Legal Definitions - fictional action

A fictional action refers to a lawsuit or legal proceeding where the parties involved are not genuinely in conflict but have secretly agreed to cooperate. Their goal is to create the appearance of a real dispute to obtain a court judgment or order that serves a hidden purpose, often to defraud others, circumvent legal requirements, or gain an unfair advantage. The court is essentially misled into resolving a dispute that doesn't truly exist between the "adversaries."

Here are some examples illustrating a fictional action:

• Example 1: Shielding Assets from Creditors

  Imagine a business owner facing severe financial difficulties and anticipating lawsuits from creditors. To protect a valuable piece of property, the owner secretly arranges for a close friend to file a lawsuit against them, claiming a large, fabricated debt and seeking a lien on the property. The owner then "agrees" to a judgment in favor of the friend, leading to a court order placing a lien on the property. This is a fictional action because the business owner and friend are not genuinely disputing a debt. Their collusive goal is to create a false encumbrance on the property, making it appear less valuable or harder for legitimate creditors to seize, thereby attempting to shield the asset from real claims.

• Example 2: Manipulating Business Competition

  Consider two corporations that are secretly owned and controlled by the same parent company. They initiate a lawsuit against each other, alleging intellectual property infringement over a new technology. After a brief period, they "settle" the case with a court-approved agreement that grants one corporation exclusive rights to the technology, effectively blocking a genuine, independent competitor from developing or using similar technology. This constitutes a fictional action because the two corporations are not true adversaries; they are under common control. The lawsuit is a pretense designed to use the court system to create a legally binding agreement that manipulates market competition and disadvantages a third-party competitor, rather than resolving an actual dispute between the "litigants."

• Example 3: Circumventing Regulatory Approval

  Suppose a developer wants to build a large project that requires specific environmental permits, which are difficult to obtain directly. The developer arranges for a sympathetic local organization to "sue" them, alleging minor environmental concerns. The developer then "settles" the lawsuit by agreeing to certain environmental mitigation measures that are less stringent than what the regulatory agency would typically require, and the settlement is approved by a court. This is a fictional action because the developer and the organization are not truly at odds. Their collaboration aims to use a court-approved settlement to bypass the standard, more rigorous regulatory approval process, achieving their desired outcome through a seemingly adversarial, but actually cooperative, legal proceeding.