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Business litigation entails a continuing process of negotiations

Business disputes in Louisiana and elsewhere follow a general procedural pattern in many instances. The disputing entities often engage in preliminary negotiations, either independently or through their chosen counsel. If the dispute is not settled in the early stages, then one or both parties will take the matter to court by filing a business litigation case. Business litigation is not generally intended to be a straight path toward trial; instead, the attorneys for each disputing side will continue to pursue a settlement resolution as the litigation progresses.

When one side rejects a settlement offer, that does not end the litigation, according to a federal court of appeals decision recently issued in a putative class action lawsuit. The case was filed by a professional medical corporation against a medical care scheduling service, alleging that the defendant had violated the Telephone Consumer Protection Act by sending out unsolicited faxes. After the plaintiff turned down a settlement offer of $6,000 plus fees, the district court granted the defendant's motion to dismiss.

The plaintiff appealed from the district court dismissal, arguing that the court could not enter judgment based on the plaintiff's rejection of a settlement offer. The three-judge federal panel agreed with the plaintiff that the rejection of an offer did not render the business litigation moot nor constitute a default by the rejecting side. The appeals court relied on a 2016 U.S. Supreme Court case that held that an unaccepted settlement offer has no force.

The case will not seem unusual to most business litigation attorneys in Louisiana or elsewhere. In fact, the decision reiterates an obvious fact:  the process of negotiating during the pendency of business litigation is standard procedure intended to find a peaceful resolution prior to trial. The overriding goal of the civil justice system is to bring disputes to a just resolution without having to engage in elongated litigation. It is fair to say that settling cases is a major interest of the state and federal judiciary.

Source: businessinsurance.com, "Settlement offer doesn't put end to litigation", Judy Greenwald, March 9, 2017

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