The first step in an unfair competition lawsuit is to contact a qualified and experienced attorney who can effectively defend your company against allegations. The role of legal counsel is crucial, as an attorney not only develops a strong defense strategy, but also anticipates legal and commercial risks that could arise when defending against a lawsuit.
Delays in handling the case can lead to significant penalties, such as reimbursement of losses suffered by a competitor or consumer, the return of any profits earned due to unjust enrichment, or even criminal prosecution in cases of serious misconduct.
Aside from preventing any risk exposure to your business, an attorney can also help the company understand potential special damages awards under the appropriate frameworks to determine the difference between actual expenses incurred, versus expenses that are reasonable and necessary for purposes of a future judgment and award of special damages. Therefore, the role of legal counsel is crucial to protecting the company’s financial stability, calculated risk exposure, reputation, and long term success.
Once a complaint is filed, it’s essential to respond promptly with a competent lawyer to comply with legal deadlines and to preserve your affirmative defenses. For instance in California, CIVIL CODE SECTION 1780(a) requires an Answer to a Complaint to be filed within 30 days. An extension may be requested under certain conditions pursuant to section 1782 (a) of the same code.
Furthermore, an amicable resolution can be a strategic alternative to avoid a lengthy and costly lawsuit. A well prepared legal defense strengthens the company’s bargaining position, allowing it to negotiate more favorable terms and a lower total cost to reach resolution of the matter. Settling shouldn’t be seen as a sign of weakness. Under the right pretenses, it’s the most pragmatic approach to reduce financial risks and safeguard the company’s image.
To ensure a strong defense, it’s also crucial to identify the most relevant legal arguments. Various defense strategies can be used depending on the circumstances. For instance, the lawsuit can be challenged by demonstrating a lack of legal standing, particularly if the plaintiff cannot prove actual harm or a direct causal link between the defendants actions and the alleged harm and associated damages. If the plaintiff fails to demonstrate a sufficient connection or nexus between the action or inaction of the Defendant and the harm incurred upon an affirmative showing, the court may dismiss the case.
Another effective defense strategy is invoking the statute of limitations, which establishes a specific time frame within which a claim must be filed, and any claim filed after this period can lead to a dismissal. Indeed, the statute of limitations for claims under the UNFAIR COMPETITION LAW is four years, while the CALIFORNIA CONSUMERS LEGAL REMEDIES ACT allows for three years after the unfair practice. By raising this defense, a company can argue that the legal time limit has expired, thus preventing the plaintiff from pursuing the claim.
A defense could represent that the company’s practices were in full compliance with applicable legal standards and didn’t constitute a violation. This involves demonstrating that no harm attributable to the defendant negligence occurred, and that the company operated within the boundaries of the law, making best efforts to avoid deceptive or unfair practices. Presenting evidence of good faith business operations, transparent dealings with consumers, and adherence to regulations can strengthen this defense.
Lastly, if the defendant obtained information from a competitor, it may be possible to show that this information was already publicly available, thus undermining claims of wrongful conduct. This is often overlooked, but an important finding and defense.
By incorporating these key legal arguments, a company can effectively challenge the lawsuit and protect its interests in court.
