Federal Litigation Search

Definition

Litigation searching is part of the due diligence process and is necessary to identify any potential liabilities of the target.  The existence of one or more lawsuits may have a dramatic effect upon the purchase price to be paid for a company, or upon the terms of the financing.  It also provides valuable insight into the standard business practices that may affect longer term value, such as identifying litigation involving discriminatory hiring practices or product liability.  Litigation searches are conducted in the civil courts, and rarely involve searching for criminal cases.

The standard process is to search for any pending or active cases in which the target entity or individual is named as a defendant.  Searching for closed cases is also an option in most courts.  Closed cases will show whether a recently adjudicated matter was resolved in favor of the plaintiff or defendant, as well as the potential that a future judgment lien, garnishment, writ of execution, or other subsequent action may be taken. Searching for closed cases will often result in a much larger number of hits, and usually involve lengthier turnaround times.

 

With both open and closed cases, most courts will provide a docket that shows the status of the case, all of the actions taken, and the most recent activity. Specific documents associated with a particular case, such as the complaint, court orders, etc. require additional steps to acquire, and are generally not included with an initial search.