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Ms. Omarose Onee Manigault Newman (widely known as “Omarosa”) has been in the news lately promoting her “tell-all” book about her stint in the Trump White House (words whose juxtaposition will sadden and nauseate Minnesota Litigator for life).

In promoting her book, Omarosa has revealed that she surreptitiously digitally recorded conversations that she had, even in the White House situation room from which cell phones and recording devices are prohibited. This news comes only days after the public has learned that Trump’s personal lawyer, Michael Cohen, surreptitiously recorded telephone calls that he had with Trump.

We do not comment on the legality of Cohen’s and Omarosa’s recordings but we do take the occasion to highlight that undisclosed audio recordings are now pervasive in our society. In our personal and anecdotal experience, we are frankly stunned at the number of clients who are non-consensually recording conversations (on the telephone or in person). The rate has spiked upward dramatically in recent years. (And, woe to the lawyers who fail to appreciate fully that many of their clients are recording their every word.)

Is it unlawful?

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Boxing Boxers

George Bellows, Dempsey v. Firpo, 1924

Update (August 16, 2018): Predictably, plaintiff’s counsel in the case described below want to keep the defense lawyers in the ring, or at least to avoid any delay caused by the lawyers’ attempt to thrown in the towel.

Update (August 10, 2018): Things have gone from bad to worse for Defendants, Geckobyte and R. Tiegen Fryberger, in the case described below.

Now their lawyers are seeking permission to withdraw from representing them. Will the lawyers get permission? Time will tell. As devout Minnesota Litigator readers know but others may be surprised to learn, although it is easy to ask for permission to withdraw from representation of a client, it is not so easy to get permission, at least in federal court in Minnesota (see here and here).

We lament this situation (involuntary representation) and we hope that Geckobyte and Fryberger’s lawyers are not collateral damage in this bloodbath, even if they were responsible for the rope-a-dope defensive strategy which seems to have failed.

Update (June 26, 2018): We saw this one coming. (Plaintiffs win on their motion for summary judgment, defendants lose on theirs).

Update (May 16, 2018): From the looks of it, Defendants Geckobyte.com, Inc., and R. Tiegen Fryberger did not enter the ring to win the match in their lawsuit in the U.S. District Court (D. Minn.). They were dragged into the ring. They do not appear to want to fight very much, if at all. On the other hand, they are obviously unwilling to forfeit the match.

As discussed in the original post (below), the Riddle et al. v. Geckobyte, et al., lawsuit is a common scenario in U.S. civil litigation involving small businesses: one business buys another and either they buyer protests that the purchased assets were not “as advertised” or the seller protests that buyer’s payment(s) were not made as promised (and often both). (These problems seem particularly common when the seller is to work for the buyer’s business and seller’s payout is based in significant part on post-sale business performance.)

In this case, Plaintiff is the seller, seeking to be paid for the business he sold to Defendant. Defendant’s defense seems to have been a variant of rope-a-dope, in which a fighter seems to take the opponent’s punches to tire him out, then slips out of passivity when his opponent is exhausted, to pummel the tuckered-out fighter. (See arguments on plaintiff’s summary judgment motion on defendant’s counterclaims here, here, and here).

Rope-a-dope, as the linked article points out, was a dubious and flawed strategy in real boxing. It seems worse in the context of civil litigation.

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For some time in U.S. politics, a large swath of the electorate concluded that Democrats and Republicans were like Coke and Pepsi, two versions of basically indistinguishable sickeningly sweetened corporate junk food.

We hope that the election of Republican Donald J. Trump over Hilary Clinton, his Democratic rival, has put an end to this over-simplified and wrong-headed thinking. Who leads makes a very big difference at every level of our political system.

Our elected officials make decisions that radically change our lives and those whom we all elect will radically affect what decisions made. To suggest that your life depends on who is elected is, in one sense, a gross over-dramatization but, in another important sense, it is simply the truth.

emergency-309727_1280Update (August 13, 2018): We introduced the neologism, “GOOTCH,” about three years ago (see below).

Chief Judge John R. Tunheim (D. Minn.) issued what, in our view, was a pretty strong GOOTCH Order last week on behalf of a LEVENTHAL pllc client.

Judge Tunheim dropped a few references to Rule 11 (in footnotes 1 and 4) — sure signs that a court’s displeased.

We’ve said it once and we’ll say it again:

Weighing the harm of the [anonymous on-line criticism], on one side, and the cost of a remedy (litigation) plus the prognosis for success (i.e., the likelihood of “winning” the litigation, whatever that might mean), on the other hand, is a tricky calculation. In light of the uncertainty and expense of civil litigation, in our view, the harm of the hate must be pretty serious to justify suing over it.

East Coast Test Prep LLC d/b/a Achieve Test Prep and Mark Olynyk, plaintiffs in the case that occasions this post, seem to have miscalculated badly.

Update (July 22, 2015): A GOMER is medical slang for “a patient in an emergency room who is not in need of emergency services.” GOMER stands for “Get out of my emergency room.” The legal analog is A GOOTCH (“Get out of this courthouse”). (more…)

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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