Minnesota law, consistent with the second law of thermodynamics, implicitly acknowledges that buildings, over time, inevitably develop problems. It’s no one’s fault. It’s the ravages of time.

On the other hand, sometimes latent construction defects are built in from the get-go.

Because of these two facts, Minnesota law allows for lawsuits for badly built buildings but also sets a time limit on just how long after “substantial completion” such claims can be brought.

To address this tension (and also due to the fact of lost memories and witnesses, making defenses difficult), the legislature has to balance the interests of builders, who obviously do not want open-ended and timeless potential liability for every building they have ever built and building owners who cannot possibly appreciate what might be expensive hidden construction defects until, years later, they burst out into the open.

Photo by Horst Gutmann

The Minnesota Supreme Court is poised to review a Court of Appeals decision on this issue, which is complicated by virtue of the fact that the construction involved two separate buildings, not built at the same time, and condominium owners wh0 bought their units at different times.

Under these circumstances, when does the clock run on the “statute of repose” (the ultimate time limit for most construction defect claims)? On substantial completion of “Building A”? “Building B”? Are the buildings a single “improvement” or two? And when do the statutory warranties start to run? From when each condo is bought? From when the first condo was bought?

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As all Minnesota litigators know, we are obligated to “meet and confer” with their adversary before bringing a motion before the Court. The “meet and confer” rule has an obvious benefit for court administration as it avoids work for the Court if the parties (or their lawyers, typically) are able to negotiate a solution to their disagreement before bringing a motion.

Minnesota litigators routinely by-pass the “meet and confer” obligation and Minnesota courts routinely ignore the lapse because, under many circumstances, it is widely recognized as a futile formality. For example, if a movant is bringing a long-anticipated motion for summary judgment to kick her adversary’s case out of court, it would seem extremely unlikely that this motion could be averted through a “meet and confer.”

Nevertheless, these “meet and confer” requirements are real and they are really important, as set out in an order this week by U.S. Mag. Judge Katherine Menendez (D. Minn.).

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U.S. Air Force Graphic by: T Sgt Josef Cole

Update (May 8, 2019): The pessimism about the class action complaint against Capella University in the post below has not been entirely borne out but we were not far off.

This week, the plaintiffs’ second amended complaint has withstood a motion to dismiss (in part).

The plaintiffs barely survived the motion to dismiss, losing every claim of every plaintiff but for one plaintiff.

A follow-up question, then, will be what this does to the size of the proposed plaintiffs’ class. The one surviving claim, of Plaintiff Maurice Jose Ornelas, was that “a Capella recruiter” told Mr. Ornelas in an email, “[o]ur typical learner will complete their PhD program in 3 years, plus or minus one quarter, by averaging 2 courses per quarter.” (here at p. 9). This was allegedly (and apparently) false.

But, unless this was part of a script, a repeated representation, this one instance presumably cannot support or justify a class action…

Original post (10/5/2018): About eight years ago, Minnesota Litigator noted a securities fraud class action against Capella University and predicted that the lawsuit would fail. It did.

Once again, Capella University finds itself being sued in a class action (not for securities fraud this time, just fraud). Once again, Capella University has brought a motion to dismiss and, again, we predict the University will prevail on its motion to dismiss. The allegations are that:

Capella’s doctoral programs were not designed for completion within the represented timeframe and cost; to the contrary, they were designed to last considerably longer so Capella could maximize the extraction of tuition payments from Plaintiffs and the Class.

We have not read the entire 137-page complaint nor undertaken our own investigation. Maybe Capella University understated the amount of time it would realistically take for students to obtain their degrees, putting profit and marketing above candor at aspiring students’ expense. On the other hand, as Capella’s lawyers point out, with a product as complicated as “an education,” it is extremely difficult for courts to weigh in on the quality of the product.

It is extremely difficult for a court to consider the claims of John Doe, Jane Roe, Pete Coe, and Terry Boe, and, as to each plaintiff, decide who is responsible for the delays or failures in their academic pursuits (much less who is responsible for the delays or failures the many class members whom John, Jane, Pete, and Terry claim to represent).

It might be ironic that Capella University’s current marketing tag-line is “Live and Learn;” it seems that many Capella University dropouts have learned gotten an expensive education at Capella, but not the one they signed up for…

We’re back. We spent about ten days straight preparing for a five-day trial scheduled to start on Monday, May 6. (This, by the way, supports our rule of thumb for budgeting trials: two full days of preparation for every one day of trial.)

Our adversaries failed to show up with exhibit notebooks for opposing counsel (that is, for us) (practice pointer: don’t be like them) but they did show up with their checkbook (metaphorically). We settled the case before a jury was empaneled.

In the past, we have called trial, “Whack-a-Mole on Steroids.” (Here is a video of “Whac-a-Mole” in action to give a flavor of the experience (note the alternative spelling which might have to do with branding (in which sellers like to use non-existent words))).

Some might consider trial “fun.” Some consider trial “nightmarish.”

Almost everyone, if not everyone, should agree that it is challenging and stressful.

So, congratulations are in order that the parties were able to bridge the chasm of their dramatically differing assessments of the case. Next time, we can only hope it happens sooner than Day #1 of a scheduled trial.

Photo by Molly Steenson

Photo by Molly Steenson

Talk amongst yourselves…. I’ll be back…

Update (May 3, 2019):  The Minnesota Court heard argument in the the case described below, Engstrom v. Whitebirch, this week.

For those of you looking for a rule of thumb for predicting outcomes of appellate courts, watch the video of this oral argument. Watch the questioning of the lawyers. In the case of Engstrom’s counsel, the questions are slow in coming and, when they do come, are either softballs or wild pitches.

We found the Supreme Court justices questions (and the relative lack of them for Whitebirch counsel, Mr. Gerald Von Korff) revealing and almost excruciating to watch. Mr. Von Korff is asked very little at the start of his argument but then is asked essentially the same question at great length (in light of his evasive responses).

We do not believe that it is risky to predict a win for Mr. Engstrom and a win for consumer fraud plaintiffs, generally. The Minnesota Supreme Court, we predict, will find that plaintiffs state actionable fraud when their only “injury” is having had to hire lawyers and challenge a false claim made by a supposed creditor (or other allegedly unscrupulous schemer).

Update (December 5, 2018): Following up on the post below about how one commits a massive fraud, let’s hypothesize a situation where a company falsely charges people for services that the people do not owe but stops doing so immediately when the invoiced people object (or hire lawyers to object on their behalf).

Could an intended victim, who incurred legal fees hiring a lawyer to fight the false charge, sue for consumer fraud?

On the one hand, this “intended victim” suffered no loss. On the other hand, the “intended victim” incurred legal fees to avoid suffering a loss. Furthermore, this “intended victim” might be a good candidate to vindicate the rights of ALL of the ACTUAL victims, right?

What would be wrong or problematic about allowing the intended victim to bring a lawsuit to enjoin the improper conduct?

These are issues to be addressed by the Minnesota Supreme Court in Engstrom v. Whitebirch. Here is the plaintiff’s petition for Supreme Court review, here is the response, and the Supreme Court granted the petition for review last week.

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Showing our age (yet again), we invoke our older readers’ memories of comedian Flip Wilson who had a successful record album, “The Devil Made Me Buy This Dress,” in the 1970’s, which, in turn, spawned the 1970’s meme, “The Devil made me do it.”

At issue in a newly filed case in the U.S. District Court (D. Minn.) is whether the Minnesota town of Belle Plaine stopped allowing private citizens to erect their own veterans’ memorials in a public park in response to The Satanic Temple’s application for a permit to erect such a display (and, if so, whether that violates the U.S. Constitution).

It seems the town was okay with the Belle Plaine Veteran’s Club’s display, known as “Joe,” depicting a soldier kneeling before a Christian cross. (See here, at Para. 27) (that is, until Belle Plaine was threatened with litigation over the religious nature of the display on public land after which the display was taken down). But when the Satanic Temple applied for a permit, the town decided it had had enough of this “limited public forum in Veterans Memorial Park.” (See here, the towns decision that private displays “no longer meets the intent or purpose of the park” (at p. 9 of 11)).

It seems a bit odd to us if a town, realizing that a particular public forum has become controversial and politicized, could not decide to abolish the forum for all, but we are not First Amendment specialists. Who knows? For what it’s worth, the Satanic Temple’s proposed monument included the pentagram, a religious symbol of that faith, we believe. It seems odd to us that a display with a cross might run afoul of the Establishment Clause but not so much for a symbol of the Satanists’ faith?

Jeremy Greenhouse

The Minnesota-based law firm of LEVENTHAL pllc specializes, if you will, in general civil litigation. Put a different way, we don’t specialize very much.

If we did, “lake law” might be a tempting body of water law because our state has 10,000 or more of them. And the connection between many Minnesotans and their lakes is an intense bond which, from time to time, can cause intense conflict and bitterly fought civil litigation.

But, when it comes to environmental law, Minnesota Litigator and LEVENTHAL pllc have a healthy phobia of getting in over our heads. We are therefore delighted to be able to pass on the analysis of Minnesota environmental lawyer, Jeremy Greenhouse, on an important environmental case of local but broad public interest: White Bear Lake Restoration Association v. Minnesota Department of Natural Resources (“DNR”):

Thanks for the opportunity to comment on this important environmental law decision. Full disclosure: I represented the Minnesota Chamber of Commerce in this case, co-drafting the Chamber’s amicus brief in support of the DNR, but my comments here are my own and do not necessarily represent the Chambers’ position on the issues at hand. 

The decision addressed head-on two issues that have been regularly discussed in my practice as an environmental attorney: (1) the interplay between sections 116B.03 and 116B.10 of the Minnesota Environmental Rights Act (MERA), and (2) whether the public trust doctrine reaches natural resources beyond navigable waters and the underlying soil.

The first issue, MERA, was a pure question of statutory interpretation. Section 116B.03, subd. 1 establishes a cause of action that any person residing in the state can bring against “any person” for the protection of natural resources; to a successful plaintiff, the court can grant direct equitable relief necessary to protect the natural resources. Minn. Stat. § 116B.07.  Section 116B.10, on the other hand, establishes a cause of action against a state agency that has issued an environmental quality permit where the plaintiff claims the permit is inadequate to protect natural resources. However, under section 116B.10, subd. 3, the only available relief for a successful plaintiff (apart from emergency temporary injunctive relief) is for the court to remit the matter to the agency to for further administrative proceedings. Understandably, a plaintiff challenging an agency permit would prefer to have access to the broader court-ordered relief under section 116B.03, rather than having the matter sent back to the agency that issued the challenged permit under 116B.10.

The district court in the White Bear Lake case held that the plaintiffs could sue the DNR over the inadequacy of its water appropriation permits under section 116B.03 and were not required to proceed under section 116B.10. Accordingly, the court could and did grant direct relief, right down to dictating the times of year that residents in the Northeast Metro area could operate lawn sprinklers. On appeal, the DNR argued, convincingly, in my opinion, that the court’s interpretation of MERA effectively rendered section 116B.10 of no effect, contravening principles of statutory interpretation. The court of appeals agreed, and I think footnote 9 of the opinion nicely highlights the sorts of practical problems that would face permit holders if permits could be challenged under section 116B.03:

We observe in passing that, if section 116B.03 relief is available in this circumstance, then the multitude of certiorari appeals concerning mining permits, pipeline-construction permits, and the like will never be final so long as there is a person or entity with a district court filing fee who can state a colorable claim to a district court that the agency permit allows the pollution, impairment, or destruction of natural resources. If respondents’ construction of section 116B.03 is accepted, district courts will, in the future, be reviewing agency-issued environmental quality standards, licenses, permits, and the like and will be authorized to issue remedies outside of the ordinary administrative process established by the legislature. We cannot see in section 116B.03 such a disruptive and far-ranging authorization of the exercise of court jurisdiction.

With regard to the pubic trust doctrine, this ancient cause of action, which in many ways was rendered obsolete upon the early-1970s dawn of modern environmental law and environmental rights statutes such as MERA, has been making a solid comeback.  The core doctrine is undisputed, holding that the state, in its sovereign capacity, holds absolute title to all navigable waters and the soil under them for common use. Where the public trust doctrine has been making a comeback is with plaintiffs trying to expand the doctrine’s scope to other natural resources. Most recently groups such as Our Children’s Trust have brought actions in state and federal courts across the country arguing that the public trust doctrine applies to the atmosphere and can be used as a basis to force government action on climate change. Such a case was brought in Minnesota in 2012, and the Minnesota Court of Appeals took a conservative position, holding that the doctrine had never been expanded to resources other than navigable water in Minnesota and that the court of appeals was not in the business of creating “an entirely new common law cause of action.”  Minnesota in Aronow v. State, 2012 Minn. Dist. LEXIS 171 (Minn. Ct. App. 2012).

This is essentially the position the court took in White Bear Lake in refusing to extend the public trust doctrine to cover groundwater, writing:  

As an error-correcting court, it is beyond our authority to change the law. That power, if it is to be exercised by the judicial branch, is properly vested in the Minnesota Supreme Court

Considering the court of appeals’ repeated punt to the supreme court, the importance of the environmental law issues at hand, and the bristling dissent by Judge Bratvold, I would not be surprised if this case was appealed to and taken up by the Minnesota Supreme Court.

Turtling is an overwhelming temptation for many of us in many situations when confronted. It can be a sound strategy in many contexts. It is an extremely unwise strategy when you have been sued in Minnesota district court.

Plaintiff Mary Brown sued Defendant MSP Services LLC dba MSP Home Rental (“MSP”), alleging that MSP discriminated against her in violation of the Minnesota Human Rights Act based on her disability. MSP claims to have “believed the process was similar to conciliation court and housing
court, where no written response to the claim [was] necessary….” Therefore MSP did not respond to the summons and complaint and, in fact, did not respond to anything until after a default judgment had been entered against it for $915,330.65
.

Post-judgment, when Ms. Brown’s lawyers began their efforts to collect on their judgment against MSP, it occurred to MSP to hire lawyers.

Facepalm (Caïn by Henri Vidal, Tuileries Garden, Paris, 1896. )

“Call the doctor! Grandma’s dead!”

The Minnesota Court of Appeals, in an unpublished decision (don’t get us started), held that the district court abused its discretion when it let MSP off the hook for its cavalier attitude toward Ms. Brown’s lawsuit. That is, the appellate court overruled the trial court’s grant of MSP’s Rule 60.02 motion for relief from judgment, that MSP had sought to get out from under the default judgment against it.

There is no “practice pointer” here for Minnesota litigators. If you don’t see the problem with MSP’s conduct (that is, its lack of conduct, of course), you’re hopeless. But this might be a “case study” for Minnesota citizens and businesses who think that turtling is a viable defense strategy in Minnesota civil litigation.

It might be fair. It might be unfair. But certain industries and certain businesses within those industries sometimes get reputations for litigation misconduct. For example, there seems to be almost a lore that railroads railroad their adversaries (and courts) in litigation. And the BNSF railroad, in particular, seems to run off the rails from time to time in litigation. (See a few bad results for the BNSF discussed here and here, for example.)

Oops. They did it again (or maybe not?)….

Maybe it’s all a big misunderstanding?

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