Legal help: How would I go about filing a lawsuit against a US company from abroad?

In My Humble Opinion
1

First of all, let me just say that I am new here and it is great to join this message board. I have been lurking around here on and off in the past, but never had a need to post a question until now.

At any rate, here is my situation: I am the owner of a small consulting firm in Japan. Last year my company was approached by a California headquartered tech firm that needed consulting services for Japan, and they asked if we could help. We discussed our services and pricing, signed a contract, and got started. It was on a contingency basis (no payment from the client until completion of the project). This is typical in my industry.

Altogether, we spent almost 10 months on the client’s project, and just wrapped things up last month. However, when it came time for them to pay for our services, they sent us a message that basically said our fees were too high, and they proposed only paying 1/3 of what we had originally agreed. Again, this was in spite of the fact that our fee structure had already been outlined in our contract, and they had signed and accepted it.

I replied telling them that if they had wanted to negotiate the price, they should have done it before we completed all the work, and that 1/3 of our fee was unacceptable. They responded in turn by saying that in that case, they would pay nothing at all! Since then I have not heard from them again. For the record, the total amount they owe us is significant, several tens of thousands of dollars, so I cannot just walk away.

I already spoke to a lawyer in Japan and was informed that this is a clear breach of contract, and the company does have to pay my fees, and if they refuse and I need to go to court, I should be able to get damages as well. Nonetheless, the issue is that the company has no office or assets in Japan, so trying to take them to court here would most likely be a waste of time as there would be no practical way to enforce the ruling. My local lawyer said that my only hope was to file suit in the US.

How would I go about doing this? Can I just call some lawyers in California and see if they can take my case? Would I physically have to travel to California?

Finally, let me also note that the jurisdiction of our contract is Japan. Does this mean I would need to find a lawyer in the US who is familiar with Japan law as well? Would the US court enforce Japan contract law?

Thanks in advance for any advice that is offered. This is the first time I have had a client ever try to do something like this, and it has been quite stressful.

2

Real-life legal questions go in IMHO rather than General Questions. Moved.

samclem, moderator

5

Yes, hire a US lawyer.

As to deciding which lawyer, there are a few issues.

First, US state jurisdiction may be important (location vs state of incorporation). I can’t give you answers but I know this may be a question to ask when trying to find which lawyer to retain.

Did the contract specifically say that if a dispute arises then the law of Japan prevails? Did it also say anything about jurisdiction of dispute resolution?

A US court can enforce Japan contract law.

6

There are a number of US law firms with offices and practices in both California and Japan, and simply googling for those terms will turn up several of them. Typical US practice would be not to charge for an initial consultation. These firms tend to be among the more expensive, by US standards, but if their fee structure is out of line with your dispute, they may be able to refer you to a more affordable firm.

7

You may want to raise with your Japanese lawyer the question of whether the Japanese courts have jurisdiction, and whether you can obtain a judgement in Japan that could later be enforced in the U.S.

If I were advising a New York client and the nationalities were reversed, I would point out that under New York’s “long arm” jurisdiction statute, the New York courts have jurisdiction over someone who “contracts anywhere to supply goods and services in the state.” It is also possible to serve a legal complaint on a Japanese business under the Hague Convention on Service of Process. As such, it is relatively easy (not very but relatively) to file an action against the company in New York that they are legally obliged to come and defend.

If the other company either defends and loses or does not appear and is subject to a default judgment, it is possible, I believe, to have the judgment enforced in Japanese courts (I know it is possible to have a Japanese judgment enforced in New York). As such, depending on the circumstances, I might recommend that a New York client sue a Japanese company in breach of a contract in the New York courts.

I agree that it would be useful to consult with a law firm that has both U.S. and Japanese offices as they deal with these cross-border issues all the time.

8

Welcome to the boards.

When I worked for a Japanese company, we needed to sue an American manufacturer for breach of contract. The amount of damage was large, about a million dollars, and we spend well over $100,000 on the legal fees, and wound up settling for about 50%, which is a somewhat less than the average of 60% or so, but we got some money out of it.

You should have a slam dunk case, but the problem will be how much it will cost to litigate and how long the other party can string things along. If it’s a few tens of thousands, that shouldn’t be a problem.

You will need specific legal advice for which strategy is best, and you need to closely look potential legal costs. One friend lost money when his client went under and the client left Japan leaving him about $2,000 in lost claims. His attorney said it would cost much more to litigate by suing first in Japan and then taking action to have a US court enforce the ruling, and in that particular situation, he would not have been able to recover his legal fees, but only actual damages.

When I sued a former employer, had it gone to court instead of being settled, it would have been a Japanese court enforcing US law, so it’s possible for this to happen.

Most of the big name international legal offices are really good, with many Japanese attorneys also bar members in a US state.

If you need the name of a good Japanese attorney, PM me.

9

Many thanks for the replies so far. This is all very helpful.

One update from my side: I sent a message directly to the CEO of the client saying that I had consulted a lawyer on this issue, and I also said that if I did not get a satisfactory response from the client soon that I would be investigating my legal options.

He replied almost immediately saying he would speak with the rest of his management team and get back to me. I assume he is just stalling to speak to their own lawyers, but at least now they know I will not cave in without a fight. I am still hoping to reach an agreement without going to court.

Unfortunately our contract was pretty simple and there was no specific mention of the jurisdiction of dispute resolution; it simply says that the contract is governed by the laws of Japan.

Thank you very much. I will take you up on this offer and PM you shortly!