AI Saved My Company from a 2-Year Litigation Nightmare

Summary

After 2+ years and a tremendous waste of energy and money, my firm Calm Company Fund resolved a lawsuit against us on very favorable terms. What started as one of the most challenging periods of my life became an unexpected masterclass in using AI to level the playing field against well-funded opponents. If you’re an entrepreneur, especially one without a massive legal budget, this story contains lessons that could save your company. The Broken System: Why Defendants Always Lose The Delaware legal system is fundamentally broken for defendants. Due to the ironically labeled “American Rule,” even if you win, it’s extremely rare for the other side to have to cover your attorneys’ fees, much less compensate you for lost time and energy. The best case scenario is spending a small fortune to maintain the status quo of: not guilty of anything. By and large, the U.S. legal system seems to imbue people and companies with a strong right to file dumb lawsuits, even if they are mostly fabricated or based on incredibly weak claims. And the legal costs to defend against a lawsuit all the way through trial can be enormous. $1 million is a reasonable expectation. “But wait, if the lawsuit is truly dumb, won’t a judge just ‘throw it out’?“ This is the first question you get from anybody who has not actually had to interact with the U.S. legal system. And, yes, while there are two primary opportunities for a judge to throw out a case without it going to a jury trial, once you look at the basic details of each phase, you realize that they are pretty poor protection to defendants from the cost of a defense. Let’s look at the two of them. Motion to Dismiss: This is usually what folks who don’t have legal experience are thinking of when they think of a judge throwing out a dumb lawsuit. That somebody will file a lawsuit with basically no actual supporting facts or evidence or founded legal claims, and a studious judge will look it over and say this is BS and throw the case out. It happen...