How U.S. Courts Work and Why it Matters for You and Your Art Business
A pretty regular feature of my life as an arts lawyer is explaining to artists how U.S. courts work. If you contact me for help because someone’s using your work without permission, or a client isn’t paying you (to name a couple of the more common problems), you’ll probably hear me talk about what it means, in practice, to use a court of law to assert your legal rights. Though it might seem kind of wonky and not directly relevant to the problem you’re navigating, I think this wider view is useful for a couple reasons:
When an obvious problem arises—like a blatant, widespread copyright infringement—you might assume that suing the infringer is the most effective way to enforce your rights. In fact, that’s rarely the case. I want to help you understand why.
When you understand how the courts work, you’ll have an important perspective that can help you protect your rights proactively rather than defensively. For example, you’ll know how to craft a contract with a client that gives you the clearest possible protection and leverage. A well-designed contract telegraphs to the client what you expect from them (making it less likely you’ll ever have to consider taking them to court—i.e. “litigate,” “bring a lawsuit” against them). And, in the event that your client breaches the contract and you decide that taking them to court is your best route to justice, your contract will serve as a clear explanation (for your attorney and the judge or jury) of what you and your client expected of each other, and agreed to, at the outset.
Organization of U.S. Courts
Federal and State
Courts in the United States are divided between national and state governments. The United States federal government operates its own courts, aimed at enforcing national laws (federal laws) enacted by the U.S. Congress, across all fifty U.S. states and five territories. Each U.S. state government, separately, operates its own courts, aimed at enforcing the laws of that state (state laws) across all counties in that state.
In any legal dispute, it’s important to know whether the context is federal or state law. For instance, a copyright infringement lawsuit arises under federal law and is typically filed in federal court. Contracts are governed by state law and a breach of contract dispute is typically filed in state court. I say “typically,” because this scheme has exceptions, but it describes the vast majority of legal disputes.
Civil and Criminal Courts
Legal actions divide into civil and criminal. A civil case may involve an alleged violation of law, but typically involves a claim for money or a request to the court for an order telling the other party do something. What makes a violation of law a “crime” is that the punishment for the violation may involve taking away the defendant’s freedom, as in being incarcerated, or the imposition of serious fines. Obviously, artists are far more likely to be involved in a civil action.
Levels of Courts
In both federal and state courts, there are three levels: trial, appellate, and supreme. (This is true of civil and criminal actions, but here I will focus on civil actions.)
A civil lawsuit begins in the trial court. Most lawsuits “settle” at some point. A settlement is where the parties agree to a contract called a “settlement agreement” that resolves the legal dispute and usually involves some kind of payment in lieu of the damages sought in the lawsuit.
If the case does not settle, then it will be decided either by a jury or a judge in the trial court, resulting in a final decision. The losing party can appeal the final decision to the appellate court. The appellate court reviews the trial court evidence (called the “trial court record”) and decides whether the trial court got the matter right. If they agree, the case is affirmed. If they disagree, the case is overruled. The party that loses in the appellate court can then appeal to the supreme court. The supreme court will either agree or refuse to review the case. If they refuse to review the case, the appellate court’s decision stands. If they agree to review the case, then the supreme court will look at the trial court evidence, the appellate decision, and issue a final ruling on the matter. Compared to the trial courts, where thousands of cases are dealt with, supreme courts take on only a handful of cases in any given year. Typically, these are cases where the law is unsettled at the trial and appellate court level and the supreme court wants to issue a binding decision settling the matter for everyone.
It’s uncommon for cases brought by artists to get to the supreme court level. There are some interesting and important examples, but we’ll leave those for a future article. For now, let’s stay in the realm of the trial courts, so you can see the hurdles to court access at this preliminary level.
Practical Access to the Courts
The Typical Sequence in a Civil Legal Case
Most court cases follow a typical sequence. A person or company believes that another person, company, or government actor has violated the law and harmed them. They meet with a lawyer who collects the facts, assesses the law, and advises them on whether they “have a case.” If they do, and the person or company wants to file a lawsuit, the lawyer goes ahead and prepares a written document called a “complaint.” In the complaint, the aggrieved party is the “plaintiff” and the party who allegedly broke the law is the “defendant.” The complaint describes the facts and explains how the defendant’s actions violated the law and harmed the plaintiff. The complaint seeks a court order to remedy the harm done to the plaintiff, usually a judgment for money or an order telling the defendant they have to do something.
In response to the complaint, the defendant files a written document called an “answer” denying the allegations and describing “affirmative defenses” that allegedly negate the legal claims in the complaint. For instance, in a breach of contract case, the defendant might assert that the plaintiff breached the contract first, excusing the defendant’s breach.
After the defendant answers the complaint, the plaintiff and defendant (called “parties”) exchange fact information, commencing with the exchange of documents (digital and physical) followed by witness depositions. Collectively, this is called “discovery,” as the parties seek to discover all the relevant information in the other party’s possession.
Document discovery is a pricey operation. The records need to be collected in a careful way, by a company that specializes in handling discovery records, so as to create a verifiable chain of custody for trial. Records that contain communications with a lawyer, or that reflect confidential legal advice, must be reviewed for privilege, and a log describing privileged documents withheld must be created and provided to the opposing party so they may challenge the validity of the privilege claim. All this formality drives up the cost. In complex lititation, just the trading documents part of the process can cost a hundred thousand dollars or more. And even in a “simple” lawsuit, ten thousand dollars or more would be common.
After records are obtained and reviewed, each party then takes “depositions,” typically of people who will be witnesses at trial. In a deposition, each witness appears with his or her lawyer, before the opposing party’s lawyer, and in front of a court reporter who administers an oath under penalty of perjury. The lawyer who initiated the deposition asks questions, and the witness’s lawyer makes evidence objections, while the court reporter collects and marks exhibits shown to the witness and records what everyone says, later creating a “deposition transcript” with exhibits. The process resulting in a 200-page deposition transcript can cost five thousand dollars at a bare minimum.
When discovery is completed, each party may file with the judge a document called a “Motion for Summary Judgment.” This document says, “Looking at all the facts collected, we win on the face of the matter.” In other words, the plaintiff says, “I’ve established all the facts needed to prove my case,” or the defendant says, “The plaintiff hasn’t proved one key fact she has to prove, so I win.” The idea here is whether key facts are really disputed or not. Suppose two witnesses who saw the key event say opposite things and the jury will have to decide who’s more believable. Where the truth of a fact is disputed, summary judgment won’t be granted. But if the facts aren’t in dispute, the judge can issue a final decision based on the summary judgment motion. A summary judgement basically decides the matter without trial and is the kind of decision that can be appealed by the losing party. Summary judgment motions are big, complex, and typically involve scores of hours of attorney time.
If summary judgment fails, then the case goes to trial. Trial is a super intense, time-consuming process. It can take days just to pick a jury and weeks to complete the trial. During trial, lawyers commonly work 12 or more hours every day and typically spend the weekend preparing witnesses and otherwise readying for the week. Here’s a quirk: Most of the witnesses who gave depositions will appear again to give live testimony on the same subjects. Why? Because the deposition, even though under penalty of perjury, is hearsay and hearsay, absent a legal exception, cannot be admitted as evidence in a trial.
The gist of a trial is each party’s lawyer telling a story. It begins with an opening statement to the jury, where the lawyer says what the facts will show, and proceeds to all the witnesses and the trial exhibits they discuss, in effect providing all the facts the jury needs to decide the matter, and ends with a closing statement from each party’s lawyer telling the jury what they think the facts show.
The judge then instructs the jury, gives them a “verdict form” which will guide them as to the things they will need to decide. Like a summary judgment order, the jury’s verdict is a final decision that can then be appealed.
Legal Fees
OK, so by now you’ve grokked the simple reality that access to the courts is primarily a question of money. In most cases (and I’ll cover the exception in a future article), you need a lawyer to represent you. Most lawyers charge by the hour, anywhere from around $200 an hour on the low end and as high as $1000 an hour or more for lawyers with a proven track record of winning high-stakes cases.
It’s hard to provide a one-size-fits-all description of the cost of litigation other than that it’s shocking how fast the fees add up. It’s not uncommon for a contested case that goes all the way through trial to burn through a thousand hours of lawyer, paralegal, and contractor time. Think $200,000-$300,000. Even simple matters, like a boundary dispute between neighbors, can generate legal fees of $10,000-$20,000 just to reach a settlement without trial, and if the dispute goes to summary judgment or trial, $50,000 or more is common.
Because costs are so high, many law firms won’t even consider a business dispute where the amount at stake is less than $500,000, otherwise the firm’s fees could quickly outstrip the amount the client stands to receive. Some cases settle right away. Others drag on. When one party can afford litigation and the other cannot, the balance of power tilts markedly in one direction.
I think it’s obvious that most artists, or indeed U.S. citizens, simply don’t have the kind of wealth needed to pay for litigation out of pocket. My first aim, though, is to help you understand what it means, in practical terms, to “go to court.” In my next article I will share some ways in which an ordinary person can, under certain circumstances, get into court without risking everything. I’ll also look at some powerful strategies you can follow to avoid the risk of court in the first place.