Update (June 2, 2017): The prohibition of “champerty” —  the sale of a share of one’s interest in a lawsuit to “a stranger” —  may seem antiquated to many (and bad policy to some) but it is clearly alive and well in Minnesota.

In the post below, we were critical of Minnesota courts’ prohibition of “champerty.” Prospect Funding sought Minnesota Supreme Court review of an adverse decision in which the Court of Appeals identified a “strong public policy” against champerty. Recently, the Minnesota Supreme Court sided with Ms. Maslowski and rejected Prospect Funding’s petition for further review.

Original Post (February 15, 2017): “Champerty” is “an agreement between a stranger to a lawsuit and a litigant by which the stranger pursues the litigant’s claims as consideration for receiving part of any judgment proceeds.”

Sound familiar? Ever heard of a “contingent fee agreement”?

Contingent fee litigation, in which lawyers recover for their time by taking a percentage of the litigant’s recovery is NOT considered “champerty.” Apparently, lawyers are not considered “strangers” to the lawsuits in which they claim a contingent fee interest. That is convenient. No one questions the legality and propriety of lawyers’ contingent fee agreements.

The general purpose of the law against champerty…is to prevent officious intermeddlers from stirring up strife and contention by vexatious or speculative litigation which would disturb the peace of society, lead to corrupt practices, and pervert the remedial process of the law. In other words, the prohibition on champerty and maintenance is aimed at discouraging intrusion for the purpose of mere speculation in the troubles of others.”

But wait. Hold on. When a court steps in to void a contract between two sophisticated private parties, who’s the officious intermeddler again? “Stirring up strife”? “Vexatious litigation to disturb the peace”? “Intrusion in the troubles of others”? Give us a break. None of these characterizations correspond, even remotely, to reality.

In reality, the controversy of “litigation funding” is all about money and has nothing to do with trouble-making.

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Update (May 31, 2017): We just learned today that, on May 26, the day of our most recent post on Rumble v. Fairview Health Services, et al., (below), the case settled on confidential terms. Plaintiff’s tenuous motion for a continuance of trial filed on 5/23 could not have been helpful leverage for Plaintiff in settlement discussions three days later…

Original Post (May 26, 2017): Minnesota Litigator has previously covered the case of Jakob Rumble v. Fairview Health Services, et al.. The case is hard-fought, has gotten national attention, and involves many lawyers who have been working it for two or three years.

Trial is set for June 19. Plaintiff Jakob Rumble and his lawyers have brought a motion for a continuance until the fall when Mr. Rumble anticipates he “will have a less intense academic schedule.”

Fairview Health Services vigorously opposes Plaintiff’s motion.

Want to predict how U.S. District Court Judge Susan R. Nelson (D. Minn.) will rule?

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Lawyers who specialize in civil litigation spend most of their days writing. We have heard it said that U.S. lawyers, collectively, are the highest-paid professional writers in the country and there might be truth to that.

Some lawyers get playful with language. A federal judge made up a word and, over time, others adopted the word and it became an accepted word now in at least some dictionaries.There are stories of judicial clerks challenging one another to insert an obscure word in a judicial opinion, for example.

We had to wonder if the appearance of the fairly obscure word, “sclerotic,” in a recent opinion by Sr. U.S. District Court Judge Paul A. Magnuson (D. Minn.) was inserted playfully (though the word was completely appropriate in context).

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Memorial Day ImageMinnesota Litigator wishes its readers a happy Memorial Day.

If I wish to harm a person’s reputation, what is to stop me from simply making things up (for example, that the person was involved in a far-reaching financial fraud, that the person engages in bizarre sexual conduct, that the person is a pathological liar)?

Obviously, such allegations are serious and harmful. They could form the basis of a lawsuit for defamation.

But here’s a twist. Imagine I say something along these lines to several people about John Doe and he sues me. Under Minnesota law, to defend against his claim, do I have to come up with evidence that my statement is true or does Doe have to come up with evidence that the statement is false?

Which makes more sense to you? Lawyers call this “the burden of proof” and lay people often do not appreciate how critical it can be — to be forced to carry the burden or to be relieved of the burden.

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In our minds, many trial lawyers like to think of ourselves as warriors, clashing our weapons and out-maneuvering our adversaries. Some of us imagine ourselves in an epic struggle of good against evil, a pitched battle for nothing less than Justice — a transcendent reckoning, an adjustment or realignment of reality so that a wrong is righted and injury is undone.

There is sometimes great truth to our grandiose fantasies. We all know that U.S. lawyers have played enormous roles in the lives of many of their clients and for the benefit of society as a whole.

Unfortunately, though, parts of our job simply cannot be reconciled with our swash-buckling day-dreams. Word-counts, font choices, counting days and calendaring deadlines, on and on and on…. The appalling truth is that a major part of our professional lives is mind-numbing paper-pushing. Sometimes the Achilles heel of trial lawyers can be their failure to comply with a picayune point divorced from the drama that inspires us to do our work.

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“A Tough Knot to Crack” (photo by Jay Fanelli)

Update (May 19, 2017): This week’s published Minnesota Court of Appeals decision, Security Bank & Trust Co. (“SB&T”) v. Larkin, Hoffman, Daly & Lindgren, Ltd. (“LHD&L”) is yet another thread in Minnesota’s knotty jurisprudence on the appropriate accrual date of a legal malpractice case.

Mr. Gordon Savoie got allegedly bad estate planning help from LHD&L in 2009. The papers drawn up by LHD&L failed to include a provision for a generation-skipping trust or other mechanism to avoid a  generation-skipping tax. This lapse is alleged to have been legal malpractice.

Mr. Savoie died, SB&T became the personal representative and successor trustee to the estate, and, SB&T alleged that LHD&L’s negligence caused the estate a tax burden of $1.654 million.

So, the question before the court was when did the claim accrue? When LHD&L did the allegedly negligent work? When Savoie paid for it? When Mr. Savoie died? When the tax was imposed? When Mr. Savoie suffered “some damage” (or did he?)? When the trust suffered “some damage” (or did it?)? And when did Mr. Savoie suffer “some damages? When did the trust?

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The Cardsharps, painted by Caravaggio

The lawsuit, Transport Drivers, Inc. v. Coca Cola Refreshments USA Inc. (“TDI” v. “CCR”), in the U.S. District Court (D. Minn.), is a generic and stunningly boring contract dispute (like many others, admittedly).

In a nutshell: A predecessor of CCR made a promise to a predecessor of TDI in 1985. CCR and TDI made later promises to one another in 2010. The issue is whether the 2010 agreement erased all of the obligations in the 1985 agreement or whether CCR’s ’85 obligations persisted until 2013. In 2013, TDI suffered a loss that, TDI argues, CCR agreed to cover back in 1985.

This past week, U.S. Judge Donovan W. Frank (D. Minn.) denied CCR’s motion for judgment as a matter of law. That is, Judge Frank ruled that CCR could not win its argument — that the 2010 agreement effectively obliterated any and all obligations under the 1985 agreement — based solely on allegations in the pleadings and the related contracts.

As this matter proceeds, the Court is hopeful that discovery will lead to greater clarity over the relevance of these competing agreements and the nature of the business relationships between TDI and the relevant Coca-Cola entities. For these corporate entities seeking to govern their business affairs by contract, it seems clear that this case will likely be resolved by an interpretation of contractual terms to which the parties mutually agreed. Going forward, therefore, the parties will have the obligation to clearly persuade the Court regarding which contract governs this dispute and whether the terms of that contract support a judgment in their favor. Because the answers to these critical questions remain unclear at this stage, CCR’s Motion for Judgment on the Pleadings is denied.

Though the dispute is deadly dull (that is, if you’re not the one tagged with or threatened by $500,000+ of liability or one of the people being paid by the hour to win the dispute), there is a hidden gem on a strategic issue that civil litigators come across regularly.

If you have a card up your sleeve — the proverbial “ace in the hole” — when do you play it?

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Dallas Cowboy running back, Darren McFadden, has brought suit in Little Rock, Arkansas against Ameriprise, alleging that an Ameriprise financial adviser stole millions of dollars from McFadden. The Star Tribune reported the story late in the evening two days ago. The Minneapolis/St. Paul Business Journal picked up the story (noting and linking to the Strib’s story) and tweeted about it this morning.

Neither newspaper thought their readers might be interested in reading the complaint itself, I guess. Or they thought the $2.90 it costs to get a copy and the infinitesimal data storage costs 956 kilobytes might eat into their papers’ profit margins. Or they thought this is unfair to Ameriprise because complaints are one-sided, obviously biased, and potentially inaccurate allegations.

Whatever the case may be, once more, Minnesota Litigator fills the breach. Here, linked, is the complaint.

Katherine L. MacKinnon

[NOTE: Notwithstanding the auto-populated “by-line,” above and to the left, the post below is by an eminent Minnesota ERISA benefits litigator and counselor, Kate Mackinnon (pictured to the left, from her 2014 Minnesota Litigator profile).]

 

What does it mean that a Minnesota health insurer is bound by a decision of an external review organization? In Linn v. BCBSM, Inc. (Minn. Ct. App. 1/30/17), Mr. Linn purchased a private health policy from Blue Cross Blue Shield of MN (BCBSM).  He later developed chondrosarcoma of the thoracic spine.  His physicians recommended proton beam radiation therapy (PBRT).

But the BCBSM policy stated PBRT was medically necessary for chondrosarcoma affecting the cervical spine or base of the skull. However, for all other conditions PBRT was investigational and not covered.

BCBSM denied Mr. Linn’s claim as not covered.  Under Minn. Stat. §62Q.73, an insured who receives an adverse determination from a health insurer may seek review by an external review organization (“ERO”).  The ERO decides whether the care was “medically necessary” as defined by the statute.  That determination is nonbinding on the insured but binding on the insurer.  Minn. Stat. §62Q.73, subd. 8.

The ERO concluded PBRT was medically necessary.  BCBSM paid the claim.

Normally that would end the dispute.  But Mr. Linn claimed the policy also promised he would receive “timely” service.  He claimed the favorable ERO determination meant that BCBSM breached the contract when it denied his claim and thereby delayed.  BCBSM defended saying it followed the policy language and when the ERO reversed BCBSM paid.  Where is the breach?

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