Artists-impressions-of-Lady-Justice,_(statue_on_the_Old_Bailey,_London)Common practice in Minnesota civil litigation is for defendants’ answers to allegations made against them in  civil complaints to look something like this (I paraphrase):

Paragraph 1: I admit that I am who you say I am.

Paragraph 2: I deny Paragraph 2-10 of your complaint.

Paragraph 3: Paragraph 11 of your complaint quotes a document that speaks for itself.

Paragraph 4: Paragraph 12 of your complaint states a legal conclusion and I do not have answer legal conclusions.

Paragraph 5: I do not have information to admit or deny Paragraph 13 of your complaint so I deny it.

Paragraph 6: I deny everything else you allege in your complaint.

As all experienced Minnesota civil litigators know, this is barely an exaggeration of the vast majority of responsive pleadings in Minnesota civil litigation. (Appended to this unhelpful jumble are defendants’ “affirmative defenses,” which are often long and silly recitations of inapt defenses. Defendants’ excuse for the catalog of inappropriate defenses is that their clients must raise all imaginable affirmative defenses so as not to waive any of them. This is generally false.)

Answers to complaints do not have to be this way. They could be a lot better and more informative. Courts should enforce their rules so defense lawyers make answers to pleadings better. It could make a difference in how efficiently cases are litigated. Consider one recently filed answer I came across as a model for how the system could work…

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http://goo.gl/RiLwD3

http://goo.gl/RiLwD3

Imagine that Manufacturer A has been selling products of Company B for downstream sale to retailers for many years throughout the state (or some other defined region). Imagine that A & B’s agreement was for a one year term, automatically renewing unless and until either party gives 90 days advanced notice to the other of its intent to terminate the arrangement.

Does this not sound quite simple — like a year-to-year lease arrangement or any kind of term agreement subject to renewal?

Wouldn’t you think that Manufacturer A could, consistent with its contract with B, give the appropriate notice,  terminate Company B, and sign on another business partner? Is there something wrong with that? Would it be “unethical”?

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GuillotineAs all civil litigators know, a “default judgment” occurs when a plaintiff wins her case because the other side “defaults.” In other words, the defendant has notice of the lawsuit and does not bother to defend itself for one reason or another. It’s a pretty extreme outcome. One side loses the lawsuit without any finding that the loser actually did anything wrong (aside from failing to show up).

So, “[d]efault judgments are to be liberally reopened to promote resolution of cases on the merits.”

What can civil litigators do to try to keep a default judgment from being vacated by the trial court or on appeal?

The first, most obvious step is to make sure the defendant is properly served; the most typical and compelling reason to vacate a default judgment is defendant’s argument that she did not have any knowledge of the lawsuit. This will be the go-to argument for many defendants in the face of a default judgment if they can cobble together evidence to support the claim though such claims do not always win the day. In the linked case, the trial court basically held that the default judgment loser was a liar and the Court of Appeals deferred to the trial court’s determination on that point.

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Pendleton_Sinking_ShipI have been repeatedly documenting and lamenting the horrible prospects for U.S. lawyers in recent years (here and here, for example).

Altman Weil, Inc. is a Pennsylvania-based legal consultant. Law360 is an on-line legal industry publication, which disseminated the results of an Altman Weil survey this past week in an article by Melissa Maleske.

In a nutshell, there is no sign of recovery on the horizon for the U.S. civil litigation industry . The Altman Weil report suggests that, in large law firms, associates are working the most, then equity partners, and, lagging behind, non-equity partners. In many ways, this makes sense. Associates have the lowest billing rates. They also have the most to learn. Equity partners take home most of the money; they should have to work for it. Non-equity partners dwell in purgatory. They do not have the appeal of the associates lower billing rates. Also, they get work done more quickly and efficiently than associates because they have much more experience. It’s actually difficult for these lawyers to spend a week on a deposition outline whereas an associate could flounder around on such a project for a fortnight or longer. And, finally, equity partners have incentive to work associates like dogs and disincentive to give work to non-equity partners. Equity partners know that the non-equity partners hope to get their own piece of the equity pie, and that can be a zero-sum transaction.

60% of the law firms surveyed by Altman Weil, Inc. reported over-capacity.

“Despite overcapacity, 51 percent of firms said headcount of nonequity partners increased last year,” the Law360 article continues.

In other words, ships are sinking, and as they sink, many are hiring more crew members and taking on more ballast?

The Law360 article reports that one survey respondent commented, “Growth is necessary, if business and revenue are to expand.” I believe this is the same thing as saying, “Growth is necessary, if there is going to be growth,” and this kind of reasoning reminds us that law schools do not teach lawyers to run businesses…

 

640px-Water_well_types_wiki.svg

Update (May 20, 2016): Below, I noted a rare granting of a motion to reconsider. It is not all that surprising when a court agrees to change its decision after it has already agreed to “reconsider” an earlier decision. That happened here. Congratulations, again, to ADM counsel, Curtis Ripley of Stinson Leonard. As a bonus, ADM counsel was also able to beat back a request by Plaintiff’s counsel to allow for a claim of punitive damages. Plaintiff’s request was two years after the deadline and the delay, the Court held, was not justified.

Original post (February 22, 2016) (under the headline: Well, well, well, what do we have here? Ripping Off Groundwater?): A company paid a farmer $20,000 to dig two wells (for water) on the farmer’s property. The wells aged and and a successor company had to negotiate with the farmer to dig new wells on the property. Or did it? The successor company took the position that it had bought the right to two wells on the property so it could simply stop up or dismantle the first two wells and then dig two more in the same vicinity (that is, in the same “well site,” a defined term under the original contract).

Earlier this year, U.S. District Court Judge Michael J. Davis (D. Minn.) construed the contract and held that the defendant company (ADM) was not eligible for a BOGO bargain (“buy one, get one free”) (or, more accurately, BTGTF?). Not only that, Judge Davis ruled that the farmer plaintiff could proceed against ADM for theft of the farmer’s water.

ADM asked Judge Davis to reconsider.

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Vice President Spiro Agnew coined the phrase,  "NN of N"

Vice President Spiro Agnew coined the phrase, “NN of N”

Critics are relentless in their criticism but they are stingy with their gratitude. After all, people enjoy critics because critics voice opposition.

Having said that, if a critic does not acknowledge progress in those whom he criticizes, does the critic not become a mere nattering nabob of negativity? Is there not a big and important line between a critic (who is a good person) and a cynic (who is not a good person)?

This is by way of saying “Thank you” to the StarTribune, which I have frequently criticized for failing to link to court documents. “Thank you” for deviating from your common practice in a post today about supposed heirs to the fortune of He-Who-Is-Widely-Known-As-Prince.

Creative Commons License. Photo by BoH

Creative Commons License. Photo by BoH

Update (May 18, 2016): The original post, below, concerned a commercial dispute over a valuable contract ($72 million or more) to provide a revolving crane suitable for offshore oilfield support services. In brief, Plaintiff Blake allegedly lost a contract with non-party Oceanografia; some years later Blake allegedly discovered that the opportunity had been lost due to the tortious machinations of Defendant CarVal.

The key words there are “some years later.” Blake is an Alabama company. Alabama has a two-year statute of limitation (“SOL”) on tortious interference claims. Defendant CarVal is a Minnesota entity. Minnesota has a six-year SOL. So, in one of the many examples of civil litigation making for strange bedfellows, the Minnesota entity wants Alabama law to apply (to bar the lawsuit) but the Alabama company wants Minnesota law to apply (or, maybe, federal admiralty law?) to enable its lawsuit to go forward.

The U.S. District Court (D. Minn.) (Ericksen, J.) found that Alabama’s two-year limitation applied and so the judge held that Plaintiff’s case was time-barred.

According to Plaintiff-Appellant, however, the judge failed to do “any analysis of [Plaintiff] Blake Marine’s alternative arguments – that the Alabama two-year statute of limitations should be tolled based on the facts of this case, that an exception applies to the application of Alabama’s statute of limitations based on Minnesota statute, and whether laches applies pursuant to Federal maritime law.”

Of course, the U.S. Court of Appeals cannot resolve the issue on appeal in this case by simply expressing its preference between a two-year or an six-year SOL. Neither can the Court of Appeals simply defer to Judge Ericksen. It must base its decision on legal analysis. The questions before the Court are difficult and  well-briefed (see here, here, and here).

An aside: I also note in the Court record that both litigants got “notices of deficiency” from the 8th Circuit for problems with their briefs (here’s one and here’s another). If even the most preeminent lawyers in the country cannot follow the court’s administrivia rules, should we conclude that lawyers are sloppy or that courts are perhaps a bit too rigid and ruly?

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everclear2 College PartyingI recently high-lighted a multi-million dollar contract case where the Plaintiff’s complaint was a mere six pages. In many posts, over the years, I have noted excessively long complaints, which are annoying to courts and ineffective as advocacy (here is an example; here is another).

The is no magic answer. There is no “optimal” complaint length. Different cases call for different strategies. Does Elizabeth Shank help or hurt her case against Carleton College for its response to her alleged rapes with a recently filed 49-page complaint? Is the complaint drafted as a public document for the general public or for the court? (The case has been assigned to U.S. District Court Judge Patrick J. Schiltz (D. Minn.) who is not a fan of sprawling complaints.)

As for the merits of Ms. Shank’s lawsuit, time will tell. As a Carleton grad and Carleton dad, I suppose I won’t be on the jury. Admitting my bias, I think that Plaintiff does herself no favors by adding a count for intentional infliction of emotional distress against the school (see p. 43). Suggesting that the college intentionally caused her “physical injury and severe mental and emotional distress” seems to me to go too far.

Whether it is Carleton or any other college, such allegations are unfortunately predictable and colleges are stuck between risks of lawsuits by alleged perpetrators and alleged victims (here is a complaint against Macalester College by an accused perpetrator).

 

A Wizard. (Photo thanks to John Dallman, Flickr Creative Commons)

A Wizard. (Photo thanks to John Dallman, Flickr Creative Commons)

Update (May 13, 2016): In 2006, Vaughn Veit donated real property to a foundation (the Veit Foundation) and sought a tax deduction based on the value of the donation. Veit hired ProSource Technologies to appraise the property for purposes of determining the size of hi tax benefit. The higher the valuation, the bigger the tax deduction that Mr. Veit would enjoy.

One has to imagine that the Prosource appraisers had a sense that their customer would be more disappointed in a low estimate than a high estimate and they might have felt some pressure to estimate on the high side.

But, as I have emphasized in earlier posts, below, contrary to the sense I get from many lawyers and many business people, appraisers cannot just make sh*t up. Competent appraisals are within a range of reasonableness. Sure, you can find crooked appraisers, as you can find any other crooked professionals if that is your intent. But you’re kidding yourself if you think you can simply get any appraiser to back into any number that suits your needs.

The IRS decided that the ProSource appraisal was “grossly inflated” and this had tax implications for Mr. Veit.

However, Mr. Veit lost his appraisal malpractice action against ProSource, but not because anyone concluded the appraisal was within a reasonable range. The district court decided that the lawsuit was past the six-year statute of limitation. The Minnesota Court of Appeals affirmed. The key question: did the statute of limitation start to run when ProSource completed the appraisal or when Mr. Veit submitted it to the IRS to support his deduction? The courts held that it started on the earlier date.

The result has to be deeply disturbing to Mr. Veit. How was he supposed to know that the ProSource appraisal was unsound (if it, in fact, was) until the IRS rejected it? What are buyers of appraisals supposed to do to assess the validity of an appraisal they buy? Get a second opinion every time?

On the other hand, as we all know and appreciate in light of the 2008 economic meltdown, the validity of appraisals is critically time-dependent.  Over six years, property valuations can change a great deal. Maybe appraisers need the protection of the broadest possible application of a six-year statute to avoid against 20/20 hindsight bias applied to an inherently imprecise practice?

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Thief Criminal Burgler RobberUpdate (May 11, 2016): You hire a kid while he’s still in business school, you give him a summer internship, you give him work during his last year of school, and you give him a full-time job upon graduation. About six months later, he abruptly resigns to join a direct competitor after having allegedly:

  • accessed your sensitive files that were not relevant to his job;
  • placed dozens of your files in his desktop’s recycle bin;
  • attempted to connect an external hard drive to his work computer at your shop;
  • accessed his personal email account from his work computer, while also working in your secure database;
  • accessed a direct competitor’s recruiting files and emailed the competitor about prospective employment from his work computer;
  • attended your confidential meetings after he knew he was going to resign;
  • had your company configure a smartphone to include access to your proprietary data four days before his resignation;
  • reported that the smartphone was “no longer available” just one day before his resignation;
  • created a document using your “highly proprietary and confidential” information the day before his resignation; and
  • deleted over 200 files, many of which he did not need to perform his job just before resigning.

Going forward, the kid will NOT be getting a holiday card.

But, assuming the allegations are true, does the conduct listed above result in liability under the Computer Fraud and Abuse Act, a federal statute that was passed to address computer hacking?

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