Posts filed under ‘Litigation’

Using a Gavel To Hammer Citizens’ Groups Can Cost More Than Legal Fees

Lawsuits, especially over opinions of a citizens’ group, can cost a lot more than dollars.

Should a developer facing a boisterous and vocal community group sue the members of that group to muzzle them? Tempting, isn’t it?

On the Jersey Shore, a homebuilder has done just that. That company received permission to build and sell 76 homes to the general market instead of to active adults, as originally approved. A group of residents, however, doesn’t agree with the change, and has expressed its opposition in a variety of ways. The builder has filed suit, according to the local newspaper, complaining that one of the members of the group has “issued defamatory statements and information constituting libel and slander.”

I don’t know any more than what’s been written in that one article, so I’m not going to comment on this particular case. But it got me thinking: Is it a good idea to fight back against citizen groups by using the courts?

Here are some of my random thoughts. What do you think?

  • Lawsuits are part of the development process in New Jersey. They shouldn’t be, but they are. Usually, suit is filed over interpretation of points of law, not over points of opinion. The arguments are usually esoteric, and tied directly to some law or regulation related to the project.
  • Companies that protect their reputation enjoy better sales, higher customer satisfaction rates and happier employees. They also can usually withstand the unsubstantiated verbal barrages of a citizen’s group. It is, of course, a different story if the citizen’s group is telling the truth and the corporation is isn’t being completely honest.
  •  Court is the appropriate place to prove a point of law, but is it the appropriate place to stop or hobble a conversation? Even if the gavel drops eventually in favor of a developer who complains in court that people are saying bad things about the company or a community, does anyone really believe they’ve gagged the opposition?
  • There are more expenses to a lawsuit than financial ones. One must weigh the reputational and good-will costs and compare them to walking away from a project or just gritting one’s teeth and bearing the insults. A lawsuit will be seen as heavy artillery wielded by a corporation against residents exercising their First Amendment rights. People – including those who will be giving you approvals and buying your homes – may wonder why the company was so heavy-handed.
  • There are other steps to try before filing a highly visible lawsuit (all lawsuits are highly visible). A developer can meet with the opponents to listen to concerns and, if possible, address them. Use public meetings; op-ed pieces; interviews with news outlets; alliances in the community; direct mail pieces; special Web sites, blogs, Facebook pages or other forms of interaction to communicate. A developer who wanted to build in my neighborhood went door-to-door. Does it work every time? No. Will you win over every opponent? No. Can you proceed and honestly say you’ve listened and tried to address concerns. Yes. Have communities been built and been very successful despite community activism? Yes.

A lawsuit is almost always a last resort. If used to stop someone from saying angry things against a corporation, it must be carefully considered, including how much it will fan flames and what it does to a developer’s attempts to build bridges in the community.

If, however, you find yourself filing such a suit, be ready to defend it in the court of public opinion as well as a court of law.

  • Make sure you can clearly explain in a few compelling words why you’ve filed the suit. You have about one sentence to make your case, whether it’s to the media, the mayor or the minions in your company and the community.
  • Make sure your allies and community officials know it’s coming, even if the warning is just a few minutes.
  • Decide with your public relations person whether the filing should be announced or if you should wait for questions.
  • Always respond to the media. Refusing to talk with the media allows your opponents to tell your story for you. Even if you’ve strategically decided not to comment, not returning a reporter’s call is rude. Returning the call keeps the lines of communication open. And remember: Never say “no comment.” You can explain that you can’t comment on pending litigation, or you can decline to speak about specifics, but talk generalities. Your PR person and your attorney must work together to counsel you on your response once a lawsuit is filed.
  • Remember to have your key messages ready and make any interview — media, community appearance or small meeting — yours.

Your development team should include an experienced public relations professional to protect and build your reputation by helping you deal with the media, the community and the government (shameless plug: like In-House Public Relations). Your public relations team is your diplomatic corps. A lawsuit is a big military weapon. You need both to navigate the crazy populist regulatory paths in New Jersey. And your PR team may keep you out of a lawsuit.

The method of dealing with issues that I’m suggesting may take more time and the outcome isn’t assured — you may still wind up in court. But then, a legal verdict is not a sure thing either. The longer method enables you to look everyone in the eye and honestly say you tried to be a good neighbor.

July 25, 2012 at 10:46 am


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