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.


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…


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.


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?


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?


Black Robe Disease (“BRD”) is a rare illness, an orphan disease, in fact.

Fewer than 32,000 Americans are exposed and vulnerable at any given time. It appears to be an occupational hazard. Approximately 100% of all reported cases have the job title of “Judge,” “Referee,” “Arbitrator,” or the like.

Fortunately (but to the disappointment of a few trial lawyers and litigants), it is never fatal. Also, fortunately, there are many reports of recoveries from BRD (which, after all, might be simply from stress, a bad night’s sleep, etc.).

BRD gets little attention because the true victims of the disease are not the infected jurists but the unfortunate lawyers and litigants who must endure the BRD sufferers’ arrogance, abuse, clumsy, obnoxious, mean-spirited attempts at humor that are not funny, etc., etc.

In defense of the abusers, bear in mind that the enabler lawyers before these sick judges fawn, bow, scrape, profusely apologize, and chuckle politely through gritted teeth. BRD also gets little publicity because, although lawyers’ rules of professional conduct allow for lawyers to call out the afflicted, there is enough play in the rules so that even an accurate public diagnosis of BRD might be deemed “in reckless disregard to truth or falsity yadda-yadda-yadda” and get the treating logician into ethical hot water.

Also, as all students of game theory and “repeat games” know, what goes around comes around…It does not take a genius to understand that if you call out Judge ________, the next time(s) you appear before Judge __________ might not go very well.

See below, an apparent case of BRD in U.S. District Court (N.D. Tex.). To set the stage, a lawyer asked permission to appear without local Texas counsel. That lawyer (that is, “the movant”) is a member of the Texas bar but he does not live in Texas. But the Court still required that he appear with local counsel (!!??)). By itself, this seems symptomatic. But the clincher is when the BRD sufferer criticizes the lawyer for the illegibility of the lawyer’s signature when the judge’s own signature is itself no model of legibility (see the footnote (the one with the typo)).

Photo thanks to tipstimes.com/pregnancy via flickr

Photo thanks to tipstimes.com/pregnancy via flickr

Update (July 13, 2018):  In the case described below, Dr. Angela Ross D.M.D. (a dentist), owner of Family Orthodontics (ironic under the circumstances), was sued by Nicole LaPoint for discrimination based on pregnancy. Dr. Ross offered Ms. Nicole LaPoint a job at Family Orthodontics, but when Dr. Ross found out that Ms. LaPoint was expecting a child and wanted 12 weeks maternity leave, she promptly revoked the job offer to Ms. LaPoint.

So, the question that the district court had to consider was whether the decision not to hire Ms. LaPoint was based on her pregnancy or her desire for 12 weeks leave (or would it be pregnancy discrimination either way?). The district court concluded that the discrimination standard was not met by a hiring decision based on a request for 12 weeks of leave. The Minnesota Court of Appeals affirmed over a dissent of Judge Diane Bratvold. Judge Bratvold wrote, “I can reach only one conclusion: Family-Orthodontics discriminated against LaPoint on the basis of her pregnancy.”

We agree with Judge Bratvold’s dissent. Unfortunately for Ms. LaPoint, it seems that the Minnesota Supreme Court might not. Ms. LaPoint’s lawyers sought Supreme Court review (here is her petition and the response) but the Supreme Court denied Ms. LaPoint’s petition for review in late June.


Photo by Jonathan Rotondo-McCord

Update (April 10, 2019): Sometimes we need reminders. Sometimes our clients need repeated reminders.

Update (July 11, 2018): Supplemental briefing (here and here). Apparently, the Court raised an interesting question at the hearing on the motion for a protective order regarding an employee’s attorney/client communications via the corporate servers: the application of Carpenter v. United States, 16-402, 2018 WL 3073916 (U.S. June 22, 2018). At first blush, Carpenter, a Fourth Amendment case about warrantless tracking of cell-phone location data, seems to have nothing to do with the case discussed below (about whether the attorney-client privilege applies to email communications by company employees to their personal lawyers via the company email system).

But both raise the question: when there is a third-party “conduit” of information, does that sacrifice the confidentiality of the information? On the other hand, (1) Mr. Kirschke certainly had other means of communicating with his lawyer other than through the corporate email system (but we cannot use cell phones without communicating location data to third parties); and (2) companies (including Carlson Hotels, apparently) go out of their way to put employees on notice that they have no legitimate claim of privacy for communications on the companies’ communication systems (email, voice-mail, text messages on company issues cell phones, etc. etc. etc.). These seem to be critical distinctions.

But think about this: Carlson Hotels seeks discovery of Mr. Kirschke’s communications with his personal lawyer. What about the next case: where a third-party (a soon-to-be ex-spouse, for example) seeks discovery of an employee’s communications with her personal lawyer sent and received through her work email account, arguing that the communication(s) were over corporate email and therefore not entitled to the privilege?

Original post (June 27, 2018): We have previously noted that the concept of “waiver” in U.S. law is muddled and muddy. Think about it and this lack of a bright-line universal rule makes sense. For one thing, the consequences of waiver — that is, “voluntary and intentional relinquishment of a known right” — can be small or huge in particular circumstances. Compare a criminal defendant pleading guilty and waiving her right to trial with a property owner waiving its contractual right to a written change order in a construction project, for example. In the first scenario, in theory, a human life could be at stake. In the second scenario, the issue is whether the property owner can exploit a technicality (absence of a written change order) to avoid paying for a benefit she has received.

Clearly, we should infer waiver more readily under some circumstances than others.

On this continuum of waiver, where should we put waiver of the attorney-client privilege for a corporate employee’s emails to his lawyer sent via the company email system?

Should courts require strong evidence of waiver? If a company has a policy, shared annually with all employees, that they should have no expectation of privacy with regard to their corporate email, should this, by itself constitute the waiver of the attorney-client privilege for emails sent between employees and their personal lawyers?

The issue is now before U.S. Magistrate Judge Steven E. Rau (D. Minn.) in Kirschke v. Carlson, Inc., et al.

If employees are held to have waived the confidentiality of email communications to their lawyers from their work-place email accounts, could the receiving lawyers be liable for professional malpractice if they failed to advise their clients of the need to avoid communicating through the company’s corporate email system?

Or, on the other hand, could the company (or its lawyers) be punished for knowingly exploiting confidential attorney-client privileged communications if the company exploits such common oversights by employees who inadvertently “share” their confidential communications with their employer simply by using their work email systems (but don’t “voluntarily and intentionally relinquish a known right”)? (The linked case involves the disqualification of a law firm for its erroneous exploitation of a privileged email when the law firm thought the privilege had been waived because it had been shared with a third party.)

Practice pointer: All client intake, without exception, should include taking client information, including the client’s contact information, and, at that time, there should be a discussion of the use of email, the nature of a client’s email address(es), and the importance of confidentiality. The same holds true of voice-mail, of course, and other systems that might be vulnerable to access by third-parties (and, therefore, subject to waiver).

The Office of Lawyers Professional Responsibility (OLPR) Board has issued its annual report this week and there seems to be no substantial change in the rate of identified unethical conduct among Minnesota lawyers, judging from the data in the report. That is, the data validate our sense that the vast majority of Minnesota lawyers are honest, hard-working, competent, and ethical.

Roughly 1,100 complaints were lodged against Minnesota lawyers in 2017. Of these, based on the data of previous years, it seems that well under 10% will ultimately result in findings of unethical conduct. Since we have about 20,000 practicing Minnesota lawyers, that’s a pretty small number of ethical violations (though, as with crime and negligence, we all recognize that reported instances are not comprehensive of all of the misconduct (and maybe not even most of it)).

Predictably, the two biggest missteps of Minnesota lawyers appear to be (1) failure to communicate and (2) lack of diligence (though it is possible that the OLPR might have a bias toward finding these violations rather than say, incompetence, which can be the root cause of failures to communicate and lack of diligence).

Ironically, the OLPR itself might be considered to have received the most criticism in its own report, since it has long been criticized for the length of time it takes to resolve ethics complaints and it did worse in 2017 than in the previous year (see the last paragraph on page 3). The OLPR attributes this to staff turn-over and other causes, adopting optimism about progress in the year to come. Of course, all annual reports communicate enthusiasm and optimism. Let’s hope that the optimism here is borne out.