The way I see it, SMTS is suing (now as opposed to later down the road) for one of two reasons. A) they have the cash and think that CASM will settle under the pressure of mounting a defense or B) CASM is getting some real traction and they want to stop them.

In either case SMTS loses.

In case A) they sue because they think they have the upper hand. Except that investors hate uncertainty and that just adds to the uncertainty that is already there with Obamacare. (Govt will go after a company with 80% gross profit). So they lose because there are fewer investors interested in the company.

In case B) they lose because CASM is a real competitor and the know it and want to stop them in their tracks. They certainly loose on the growth and/ or margin side. Under this scenario winning the lawsuit is a must.

On top of it, suitors are not going to be interested in SMTS until the conclusion of the lawsuit.

Having said all this, the stock can still go up if the quarterly results are there but fewer investors will be bidding on the shares.

Most quality (low debt & decent growth) companies have rallied to where they were a year ago.. SMTS is under-performing big time.