• July 12, 2012

Every lawsuit contains at least one collective failure at its core — a failure to see eye-to-eye, a failure to agree that has precipitated the lawsuit.  More often than not, lawsuits have many nested, overlapping, and entwined layers of disagreements.

In some cases, everyone agrees on the facts but they disagree on the legal ramifications of the agreed-upon facts.  In other cases, everyone agrees on the applicable law but disagrees as to what actually happened.  These two extremes  are, in a sense, the easy cases.  In many if not most cases, there are disagreements on both scores.

How are courts and lawyers to sequence the resolution of multiple knotty problems most efficiently and cheaply?

Such a vague and open-ended question must be rhetorical; there can be no single answer or recipe.  But a recent development in a very longstanding and hotly litigated dispute in the U.S. District Court for the District of Minnesota highlights the complexity of the question and a part of the answer is, “Timing is everything.”

The case of Leticia Zuniga Escamilla against SMS Holdings and alleged serial rapist, Marco Gonzalez, employed by SMS.  There are issues of what actually occurred, who did what when, who knew about it, what did they do about it, and there are legal questions as to SMS’ liability for the alleged intentional misconduct of an employee (what should they have known about it? what should they have done about it?).

Minnesota Litigator has no connection or involvement with the case but speculates that, after years of discovery, there may be, at a minimum, a general consensus about the underlying facts among the parties and their lawyers.  One can speculate, therefore, that the questions that block resolution after years of discovery may skew toward the legal questions rather than factual ones.

And so, as the parties finally head toward trial and make a last gasp attempt to negotiate a settlement before the enormous risk and cost of trial, they run into the problem that the case may tip strongly in one side’s favor or the other depending on the resolution of legal issues yet to be decided by the Court.

It is not uncommon for cases to be at a settlement impasse because of a major legal issue (or two or more) on which liability (or damages) may hinge – in part or in its entirety – is outstanding.  It is not uncommon for lawyers to seek some clue from the courts — “to help us tie this up, give us a hint on where you are leaning” — and it is common for courts to be reluctant to give “sneak peeks” at potential future legal rulings.

U.S. District Court Judge Ann D. Montgomery (D. Minn.) held the line in response to a joint inquiry in the Escamilla case but, in a letter to the parties on the day before mediation this week, she did hint that no one should count on getting out of this case before trial absent a settlement.

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