How Much Does a Business Lawsuit Cost in Minnesota?

What Are the Court Fees to Sue a Business in Minnesota?

In a Minnesota district court civil case other than a divorce, each side pays $310 when its first paper is filed. Under Minn. Stat. § 357.021, subd. 2, the plaintiff “shall pay, when the first paper is filed for that party in said action, a fee of $310,” and each defendant appearing separately pays the same amount. That fee covers the case through trial and judgment.

The other court charges are smaller and arrive as the case moves:

1. Motions. “Filing a motion or response to a motion in civil, family, excluding child support, and guardianship cases, $100.”
2. Jury. “The party requesting a trial by jury shall pay $100.”
3. Subpoenas. “Issuing a subpoena, $16 for each name.”
4. Law library fee. In Hennepin and Ramsey Counties, the court also collects a law library fee from each party under Minn. Stat. § 134A.09, subd. 1, in an amount the county law library board sets under subd. 3. Under Minn. Stat. § 134A.10, subd. 1, “In counties other than Hennepin and Ramsey, the court administrator shall collect in each civil suit, action or proceeding filed in the district, county or county municipal and conciliation courts of the county, in the manner in which other fees are collected, a law library fee” from the plaintiff and each defendant, in an amount the county law library board sets under subd. 4.

Conciliation court, Minnesota’s small claims court, costs less. Minn. Stat. § 357.022 sets “a filing fee of $65 from every plaintiff and from every defendant when the first paper for that party is filed in any conciliation court action.” Under Minn. Stat. § 491A.01, subd. 3a, “The court administrator shall serve the summons in a conciliation court action by first class mail, except that if the amount of money or property that is the subject of the claim exceeds $2,500, the summons must be served by the plaintiff by certified mail, and service on nonresident defendants must be made in accordance with applicable law or rule.” Under Minn. Gen. R. Prac. 508(d), “proof of service must be filed with the administrator,” and “If the summons is not properly served and proof of service filed within sixty (60) days after issuance of the summons, the action will be dismissed without prejudice.” Check the current text of Rule 508 before relying on this period.

How Much Do Attorney’s Fees Add at Each Stage?

In a contested case, attorney’s fees are the largest part of the cost, and they grow with each stage the case reaches. A dispute that settles after a demand letter costs a fraction of one that goes through discovery, motions, mediation, and trial. Under hourly billing, the fee is the rate multiplied by the hours, so the stage at which a case ends drives the total.

The Minnesota attorney hourly rates I saw in 2022 ran from $300 to $800, with $400 to $600 very common. As an example only, 50 hours at $400 is $20,000. The stages, in order:

1. Demand and negotiation. A written demand and a few rounds of negotiation take the fewest hours.
2. Complaint and answer. Drafting, serving, and filing the pleadings, and answering any counterclaim.
3. Discovery. Exchanging documents, written questions, and depositions. A court reporter typically charges around $500 for half a day of deposition, and a transcript typically costs a couple of thousand dollars for a couple of hours of testimony. Minn. R. Civ. P. 26.02(b) limits discovery to what is “proportional to the needs of the case,” considering factors including “the amount in controversy,” so a small claim should carry smaller discovery.
4. Motions. A single motion can cost $5,000 to $10,000, and that is fairly common; the court adds its $100 fee.
5. Mediation. Under Minn. Gen. R. Prac. 114, “All civil and family cases are subject to this rule except” listed categories, and “If the parties cannot agree on an ADR process, the court shall order the parties to use a non-binding ADR process.” The mediator, called the Neutral, “shall be paid according to the terms of the agreement with the parties, their attorney, or as ordered by the court.”
6. Trial. Trial adds witness preparation, exhibits, and the days in court themselves.

Whether a contingency fee or representing yourself can lower the bill is covered under contingency fees and representing yourself, and the time each stage takes is covered under why each stage takes so long.

When Does Conciliation Court Cost Less?

Conciliation court costs less when your claim is $20,000 or less and is a type the court can hear, because the filing fee is $65 and your company can appear without an attorney. Under Minn. Stat. § 491A.01, subd. 3a, “Except as provided in subdivisions 4 and 5,” the court hears claims where the amount “does not exceed: (1) $20,000; or (2) $4,000, if the claim involves a consumer credit transaction.” Subdivision 4 provides that “The conciliation court does not have jurisdiction over the following actions,” including those “involving claims of defamation by libel or slander,” “for specific performance, except to the extent authorized in subdivision 5,” “requesting or involving prejudgment remedies,” “involving injunctive relief, except to the extent authorized in subdivision 5,” and “for eviction.”

Under Minn. Stat. § 491A.02, subd. 4, “A corporation, partnership, limited liability company, sole proprietorship, or association may be represented in conciliation court by an officer, manager, or partner,” or “may appoint a natural person who is an employee or commercial property manager to appear on its behalf or settle a claim in conciliation court.” For an officer or employee, “an authorized power of attorney, corporate authorization resolution, corporate bylaw, or other evidence of authority acceptable to the court must be filed with the claim or presented at the hearing.”

Three limits can add cost later:

1. Removal. Under Minn. Gen. R. Prac. 521(a), “Any person aggrieved by an order for judgment entered in conciliation court after contested trial may remove the case to district court for trial de novo (new trial).” The aggrieved party “must perform all the following actions within 21 days after the date the court administrator transmitted to that party notice of the judgment order.” Those actions are to serve a demand for removal “upon every opposing counsel or self-represented party,” “File with the court administrator the original demand for removal with proof of service,” “File with the court administrator an affidavit by the aggrieved party or that party’s lawyer stating that the removal is made in good faith and not for purposes of delay,” and pay the removal fee, plus the jury fee if a jury trial is demanded. Check the current text of Rule 521 before relying on this period. The removal fee is “the amount prescribed by law for filing a civil action in district court,” and “If the aggrieved party is a corporation, the demand for removal must be signed by the party’s attorney.”
2. Cost of losing a removal. Under § 491A.02, subd. 7, “If the removing party does not prevail, the court shall order an additional $50 to be paid to the opposing party as costs.”
3. Collection. Under § 491A.01, subd. 2, “No writ of execution or garnishment summons may be issued out of conciliation court,” so collecting from a customer who will not pay takes further steps in district court. See collecting a Minnesota judgment.

Who Pays the Attorney’s Fees in a Minnesota Business Lawsuit?

Each side pays its own attorney unless a contract clause or a statute shifts the fees. In Dunn v. National Beverage Corp., 745 N.W.2d 549 (Minn. 2008), the Minnesota Supreme Court stated, quoting an earlier decision, that “attorney fees are not recoverable in litigation unless there is a specific contract permitting or a statute authorizing such recovery.” Dunn shows how far that rule reaches.

A jury found that a beverage supplier breached a franchise agreement and “awarded $288,000 in damages for the breach.” Because the contract had no fee clause, the winning distributor could recover fees “only if permitted by statute,” and the court held that the franchise statute’s fee provision “requires that the plaintiff seek and recover some relief under the franchise act,” which the distributor had not. The distributor won the contract claim and still paid its own attorney.

Three points follow for a Minnesota business:

1. A fee clause is the main way to recover fees. If your contract, purchase order terms, or credit application says the customer pays collection costs and attorney’s fees, that clause can shift them. Without one, see why winning does not guarantee your fees come back.
2. A corporation pays for its own lawyer in district court. In Nicollet Restoration, Inc. v. Turnham, 486 N.W.2d 753 (Minn. 1992), the Minnesota Supreme Court stated that “Generally, a corporation must be represented by a licensed attorney when appearing in court, regardless of whether the person seeking to represent the corporation is a director, officer or shareholder,” and it reaffirmed “that a corporation must be represented by a licensed attorney when appearing in district court.” That case had been removed from conciliation court. Section 491A.02, subd. 4 now states that it “also applies to appearances in district court by a corporation or limited liability company with five or fewer shareholders or members” when “the action was removed from conciliation court,” but Nicollet stated that “legislative enactments which purport to authorize certain classes to practice law in the courts of this state are not controlling upon the judiciary.” In Nicollet, after the company chose to go forward without a lawyer, “the trial judge dismissed the action with prejudice.”
3. The winner of a sanctions motion may be awarded its fees for the motion. Under Minn. Stat. § 549.211, subd. 2, by presenting a pleading, written motion, or other paper to the court, an attorney or unrepresented party certifies, after “an inquiry reasonable under the circumstances,” that it “is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation,” among other points. A sanctions motion must be served first and “may not be filed with or presented to the court unless, within 21 days after service of the motion, or another period as the court may prescribe, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.” If the motion goes forward, “the court may award to the party prevailing on the motion the reasonable expenses and attorney fees incurred in presenting or opposing the motion” (subd. 4).

What Can the Winner Recover Besides Attorney’s Fees?

A winning business can recover $200 in statutory costs, its reasonable out-of-pocket disbursements, and interest. Under Minn. Stat. § 549.02, subd. 1, a plaintiff with “a judgment in the plaintiff’s favor of $100 or more in an action for the recovery of money only” receives “$200,” and a winning defendant receives $200 too. “This section does not apply to actions removed to district court from conciliation court.”

Disbursements come under Minn. Stat. § 549.04, subd. 1: the prevailing party “shall be allowed reasonable disbursements paid or incurred, including fees and mileage paid for service of process by the sheriff or by a private person.” Under Minn. R. Civ. P. 54.04(b), a party seeking to recover costs and disbursements “must serve and file a detailed application for taxation of costs and disbursements with the court administrator.” The application “must be served and filed not later than 45 days after entry of a final judgment as to the party seeking costs and disbursements.” Check the current text of Rule 54.04 before relying on this period.

Interest can add more than costs do. Under Minn. Stat. § 549.09, subd. 1, “Except as otherwise provided by contract or allowed by law,” preverdict interest runs “from the time of the commencement of the action or a demand for arbitration, or the time of a written notice of claim, whichever occurs first, except as provided herein.” A written demand can therefore start the interest, but “The action must be commenced within two years of a written notice of claim for interest to begin to accrue from the time of the notice of claim.” Section 549.09 is not the only route. In Hogenson v. Hogenson, 852 N.W.2d 266 (Minn. App. 2014), a case on conversion claims, the Minnesota Court of Appeals concluded “that section 549.09 was meant to supplement, not replace, the existing law on preverdict interest.” Under that existing law, “preverdict interest began to accrue at the 6% rate prescribed by section 334.01 from the date a claim arose” when the amount could be computed. The same court noted that “The Minnesota Supreme Court has never discussed the interplay between section 334.01 and section 549.09,” so the start date and rate on a fixed amount such as an unpaid invoice may differ from the statute’s. Under § 549.09, subd. 1(b), “If either party serves a written offer of settlement, the other party may serve a written acceptance or a written counteroffer within 30 days.” Check the current text of § 549.09 before relying on these periods. Written settlement offers also change the interest: the winner receives interest for the full period “only if the amount of its offer is closer to the judgment or award than the amount of the opposing party’s offer.” If the losing side’s offer was closer, the winner receives interest “only on the amount of the settlement offer or the judgment or award, whichever is less,” and only until that offer was made. Three more rules in § 549.09 shape the number:

1. Small judgments. Preverdict interest under this statute is not awarded on “judgments or awards not in excess of the amount specified in section 491A.01,” the $20,000 conciliation limit, unless a contract or other law provides it. An interest term in your contract, or the common-law route Hogenson describes for an amount that can be computed, matters most here.
2. Rate. For a private judgment over $50,000, “the interest rate shall be ten percent per year until paid.” For smaller judgments, the state court administrator sets the rate each year from the one-year Treasury yield, “rounded to the nearest one percent, or four percent, whichever is greater.”
3. After judgment. Under subd. 2, “interest shall accrue on the unpaid balance of the judgment or award from the time that it is entered or made until it is paid, at the annual rate provided in subdivision 1.” See interest on Minnesota judgments.

A settlement offer can also move costs. Under Minn. R. Civ. P. 68, “An offer does not have the consequences provided in Rules 68.02 and 68.03 unless it expressly refers to Rule 68.” When a defendant’s offer is rejected and “the defendant-offeror prevails or the relief awarded to the plaintiff-offeree is less favorable than the offer,” then “the plaintiff-offeree must pay the defendant-offeror’s costs and disbursements incurred in the defense of the action after service of the offer, and the plaintiff-offeree shall not recover its costs and disbursements incurred after service of the offer, provided that applicable attorney fees available to the plaintiff-offeree shall not be affected by this provision.” The court “may reduce the amount of the obligations to eliminate the undue hardship or inequity,” and the rule does not “create a right to attorney fees not provided for under the applicable substantive law.” Under Rule 68.02, “Acceptance of the offer shall be made by service of written notice of acceptance within 14 days after service of the offer,” and “If the offer is not accepted within the 14-day period, it shall be deemed withdrawn.” Under Rule 68.01(c), an offer is a “damages-only” offer “unless the offer expressly states that it is a “total-obligation” offer,” and “A damages-only offer does not include then-accrued applicable prejudgment interest, costs and disbursements, or applicable attorney fees,” which are added to the amount stated. Check the current text of Rule 68 before relying on these periods.

How Does Minnesota’s Prompt-Payment Law Change a Subcontractor’s Math?

On a Minnesota construction job, a subcontractor or material supplier owed money by the prime contractor or another subcontractor has tools other businesses lack. They include statutory interest and, in a suit to collect that interest, attorney’s fees. Under Minn. Stat. § 337.10, subd. 3, a “building and construction contract” is deemed to require “the prime contractor and all subcontractors to promptly pay any subcontractor or material supplier contract within ten days of receipt by the party responsible for payment of payment for undisputed services provided by the party requesting payment.”

The same subdivision sets the consequences:

1. Interest. The paying party must “pay interest of 1-1/2 percent per month to the party requesting payment on any undisputed amount not paid on time.”
2. Fees. “A party requesting payment who prevails in a civil action to collect interest penalties from a party responsible for payment must be awarded its costs and disbursements, including attorney fees incurred in bringing the action.”
3. Stopping work. “If an undisputed payment is not received within ten days, the prime contractor or subcontractor of any tier that has not received the undisputed payment may suspend work under the building and construction contract until the undisputed payment is received.”

Each piece has limits that decide whether it helps. The ten days run from the contractor’s own receipt of payment, the rules reach “undisputed” amounts only, and the fee award attaches to an action “to collect interest penalties.” A supplier or subcontractor may also have lien rights against the property with their own short filing deadline; see Minnesota mechanic’s lien law. For a subcontractor or supplier not under direct contract with the owner, Minn. Stat. § 514.011, subd. 2(a) makes a written notice to the owner “a necessary prerequisite to the validity of any claim or lien.” The notice must be given “not later than 45 days after the lien claimant has first furnished labor, skill or materials for the improvement,” with exceptions in subd. 4c for some work on “an improvement to real property which is not in agricultural use and which is wholly or partially nonresidential in use” involving more than 5,000 square feet of floor space. Check the current text of § 514.011 before relying on this period.

A lien judgment carries “costs and disbursements to be fixed by the court at the trial” under Minn. Stat. § 514.14, and in Obraske v. Woody, 294 Minn. 105, 199 N.W.2d 429 (Minn. 1972), a mechanic’s lien case, the Minnesota Supreme Court held “that reasonable attorneys’ fees may be awarded within the discretion of the trial judge.” Under Minn. Stat. § 574.26, subd. 2, a contractor on “a contract with a public body for the doing of any public work” must give a payment bond, “Except as provided in sections 574.263 and 574.264 or if the amount of the contract is less than the amount in section 471.345, subdivision 3.” Subdivision 1 defines a “public body” as “the state, municipal corporation, school district, or other public board or body,” and subdivision 1a lists further exemptions. Subdivision 2 also states that “Reasonable attorneys’ fees, costs, and disbursements may be awarded in an action to enforce claims under the act if the action is successfully maintained or successfully appealed.” For a payment bond on a federal contract, see 40 U.S.C. § 3133.

How Do You Decide Whether Suing Is Worth It?

Suing is worth it when the amount you would net, after fees and the chance of collecting, beats your other options. I suggest estimating that net figure before deciding, because the net figure is what the business would actually keep. That figure starts from what is owed, adds any interest and fees your contract or a statute lets you recover, and subtracts estimated attorney’s fees and court costs. It should also be discounted for the risk that the customer cannot pay a judgment.

The options, from least to most expensive:

1. A direct conversation. An owner-to-owner call can surface the real reason for nonpayment, such as a cash-flow gap or a complaint about the work, and lead to a payment plan. It costs nothing but carries the risk that promises are not kept, so I suggest confirming any plan in writing.
2. A business step. A credit hold or a stop on further work limits your exposure while you talk. I suggest reading your contract before taking that step, because stopping work can itself be a breach unless the contract or a statute such as § 337.10 allows it.
3. A written demand. A pre-suit demand letter takes far less attorney time than a lawsuit, can start preverdict interest under § 549.09, and can settle the dispute.
4. Conciliation court. For $20,000 or less, on a claim outside the actions § 491A.01, subd. 4 excludes (such as defamation, injunctive relief, or eviction), an officer or employee can present the claim for a $65 filing fee.
5. District court. Above $20,000, or when you need discovery, a lawsuit with an attorney is the remaining path when the contract has no arbitration clause.

Whatever the order, a suit must start in time. Under Minn. Stat. § 541.05, subd. 1, “Except where the Uniform Commercial Code otherwise prescribes, the following actions shall be commenced within six years: (1) upon a contract or other obligation, express or implied, as to which no other limitation is expressly prescribed.” For a sale of goods, Minn. Stat. § 336.2-725(1) provides that “An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.” Check the current text of both statutes before relying on these periods.

In one matter, a customer offered a little more than half of an invoice after the work was finished, with no complaint about the work. The contract had no attorney’s fee clause, and the fees to sue would have exceeded the full invoice, so I advised the owner that accepting the partial payment left the business better off than suing. That matter is told in the full story of that unpaid bill. The same math applies to a company being sued: business owners are often better off paying a settlement than fighting for a year or two.

Planning the Cost of a Business Lawsuit

The court’s fees are predictable and small; attorney time, the stage at which the case ends, and whether a contract clause or statute shifts fees decide the real cost. Before suing, I suggest reading your contract’s fee and interest terms, sending a written demand, and comparing the net recovery against conciliation court and settlement. For how I handle disputes, see my litigation practice. If you are weighing a lawsuit over an unpaid invoice or contract, email [email protected] with a brief description of the dispute. I can then start an intake and conflict check before you send any confidential documents.