Summer 2004 E-Newsletter

AVOIDING THE PYRRHIC VICTORY - IMMEDIATE ACTION STRATEGIES IN CIVIL LITIGATION

Douglas W. Lytle, Esq.

In the Battle of Ausculum in 279 B.C., the Epirot King Pyrrhus defeated the Romans, but with severe casualties. After the battle, Pyrrhus commented,"If we win another battle against the Romans, we will be completely lost." Litigation involving business disputes, intellectual property, and real property can be futile if much money was spent obtaining a judgment, but the property or asset at issue has been wasted or lost.

Before trial, and often when the Complaint is filed, if there is a risk of losing or wasting property or assets, provisional remedies such as temporary restraining orders (TROs), preliminary injunctions, attachment, and receiverships, can help avoid a Pyrrhic victory.

TRO and Preliminary Injunction
Where the defendant's continuing wrongful conduct will produce additional injury, the plaintiff may pursue immediate injunctive relief in the form of a temporary restraining order ("TRO") and/or a preliminary injunction. A TRO can be obtained within a few days and halts a party from engaging in harmful conduct until the court considers a preliminary injunction. The idea is to preserve the status quo pending trial.

Almost every case involving threatened or actual misappropriation of trade secrets justifies injunctive relief. Likewise, certain nuisances and trespasses to real property may qualify. HF&M attorneys have obtained injunctions in situations ranging from preventing the seizure of a client's monkeys to preventing the transfer of disputed assets.

Attachment
In certain cases, if the defendant will spend all available funds during litigation, a monetary award to the plaintiff may prove uncollectible. Upon satisfying certain requirements and procedures, a plaintiff may be entitled to attach the defendant's assets. Essentially, attachments permit an unsecured creditor (plaintiff) to become a secured creditor, gaining priority over the defendant's other creditors. Attachment may also cause defendants to reevaluate their positions, facilitating early settlement.

The case must involve a money claim for a "fixed or readily ascertainable amount." Once a right to attachment is shown, many types of property can be attached. HF&M attorneys have attached property ranging from bank accounts to a Lamborghini automobile. Analysis of ramifications is key, however, since attaching assets might lead to the defendant's bankruptcy. Experienced counsel can help determine the key considerations so intelligent decisions can be made and advantages secured.

Receiverships
If improper management of the defendant's business is likely to lead to a loss of available assets, a plaintiff may be able to obtain a receivership to run the business. Some statutes provide for receivers in particular contexts. However, a more general provision - the plaintiff has a probable property interest in danger of being lost, removed, or injured - gives the court wide discretion to order a receivership to preserve the assets. Because an outside receiver is often costly and disruptive, without persuasive arguments courts can be reluctant to order such a remedy.

Conclusion
Provisional remedies help preserve assets or property that may be lost during the course of litigation. Analysis of the various types available can help prevent a Pyrrhic victory.

LETTER FROM JOHN L. MORRELL, CHAIRMAN AVOIDING THE PYRRHIC VICTORY - IMMEDIATE ACTION STRATEGIES IN CIVIL LITIGATION USING U.S. CUSTOMS TO PROTECT YOUR INTELLECTUAL PROPERTY RIGHTS MARTIN ELIOPULOS: PERSONALLY AND PROFESSIONALLY

619 236-1551

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