Can someone more wealthy than me bury me in legal fees?
<p>USA Federal Law  - </p>

<p>I have a company worth about $6m. I got on the bad side of a person with a company worth well over $750m (with attorneys on staff). The CEO threatened to bury me in an endless sea of frivolous lawsuits, so that I'm essentially paralyzed having to defend myself in court day after day until my legal expenses drain my bank account and put me out of business. </p>

<p>Is this legal? Are there any countermeasures or defenses against it?</p>

<p>There are both statutes and customs aimed at preventing "<a href="http://www.alllaw.com/articles/nolo/personal-injury/lawsuits-malicious-prosecution-abuse-process.html">Malicious Prosecution</a>" and "<a href="http://abuseofprocess.uslegal.com/abuse-of-process-overview/">Abuse of Process</a>."  (In Pennsylvania, for example, the 1980 <a href="http://www.consumerlawblogging.com/?p=65">Dragonetti Act</a> allows the victim of a frivolous lawsuit to counter-sue for compensatory damages.)</p>

<p>One can also buy insurance against this type of risk:  Umbrella liability policies will generally provide a defense against civil lawsuits and any damages awarded, as will many business insurance policies.</p>

<p>Of course, none of this is to say that a skilled legal team can't avoid all of these countermeasures and, in practice, take up a significant amount of your time and trouble.  We do not have a perfect system of justice.</p>

<p>Lawyers can be sanctioned for filing law suits they know have no merit. It's unethical and an abuse of due process.</p>

<p>That said, there are plenty of legitimate reasons someone could find to file a law suit against you if they choose to make you their "pet project." The more business dealings you do with them, the more reasons they could potentially find to sue you.</p>

<p>And, yes, you are correct. The discrepancy in your relative bank accounts gives your counterparty a distinct advantage in this situation.</p>

<p>As a practical matter, I suggest the following:</p>

<ol>
<li>Invest in an attorney to figure out your legal position regarding the matter at hand.</li>
<li>Negotiate with your counterparty to reach an amicable settlement.</li>
<li>Go kindly on your way and try to have no further contact with him. (Hopefully, he will forget about you and focus on more constructive things than filing law suits.)</li>
</ol>

united-states common-law business fees