Corporate Court Cases: How to Search and Access Business Litigation Records
Before partnering with any company, you should learn everything you can about it. Taking on a crucial vendor or supplier who is in the middle of nasty litigation and who could go out of business soon could put your business at risk. The solution is to thoroughly research the company before doing business with it - and a search of corporate court cases can be an important part of due diligence.
Thankfully, most business litigation records are public records; you can easily search for them to conduct due diligence before you get too deep.
What is Business Litigation?
Business litigation refers to any court-related matter in which a company is involved. It includes criminal and civil cases. Criminal cases imply that the company representatives have done something illegal, and the federal government or state is taking them to court to find them innocent or guilty. Civil matters usually involve commercial disputes where customers, vendors, or others accuse the company of wrongdoing and want some form of justice.
Business litigation involves various issues, from contract breaches to employment and intellectual property disputes. Sometimes, the company will be the plaintiff, not the defendant. Some cases involve real estate transactions, shareholder disputes, and class action lawsuits.
Types of Business Litigation
Business court cases encompass a wide variety of legal issues, including business torts, arbitration, insurance disputes, labor law, and antitrust matters. Some of the most common types of business litigation are as follows:
- Lawsuits
Often, a plaintiff will sue a company for product liability. If the person used the product and it caused harm or death, that would be one reason for suing the company that made the product. Consumer litigation is one of the most common types of business legal issues a company can have. Lawsuits could also come from employees for wrongful termination, discrimination, or breach of the employment contract.
- Bankruptcies
If the company is in financial trouble, it may file for bankruptcy to consolidate locations and assets and pay off debt. It may not indicate that the company is going out of business, but putting them in a position where they owe you money might be risky. Bankruptcy could be an indication of poor management.
- Partnership Disputes
Companies formed through partnerships can be challenging. Not all partners will see things the same way. If one or more partners believe they aren’t getting their fair share according to the partnership agreement, they may bring the others to court. Partnership disputes are common.
- Fraud
If a company commits fraud against its customers, insurance company, or the government, it may be charged with criminal fraud and held accountable. In which case, the government will bring criminal charges against the company, but there may also be civil lawsuits tied to the fraud as well.
- Class Action Suits
Class action suits ensue when multiple plaintiffs band together and sue a company due to harmful products, unlawful business practices, or other issues. Usually, a law firm handles the case as a single docket rather than many different lawsuits. In the end, even if the plaintiffs win, each one usually gets a tiny portion of the payout.
Entity Types and Business Litigation
In business litigation, the entity type matters quite a bit. With sole proprietorships and partnerships, the individuals who own the company can be held personally liable. If sued, they could lose their personal assets, not just company holdings. LLCs and corporations offer members, directors, officers, and managers protection against lawsuits so they cannot be held personally liable, and the plaintiff cannot go after their personal assets. This is called “limited liability.” Limited partnerships also offer some protection. Anyone wanting to sue a company must first determine who owns it and how it is structured so they know whom to name in the lawsuit.
Federal Cases vs. State
The United States has both a federal and state court system. Each level handles different types of cases, including business issues. Federal cases are limited to those related to the Constitution and violations of its rights. State courts have more leeway and see various types of cases.
In rare situations, both federal and state courts may have jurisdiction over cases; this is called “concurrent jurisdiction.” In this case, the plaintiff can usually choose which court to use.
- Federal Litigation: Federal cases include securities fraud, antitrust violations, patent or copyright infringement, and environmental regulations related to business activities. Federal courts also hear cases between states, such as a contract breach between a California company and a New York company. The federal court system also handles cases that charge a company with violating federal laws or sue it for breach of contract. Other types of federal cases include bankruptcy, copyright, patent, and maritime law cases.
- State Litigation: State courts typically handle cases where a business violates state laws, such as breach of contract, tort cases (negligence or product disputes), employment law cases, and violations of state rules.
Other Business Legal Issues
Along with court cases, you can also find other negative details about a company using the court system. You may discover liens, judgments, SEC filings, court orders, summonses, notices, affidavits, and witness testimonials.
- Liens
Liens are legal claims on property. When a company takes out a loan to buy a piece of property, the bank holds the lien until the mortgage is paid off. If the company fails to pay property taxes or loses in a judgment case, other types of more serious liens on the property may exist. These liens can lead to foreclosure and the company losing the property.
- Judgments
Typically, when a business loses in court, the judge sentences the company to pay the plaintiff. These judgments or rulings set a standard for how the public perceives the company. Too many negative judgments can ruin a company’s reputation.
How to Search for Business Litigation Records
Searching for business litigation records is a process, depending on what you hope to find. You have options like the PACER system, SEC filings, news databases, company websites, state and federal courts, court clerks, and even local town offices. Many of the court records you need can be found online through one of these systems. You can also try third-party systems like EntityCheck to quickly and easily pull business court cases and other essential details.
Steps to Find Federal Court Cases
- Use the PACER system.
- Register for an account and log in.
- You may have to pay a fee for some records.
- Use the PACER Case Locator to find specific court cases.
- Access the documents you need.
Steps to Find SEC Filings
- Use the SEC’s EDGAR service website.
- You can also try LexisNexis Academic to find these filings.
- Check news articles and online postings.
- Search for keywords like “lawsuit,” “sued,” “legal action,” or “litigation.”
- Check the company’s website or investor relations page.
Steps to Find State Court Records
- Find the specific court online or in person. State courts are typically superior or circuit courts.
- Perform an online search or speak to the court clerk about records.
- You may need some basic details to find what you need.
EntityCheck Helps You Run a Corporate Court Cases Search
Instead of visiting dozens of websites or search tools to find all the business litigation files on a company, a better option is EntityCheck, where you can find everything in one place. Enjoy unlimited nationwide searches and learn more about a company than just court cases.
EntityCheck delivers comprehensive business data that we have compiled from government, public, and private sources. Our reports include multiple sections with dozens of data points. You’ll find detailed Secretary of State records, such as Articles of Incorporation, annual filings, ownership changes, and entity classifications. UCC filings that cover equipment, vehicles, inventory, accounts receivable, and real estate.
License status and expiration details are included if a business requires professional licensing, such as in law, real estate, dentistry, or skilled trades. Court-related data is also available, including lawsuits, bankruptcies, liens, judgments, and federal cases. You can also see information about trademarks, patents, company officers, employees, and their background information.