What Is Business Litigation?

Business litigation—also known as commercial litigation—affects all types of businesses and industries and can involve a variety of issues.
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Article By: Marc Newman

A Leading Commercial Litigation Attorney in Michigan

What Is Business Litigation?

Published on: May 20, 2020

What-Is-Business-Litigation Litigation begins when someone files a complaint with a court or an administrative agency. Depending on your case, the litigation process can include:

  • Motions,
  • Discovery,
  • Administrative hearings,
  • Arbitration,
  • Mediation,
  • Trial, and
  • Appeal.

Business litigation law is complex. It involves combing through myriad documents, consulting experts, investigating evidence, interviewing witnesses, drafting and responding to numerous motions, and participating in court proceedings. It can also drag on for years, especially when it concerns complicated issues or large amounts of money.

If you are involved in a business dispute, it is important to have a seasoned commercial litigator on your side. Your attorney can look out for your interests so that you can focus on running your business.

Types of Business Litigation

So exactly what is business litigation? Business litigation encompasses numerous legal issues, including:

  • Breach of contract,
  • Employment,
  • Real estate disputes,
  • Class actions,
  • Intellectual property disputes,
  • Shareholder oppression,
  • Zoning and land use disputes,
  • Conversion,
  • Fraud,
  • Automotive industry issues,
  • Insurance coverage disputes,
  • Breach of fiduciary duty,
  • Commercial debt collection,
  • Product liability,
  • Tortious interference with contracts or business relationships, and
  • Partnership disputes.

Below, we’ve compiled summaries of some of the most common types of business litigation. However, any legal issue confronting your business can fall within the scope of commercial litigation. Consulting with a business litigation attorney is the best way to understand these issues and how they may affect your business.

Breach of Contract

Breach of contract cases are probably the most common type of business litigation. Contracts can govern practically every aspect of your business, including transactions for goods and services, terms of employment, and even the very structure of your company.

The success of your business depends on others fulfilling their contractual obligations to you. And when someone breaches a contract, it can have devastating consequences. A business litigation attorney can help you enforce your contracts. They can also help defend you if another party alleges that you are in breach of a contract.

Employment

Employment claims are another common type of business litigation. Frequent employment issues that arise include:

  • Wage and hour disputes,
  • Harassment or discrimination claims,
  • Retaliation claims,
  • Wrongful termination,
  • Breach of noncompete or nondislosure agreements,
  • Breach of employment contracts,
  • FMLA (Family and Medical Leave Act) violations, and
  • ERISA (Employee Retirement Income Security Act) violations.

Employment claims often involve federal laws, but they can also rely on individual state laws. Many types of employment claims need to be pursued through administrative agencies, which can involve different procedures than claims in state or federal court. An employment litigation attorney can help you determine which procedures apply.

Class Actions

Class action lawsuits can arise in many circumstances, but they frequently involve businesses as defendants. Class actions are cases where numerous plaintiffs have been affected by the same allegedly wrongful action. Common examples include:

  • Product liability,
  • Data breaches,
  • Pollution,
  • Debt collection practices, and
  • Employment practices.

Just because a class action is filed doesn’t mean the court will permit it to proceed. First, a judge must certify the class. In Michigan, the plaintiffs have to show the following for class certification:

  • So many people have been affected by the alleged action that it is impractical to join them all as parties in the lawsuit;
  • The predominant issues in the case affect all members of the class;
  • The claims and defenses of those representing the class are typical of the whole class;
  • The representative parties can adequately protect the interests of the class; and
  • A class action is a superior method for pursuing justice to other available methods of adjudication.

If someone files a class action against your business, a commercial litigation attorney can help you fight the class certification. Class actions can be extremely time-consuming and involve unique legal issues. It is important that you have an attorney with specific experience in class action suits.

Shareholder Oppression and Other Shareholder Disputes

In closely held corporations, shareholder disputes can occur when minority shareholders feel that corporate officers or majority shareholders have not protected their interests. Disputes may arise over things like:

  • Breach of the shareholder agreement,
  • Breach of fiduciary duty,
  • Self-dealing or conflicts of interest,
  • Disagreement over corporate actions,
  • Payment of dividends,
  • Excessive compensation,
  • Denying access to corporate records or ledgers, and
  • Illegal actions like embezzlement or fraud.

Depending on the circumstances of your case, a number of different remedies may be available for shareholder oppression. Remedies can include injunctions, damages, or, in extreme cases, even a court order dissolving the corporation or liquidating assets.

Automotive Litigation

As the center of the U.S. auto industry, Michigan sees frequent automotive litigation. Some frequent issues include:

  • Misappropriation of trade secrets,
  • Breach of contract,
  • Supply chain disputes,
  • Unpaid royalties,
  • Product liability,
  • Warranties, and
  • Intellectual property disputes.

Force majeure is another important legal issue that could impact litigation in the automotive industry due to the coronavirus pandemic. This principle may apply to excuse contract performance when an event outside of a party’s control prevents them from fulfilling their contractual obligations.

If you have a business in the automotive industry and are facing any type of legal dispute, an automotive litigation attorney in Michigan can help you determine what claims and defenses might apply in your case.

Breach of Fiduciary Duty

A fiduciary relationship arises when one person takes on a special responsibility to act in the interests of another. Fiduciaries must act with loyalty and good faith toward those to whom they owe a duty.

There are many types of fiduciary relationships in business such as:

  • Corporate officer to shareholders;
  • Employee to employer;
  • Majority shareholders to minority shareholders;
  • Partners to one another; and
  • Agent to principal.

Those who work in specific industries may also have special fiduciary duties to their clients. These include lawyers, financial advisors, real estate agents, banks, insurance companies, accountants, and more. Common breaches of fiduciary duty include:

  • Self-dealing,
  • Conflict of interest,
  • Failing to provide proper accounting,
  • Engaging in illegal activity,
  • Failing to disclose material facts, and
  • Misusing funds.

The fact that a fiduciary made a business decision that resulted in a loss is not enough to show a breach of fiduciary duty. Business litigation law recognizes that people can act in good faith and still make poor decisions. To prove breach of fiduciary duty with respect to a business decision, a plaintiff has to show that the fiduciary acted in bad faith or had a personal interest in the transaction.

Partnership Disputes

When people go into business together, they generally start out with the same goals and expectations. However, over time, a business partnership can deteriorate as partners disagree about how to run the business.

Partnership disputes can also arise if one partner misappropriates partnership funds or assets or engages in wrongful or illegal activity that might hurt the business. One partner may also breach the partnership agreement or other written agreements between the partners.

In some cases, you may be able to negotiate with your partner either to resolve your differences or for one partner to buy out the other. In other situations, you may need to go to court to protect yourself and your business. A partnership dispute lawyer can help you understand your options and look out for your interests.

What Is the Benefit of a Business Litigation Attorney?

An experienced business litigation attorney can help you navigate the complexities of your commercial dispute from beginning to end. Miller Law is nationally recognized as a leader in business litigation and class-action lawsuits.

We represent individuals, businesses, investors, and consumers in all types of commercial litigation. We have successfully litigated high-profile cases involving hundreds of millions of dollars. All told, we have recovered over $3 billion for our clients since we opened our doors in 1996. Call or contact us today to schedule a consultation, and learn how we can help you with litigation facing your business.

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