TSR Explainers: Part 2- Stages of Litigation (TSR/WoTC Litigation)

Snarf Zagyg

Notorious Liquefactionist
Given that I occasionally drop into the various (and seemingly multiplying) threads on the TSR/WoTC litigation with brief-ish explanations as to what is going on, I thought I might as well give some background explainers on some of the choices made. Most of these explainers will be in two parts- first, an explanation of the background principles, and second, the application of those background principles to the TSR/WoTC litigation. Finally, this is meant to be somewhat informative and mostly fun. Please do not confuse anything herein with actual advice.

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This second post will be about the stages of civil litigation, what stage the TSR/WoTC litigation is currently in, and why that matters. Depending on how I feel, there might be a part 3. Maybe. Verbiage is the enemy of my natural inclination to laziness. (Part 1 is here).

A. The Stages of Civil Litigation.
Anybody who says they are a good liar obviously is not, because any legitimately savvy liar would always insist they're honest about everything.

After the amazing and positive response to the first in my occasional series of posts (spawning almost, but not quite, 30 comments!), wherein I poorly explained how 'Murika has more than one court (no matter how much you might like the music of the Supremes and Ms. Diana Ross), I shall now endeavor to explain the stages of civil litigation in approximate terms. Quick side note- this is about civil litigation, which generally is about people suing other people for money, not criminal litigation, which is when the government wants to put you in the pokey for repeatedly peeing on ATMs (note- they do have cameras!).

Most litigation is started by the filing of a Complaint. Notice the capitalization of that term- Complaint. Much like the forwarded emails or Facebook rants your crazy uncle sends you, the legal profession prides itself on Random and Inscrutable Capitalization. A Complaint is a specific document, and not the same as the complaints your neighbor, Glenn, who can’t wait to tell you about his rheumatoid arthritis and all the problems that it is causing him. In the Complaint, the Plaintiff (that’s the guy who wants the money) sets out his allegations, and then puts together a list of counts that (hopefully!) map those allegation on to specific causes of action. Remember, though, that the Complaint is the Plaintiff's version of events.

After some period of time, usually after one of more extensions, the Defendant (the person with the money that the Plaintiff wants) will then file an Answer to the Complaint. Many Plaintiffs are very, very excited to see what the Defendant has to say; these Plaintiffs are wrong. The Answer’s purpose is to verify that the Defendant is able to cut and paste the word, “Denied” over and over again. Along with the Answer will be the Affirmative Defenses- these are (usually) short reasons why the Plaintiff should or cannot win. You know, like- Statute of Limitations (Plaintiff took too long). Statute of Frauds (Plaintiff should have gotten that in writing, Brah!). Unclean Hands (you pissed on my leg before I pissed on yours).

Finally, the Answer is when the Defendant might also file counterclaims. A counterclaim is the Defendant's Complaint. In other words, the Defendant is alleging that the Plaintiff did something bad to Defendant. When that happens, you see the terms "Counter-Plaintiff" and "Counter-Defendant" used.

In addition to the Complaint/Answer, there are three other primary turning points in the litigation.
1. Motion to Dismiss. Let’s say you’re a Defendant, and you read the Plaintiff’s Complaint, and you’re all like, “Wut?” There is something so wrong with the Complaint, you don’t even need to answer it. Maybe the Complaint states it is for something that happened 150 years ago. Maybe the Complaint never even names you. Maybe the Complaint is trying to assert a cause of action that doesn’t exist (Intentional Infliction of Maple Syrup Goodness). Whatevs. Instead of filing an Answer, you file a Motion to Dismiss. You’re telling the Court, “Hey, Court. This Complaint is so bad because of ... REASONS ... that even if you accept everything in it as true, Plaintiff is still a loser. Get that weak-azz Complaint outta here!” The important thing about the Motion to Dismiss is that the Court has to accept everything in the Complaint as true, and it won’t take any evidence. Here’s the thing, though. Most Courts don’t like Motions to Dismiss (wah wah day in Court, liberal amendments, why are you interfering with my fishin’ time), and even a well-taken Motion to Dismiss will usually only result in the Court allowing the Plaintiff the opportunity to write a better Complaint. Given all of this, why would a Defendant try to win on a Motion to Dismiss? Simple- discovery. For that, see below.

2. Motion for Judgment on the Pleadings. This is lawyer-speak for a Motion to Dismiss, but filed after the Answer has been filed. The sucker-punch of litigation. It uses the same standard as a Motion to Dismiss, but because it’s filed after the case is “at issue” (with the Complaint and Answer filed), it wins the case. Boom. Drop the mic. So ... if this is so awesome, why don't you see it more? Because most Courts despise this type of gamesmanship, especially early in the litigation.

3. Summary Judgment. This is the last good chance to win before trial. The primary difference between a Motion to Dismiss and Summary Judgment is that you can use evidence. However (and this is important) the other side gets to use evidence too! And summary judgment can only be granted if there is no material dispute of fact. Wait- huh? Okay, the Court isn't allowed to determine what evidence is credible or not at this stage, so if the two sides offer opposing views on what happened, then the Court will just punt the case to trial. Unless it’s a federal court- those guys hate trials, so they’ll put all their Article III powers on the scales of justice at summary judgment. But winning summary judgment means ... you win.

Ah, you might say? What about trial? This is a guide to civil litigation. Your case will never get to trial. If the case gets past summary judgment, it will settle.

Now, while those are the main stages of civil litigation, there is one major thing that I haven't discussed.... discovery. Discovery is the driving force of litigation, and the primary reason it is so expensive. What is discovery? Well, it's how the parties (that's the collective name of the Plaintiff and Defendant) get information from each other (and others as well, but that's neither here nor there). There are two primary means of doing so- written discovery, which usually consists of written questions that have to be answered under oath (referred to as "interrogatories" and "admissions") or records that have to be produced, and oral discovery, which usually consists of a bunch of attorneys getting in a room and badgering some poor schmuck with questions (referred to as a "deposition"). Discovery can be tedious, time-consuming, and expensive, and the great expense of discovery in litigation often encourages settlement.

B. What is happening in the TSR litigation, and what are we likely to see in the future?
Anyone who insists they like "all kinds of music," is, in fact, telling you that they like no kinds of music.

As of today, the TSR litigation has the following- there has been a Complaint filed by TSR. There has been an Answer with Affirmative Defenses filed by WoTC. In addition, WoTC filed a counterclaim (there own Complaint) against not only TSR, but also against Dungeon Hobby Shop Museum LLC (DHSM) and Justin LaNasa (LaNasa) individually. There has been no Answer filed by TSR, DHSM, or LaNasa yet.

Moving forward, it is possible that TSR, DHSM, and/or LaNasa will file a Motions to Dismiss. While the counterclaims by WoTC are well-pled, it is possible that the attorneys might try to "knock out" one or more claims procedurally through a Motion to Dismiss. In addition, it is often used a procedural delaying tactic.

That said, from a strategy standpoint, and ignoring the merits of the case (which .... are not favorable, IMO, to TSR), the primary issue is that litigation is very expensive. For that reason, I would think it is likely that TSR, DHSM, and LaNasa would be looking to settle sooner rather than later. While the costs are certainly not the same (it will be higher for WoTC, because they have more to produce, more attorneys billing, and more responsibilities in discovery), the financial disparity is massive, and it is incredibly unlikely any attorney is taking this type of case for TSR on a contingency basis.

In addition, by naming LaNasa individually in the counterclaims, WoTC has ensured that he, individually, will have "skin in the game." It is one thing to have a legal entity with few assets involved in litigation; it is entirely different when your own assets are involved. As such, it would not be surprising if the Counter-Defendants (TSR, DHSM, and LaNasa) concentrate the Motion to Dismiss on trying to get LaNasa out of the action, individually.

Assuming that the action does not settle quickly and early (as I assume it will), what next? Well, most of the issues involving trademark and copyright look like they will by resolved by Summary Judgment. The collateral state law claims (deceptive and unfair practices under North Carolina and Washington law) do not appear amenable to Summary Judgment, but the trademark and copyright claims are fairly straightforward.

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Snarf Zagyg

Notorious Liquefactionist
I should add this as an illustrative example of why litigation is so expensive, and I expect this to settle relatively soon.

Imagine a deposition. This is when you sit down someone and question them, under oath. Now, a typical deposition can take from 4-7 hours... but can take more.

Imagine you are paying an attorney $500 an hour. The typical rule of thumb is that you require a bare minimum of twice as much time to prepare for a deposition than you need to take it (again, this is a rule of thumb- if you are doing a deposition that requires going over a lot of documents, or is in a very involved case, this number can go up; conversely, if you just defending the deposition of someone minor, this might go down).

So, 14 hours x $500 an hour = $7000, plus you might want to get a court reporter ... and pay to have a transcript of that deposition. That's one deposition. One person.

Assuming everyone is happy and cooperating (as lawyers are famous for doing!). If the lawyers get in arguments about taking the deposition- whether it should take place, how long it should be, whether the person should even be deposed, etc. Well, that's a lot more money spent.

In summation- I don't see any fundraising that's going to help TSR (and LaNasa) through the mess they have created.

I get the impression counter claims are very popular in US legal proceedings because, as I understand it, it's very hard to get your Costs back if you win the case. So unless you can include a counter claim in there somewhere all you get for winning is that warm fuzzy feeling of knowing that you won't be spending any more money.

Unlike in the UK, where you will normally be awarded your Costs if you win, meaning the other side has to pay your legal expenses - in as much as they are reasonable, with the benefit of hindsight, so you won't get everything back but it's a lot better than nothing.

Snarf Zagyg

Notorious Liquefactionist
I get the impression counter claims are very popular in US legal proceedings because, as I understand it, it's very hard to get your Costs back if you win the case. So unless you can include a counter claim in there somewhere all you get for winning is that warm fuzzy feeling of knowing that you won't be spending any more money.

That's not the only reason.

The real reason is ... leverage. Most cases (and when I say most, I don't mean 60%, I mean 99%) don't get resolved by a jury. So if you file counterclaims (get the Plaintiff's "skin in the game") then you are more likely to reach a settlement that is beneficial.

Unlike in the UK, where you will normally be awarded your Costs if you win, meaning the other side has to pay your legal expenses - in as much as they are reasonable, with the benefit of hindsight, so you won't get everything back but it's a lot better than nothing.

This is correct. Quick note- there is a difference between "costs" (things like reasonable expert fees and per diem for a court reporter) and attorney's fees. Costs are almost always recoverable by the winning party.

Fees, however, are not recoverable. It's called the American Rule. Unless there is a specific provision (a contract, a statute) that allows for a party to recover their fees, then you don't get back your attorney's fees.

This leads to two outcomes-
1. Contracts with "prevailing party fees" are very common.
2. Those laws that allow recovery of attorney's fees are very popular with Plaintiff's attorney's, especially if they aren't fully reciprocal (many of them allow the Plaintiff to collect fees, but the Defendants to get fees only if the Plaintiff's case has no objective merit).

Finally, from the big-picture perspective, the American Rule is thought to make it more fair for "regular people" to access the justice system, knowing that they won't be on the hook for The Man's legal fees, with the disadvantage of allowing more frivolous litigation.

Whether any of that is true or not is up to you.

(I don't think I'm going to add any more general comments as this moves pretty far afield from the TSR/LaNasa issues and is more general stuff, and I think it's better to focus on the specific, RPG-related issue for this forum.)

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