B. Riley FBR Inc. (“Riley”) v. Chippewa Capital Partners LLC (“Chippewa”), et al., is a lawsuit now pending before U.S. District Court Judge Nancy E. Brasel (D. Minn.). A recent decision in the case gives us a nice snapshot of our convoluted legal system.

The case appears to be simple. Riley performed a bunch of work for the defendants based on an agreement that the defendants would pay Riley about $16 million. Riley’s not been paid.

Chippewa and the other defendants don’t have much money and Riley sought an order from Judge Brasel to freeze the defendants’ money (a preliminary injunction) so that, when all’s said and done, Riley will not be left with worthless judgments against several insolvent entities.

Riley’s efforts make a great deal of sense. Judge Brasel, nevertheless, correctly denied Riley’s motion for a preliminary injunction. Why?

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Update #8 (November 30, 2018): We have covered Unitherm v. Hormel, the so-called Bacon Battle, for some years now (see the string, below) but we only recently learned that we might more appropriately call it Pig War II, or PW II, because history already has had a Pig War.

(However, we’re partial to variant names for PW I: “the Pig Episode” (perhaps appropriately understated) or the “Pig and Potato War” (more appetizing and also evocative of the underlying narrative.))

As it turns out, PW I, just like PW II had no shots exchanged and no human casualties. Apparently, in PW I, casualties were limited to one pig and an indefinite number of potatoes. But, while relatively non-violent, both Pig Wars seem to have been quite expensive.

Below, readers will note that we described the Unitherm vs. Hormel case as a “complete disaster” for Unitherm but then we tentatively walked that back to perhaps merely a “mitigated disaster.” We revert to “complete disaster” for Unitherm in light of this week’s rulings on the two litigants’ motions for award of attorneys’ fees.

Hormel sought $1,301,673.44 in attorneys’ fees + $196,105.61 in costs + $173,705.00 in attorneys’ fees for defending Unitherm’s appeal ($1.671 million). Unitherm sought $1,331,731.35.

U.S. District Court Judge Joan N. Ericksen (D. Minn.) held:

In its motions for attorneys’ fees, Hormel applied a 20% reduction to its calculated lodestar to account for its counterclaims, cross-appeal, and for any other inefficiencies in its work product. The Court nevertheless reduces Hormel’s requested fee award by an additional 50%. Hormel cannot recover attorneys’ for defending against Unitherm’s JDA and declaratory judgment claims [for which there was no fee-shifting provision]….Because defeating these ineligible claims was at least as important to Hormel’s overall success as was defeating the eligible claims [i.e., those claims that allowed for fee-shifting], the Court applies the above 50% reduction.The Court therefore awards Hormel $737,689.22 in attorneys’ fees.

The Court awarded Unitherm nothing.

Will either side appeal? Both? Time will tell. We would not put it past them.

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A red car and one black crash in an accidentBlake School facilitated a student athletic trip and a Blake student and 16 year-old recently licensed driver lost control of his car, crossed the centerline, crashed into JeanAnn and Gary Fenrich, killing Mr. Fenrich and badly injuring Ms. Fenrich. Was the accident “foreseeable” to the school? Was “the specific danger…objectively reasonable to expect, not simply whether it was within the realm of any conceivable possibility”?

The Minnesota Supreme Court recently confronted the question of whether Blake could be liable to the Fenrich couple based on the student’s having caused the fatal accident.

The Court, over a dissent, held that there remained an issue for trial as to whether the school’s own conduct (not the student’s conduct) was “misfeasant,” meaning wrongful and potentially triggering liability to the Fenriches.

The [Blake] head coach strongly encouraged the entire team to participate in the Nike meet and 14 team members registered. The [Blake] assistant coach paid the bulk registration fee. The [Blake] coaches were active in preparation for the meet, including the assistant coach attending one of the practices and recruiting a volunteer coach to run them.

The assistant coach also took active responsibility for coordinating transportation to, and lodging at, the Nike meet. As he put it, “we all drove down as a team.” He expressly approved the plan to have [the student] —and not [the student’s] father or another adult—drive team members and the volunteer coach more than 200 miles to Sioux Falls. The assistant coach decided that the volunteer coach, a teenager, would ride with T.M. But he did not give the volunteer coach any safety instructions—such as to sit in the front seat, to pay attention (rather than be distracted by electronic devices), and to make sure that [the student] drove responsibly. Nor did the assistant coach give any instructions to [the student] except, during a break, to “keep it safe and keep rolling.” Based on these facts, a reasonable factfinder could conclude that the school’s own conduct was misfeasant.

The Minnesota Supreme Court decision was not unanimous. Justices Anderson and Gildea dissented on the issue of whether the school “owed a duty” to the Fenriches and whether the accident was “foreseeable” to the school.

The dissent (by Justice Anderson) argued that the school officials’ conduct (described above) “cannot even be described as active conduct generally.” (See here at p. D-4.) And the dissent went further, arguing that this was not a “close case” as to whether the accident was “foreseeable” to the Blake School. Was “the possibility of an accident was clear to the person of ordinary prudence”?

It is clear from the dissent that Justices Anderson and Gildea’s concern is the expansion of liability to schools and others. Justice Anderson expressed concern that “[a]ll extracurricular, and co-curricular, activities, are now guaranteed a gimlet-eyed review by the school’s lawyers.”

We think this concern is exaggerated, if not unfounded. There are far too many other decision-makers, stake-holders, factors, and considerations involved. We do not think it is realistic to posit that this change (if it is, in fact, a change at all) in Minnesota law will have a material effect on school decision-making on these activities. More likely, it theoretically could result in a slight upward adjustment in institutions’ insurance premiums.

Ultimately, the decision is worth study as it underscores the indeterminacy of legal decisions and the elasticity of concepts like “misfeasance vs. non-feasance” or “foreseeability.”

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Updated post (November 14, 2018): The post below discusses whether a witness can change the substance of deposition testimony in a later-completed “errata sheet” (written corrections to prior oral testimony). We took the position that this is and should be permissible under normal circumstances (the right can obviously be abused), recognizing that there are some judicial decisions suggesting otherwise.

Recently, the U.S. District Court (D. Minn.) (Frank, J., presiding) (and U.S. Mag. Judge Thorson) went with our position. The court got it right. Charitably, in our view, the defense lawyers’ position opposing the corrections was what passes for “zealous advocacy” — not at all shameful or repugnant, but not all that flattering.

The order in Murphy v. Piper highlights other cynical defense tactics to class actions, as well: e.g., the grilling of named plaintiffs’ lack of knowledge as to the details of the case (often on the issue of remedies or damages). It is as if the defense lawyers take the position that litigants who are not their own lawyers are unfit to prosecute their lawsuits their lack of detailed knowledge of their cases — more “zealous advocacy.”

Original post (September 24, 2018): At the conclusion of a deposition recently, a lawyer (whom we’ll call “Lawyer A”) instructed the deponent that he, that is, the deponent, had the right to review the deposition transcript once the transcript was completed to identify and correct any errors in the transcript. (more…)

In our view, very few people in our society, a tiny percentage, qualify as “evil,” which one might define as, “all things being equal, being predisposed, temperamentally inclined, or preferring to hurt other people rather than to help them.”

Most of us genuinely believe ourselves to be “good people,” we want the world to believe we are “good people,” and, most importantly, we are personally invested in seeing ourselves as “good people.” Consequently, we invest time and energy to do and to be good.

If we can agree with this proposition, punitive damages, i.e., the imposition of a financial spanking for intentional and unjustified harm to other people, should be fairly rare.

Further, when it is appropriate, it should rarely arise in the context of the intentional infliction of harm. Rather, it should arise as a result of apathy, thoughtlessness, something more like negligence — but something even more (and worse) than that — “reckless disregard” — for the rights of others.

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Maybe every few years, we should disinter our “Pleading Federal Diversity for Limited Liability Companies (LLCs)” string of posts.

In these posts, which go back some years now, Minnesota lawyers get chided because they forgot (or never knew) how to plead federal jurisdiction when basing their jurisdictional claims on the diversity of citizenship of LLCs.

Here we go again.

The kicker in this most recent case is that the Plaintiff LLC allegedly does not know who its own members are. (“Cypress Creek confessed that even it is unable to identify all of its own sub‐members.)

How are the defendants supposed to know an adversary’s LLC members’ citizenship for purposes of pleading federal jurisdiction?

The courts answer: “Not our problem,” and the litigants are banished back into the state court underworld from which they came. (Happy Halloween)

 

 

Let’s say, hypothetically, that you’ve been working on the railroad. All the livelong day. You’ve been working on the railroad, just to pass the time away. In Minnesota.

First, that’s just sad. “Working on the railroad to pass the time away?” That’s hard work. You might consider something less arduous and safer if passing the time is your modest goal (reading?).

Also, hypothetically, if you are injured and you sue your railroad employer and you win your lawsuit, do you think you should get the federal post-judgment interest rate applied to your money damages or the Minnesota post-judgment interest rate?

And do you care?

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The goal and idea of diversity has been getting a lot of attention in our society for decades now but, unfortunately, it gets more lip service than many of us would like. Though we rarely openly admit it, many in our community do not value diversity. Indeed, they feel threatened by it, which is a sad paradox because one of the greatest threats we face is our society’s fear and resistance to diversity and inclusion.

We recently had the pleasure of interviewing Mr. Inti Martinez-Alemán, a young Minnesota lawyer originally from Tegucigalpa, Honduras. Inti embodies the tremendous strength and promise of diversity and inclusion in our society.

Read the interview, below. See for yourself.

Inti, a third generation lawyer (Honduran trained, U.S. trained, licensed in Minnesota and New York), brings unsurpassed breadth of experience and promise to our community. He has left behind a country that struggles with terrible violence and corruption and he brings hard-earned insights and experience that most of us will never have to encounter. (Incidentally, Inti’s journey is reminiscent of another Minnesota Litigator profile from another part of the world, Rachhana Srey.)

And this profile is timely. Inti notes in our interview that Hispanic National Bar Association, in which he is active, will host (with other hosts) the “Su Negocio” (“Your Business”) program in Minneapolis coming up on November 7.

ML: Tell our readers what is the bread and butter of your legal practice?

Inti Martinez-Alemán: The bread and butter of my legal practice is anything related to assets, businesses and jobs for Latinos. So any Latino or Latina who has been cheated by someone who is more savvy, more knowledgeable, or more of a trickster. So it could be their landlord, it could be their employer, could be a business partner. That’s my bread and butter. It’s pretty broad: civil, business, and employment litigation. If there is something that is an area of law that I don’t feel comfortable with, I either refer it out or co-counsel with someone.

ML: So it sounds like the vast majority of your clients are people rather than businesses. Is that right?

Inti Martinez-Alemán:  I’d say about 70 percent are individuals. And then 30 percent are businesses.

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When you lend someone $193,000, you probably should know who the borrower is, right?

When you sign something in return for a receipt of a $193,000 loan, you should probably know whether you may be personally responsible for the debt, right?

Believe it or not, as obvious as these two questions are, people find themselves in situations where the lender and the borrower cannot agree on who the borrower was — that is, who assumed the obligation to repay the loan. This becomes rather important information when the borrower defaults on the loan…

In the case of Jennifer Peters and Juniper Ventures v. Nathaniel “Nate” Armstrong, there is uncertainty as to whether Nate borrowed money or merely signed two promissory notes on behalf of two limited liability companies, who are responsible for repaying the notes.

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(The Scarlet Letter)

What are lawyers to do when disgruntled ex-clients make false claims against their lawyers online for all the world to see (for all time as far as we know)?

Are lawyers to bear the brunt of false accusations under an ethical obligation of silence owed to their ex-client defamers?

We previously covered the pending proposal for amendment of Minnesota’s ethical rules to tweak the balance between our society’s interest in protecting the near-sacred confidentiality that we respect between lawyers and their clients and lawyers’ interests in protecting their reputations (a.k.a., their livelihoods).

Linked here, William Wernz, a star in the constellation of Minnesota ethics experts for decades, weighs in.

Most of us now agree that ESM, or “electronic social media,” is, unfortunately, a world-wide cesspool of information, misinformation, distortion, and propaganda.

There is always the option of suing former clients for defamation, of course. But compare the costs of simply replying to an online comment along these lines: “The ex-client urged us to undertake the strategy he now complains of against our advice. We regret we did not obtain the results that we and the client had hoped for”) or another far more common situation (“The ex-client says Our Distinguished Law Firm ripped her off company by charging her company over $500,000 for the company’s litigation but we stated our hourly fees up-front, we made the uncertainties and risks of litigation clear from the start, and we gave a budget estimate (which was higher than what we charged). Further, we presented the company for over three years in hard-fought litigation.”

Let’s put aside whether lawyers or law firms would want to respond in these ways to these false complaints of incompetence and thievery. (A great many (probably most) would not.) (This linked extraordinary (NSFW) online response to alleged online defamation (not involving lawyers, btw) seems to have exponentially increased the damages sought to be remedied.)

Let’s put aside that lawyers would need to be extremely careful that their public responses not pose any threat to the outcome of ex-clients’ still-pending matters. Should such comments be considered breaches of the lawyers’ ethical obligations?

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