Litigation for Online Businesses, Brands and Owners

By Paul S. Rafelson, Founder, Rafelson Law PLLC

What kinds of cases do eCommerce businesses litigate?

• Contract disputes with suppliers, distributors, service providers, co-owners and counterparties after a sale. See contract and business sale disputes.
• Intellectual property: trademark and false-advertising claims under the Lanham Act, copyright infringement, trade secrets and patents. See trademark vs. copyright in court and patent disputes.
• Unfair competition and interference with business, including competitor conduct that goes beyond platform complaints.
• Co-owner disputes about control, distributions and exit. See operating agreements.
• Collection of unpaid amounts, including promissory notes after a sale.
• Regulatory and statutory claims, such as responding to a notice of violation and negotiating its resolution (see Prop 65).

What are the first questions in any case?

1. Does the contract require arbitration or a particular court? Forum-selection clauses are generally enforced (Atlantic Marine Construction Co. v. U.S. District Court, 571 U.S. 49 (2013)), and arbitration agreements are generally enforceable under the Federal Arbitration Act (9 U.S.C. § 1 et seq.).
2. Which court has authority? Federal courts hear federal-law claims (28 U.S.C. § 1331), including exclusive jurisdiction over patent and copyright claims (28 U.S.C. § 1338(a)), and some disputes between citizens of different states (28 U.S.C. § 1332). State courts hear most other claims, and they also hear many federal claims. A federal court also hears state-law claims tied to a federal claim (28 U.S.C. § 1367). The court must also have personal jurisdiction over the defendant and be a proper venue.
3. What is the deadline? Limitations periods differ by claim and state, and a defendant has a short period to respond to a lawsuit. In federal court that is generally 21 days after service (Fed. R. Civ. P. 12(a)(1)(A)(i)), and state deadlines differ.
4. What evidence exists and is it preserved? Messages, listings, account records and financials disappear or change over time, and a party letting evidence go faces sanctions. Preservation starts the day a dispute is likely.
5. What outcome do you want? Payment, an order to stop conduct, a clean exit or leverage for settlement. The answer changes which claims we bring and where.

How does a case progress?

Most disputes resolve before trial. The right plan weighs the strength of the claims, the time and attention a case takes and the business goal.

What about emergency relief?

A temporary restraining order or preliminary injunction can stop conduct while a case continues, such as ongoing infringement, misuse of confidential information or a breach of a restrictive covenant. A party seeking one must generally show a likelihood of success, likely irreparable harm without relief, that the balance of hardships favors relief and that relief serves the public interest (Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008); Fed. R. Civ. P. 65). A restraining order issued without notice to the other side is limited in duration (Fed. R. Civ. P. 65(b)(2)). The standard is demanding, and relief is not available in every case. A party served with a request for emergency relief has very little time to respond, so send us the papers immediately.

What if I have been sued?

1. Do not ignore the summons. A missed deadline can lead to a default judgment.
2. Send us the papers and note the date you were served.
3. Preserve everything and do not delete messages or records.
4. Do not contact the other side about the merits until you have advice.
5. Check insurance. A business liability or other policy may have notice requirements and may provide a defense.

What about arbitration and mediation?

If the contract requires arbitration, the dispute goes to an arbitrator under the rules the contract names, and court involvement is limited. Mediation is a negotiation with a neutral. Contracts often require mediation before a lawsuit, and courts often order it during a case. See Advocacy for how the forums compare.

Where do you litigate?

Paul Rafelson is admitted in Florida and New Jersey. Katie Dariano is admitted in New York. Federal courts admit lawyers court by court. Outside those courts, we work with local counsel or ask the court for permission to appear in your case (pro hac vice). We tell you at the start who will appear for you.

How do I get started?

Contact us. Tell us the dispute, the contract involved and any deadline or papers you have received, and we will tell you whether we can help.

Frequently asked questions

Related pages

Sources and notes

• 28 U.S.C. §§ 1331, 1332, 1338(a); 9 U.S.C. § 1 et seq.; Fed. R. Civ. P. 12(a), 65; Atlantic Marine Construction Co. v. U.S. District Court, 571 U.S. 49 (2013); Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008).