Legal Definitions - sham litigation

Sham litigation refers to a lawsuit that appears to be a legitimate legal action but is, in fact, filed for an improper, ulterior motive rather than to genuinely seek a legal remedy or enforce a right. The party initiating the lawsuit does not truly intend to win the case based on its legal merits but uses the legal process itself as a tool to achieve an anti-competitive outcome, harass an opponent, or delay a project.

Here are some examples to illustrate this concept:

• Example 1: Anti-Competitive Strategy

  A dominant technology company, facing a new competitor with an innovative product, files a series of patent infringement lawsuits against the smaller company. The larger company knows its claims are weak and unlikely to succeed in court. However, its true intention is to overwhelm the competitor with legal fees, tie up their resources, and delay their product launch, thereby stifling competition rather than genuinely protecting its intellectual property.

  This illustrates sham litigation because the lawsuits are not filed with the primary goal of winning on their legal merits but rather to use the legal process as a weapon to gain an unfair business advantage and eliminate a competitor.

• Example 2: Delaying a Development Project

  A group of individuals opposes the construction of a new commercial complex in their neighborhood. They repeatedly file lawsuits challenging various permits and environmental assessments, even though their legal arguments are flimsy and have been rejected in prior proceedings. Their actual goal is not to win these specific cases but to cause significant delays, increase the developer's costs, and ultimately force the developer to abandon the project due to financial strain and prolonged legal battles.

  This demonstrates sham litigation because the lawsuits are not brought with a genuine belief in their legal validity but are instead used as a tactic to obstruct and delay a project through the abuse of the legal system.

• Example 3: Suppressing Free Speech (SLAPP Suit)

  A powerful real estate developer files a multi-million dollar defamation lawsuit against a local journalist who published an investigative report critical of the developer's business practices. The developer knows the journalist's report is well-researched and truthful, making a defamation claim highly unlikely to succeed. The real purpose of the lawsuit is to intimidate the journalist, silence future criticism, and discourage others from speaking out against the developer, rather than genuinely seeking compensation for reputational harm.

  This is an example of sham litigation (often referred to as a Strategic Lawsuit Against Public Participation or SLAPP suit) because the lawsuit is not intended to win on its merits but to use the threat and cost of litigation to suppress protected speech and retaliate against critics.