Before this week’s article starts in earnest, we are going to have a quick quiz. So go grab your old CRT monitor and Star Trek: Nemesis movie poster, because we are going to play Beyond Belief: Fact or Fiction. See if you can tell which of these cases are real…and which are works of fantasy. Answers and an explanation of why you should care are below.

1. In Illinois, an attorney managed to sue himself when he filed suit on behalf of a client against a title-company that he himself owned.
2. Au Bon Pain was once slapped with a lawsuit for $2,000,000,000,000,000,000,000,000,000,000,000,000 and an unspecified amount of cents over, apparently, a dog bite.
3. A Michigan woman was sued for $2 million after her boyfriend burned down their apartment block while skinning a squirrel with a blowtorch.
4. A man sued Burger King for the equivalent value of one Whopper per week for twenty-two years as compensation for his being stuck in a restroom for an hour while employees laughed at him.
5. A federal appeals court once ruled that Juaggalos – fans of hip-hop duo Insane Clown Posse – had standing to sue the Department of Justice for listing them on a National Gang Threat Assessment.
6. A man once sued a few dozen law schools for violating, among other things, Magna Carta by not allowing him to apply without taking the LSAT.
7. Both the New York Giants and their little brother the New York Jets were sued for $6 billion because they fraudulently play in New Jersey and not the empire state.

We will get to the answers eventually. Our quiz highlights perhaps the most important thing that you, someone with business assets, needs to realize: the only thing one needs to file a lawsuit is a filing fee. A potential litigant can haul you into court holding no other cards – not facts, not a viable legal theory, not even a full grasp of the English language. And, outside of rather rare (and annoying) circumstances, they can do this without any threat of repercussion. In the United States, our legal tradition favors broad and open access to the courts for all. This is for the best, all things considered, but it means that you, as a business owner, need to be prepared for anything.

So, what can you do about it? The best answer is to accept that if you own a business, eventually you will be sued. And there are two sorts of cases – ones that make defense lawyers chuckle, like those above, and those that make defense lawyers cringe. Both cost money to defend, and both have the potential to drive you mad.

With this in mind, it is important to give possible plaintiffs as little chance to catch you unawares as possible. You can reduce your exposure to any sort of lawsuit by taking mundane steps such as:

1. Investing in safety promoting and liability limiting devices as a matter of course and not as a reaction to bad things happening. To paraphrase Dave Chappelle, it is very good to get things on video.
2. Paying your insurance premiums on time and making sure that you understand what those premiums are buying you. Overlapping coverage is rarely a bad thing.
3. Keeping up to date with specific legal issues facing your industry. If you are hit with an Americans with Disabilities Act suit, for example, it would be helpful to know whether the person suing you is a bona-fide plaintiff or a serial filer looking to extort your business.
4. Establishing buy-in from your employees so that they feel responsible for protecting your business. Your humble author was recently on his way to the restroom in a restaurant here in Richmond. An employee helpfully told me that the floor upon which I was about to venture was quite slippery. It was – and so it remained, un-mopped and lacking a little yellow sign – for the rest of the evening. She was just trying to be helpful, but her admission that she knew about a hazardous condition and didn’t do anything to fix it would have been incredibly helpful for a plaintiff’s attorney.
5. Making sure your corporate structure is in order. Asset protection can be done safely, legally, and simply through proper methods of incorporation or business organization. Depending on how complex your structure is, you can do this relatively inexpensively and without a lawyer. But don’t get too cute, like the litigants who your author witnessed swindle themselves out of Florida’s unlimited homestead protection by quitclaiming their houses to each other’s holding companies (and marrying each other’s cousins, for some reason).
6. Knowing what is happening in your business. Do you remember the McDonald’s “Hot Coffee” case, where a woman sued McDonald’s after she spilled a cup of coffee in her lap? That suit was exponentially more serious than most people understand – the coffee, served at nearly 190 degrees Fahrenheit, caused third-degree burns across the plaintiff’s pelvis, put her in the hospital for eight days and caused her to lose nearly 20% of her body weight. McDonald’s got tagged for $2.6 million in punitive damages (but settled the matter before appeals could be heard), no doubt in part because McDonald’s swept aside not only 700 other scalding incidents over the previous ten years, but its own law firm’s findings that the coffee it served in the plaintiff’s town was, on average, twenty degrees hotter than that served by its competitors.

To summarize: over 100 million lawsuits are filed each year in state courts alone. On a long enough timeline, it is a guarantee that your business will be a defendant in one of those suits. And you need to pay to defend that suit regardless of whether it has merit. So, for the sake of both your bottom line and your sanity, be proactive. Make sure that if you are being sued, it can only be for something that will at least make someone laugh.

And finally, the quiz answers? They’re all real, though this is probably no surprise to most readers.

If you’d like advice on how your business can proactively head off lawsuits – both believable and otherwise – the attorneys at Setliff Law are here for you. Please contact Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261 or Anthony Tamburro (atamburro@setlifflaw.com) at (804) 377-1268 if you have any questions.

Image Disclaimer: This image used in this article is a logo owned by Fox Broadcasting Company for Beyond Belief: Fact or Fiction. The image is used under the fair use doctrine because it is a) used for the purposes of satire; b) the nature of the copyrighted work is that of a logo and not a full production of the program to which it relates; c) the amount of copyrighted material used is proportionate and reasonable, and d) the effect of the use on the potential value of or market for the work is non-existent.