Boxing Boxers

George Bellows, Dempsey v. Firpo, 1924

Let us all hope that the linked recent Court of Appeals decision against Rochester City Lines (“RCL”) is the terminus of this excruciating litigation road-trip.

RCL seems to have had a pretty sweet deal, a contract to provide bussing with the city of Rochester for 46 years. It is putting it mildly to suggest that RCL was unwilling to give up this relationship without a fight. The contract was put out for bid and RCL lost to another company but, with several years of on-going litigation, it went down swinging.

This litigation, over six years old, with a number of round-trips to the appellate courts. It almost seems like a bus of process.

We found footnote 3 on page 10 worth highlighting for the Court’s use of the somewhat obscure expression, “suppressio veri,” as in, “If that were the case, RCL’s attorney would seem to be guilty of suppressio veri…” (“suppression of the truth,” better known as lying? Or misleading by omission?).

The Court explains this concept by example: “It would be similar to a court asking someone, ‘Did you kill her?’ and the person responding, ‘I wasn’t there,’ when that person had in fact hired someone else to kill her.”

 

Minnesota Litigator has criticized mainstream media (the Star Tribune, mostly)  for their often repeated failure to link to complaints when they pull their news stories from complaints filed in courts (but, we also give credit when due, see here).

First, they are depriving their readership of a “deeper dive” into the allegations. Second, they rarely identify the lawyers in the articles, the authors of the complaints in most cases. This information interests many readers. Third, to us, it seems that journalists are concealing their articles’ reliance on pleadings, when their stories are almost entirely reliant on the pleadings but they do not link to their source.

But there are some good arguments in favor of NOT linking to pleadings, at least in some cases. As most lawyers know, pleadings enjoy an “absolute privilege” (total freedom from any claims of defamation) so it seems that, sometimes, linking to a pleading would literally and recklessly publish harmful falsehoods about a person or an organization (see, e.g., here).

Right or wrong, these thoughts came to mind when we noted the recent FDCPA class action complaint brought against the Bassford Remele law firm. (FDCPA = the Fair Debt Collection Practices Act.) That is, we wonder whether the complaint tells only a part of the story and, in doing so, paints a misleading picture.

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From time to time, our Minnesota Supreme Court surprises us by taking cases that, in our view, were plainly correctly decided by the Minnesota Court of Appeals.

This is the case with Larson v. Gannett Co., et al., a defamation lawsuit brought by Mr. Ryan Larson, who was incorrectly arrested and apparently charged with murder but was subsequently 100% exonerated.

In essence, Mr. Larson sued media companies for reporting on law enforcement’s bungled job arresting and apparently charging him briefly, an innocent man.

The Court of Appeals threw out Mr. Larson’s case against the media defendants holding:

(1) the fair-report privilege protected appellants’ news reports that accurately summarized and fairly abridged statements made by law enforcement at an official press conference and in an official news release; and (2) the district court erred in vacating the jury’s verdict that appellants’ statements were not false and in ordering a new trial.

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Steve Dupuis was president of a company in Memphis, Tennessee, where he made $600,000/year. He left that job to be the president of GATR Truck Center, near St. Cloud, Minnesota, for $350,000/yr plus deferred and equity compensation that would vest after employment of a set number of years.

Mr. Dupuis was obviously willing to take quite a pay cut.

We have to assume that Mr. Dupuis was not very happy in Memphis and/or he envisioned a steep rise in income after jumping over to GATR.

Unfortunately for Mr. Dupuis, after he took the job at GATR, he appears to have discovered (or he alleges) that Mr. Neitzke, GATR’s CEO, had been arrested for soliciting prostitutes, that Mr. Neitzke sexually harassed GATR employees, that Mr. Neitzke “over-financed” used truck inventory, and that Mr. Neitzke cheated sales-people out of commissions. Mr. Dupuis appears to have discovered Mr. Neitzke’s “severely damaged reputation” (to use his words) too late.

Mr. Dupuis resigned after about 1.5 years at GATR. He sued GATR for “fraudulent inducement.” In other words, he seems to suggest that Mr. Neitzke owed him a duty to disclose his alleged sleazy behavior and bad reputation. Mr. Dupuis lost.

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LEVENTHAL pllc has enjoyed considerable success in representing clients in arbitrations, but we have also been critical of arbitration as a form of dispute resolution.

Arbitration is a money-making endeavor. Subjecting judging to market forces raises serious and obvious risks of contamination of a justice process.

For example, if a Fortune 100 company imposes arbitration clauses on millions of its U.S. consumer customers, the arbitration company sees that Fortune 100 company in every single one of its thousands of customer arbitrations; it sees the adversaries, the individual consumers, once or twice maybe. You think this might influence who the arbitrators might be incentivized to please?

Take another example: our state and federal courts do not make more money by increasing the number of cases they handle nor by increasing the duration of cases before them. In fact, many of our court systems’ limited resources are terribly burdened by the number of cases before them (paradoxically, causing the cases to languish and to cost more). Arbitration companies, on the other hand, make more money by arbitrating more cases (and taking more time to decide them). You think that might influence arbitration companies’ views on the scope of their jurisdiction (what cases are subject to arbitration) (and how long is needed to resolve cases)?

These thoughts come to mind from the recent declaratory judgment action brought by the Minneapolis law firm of Messerli & Kramer against the American Arbitration Association in U.S. district court (D. Minn.). A bank sold a debt to a debt collector (Midland Funding LLC, represented by Messerli & Kramer) who brought an action against the alleged debtor. The debtor was subject to an arbitration clause with the bank. Based on that, the debtor invoked arbitration against Midland Funding. (Query: why wasn’t Midland Funding the proper plaintiff in the declaratory judgment action?)

Putting the parenthetical aside, it seems to us that invocation of the arbitration clause was clearly inappropriate and, if the AAA were like our courts, it would summarily reject the arbitration claim. Our courts have the economic incentive to toss cases out. The opposite is true of arbitration companies.

Editor’s Post-script: Some years ago, we noted a strange lawsuit brought anonymously in U.S. District Court over a pair of allegedly defective boots. One of the several amusing parts of the case, in our view, was that the “anonymous complaint” was a “verified complaint.” That is, the complaint’s caption named the plaintiff, “D.J.S.M.,” but, at the conclusion of the complaint, included “verification” by Minnesota attorney, David J.S. Madgett. Mr. Madgett is the plaintiff’s lawyer in the putative arbitration discussed in this post.

 

 

Update (July 25, 2018): It is relatively rare that we celebrate when we at Minnesota Litigator have made a bad prediction, but, in our view, today the Minnesota Supreme Court got it right, in our view, and disproved our prediction below

The practice pointer below still applies, however, even though the consequences of a lapse might not be so extraordinarily draconian and severe as they would have been if the Supreme Court had ruled in favor of Lifetouch.

Original post (October 9, 2017): When a client comes to you and says she is leaving her high-paying executive position at a company and wants to be sure to “do it right,” make the client aware of her obligation to return company property — ALL COMPANY PROPERTY.

Clients sometimes fail to appreciate that “all” means “all.” They fail to appreciate that there is no “carve-out” or exception for “harmless retention.” If a client fails to return ALL COMPANY PROPERTY, this lapse could result in the loss of huge benefits to which the departing employee or executive would have otherwise gotten (and other unpleasant consequences).

I predict that that is going to happen to Mr. John J. Capistrant, who used to work at Lifetouch.

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Some time ago, we pointed out the obvious (at which we are particularly adept, btw):

When people get desperate, they sometimes do desperate things.

And our research suggests that this is true not only of human beings but also true of lawyers (who are almost indistinguishable from people, btw).

One land-mine that lies just inches off the lawyer’s righteous path, which lawyers deviate from at their peril, involves conflicts of interest.

Photo by Jonathan Rotondo-McCord

Imagine, for example, you perform legal work for Client Company A and Mr. Jones at Company A jumps ship to work in the same industry for Company B. How irresistible to pick up a new client (Company B) when Mr. Jones calls up, right? You know Client A’s business, you know Jones, you know Client B’s business! What a great bargain for Company B (and for you and your law firm)! Company A, on the other hand, might not take it so well…

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Regular Minnesota Litigator readers will recall that we have, from time to time, decried the prevalent practice of the so-called “Minnesota Haircut.”

For our n00b readers, the Minnesota Haircut refers to Minnesota state and federal courts’ frequent application of sharp discounts to a prevailing party’s request for award of her lawyers’ attorneys’ fees.

Lawyers submit petitions in the hope of being awarded their fees (very often when their own clients have no money and could not themselves pay the lawyers). Often, the petitioning lawyers set out in detail the hours worked, hourly rates consistent with the community standards, the work done, and touting the result obtained. (And, of course, they cannot bill for the time to collect, organize, and set out all of this information in their petitions for attorneys’ fees.)

More often than not, the judges then slash the fees requested. This is speculation on our part, but there seems to be a not-very-subtle unspoken suspicion that the petitioning lawyers have padded their hours and, based on this unflattering and unsubstantiated suspicion, the courts feel justified in cutting the fee requests, even by 50% or more sometimes.

This is perhaps all the more galling when the petitioning lawyers are a law school clinic instructor and a law student who prevailed against a county sheriff in vindicating an indigent person’s constitutional rights.

But that’s what happened here at the end of last week.

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Photo by Lenny Baker

Update (July 20, 2018): This past Wednesday, the Minnesota Supreme Court had no problem affirming the Minnesota Court of Appeals, which had affirmed the district court. They all held that unhappy constituents cannot accumulate public officials’ open meeting law (OML) violations and bring a single action to oust public officials for “three OML violations.” Furthermore, constituents cannot simultaneously bring three separate lawsuits, each claiming OML violations, to reach the three-strike threshold and oust public officials.

“Three strikes” means “three strikes” and you cannot pitch three balls at once.

The decision is no surprise. The only mystery is why the Supreme Court accepted the petition for review of the Court of Appeals decision but presumably at least someone on the Supreme Court, at some point, thought this issue needed further review and analysis.

Original post (February 7, 2018): Some citizens of Victoria, Minnesota did not like their local elected officials (that is, the mayor and certain council members) and they wanted the elected officials thrown out of office. These citizens brought several actions against these public officials for violations of Minnesota’s Open Meeting Law (“OML”), Minn. Stat. §§ 13D.01–.07.

The statute provides that one forfeits elected office if one is found to have violated the OML three times “in three or more actions.”

What if the unhappy constituents covertly accumulated or “banked” OML violations and brought three separate legal actions at the same time?

Wouldn’t this essentially short-circuit the policy of the statute that public officials get two “free passes,” and are only thrown out of office on the finding of third violation?

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Photo credit: Jana M. Cisar / USFWS

We are often sympathetic to those caught in the expensive machinery that is the U.S. civil justice system. We might be the most sympathetic to those defendants whom we consider non-culpable because they, of course, are “haled into court” (see our 2013 post on the “weird word doctrine). They do not have any choice in the matter.

Imagine being sued for $1.5 billion dollars by a foreign company and then spending the better part of a year trying to depose a key former executive of the company who makes sure he is nowhere to be found (!).

Our friends at the Stinson Leonard Street law firm don’t have to imagine being in this hypothetical situation. They (along with a bunch of telcom companies) are living it.

The challenge U.S. Mag. Judge Leo I. Brisbois (D. Minn.) recently faced was what sanction to mete out on the evasive weasel who cannot be nailed down to sit for his deposition.

One part of an appropriate sanction seems obvious and simple: the weasel should have to pay the defendants’ attorneys’ fees that were spent in trying to get Mr. Barrera to sit for his deposition.

But what else should be part of the sanction?

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