I have a completely theoretical legal question that has been bugging me for some time.
Say there are three parties – Alice, Bob and Cindy. Suppose Alice happens to be a monopoly provider of some valuable service to Bob – say Alice is the only garbage removal company servicing Bob’s neighborhood or something like that. Suppose Cindy, a party unrelated to Bob, sues Alice for something and wins the suit, with damages assigned being such that Alice is bankrupted and goes out of business.
Bob is now clearly deprived of Alice’s services which might prevent him from making use of his own property. Does this give Bob any standing to bring a suit against Cindy for suing Alice, perhaps as a form of private nuisance?
I’m past the editing window, but I forgot to add something:
I am talking about common law jurisdictions
I realize that most likely the answer is “No” or “Only in this limited set of circumstances” because otherwise we would have a lot more lawsuits. I am curious about
a) If there’s ever standing and what is the legal history of this sort of thing?
b) What are the related legal principles/constructs that make this impossible and/or rare?
Very much not my area of law, but the closest thing I can think of is tortious interference, which occurs when a third party either induces a party to a contract to breach that contract, or when that third party acts to disrupt a business relationship.
But I strongly suspect that one of the elements of tortious interference is that the action taken is not one that the would-be tortfeasor is privileged to take. In other words, Cindy is privileged to sue. (Especially if she wins, which tosses any claim of abuse or misuse of process out the window).
So… I doubt it. If Cindy sues with no good-faith claim, just to screw up Alice’s business, then that’s a tort for which Alice can countersue, and if Cindy’s suit was intended to screw up Alice and Bob’s business, then I think Bob might have a tortious interference claim.
But Alice’s win sort of forecloses any claim that her suit was meritless.
ANy further insights from people who, unlike me, actually understand civil law are welcome.
Are we talking about a government-enforced monopoly? Because in that case, I’d assume that the relevant government body would just give the garbage collection contract to someone else, once Alice’s business fails.
My wild-ass-guess is that lawsuits are protected in some way and can’t form the basis of a lawsuit themselves. But it’s a complete guess, and I have no idea.
Not necessarily; for instance, according to Wikipedia champerty (paying for someone else’s lawsuit in return for a split of the proceeds) is a tort in some jurisdictions.
IANAL, but I am going to go ahead and say “no”. I cannot possibly imagine that you could sue someone simply because their legitimate lawsuit against some third party inconvenienced you.
Suing someone may well be a tort if it’s done in bad faith. This is difficult to prove and judges will likely err on the side of not punishing people for bringing a suit, even if it’s questionable.
As to your specific question, tort liability (usually) requires 1)damages, 2)failure to fulfill a standard of care (i.e.: acting reasonably within that context), 3) a causal link between this failure and the damages 4) a duty of care from the person who commits the fault towards the victim.
Suing someone in good faith is not a failing to abide by a standard of care. Also, it’s quite unlikely that any jurisdiction would consider that Cindy has a duty of care towards Bob.
If anything, the judge would come up with a policy reason for shielding Cindy from liability. The judge would see that it would create all sorts of bad incentives for people in Alice’s position who could go around being cunts and not worry about being sued into the ground.
IANAL - My guess is if Cindy wins, then she had a legitimate issue with Alice. Bob might be able to sue Alice (assuming she has any carcass left to pick over), say on the grounds she misrepresented her ability to do the contracted work if that was the case.
If it’s something like garbage collection, then the municipality providing the service might be liable if they did not find a replacement tout suite. Lawsuits usually last a while, so not noticing and having a contingency for that possible situation could be considered negligent?
OTOH, if the firm goes into bankruptcy, most times nowadays there’s the Chapter 11 option, where the business end keeps running. Special arrangements are made to keep that part running, on the theory a functional business (garbage collection) is worth more than leftover equipment (trucks). Then Cindy would likely end up with most of the shares in the business, which show would likely sell off to someone who wanted the contract, unless she wanted the business herself.
Of course, if you are suing someone for breach of contract or whatever for going bankrupt - your lawsuit is probably a waste of time. Not sure how that works, but the sued party would not have much to sue for; there’s a cut-off, and all debts are wrapped up and settled for cents on the dollar generally. Mayybe you’d push them from Chapter 11 to business shut-down?
Those are the elements of negligence. Not all torts are negligence. For example, intentional torts (assault, battery, conversion, false imprisonment, trespass, trespass to chattels, intentional infliction of emotional injury, libel, etc.) and strict liability torts (product liability, hazardous activites).
Can you please be more specific regarding what you mean by this? To me, it seems like, economic fallout from a lawsuit (whether lost or won) would qualify as an “externality arising out of economic activity”.
How much of this changes if Cindy brought the lawsuit in bad faith (but not necessarily to mess with Bob, perhaps with a goal of personal enrichment) and actually loses the lawsuit, never-the-less bankrupting Alice in the process?
The closest I can think of are the interference torts (negligent or intentional interference with contract/prospective business advantage). The intentional torts, however, seem to be out since they require you to show that the intent is to interfere with the contract; here, the intent would be to sue for the “something” that is the issue of the first lawsuit. It’s also a defense to a claim for interference with contract that you’re simply protecting an interest of your own. Negligence torts to me seem like they wouldn’t apply, since the duty at issue is pretty distant.
But the bigger issue is that such a suit would likely be considered a SLAPP suit, and therefore would get dismissed pretty early. SLAPP stands for Strategic Lawsuit Against Public Participation, and means that a lawsuit has been filed to quell legitimate, constitutionally-protected speech. Since Bob’s lawsuit against Cindy is based on a claim that Cindy exercised her constitutional rights (i.e., Cindy sued Alice), anti-SLAPP statutes may constitute an independent bar.
The scenario of the OP wouldn’t fall under either of these, but I assume it was just an example, not the exact situation the OP sought to have defined.