Photograph by Maura Teague

Photograph by Maura Teague

Notwithstanding the familiar meme of “run-away juries” and “frivolous lawsuits,” both of which exist but as flukes, statistically weak anomalies, our legal system generally short-changes the vast majority of meritorious litigants (whether plaintiffs or successful defendants). As discussed in the immediately preceding post (below), for example, many types of damages and harm are deemed “speculative” and, therefore, are not recoverable. If you are a civil plaintiff who has lost $X due to a defendant’s wrong-doing, it is extremely unlikely that you will net $X even if you sue and win.

You might win your lawsuit and, as the prevailing party, you might be entitled to your “costs,” which will undoubtedly be welcome news but there are two problems.

First, as all litigators (but surprisingly few clients, in my experience) know, “costs” do not include any of the client’s attorneys’ fees. Being able to recover “costs” but not “attorneys’ fees” is a bit like being allowed to feast at an all-you-can-eat buffet for $1, but being required to serve yourself with tweezers on a dime-sized plate. What first appears to be a sweet deal is, on further inspection, a rip-off.

Second, “costs” not only exclude “attorneys’ fees” — the big ticket cost (as most people understand the word “cost”)– they also exclude quite a lot of other things that people (and even trial lawyers) would normally think of as costs.

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The_Booze_Hangs_High_(1930)_screenshot_2_bottle21 percent of practicing attorneys qualify as problem drinkers, 28 percent struggle with some degree of depression and 19 percent demonstrate symptoms of anxiety. We can question the numbers. We can discount the numbers as the result of a single study whose methodology we have not scrutinized. (You think the study sponsor, Hazelden, might have a bias?)

Or we can simply face facts, as hard as that can be. The Star Tribune reported this recent study today. I have posted about this issue directly and indirectly here, here, and here (and more).

I have included a link to Lawyers Concerned for Lawyers in many posts and do so again here.

The Star Tribune article points to various potential causes (pressures of the job, alcohol-infused marketing [perceived] obligations, a culture of denial, and so on). Another word for “causes” might be “excuses.” The article did not talk about effects — domestic abuse, criminality, negligence, death (cirrhosis, suicide), etc. etc.

Alcoholism, as we all know, is a widespread illness but no one should be surprised if data shows that lawyers, in particular, are particularly hard hit, given what has happened in their industry over the past ten years (and counting).

EP_WellsFargoPlaza

There are countless instances in life where people and businesses are hurt by wrongful acts or omissions by others but the harm suffered is “speculative,” and therefore not compensable in a court of law. The most obvious example is defamation. If someone talks trash about you, in almost every instance, you will be hard-pressed to tie the calumny to specific monetary losses.

Parties to contracts often agree between themselves that, if particular provisions of the contract are breached, the harm will be “irreparable.” Clauses of this sort reflect widespread recognition that many harms exist, indeed terribly destructive harms, where the link between the wrong done and the harm suffered is difficult to establish. In theory, this “irreparable harm” contractual term makes it easier for the injured party to go to Court to get an injunction — an order from the court prohibiting conduct — regardless of a party’s inability to nail down a specific dollar amount to its injury.

 

When Party A and Party B agree that breach of an agreement would result in irreparable harm, can a Court find that aggrieved Party A, alleging a breach of contract, has failed to prove irreparable harm?

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INT. FEDERAL COURTROOM MINNEAPOLIS MINNESOTA  – DAY

At one table, a lone middle-aged man, distinguished, impeccably-dressed, scowling. At another, three government lawyers, bored. Enter Law Clerk from door behind judicial bench, also bored.

LAW CLERK

All rise! The Honorable Judge Patrick J. Schiltz presiding…

Enter U.S. District Court Judge Patrick J. Schiltz (D. Minn.) from door behind judicial bench, brusquely seating himself behind the judge’s bench.

SCHILTZ

Thank you. Take your seats. We’re here in the case of Dr. Geerish — am I saying that right, Dr. Sahu? — maybe we should start by your telling us, Doctor, the correct pronunciation of your name?

SAHU

Yes, thank you, Judge Schlitz, my name is….

FADE TO:……………

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American_law_digestsIn Minnesota, as in many states, courts draw a distinction between claims that company shareholders can bring: direct vs. derivative claims. In short, shareholders sometimes bring claims against companies because, they allege, the companies have harmed the shareholders directly. In other cases, however, shareholders bring claims against companies, alleging that company actions hurt the company itself and the shareholders are indirectly or derivatively harmed due to their ownership interests in the companies.

Because there are important differences between the legal processes (and likely recoveries) for direct vs. derivative shareholder claims, disputes can arise as to whether a shareholder’s claims are one or the other.

Wouldn’t it be nice to get some additional analysis and direction from Minnesota’s appellate courts on this?

Why, yes it would be nice. So why would the Minnesota Court of Appeals issue a ruling on this thorny subject in a large and significant lawsuit but then designate the decision “unpublished,” which means the decision is “not precedential”?

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CatAndMouseChaseJeorenMoeszRegular Minnesota Litigator readers will be familiar with earlier coverage of “brain raids,” as I call them — the competition between corporate adversaries for “human capital,” that is, experienced, talented, motivated, specialized employees or corporate officers (click here, here, here, or here, for examples of previous posts on the subject).

“Brain raids” don’t just pit corporations against corporations. They pit individual human beings against corporations.

Last week brought the latest installment of St. Jude v. Delgado and Biotronik — in the form of Biotronik’s brief seeking partial summary judgment. The brief is, in my opinion, an excellet piece of legal advocacy. I look forward to Plaintiff St. Jude’s response because the excellence and tenacity of its counsel have been demonstrated time and again.

These brain-raid cases provoke me to reflect on the larger issue of corporation v. person, with a particular focus on lawyers (because I am self-centered).

How will the proliferation of multi-national global corporations affect the future of labor, and the future of lawyer labor in particular? There can be no doubt that individuals or small businesses cannot compete against Medtronic, Boston Scientific, St. Jude, Biotronik, etc. Not only can’t they compete, they struggle to exist. Are solo/small lawyers similarly doomed? Do future lawyers get to look forward to corporate life, with all of its promises, threats, rewards, and deprivations? (more…)

Mug ShotUpdate (January 26, 2016): One more revolution in the slow wheel of justice…. (Attorney Timothy Oliver is suspended from the practice of law pending the petition for his disbarment.)

Update (September 15, 2014): Reporter Jim Hammerand, Minneapolis St. Paul Business Journal (subcription required) reported attorney Timothy J. Oliver’s guilty plea to felony wire fraud this past week.

Update (December 16, 2011):  The earlier post concerned multiple layered financial transactions and queried whether the structure, in the end, was legitimate or fraud.  U.S. District Court Judge Donovan W. Frank weighed in this week, finding fraud against some defendants, not against others.  

Original Post (November 16, 2011) (original headline: Turtles All The Way Down): The way many businesses are organized, with entities owning parts of entities holding parts of entities, can remind one of “Russian Nesting Dolls” or even the cosmological conundrum expressed in by shorthand expression “turtles all the way down.”

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George_Cruikshank_Oliver_Twist

Dickens’ Oliver Twist asks Mr. Bumble for some more gruel.

In the Bubble Pony v. Facepunch lawsuit, covered here previously, Plaintiff’s counsel has come to court, bowl in hand, to ask Sr. U.S. District Court Judge David S. Doty (D. Minn) for more civil procedure gruel. That is, Plaintiff’s counsel is asking for permission to ask his adversary, Facepunch, more “interrogatories.”

The court permits 25 questions of one’s adversary, a substantial enough meal for most litigants. Without knowing more, it is hard to say who’s to blame for troubling the judicial analog of Mr. Bumble.

One does not see requests of this kind very often, for a couple of reasons.

First, contrary to popular belief, many civil litigators are reasonable. If you ask your opposition for permission to ask a few more than 25 questions (or maybe even more than a few more), opposing counsel will often grant the request without the need for court involvement.

Second (and, to my mind, regrettably), very often parties responding to interrogatories (or more precisely their lawyers) weasel, parse, spin, sidestep, stonewall, and play dumb in answering interrogatories. Why bother to ask more questions if the answers you get have no nutritional value?

For this reason, most U.S. civil litigators prefer discovering facts through documents and through depositions. (Patent litigation might be an exception to the general rule.) The challenge for Plaintiff Bubble Pony, however, is that Defendant is in the United Kingdom. Understandably, Bubble Pony would prefer to save some shillings and get interrogatory answers rather than seeking answers in person, across the pond. (more…)

Hartwell Dam, Floodgates Open, photo by Lynne Jenkins

Hartwell Dam, Floodgates Open, photo by Lynne Jenkins

Update (January 22, 2016): In the original post, below, I questioned when it is appropriate to impose a defendant’s legal fees on a losing plaintiff. And when should a plaintiff win its attorneys’ fees from a multi-year battle against a defendant (absent a statute or contract allowing for fee-shifting)?

U.S. District Court Judge Susan R. Nelson (D. Minn.) tackled this “flip-side” question this week in the Great Lakes Gas v. Essar Steel litigation thatI have followed for years.

Plaintiff highlights four instances of Defendants’ sanctionable conduct [purportedly warranting fee-shifting]: (1) filing motions with no factual or legal support; (2) repeatedly asserting that Defendants did not breach the Contract and presenting legal arguments to support that assertion, even after the Court definitively ruled Defendants had breached the Contract; (3) creating unreasonable discovery delays and driving up costs in the process; and (4) Defendants’ conduct (more specifically, the conduct of their counsel) in support of its expert witness and challenging that expert’s exclusion by the Court. In addition, Plaintiff asks for another $853,000 in attorney’s fees ‘for three particularly egregious instances of misconduct.’ These are: (1) Defendants’ ‘baseless and unsupported’ third-party claims against Great Lakes’ parent entities resulting in voluminous discovery; (2) the fact that Defendants ‘attempted to undermine this Court’s jurisdiction by filing a complaint with FERC’ asserting the same issues as were the pending before the Court; and (3) Defendants’ challenge to the Court’s subject matter jurisdiction shortly before trial and in violation of a stipulation between the parties. Based on these instances and Defendants’ overall allegedly dilatory and vexatious conduct, Plaintiff requests a total sanction award of over $2.6 million in attorney’s fees.

Judge Nelson found:

Plaintiff’s recounting of Defendants’ objectionable conduct is largely accurate. As previously described, the Court does not agree with, nor condone, this conduct. However, an award of sanctions for millions of dollars in attorney’s fees, requires especially egregious and vexatious behavior. Even looking at the totality of Defendants’ conduct over the last several years, this Court cannot conclude that sanctions are presently appropriate.

So, no monetary punishment for the laundry list of costly tactics. But, maybe the decision reflects a reputational punishment? Note that Judge Nelson calls out the Plaintiff’s lawyers, specifically (” Defendants’ conduct (more specifically, the conduct of their counsel)…”

“Plaintiff’s objections to Defendants’ repeated mischaracterizations of the record and case law are largely well-founded….Unfortunately, there are also a number of examples of Defendants’ mischaracterizations of the record and refusal to accept the rulings and findings of this Court….” These are not findings that I would appreciate being associated with my legal practice or my law firm.

The day after Judge Nelson’s denial of the request for award of attorneys’ fees, Plaintiff filed its notice of appeal…

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Anarchy SymbolA recent disastrous pro se employment case (for the pro se plaintiff) reminded me of the libertarian anti-licensure position. If it were up to strict libertarians, we would not require licenses to practice law (or dentistry, surgery, psychiatry, architecture, or engineering etc.). The libertarian argument is that “government red-tape” and regulation increases the costs for lawyers, doctors, architects, engineers and so on.

If we just let the “invisible hand” of the free market do away with incompetence, we would enjoy excellent services at a fraction of the government-inflated price. (Would another word for that be anarchy? Is there any example in the history of human society where we can see the libertarian ideal working in practice?)

If we just let the free market do away with incompetence rather than trying to weed it out through government regulation, some of us might enjoy excellent services at a fraction of the price: that is, the very rich. They would have the means both to collect information necessary to differentiate good from bad providers and, of course, to obtain with money the services of the best providers. The rest of us would be their fodder or lab rats, the desperate, the poor, or the ill-informed who would help incompetents, or inexperienced, or scammers, build their skills, both good and bad.

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