On June 6, 1991, Richard Overton finally hit his breaking point.
Apparently, Mr. Overton had been spending quite a lot of time in front of his television, watching a flurry of beer commercials featuring scantily clad women falling all over themselves for average looking men.
Overton realized immediately that drinking Anheuser-Busch’s magical products would be the solution to all of his problems.
So he hurtled to his nearest liquor store for a case of beer.
Except… nothing happened. No tropical islands. No Clydesdale horses. No Swedish bikini team.
Moreover, Overton found out that alcohol can actually have negative effects on the mind and body.
Overton was shocked and dismayed. He felt that, by buying and drinking beer, he was entitled to the fantasy lifestyle in the commercials… without any of the downside.
Anheuser-Busch had betrayed him. And he wasn’t going to take it lying down.
So, in the name of beer drinkers everywhere, Overton sued on grounds of false advertising, claiming that Anheuser-Busch’s TV commercials “involving tropical settings, and beautiful women. . . had caused him physical and mental injury, emotional distress, and financial loss.”
Sadly this is a true story– just one example of the countless absurd, frivolous lawsuits that get filed in the Sue-nited States of America every year.
Here’s a more recent one:
Late last week, the Democratic National Committee (the headquarters for one of the two major political parties in the Land of the Free) launched a suit against everyone they could think of.
The DNC believes a carefully coordinated conspiracy between Russia and the Presidential campaign of Donald Trump hijacked the 2016 US Presidential Election.
So they filed a federal lawsuit in Southern District of New York (Manhattan) against more than two dozen defendants, including:
– The Trump Campaign
– The GRU (the successor to the KGB)
– Ten unknown, unnamed individuals, cited in the lawsuit as John Doe #1 through #10.
The DNC alleges in the complaint that these defendants violated a multitude of laws, from the Digital Millennium Copyright Act to the State of Virginia’s common law prohibiting ‘Conspiracy to Commit Trespass to Chattels’.
Now, I won’t bother to comment on the grounds of the lawsuit. That’s not relevant here.
However you feel about this Trump/Russia issue, it’s important to step back for a moment and take note of the absurdity of this lawsuit.
How in the world is it even possible to sue “Russia?”
“Russia” is not even a legal entity. It’s just the name given to a giant piece of land on a map.
In theory you could sue the Russian president. Or even the Russian government.
But suing “Russia” is about as ridiculous as suing “Rap Music.” Yet in the Sue-nited States, you’re free to sue anyone or anything.
Perhaps more importantly, the DNC is suing ten different “John Doe’s,” i.e. people who are entirely unknown.
But again, in the Sue-nited States, you’re even free to sue people who might not exist.
One of the truly bizarre things I find about this lawsuit is that the defendants are alleged to have violated an obscure Virginia state law… even though the lawsuit was filed in New York City.
But in the Sue-nited States, you’re free to sue for any reason whatsoever.
This is an incredibly important reminder. Whether you’re living in the US, or you just do business or invest in the US– this is the most litigious country that’s ever existed in the history of the world.
And you can either hope that it never happens to you… or you can do something to prevent it.
Frivolous litigators are trolls that are always scavenging for easy targets– businesses or people with wealth that’s completely exposed.
Cash in your bank account. A profitable, healthy business. A home where the primary mortgage balance has been paid down. Even cryptocurrency.
If you ever get sued, you’ll quickly end up going through a ‘discovery’ process, whereby the opposing legal counsel will obtain access to EVERYTHING in your entire life– financial records, bank statements, phone records, Facebook messages, and emails.
Their job isn’t to prove that you actually wronged their client.
All they need to do is demonstrate to the jury that you’re a bad person.
And, chances are, there’s probably something in the last 20 years of your email records– a crass joke, a naughty email that you forwarded, etc. that presents you in an unfavorable light.
In a lawsuit, all of your assets are on the table. The judge has the power to freeze your bank account, put a lien on your home, liquidate your business, whatever he/she wants.
And of course, even if you win, you lose. The mere pain of having to go through a lawsuit can be incredibly expensive and emotionally draining.
Litigators are betting on this… that you don’t have the financial resources or emotional wherewithal to go to court. So they’ll push you into a costly out-of-court settlement.
The central idea behind asset protection is to make yourself a less attractive target.
First and foremost, that means not flaunting your wealth. The more people who know about your finances, the higher the chances are that someone will want to sue you.
Second, don’t keep all of your eggs in one basket. If you own your home, your business, your bank account, investments, etc. all in the same place, you’re really taking on a lot of risk.
Your entire life and livelihood can be frozen with the stroke of a judge’s pen. And it’s just never worth taking that kind of chance.
One option is to consider moving certain assets abroad, to a jurisdiction that’s not under the control of your home country’s government, particularly a place with strong asset protection laws. (Nevis is a good example.)
When structured properly, this approach makes it difficult for litigators to attack your assets, which is a huge disincentive for anyone to file suit against you.