Dismiss the Lawsuit and Be Done With It

Defendants served with a summons and complaint need to choose the right strategy at the beginning of the lawsuit so that they might end the litigation sooner.  In two recent cases, plaintiffs’ failures to bring their case in the proper court led to dismissal of cases against defendants.

In a federal case, brought in the Southern District of New York, plaintiffs included several foreign nationals who alleged that our client had failed to properly account for and spend moneys received to sponsor an event outside of the U.S.  However, at the first conference, the judge agreed that the case should be dismissed because one of the plaintiffs, like our defendant client, was a New York resident — that is, the case lacked  parties were not “diverse” for federal jurisdictional purposes.  The New York plaintiff offered to delete her claims from the case, but because she had signed one of the contracts that was part of the complaint, the judge held that the case must include her claims.  The judge suggested that the case need not be dismissed if the sole New York plaintiff dismissed her claims with prejudice (that is, never to be the subject of a future lawsuit). However, the plaintiff declined to do so, and the case was dismissed, for lack of jurisdiction.

Now, plaintiffs could have simply re-filed the case in New York State court.  However, several months have passed, and we’ve received no notice of any re-filing.  Perhaps, as our client had predicted, the foreign plaintiffs lost faith in the U.S. court process, or in their attorney, for losing before even reaching the merits.

Another client was sued in New York State Supreme Court for allegedly failing to pay some $13,000 for photography services.  The plaintiff also sought more than twice that amount in interest (to which our clients had not agreed in writing –another problem with the plaintiff’s case).  Before we were retained, the defendants were actually in the process of settling the case for most of what the plaintiff had demanded.  However, at a court conference, the judge noted that the jurisdictional amount for the N.Y. Supreme Court is $25,000, that the court rules expressly exclude interest and costs from determining that jurisdictional amount, and cases for less than that amount couldn’t be in his court.  So, rather than the plaintiff getting summary judgment (essentially, winning without a trial), the case was dismissed.

Again, the savvy reader would realize, nothing stopped the plaintiff from re-filing the case in the New York City Civil Court (where the jurisdictional amount is less than the Supreme Court).  Plaintiff could have re-filed immediately, or a week or two later, but now it’s been several months without service of any additional papers.  Again, it seems that the plaintiff lost interest in pursuing claims after he had invested in the wrong court and gotten nowhere.

Bottom line:  early dismissal for “technical” reasons can mean an early end to the lawsuit.  You should discuss with counsel whether procedural defenses might apply to your case.  You are likely to know more than your attorney about your adversary and how they might react to the wind being knocked out of their sails.  But ending a case quickly might actually save you money. And that’s a bottom line everyone understands.