entrepreneurs who view the courts as the last safeguard for the continued vitality of their businesses might be surprised to learn that civil litigation occupies a relatively low position in the hierarchy of the judicial system. The presiding judge of Los Angeles Superior Court has emphasized that criminal cases drive the court system, given the large number of case filings and the fact that the criminally accused have constitutional rights to a speedy trial. Juvenile cases also get legal priority over civil cases; and, as a practical matter, family law cases are usually granted precedence as well. The cold reality is that budget cuts will hit civil courtrooms disproportionately hard.
The effects can already be seen. In many California civil courts today, simple court motions require several months for decision, when just a few years ago the same types of motions would take only a few weeks to resolve. Civil cases in which all participants have announced “ready for trial” often languish for months in search of an open courtroom — especially where the trial is predicted to last longer than a week. Internal case management standards have long required 90% of civil actions to be resolved within one year of the date the case was filed, and that standard was generally met up until a couple years ago. Today, however, as one Los Angeles Superior Court judge lamented, the courts simply cannot meet that standard, and 90% of cases end up taking two years or more to get to trial.
Although many segments of society have come together to address the problem of severe budget cuts in our “third branch” of government, an easy solution has yet to be found.
What Can a Business Owner Do?
There are a few tricks of the trade that an entrepreneur’s legal team can bring to bear to the problem of overcrowded courthouses.
Perhaps the most powerful remedy in the face of crowded courtrooms is the remedy of prejudgment attachment. Virtually any commercial claim for money due will come under California’s attachment law, which permits a creditor to obtain an asset seizure order at the start of a lawsuit. If the creditor can convince the court that its claim is more likely valid than not, the sheriff will seize the defendant’s bank accounts and other assets, up to the amount of the debt, and hold the assets pending trial. Getting a pre-judgment attachment ensures that money or other assets will be available once the case is over, and it often results in a quick settlement of the claim.
In cases not involving the recovery of money, pre-judgment injunctions are potentially obtainable as soon as the lawsuit is filed. However, the standards for obtaining an injunction are higher than those for an attachment order.
Pick the Right Court
Parties considering filing a lawsuit will usually have several options for the lawsuit’s venue. For example, contract cases can be filed either where the defendant resides, or where the contract was made, or where the contract was to be performed. This means a plaintiff may have to pick one of several counties in which to file suit, and that decision can and should be made tactically, with a view toward avoiding overburdened courts. Once the preferred county is selected, there may be more venue choices within the county. For example, Los Angeles County has twelve separate judicial districts with complex rules for venue assignment. A plaintiff can usually file suit in the judicial district where the defendant is located, no matter the type of case. But commercial contract cases can also be filed, at the plaintiff’s option, in the Central District courthouse in Downtown Los Angeles (the “Stanley Mosk” courthouse). Filing a case in the Stanley Mosk courthouse is often advantageous for commercial litigants, because attachment hearings and injunction motions are heard in designated courtrooms, in which the sitting judge specializes in these types of motions.
It may also be beneficial for a plaintiff to consider filing his or her commercial case in federal court, if federal jurisdiction is available (e.g., cases involving claims over $75,000 between residents of different states). These days, federal courts are not beset by the budgetary constraints of the state courts, and civil cases will often be resolved more efficiently. Although savvy practitioners usually consider federal courts to be a more favorable forum for defendants than plaintiffs (because of the greater likelihood of summary judgment and the requirement for unanimous juries), in the right case it might be advisable (and sometimes it is mandatory) to file a commercial claim in federal court.
Know Your Judge
It is said that “a good lawyer knows the law, and a great lawyer knows the judge.” The truth is that some judges move cases faster than others. All things being equal, commercial plaintiffs should prefer a judge who keeps a so-called “rocket docket”: the sooner the case is resolved, the sooner the plaintiff’s legal remedy is attained. These judges believe that firm trial dates settle cases; they do not suffer delays gladly; and they grant trial postponements only over someone’s proverbial dead body. Other courts are more deliberative, and are not as concerned about the relaxed pace of civil litigation. Because delay almost always favors the defense side, commercial claimants would do well to avoid such courtrooms, if at all possible.
Experienced trial counsel will know, or will be able to quickly learn, the tendencies and predispositions of the assigned trial judge. This is important to know at the outset of the case, because in California state courts, each side has the unquestioned right to disqualify one judge at the start of the case. Thus, a limited amount of “judge-shopping” is actually sanctioned by California law, and can be used to a party’s advantage.
Finally, there are alternative methods of dispute resolution that should be considered. Arbitration is often (but not always) speedier and less expensive than litigation. Mediation before a case is filed often results in a compromise agreement that avoids heavy legal fees on both sides. And for the more aggressive litigant, the Uniform Commercial Code authorizes numerous self-help remedies (such as repossession of automobiles and other goods, without court action).
The court crisis will not go away soon; indeed, many believe it will only get worse. The business community needs to understand this fact of life — this “New Normal.” Entrepreneurs and their experienced legal counsel need to be diligent in making sure that “justice delayed” does not become “justice denied.”