Lawyers Hope to See Asians in Court--as Their Clients

When Olen Properties closed a public walkway leading to several floating docks on Lido Island several years ago, people had no other way to get to the boats docked there except to trespass on property owned by some Japanese investors.

The Japanese did not like having strangers trudge through their well-maintained property, so, after early negotiations failed, they decided to sue Irvine-based Olen and succeeded in getting the walkway reopened.

A decade ago, Japanese investors and expatriate Japanese--used to a culture that stresses compromise rather than confrontation--might have overlooked such an intrusion. But times are changing, said Arthur Nakazato, whose Newport Beach law firm, Kircher & Nakazato, represented the Japanese investors in the 1989 case.

Traditionally, Asian companies in the United States have opted to settle business disputes quickly and amicably by compromising--going to court only as a last resort--in a desire to avoid publicity, confrontation and expensive legal fees.

But some law firms hope to encourage Japanese and other Asian companies to voice their complaints in court. Nakazato and his partner, C. William Kircher Jr., specialize in litigation involving Asian companies, betting on the fact that as Asian companies continue to expand their operations in Southern California, “there’s bound to be litigation that will grow out of the deals that were done during the go-go years of the late 1980s.”

They are also convinced that as Asian investors get used to the American way of doing business, they will increasingly turn to the legal system as a way to resolve business disputes.

Large Japanese companies with operations in Orange County--Mazda, Mitsubishi, Toshiba and Hitachi, for example--are apt to behave much like U.S. companies when it comes to legal disputes, Nakazato said. But small Japanese investors, particularly those new to the United States, tend to shy away from courtroom confrontations, he said.

Asian clients--most of them wealthy real estate investors--account for 30% of Kircher & Nakazato billings. The partners hope to raise that to 50% over the next few years.

Nakazato concedes that reaching that goal will not be easy because large Asian companies tend to go to large law firms with international practices. However, with the recent downturn in the real estate market, he said, he expects to find more Japanese companies involved in legal disputes as business relationships become strained by bad market conditions.

Nakazato, who is a third-generation Japanese-American who speaks a smattering of Japanese, is not alone in going after the Asian market in Southern California. Law firms around Orange County have specialists to advise subsidiaries of Asian companies on how to have their grievances heard in the U.S. court system.

Another local law firm that has built a strong Asian practice is Djang, O’Kain & Joy in Newport Beach.

Edward Djang, a senior partner who speaks fluent Mandarin, said 50% of the firm’s clients are Asian. A number of attorneys in the firm speak Asian languages, including Thai, Indonesian and other Chinese dialects.

Although it is still unusual for Asian companies to go to court, they are less likely to anguish over the decision when they feel they are in the right, said Kevin Takeuchi, a partner at Graham & James in Newport Beach.

Takeuchi, who counsels several Japanese companies, Hitachi Home Electronics (America) in Anaheim among them, said large Japanese firms “are just as aggressive as any American company when it comes to litigation.”

This is especially true in matters involving intellectual property rights and antitrust law or in cases involving large sums of money, said Lisa Kitsuta, an attorney at Stradling, Yocca, Carlson & Rauth in Newport Beach.

“Oftentimes, Japanese and other Asian companies are forced to litigate because they are named and served as defendants in other companies’ business disputes,” Kitsuta said. Ultimately, the goal is to resolve the disputes quickly, she said.

Although it can be lucrative to work with major Asian companies, it is not always easy, according to attorneys specializing in this kind of work.

These companies frequently ask for highly detailed descriptions of how the law firm plans to proceed with a case.

“They like us to map out a spreadsheet of our strategy for solving their cases on a step-by-step basis, just hours before a meeting,” Kircher said.

And even when evidence shows that the companies are likely to win their cases in court, many insist that all avenues to resolve the dispute amicably are exhausted before any legal action is taken, Nakazato added.

In an attempt to expand the firm’s Asian business, Nakazato and Kircher are developing seminars for Asian business owners in Orange County. They hope that the sessions will help the companies become aware of their legal rights and ease their fears about using the U.S. judicial system.