Update (July 2, 2018): Notch another successful prediction of Minnesota Litigator. The Minnesota Supreme Court, as we predicted below, reversed the Minnesota Court of Appeals this past week. Phew! A private party cannot hog-tie and force a trial court to issue an injunction, so-called equitable relief, and it follows that private parties cannot “stipulate and agree” that all of the elements for such relief exist, which would result in just that — forcing trial courts to issue injunctive relief even in cases where, objectively and subjectively, it is inappropriate and unjust.

We put “stipulate and agree” in “scare quotes” to highlight the fundamental tension that runs throughout U.S. contract law jurisprudence.

There is rarely genuine understanding and agreement in most legally binding contracts that most of us enter into every day. It is a legal fiction. Whether it is because the agreement requires a law degree to understand (and a few hours of trained lawyer time) that we don’t have or cannot afford (see, e.g., car rental agreements) or the agreement is “take it or leave it,” non-negotiable (see, e.g., “click-through” agreements on-line), or both, as we expect was the case for Mr. Heath Carter, to suggest that we have stipulated and agreed to every clause is a transparent legal fiction and the only time enforcement is evaluated by a dispassionate and competent arbiter is when such “agreements” are challenged in court. While courts must generally respect and honor the purpose and intent of private agreements, they must not be bound by them all in any just society.

Update (February 7, 2018): When two parties stipulate and agree that breach of a contract will result in irreparable harm, can a court go against that stipulation and find, as a matter of fact, that one party’s breach caused no irreparable harm to the other party? That’s the issue in the case described below, argued yesterday before the Minnesota Supreme Court.

On the one hand, the harm caused by a breach of a covenant not to compete or a breach of the duty to maintain the confidentiality of information is obviously difficult (maybe impossible) to measure. Can’t parties hold down litigation costs up front by locking themselves into an agreement as to this point?

On the other hand, as Martin Chester, counsel for the defendants, argued, giving a stipulation of irreparable harm conclusive effect binds trial courts, which seems antithetical to established law governing courts’ exercise of equitable relief, and it is also antithetical to courts’ long-held view that restrictive covenants are to be enforced narrowly.

Edward Fox, St. Jude’s lawyer, agreed that the stipulation is not conclusive of irreparable harm. But, then, what is it? “Is it an admission, is it a prediction, is it an estoppel?” Justice Lillehaug questioned both Fox and Chester.

Minnesota Litigator prediction: the Minnesota Supreme Court will overrule the decision of the Minnesota Court of Appeals. If a trial court is not bound by an “irreparable damage clause,” a proposition that both sides agree to, the trial court can exercise its discretion to decide whether irreparable damage occurred and St. Jude loses (because this is exactly what the trial court did in St. Jude’s case).

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Look at the happy students! Imagine the infra-cranial chaos behind every single one of these kids as their still-developing brains grapple with the leap from the innocence of childhood to the fraught and complex interrelations, interactions, politics, and power of adult relationships!

This week, Sr. U.S. District Court Judge Donovan W. Frank (D. Minn.) dismissed all three allegations in a student’s complaint against St. Paul Conservatory for Performing Arts. Plaintiff’s complaint stemmed from the discipline that had been imposed on him regarding complaints of other students that he had sexually harassed them.

While the motion to dismiss was pending, however, U.S. Magistrate Judge Franklin L. Noel (D. Minn.) allowed the Plaintiff to amend his complaint to add a claim for negligence. Therefore, there is still an active pending lawsuit, but, out of the blocks, plaintiff’s claim does not seem compelling.

 

Update (July 25, 2018): No. (And so, today, Minnesota Litigator is one for two on predictions.)

Original post (June 22, 2018): Richard Messina and his lawyers at Halunen Law have been wrestling with Mr. Messina’s former employer, Yosemite, since 2014. Defendant Yosemite successfully sought appeal of the denial of its motion to compel arbitration, but then lost that appeal in 2016. (Yosemite was deemed to have waived its right to arbitrate by fighting in court for more than eight months before asserting that right.)

Defendant sought to appeal again after it lost its summary judgment motion in 2017. The Court of Appeals found that it had no jurisdiction over that appeal and dismissed it.

Now the case, finally, is set to be trial ready as of July 30. Isn’t Yosemite Home Décor finally ready to tap out? Or is Yosemite really going to go to the mat?

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Update (June 25, 2018): In the discussion in our original post below, we quoted a U.S. federal district court (D. Minn.), quoting a 1995 Minnesota Supreme Court decision (quoting a 1984 Minnesota Supreme Court decision) for the following proposition (at page 15): “Under Minnesota law, every contract includes an implied covenant of good faith and fair dealing…”

It has been a while since we have construed the word, “every,” but it seems all-inclusive, does it not? It seems synonymous with “all possible,” or “the entire set of,” right?

On the other hand, a recent decision in the U.S. federal district court (D. Minn.), quotes a 1986 Minnesota Supreme Court decision in support of the proposition that Minnesota courts “have not read an implied covenant of good faith and fair dealing into employment contracts.”

So, in Minnesota, apparently “every contract” means “every contract except employment contracts.”

Let’s use the shorthand, “common decency” for this idea of “the implied covenant of good faith and fair dealing.” Why would Minnesota courts require that all contracts are built on a foundation of “common decency” except employment contracts? Doesn’t it seem strange that employers, of all actors in commercial and personal lives, should be “off the hook” when it comes to “common decency”?

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Boxing Boxers

George Bellows, Dempsey v. Firpo, 1924

Update (June 20, 2018): Lurie LLP and its lawyers from the Maslon law firm, Bill Pentelovitch and Martin Fallon, can celebrate now. They fought back Mr. Lapidus’ appeal in the case described below. Readers may point out that Defendant Neil Lapidus and his formidable trial team can still take this to the Minnesota Supreme Court and maybe they will. And maybe they will ultimately win.

On the other hand, it seems to us that Lapidus not only lost at the court of appeals; he lost bigly. We see no strong arguments for Supreme Court review, let alone reversal, but of course you never know.

Original post (April 19, 2017): (under the headline: A Bad Week for Neil Lapidus): It must have been a pretty challenging 2017 Tax Day for Mr. Lapidus, an accountant. Tax Day and the days leading up to it are a bear for all accountants. But, along with the crunch of filings, Mr. Lapidus was also socked with multi-million dollar liability on 4/14, in a lawsuit brought against him by his former partners at the Lurie accounting firm.

Mr. Lapidus was represented at trial by famed Minnesota trial lawyer, Mike Ciresi (so that undoubtedly did not come cheaply). On the other side, highly respected Maslon lawyers, Bill Pentelovitch and Martin Fallon, represented Lurie.

Hennepin County Judge M. Jacqueline Regis tagged Mr. Lapidus with over $2 million in liability, ordered his Lurie retirement benefits be cut off, ordered that he pay back some retirement benefits already received, and  ordered him to cough up 25% of money that Mr. Lapidus had been paid by Lurie clients, allegedly in violation of a non-competition agreement he had entered into.

Mr. Lapidus (and a number of his clients) were apparently victims of the Bernie Madoff Ponzi scheme. It seems possible that Mr. Lapidus has taken at least a few significant risks, in the vain hope of high returns, with disastrous results. On the other hand, as Minnesota Litigator readers know well, appeals can lead to reversals. This should temper both sides’ celebration and humiliation.

 

 

https://goo.gl/zVNer1

In the Great White Northland of Minnesota Nice, few of us regularly see overtly racist — that is anti-black — behavior. On the other hand, a great many of us (but unfortunately not all of us) are aware of subtler, thinly veiled, and pervasive anti-black attitudes and racism in Minnesota, perhaps more than many other parts of the United States with more racially diverse populations.

Take, for example, restaurant dress codes that seem tailored to exclude black people by barring clothing trends that are disproportionately worn by black people.

For another example, take Faribault’s “Crime Free Housing Program,” which appears to be subtly crafted to exclude Somali residents to remedy Faribault’s non-existent “crime problem.”

The horrible thing about these forms of racism is their subterfuge, their plausible deniability. Racist restauranteurs and Faribault politicians can feign outrage with straight faces, arguing that they are simply concerned about public safety. They can pretend their rules apply equally to all, no matter their race or nationality. They can dismiss the claims of racism as “deficient and unfounded.” What if they are not?

Subtle deniable racism takes a serious toll on its victims. It literally messes with one’s ability to think. (linked is to an article about scientific research on subtle racism’s corrosiveness on cognition). In other words, the insidiousness of indetectable (and therefore deniable) deep-rooted racism literally boggles the mind.

Regular Minnesota Litigator readers will note that, among other recurring themes, we are preoccupied with marketing for legal services and lawyers and reputation. We should not have to point out the critical overlap of these areas of interest. We have also found defamation in the internet age to be a fertile ground for posts and, again, the overlap of interest is self-evident.

That brings us to today’s post.

“Mike H” is the only person to have reviewed LEVENTHAL pllc via a “Google review.” A month ago, he gave us one star out of five. “Mike H” did not explain the low rating nor did he give any clue as to how or when he has worked with or been represented by LEVENTHAL pllc, if, in fact, he ever has (which we very much doubt).

For a month, we mulled over how we should respond to this public slight. (But is it public? Or have we just amplified something that otherwise would have been in “practical obscurity”? Even if such an uninformative speck of datum were widely viewed, would it make an impression on anyone? Would it have any impact at all?) (Ed. note: By pure coincidence, the NY Times weighed in on this subject two day ago.)

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July 1, 2018.  Amendments to the Minnesota Rules of Civil Procedure will take effect on that day.   Many of the proposed amendments will bring Minnesota’s civil procedure rules into conformity with the federal rules.

Parts of rule 56 governing summary judgment will be amended.

It is hard to compare the rule 56 provisions as they are today (before the amendments take effect) to the amended rules, because the two sets of rules are organized very differently.

For that reason, lawyers who don’t practice much in federal court will find themselves picking through the amended rule 56 provisions to find key provisions.

Most of the basics do remain the same.

The most important provision in rule 56 is – of course – the standard for the grant of a summary judgment motion.  Minnesota’s existing standard requires the grant of summary judgment where “there is no genuine issue as to any material fact” so that a party is entitled to judgment as a matter of law.

The federal rules use a different standard:  whether there is no genuine “dispute” as to any material fact, rather than no genuine “issue” as to any material fact.  The MSBA had petitioned the Minnesota Supreme Court to adopt the federal rule language (along with the other proposed amendments) to bring Minnesota’s rules in conformity with the federal rules.

The Court decided to keep its existing standard in place (providing for a “genuine issue” of material fact).

The federal rules used the term “genuine issue,” when the federal rules of civil procedure were first adopted in 1937,  and then changed to the term “genuine dispute” via amendments adopted in 2010.  Federal case law addressing Rule 56 has used the terms “issue” and “dispute” interchangeably.

The bottom line:  we don’t need to lose any sleep over the difference between the “genuine issue” versus “genuine dispute” language.  Interpretation of the summary judgment standard in Minnesota will not change.

Some provisions of the amended summary judgment rules are different from the rules that have been in effect.

Under Minnesota’s existing rules, the district court considering a summary judgment motion may grant summary judgment for either party, not just the party making the motion, when the rule 56 standards are met.  The amended rules go one step further and allow the court to order summary judgment on its own initiative after giving the parties notice.  The amendment makes clear that district court may itself initiate the summary judgment process.  (Minnesota case law had recognized that the court may grant summary judgment on its own initiative.  The rule amendment codifies that result and makes clear that notice to the parties must be given first.)

Under the amended rules, a party may not file a summary judgment motion more than 30 days after the close of all discovery, unless leave is granted.   Before, this timing question was left entirely for scheduling orders.

Under the amended rules, the court must state the “reasons for granting or denying the motion.”  (Oddly, I do not find an analogous provision in Minnesota’s existing rules.)  The court must state its reasons in a written decision or “on the record.”

Minnesota’s existing rules provide that “[j]udgment shall be entered forthwith” if the pleadings and evidence show that the summary judgment standard is met.  Existing Rule 56.03.  And, the existing rules provide that, “an adverse party may not rest upon the mere averments or denials of the adverse party’s pleading but must present specific facts showing that that there is a genuine issue for trial.”  Existing Rule 56.05.  The amended rules give the court more flexibility.  Under the amended rules, the court may now give a party an additional opportunity to support or address a fact, may consider the fact undisputed, may grant summary judgment, or may issue other relief.   Amended Rule 56.05.

The amended rules reflect some additional changes.  Counsel should – of course – review the amended rules before bringing or defending against any summary judgment motion.

 

 

King William III – King of England in 1701

 

Judicial Independence Day – June 12 – marks the passage of the Act of Settlement in England in 1701.  For the first time, the King of England could not remove judges at will.  Judges could be removed only by Parliament, and served for life during “good behavior.”   This was an important step towards norms of judicial independence established in the United States.

Judicial independence is key to the integrity of our courts.  At its core:  the idea that judges are supposed to decide cases based on legal principles – established through statutes or case law – and not based on their own whims or political pressure.

Judicial independence is under assault in this country.  The President attacks the federal judiciary.  Over and over again.  He does not just question the reasoning behind judicial decisions.  He attacks the courts as an institution.  He says the judiciary is “a joke” and “a laughingstock.”  He calls the court system “broken and unfair.”  He has challenged the authority of the federal courts and suggested they would be to blame for future terrorist attacks.  He has suggested that the Ninth Circuit should be “broken up.”

The President questions the legal authority of judges, calling a judge who ruled against him as “this so-called judge.”  He has attacked the legitimacy of a decision made by “a single, unelected district judge.”

Again, the President has not addressed the reasoning of decisions he does not like, but instead attacks judges personally.

The President does not acknowledge that the judiciary is a co-equal branch of government intended to be a check on executive power.

Around the country, state judicial elections have become politicized.  After the U.S. Supreme Court decided the White decision, state law protections against politicization of judicial elections were thrown out the window.   Judicial candidates have sought and run on endorsements from political parties.

Massive amounts of money have poured into judicial elections around the country.  Two examples:  In Pennsylvania, in 2015, 21.4 million was spent on three open seats.  Over 5 million was spent in a North Carolina race in 2015.  Significant amounts of “dark” monies have been spent by outside interest groups; the identities of the donors are secret.

There have been some ideological partisan judicial races in Minnesota in recent years.  We have seen political party endorsements for judicial candidates.  There has been some increase in spending on judicial races.  But so far we have not seen the kinds of politicization and spending seen in other states.

We have something important to protect here in Minnesota.  Judicial seats will be on the ballot this fall.  As lawyers, our friends and family members will ask about the races.  We should take every opportunity to explain the separate role of the courts and the need for judicial independence.  We should look for these opportunities and act on them.

 

Photo by Jonathan Rotondo-McCord

Only last week, we noted how schools and colleges are the bomb factories where our kids’ hormonal fire-works are set off. Kids are alleged to have behaved badly. Schools investigate and, where they believe it is warranted, discipline perceived wrong-doers. Someone ends up charged with wrong-doing (or not) and sometimes it seems the school is charged with wrong-doing either way.

Consider the fix that the University of Minnesota now finds itself in…The U stands accused of “racial and gender discrimination; intentional, willful, and malicious misconduct; and deliberate indifference… in connection with the University’s investigation of allegations of sexual misconduct against Plaintiffs and the disciplinary proceedings and punishments that followed.”

In other words, a woman complains to the University of sexual assault, the University investigates the complaint and disciplines a number of individuals, and those individuals sue the University for racial bias in the investigation and ensuing discipline.