By:  Ricardo Cestero

When lawyers think about entertainment litigation, they usually imagine a multi-million dollar, high stakes dispute involving a major studio or A-list talent.  But the typical entertainment dispute is far more modest, involving hundreds of thousands, not millions, of dollars. 
 
There are many challenges in managing such a dispute efficiently given the amount of money at issue, both as a plaintiff and defendant. 

Most matters settle before trial.  To effectively manage a mid-sized dispute, you must focus on posturing the case for an early mediation.  This means you must strike a balance between keeping fees in check, and doing the necessary work to develop favorable evidence so that you have a strong settlement position.  If you do your job right, your client can settle for a relatively high percentage of the potential amount at issue, and for a number that is significantly higher than your fees.

But as everyone knows, some cases don’t settle.  You ultimately have to prepare the case sufficiently to try it and put forward the best case possible for your client.  Again, your goal is to develop the evidence you need to win your case without incurring excessive legal fees.

In order to accomplish these goals, you need to consider two questions when evaluating any potential course of action: (1) will it help settle the case; or (2) will it make the case easier to try.  If you can’t answer one of these two questions in the affirmative, you probably shouldn’t pursue that course.  Here are some examples of common pitfalls in these types of disputes.  
 
The Pleading Stage

When drafting a complaint, be sure to stick to the key claims.  If the case is really about a breach of contract, just assert a claim for breach of contract.  Likewise, in a copyright infringement case, resist the temptation of adding marginal state law tort claims in an attempt to include a claim for punitive damages.  While this may make sense as potential settlement leverage in a “bet the company” dispute, it is usually counterproductive in a smaller case.  Including marginal or doubtful claims invites a challenge to the pleadings such as a demurrer or motion to strike, which will increase costs and delay the progress of the case.  Also, including additional claims unrelated to the core issues in the case will expand the scope of relevant discovery, further wasting energy and expense.

Similarly, avoid pleading irrelevant evidentiary matters, no matter how juicy or inflammatory they may be.  In some large disputes, it may be effective to plead evidentiary maters about a famous person or company that will be of interest to the press and result in publicity about the lawsuit.  But, this is rarely a consideration in a run of the mill dispute.  If you throw in factual allegations because you know they will bother the defendant, it is highly likely the defendant will file a motion to strike.  Whether such a motion is granted is irrelevant -- your client will have incurred legal fees fighting an issue that is unlikely to affect either the settlement posture or ultimate disposition of the case. 

On the other side, defendants need to effectively respond to a complaint.  Bringing a demurrer or motion to strike can simplify and streamline a case if it knocks out a significant claim or category of claims.  However, even if a claim is marginal, it probably is not worth bringing a demurrer or motion to dismiss unless that claim is central to plaintiff’s case. 

Similarly, when asserting affirmative defenses, stick to the 3 or 4 defenses that truly apply, rather than the laundry list of defenses that commonly appear in answers.  Most of these defenses likely have nothing to do with the facts of the case and only invite extensive and costly discovery.  Lawyers include these defenses out of habit or fear that if they don’t include something, it will be waived.  But given the liberal rules regarding amendments to pleadings, if you discover an important affirmative defense during discovery, you can always seek leave to add it at that point.  In any case, you will be saving the time and energy for an issue that you are certain is important to your case.

Discovery

If you are not careful, discovery can quickly generate very high legal fees without significantly advancing your client’s claims or defenses.  While it is sometimes appropriate to cast a wide net, or to depose every third party witness who might have anything relevant or useful to say, a major element of managing a modest entertainment dispute is focusing discovery narrowly on the documents and issues that are truly important and in dispute. 

Be sure to craft narrow, clear document requests and interrogatories that target key issues in the case.  Narrowly drawn requests will make it harder for the other side to refuse to respond, and reduce the likelihood of motion practice.  Moreover, narrowly drawn requests are more likely to elicit important information from the other side.  Lawyers often send out knee-jerk sets of hundreds of “contention interrogatories” that track every allegation in the complaint or answer and demand “all facts supporting” those allegations.  Not only do these types of requests rarely result in new information or a useful admission, preparing and responding to them is sure to drive up legal fees.

Also, consider the use of Requests for Admission to narrow the issues in dispute.  If a party admits that a certain fact or issue is not in dispute, that issue is removed from the case and need not be litigated further. 

Finally, rather than deposing dozens of witnesses, it can be more efficient to obtain short declarations from key witnesses as to important facts in the case.  These declarations will help to support a mediation brief, make a summary judgment motion, and, if necessary, cross-examine a witness at trial. 

Experts

Expert testimony can be crucial to winning a case at trial, and leaving the job of locating and preparing your experts until the last minute is risky.  But retaining an expert and allowing them to do the necessary work to prepare their opinions can be very expensive.

Start by considering the key issues on which expert testimony may be needed.  Often your client or a third party witness can offer expert testimony.  This may save some expense.  But, independent experts are often needed on the most important issues.  For those issues, give your expert clear guidance and a narrow scope of work.  This will keep expert costs under control and will limit the legal fees for preparing this part of the case.  

Also, consider voluntarily providing your expert’s report to the other side before you would otherwise have to under the discovery rules.  Showing your hand early signals to the other side that you are confident.  If you are mediating an audit claim seeking $1 million dollars in royalties from a licensee, it is far more effective to produce a comprehensive audit report, than to simply assert that your client’s damages are $1 million.  The more ammunition you give the mediator, the better the chances of settling your case.

Conclusion

In short, for the typical mid-sized entertainment dispute, you should always remember that your goal is to resolve your client’s dispute in the most cost-effective manner possible.  Choosing your litigation tactics wisely at each stage of the case will help get you there.

Originally published in the Los Angeles Daily Journal.