South Dakota Business Litigation Laws

Before defining what business litigation means, it is helpful to understand what business law is. Business law is also known as commercial law, and is the generic term for the body of laws governing entities and commercial transactions. An example of this would be if you wanted to start a clothing company. Business law would dictate how you are to organize and register your company, as well as how to pay your employees and how to legally ship your merchandise to customers overseas.

Business law applies to many different aspects of a business. Additionally, business laws vary based on:

• The type of business, such as private vs. public, for-profit vs. not-for-profit, etc;
• The structure of the business, such as corporation vs. general partnership; and
• By jurisdiction. 

Some specific examples of laws responsible for the governance of businesses include:

• The Sherman Antitrust Act of 1890: Antitrust law is intended to regulate the organization and conduct of businesses, as well as ensure fair competition and protect consumers from oppressive business practices. The Sherman Antitrust Act specifically is used to prevent monopolies and restrict business activities that affect interstate commerce, which in turn could hurt consumers;

• The Lanham Act: This is also known as the Trademark Act of 1946, and is a federal law regulating trademarks, service marks, and unfair competition. As such, if you created a trademark for your clothing company, you could register your unique trademark and receive specific legal protections under this Act;

• The Securities Act of 1933: This Act states that businesses are to provide investors with specific financial information before they invest in a company. This Act also applies when a company wishes to go public, such as initial public offering (“IPO”);  

• The Federal Tax Code: The Federal Tax Code covers everything from how to tax your employees to how to file federal income taxes for your business; and

• The Fair Labor Standards Act (“FLSA”): The FLSA is what establishes the standards for employee wages, as well as overtime pay. The Act applies to the majority of both public and private businesses. To continue the aforementioned example, if your clothing company has nonexempt employees, you will need to pay them at least the federal minimum wage plus one-and-one-half times their normal rate of pay for overtime under this Act.

A business lawsuit, then, is any type of legal claim in which at least one of the parties is a business organization as opposed to a private citizen. The term “business lawsuit” and “business litigation” can be used interchangeably, as they both generally refer to lawsuits between two businesses. 

However, business litigation may involve nearly every aspect of running a business. As such, the following disputes are just a few examples of business litigation:

• One business suing another business;
• A business suing a private citizen;
• Private citizen consumers suing a business through a class action lawsuit; and
• Disputes between businesses and the government, such as when a business is in violation of any of the aforementioned laws.

What Are Some Areas of Business Law? 

As previously discussed, there are many different business laws that govern the various aspects of a business. Business law consists of federal, state, and local regulations. An example of this would be if a business needs to determine how to pay its employees, provide employee work benefits, and/or arrange employee work schedules. Such tasks would all be included under the specific area of business law known as employment law. 

If a business owner was just beginning the process and needed to register their business, this specific start-up process would involve business laws such as:

• State statutes regarding business formation and structures;
• State tax laws; and
• The Federal Tax Code.

Both federal and state laws will apply if at this time, the business owner wishes to register intellectual property such as copyrights or trademarks of the business. 

A significant portion of business law is associated with commercial and contract law. Commercial and contract laws govern nearly every aspect of running a business, from business deals and sales transactions to employee non-disclosure agreements. Because of the variety of aspects associated with contract laws, this is often considered to be the most important and expansive area of business law. 

Some common examples of different areas of business law that may apply include:

• Business formation and dissolution, which will be discussed further below;
• Commercial law and contracts, concerning the sale of goods, services, and property;
• Investing and securities law, such as those governing the production and sale of stocks and bonds;
• Intellectual property law; 
• White collar crime;
• Corporate law;
• Bankruptcy;
• Employment law;
• International business; and
• Tax law.

Each of these categories contain even smaller, more specialized categories. Due to the intricacies of such laws, you should consult with a local business lawyer for further advice should you have any concerns related to business or business litigation. 

What Is Business Formation? 

When forming their company, the business owner will first need to determine what type of business structure they wish to utilize when registering their business. There are a number of different business formations to choose from, such as a corporation, a limited liability company (“LLC”), or a general partnership. 

The selected business structure can have a significant impact on the future of the company. This is due to the fact that the way in which a business is formed will dictate details such as:

• The amount of funds the business can receive from investors;
• How many people can sit on a board;
• Who will be held responsible for liabilities or debts incurred by the business; and
• Possibly most importantly, how the business will be taxed. 

Certain business formations provide rules regarding how a company must operate. An example of this would be how in a limited partnership, there must be at least one partner who serves as a general partner to the entire partnership. This would be the person who manages the business. Additionally, one limited partner must exist as a valid limited partnership.

What Are Some Common South Dakota Business Law Disputes?

There are some types of business disputes that are more common than others. Generally speaking, South Dakota business law disputes do not deviate from other state’s most common business law disputes.

Specifically, businesses that work with contractors, purchasers, suppliers, or business partners commonly have disputes related to the contract’s terms. Another common area of dispute involves businesses that deliver goods or services to customers. These disputes generally involve issues such as whether the goods or services were delivered, or up to the standard expected.

Another common dispute would be related to how businesses generally provide implied warranties stating that the products sold are functional and operational. When the products are not up to these standards, or if the products cause harm to any consumers, the injured party will often file a claim against the business.

Employment claims are often filed in relation to hiring, promoting, and termination practices. Because businesses are not legally allowed to discriminate against or harass its employees, those that do set themselves up for business claims and various legal consequences. Business disputes can also arise from the unapproved or unauthorized use of:

• Trade secrets;
• Confidential information;
• Intellectual property; and
• Other sensitive or protected business information.

Are There Any Unique Business Litigation Laws in South Dakota? 

As previously mentioned, there are numerous areas of what would be considered business litigation laws, and these can vary from state to state. An example of some of the business litigation laws maintained by South Dakota include:

• Antitrust Laws: In general, state antitrust laws are enforced by government agencies, who can bring either civil or criminal charges against those who violate them. Injured parties can also sue the violator. This remains true in South Dakota;

• Statute of Limitations: In terms of the statute of limitations for filing a business lawsuit in South Dakota, the minimum is two years while the maximum is twenty years. The average is six years; and

• Wage and Hour Laws: South Dakota maintains several of its own wage and hour laws, in addition to those provided by the federal government. An example of this would be how the minimum wage for non-tipped employees is $8.85 per hour.

Should I Hire a South Dakota Business Litigation Lawyer for Help? 

If you suspect you will be facing business litigation, and your business is located in South Dakota, you should consult with a South Dakota business lawyer. It is important that you hire someone local, as they will be most aware of any unique business litigation laws in South Dakota and how those laws may affect your legal options moving forward. Your attorney will also be able to represent you in court, as needed, whether you are the business or the affected party.