arrows-221459_1280Update (11/21/2016): As predicted, below. One of my less impressive predictions, imio (“in my immodest opinion”). 

Update (January 7, 2016): Immediately below nearly a month ago, I wondered, “And will the fool’s errand go still further with an appeal?” We now know the answer as of today: Yes.

I wish the best of luck to appellant and his lawyers at the distinguished law firm of Anthony Ostlund Baer & Louwagie even while I put their chances of winning on appeal near zero. If their appeal is successful, I will have to eat crow for having called the attack on the AAA a “fool’s errand” but it will be with a smile on my face in light of my serious misgivings about arbitration as a general matter.

Update (December 9, 2015): Chalk up a successful prediction of Minnesota Litigator (see below and linked order). Owens’ quixotic attack on the American Arbitration Association failed quite quickly and decisively. (Who, I wonder, footed the bill for that doomed misadventure? And will the fool’s errand go still further with an appeal?)

Update (November 18, 2015): The American Arbitration Association’s reply brief is linked here. It has been a while since I have inched out on a limb and predicted how a motion or a case will go. I am feeling bold. I predict the AAA will win and, in doing so, will reinforce my deep reservations about arbitration as a desirable dispute resolution process in most legal disputes.

Update (November 10, 2015): I challenge anyone to read the attached memorandum and to contest that Mr. Timothy Owens was dealt a disturbing and, in fact, shocking injustice. (On the other hand, other allegations about Mr. Owens might lower one’s sympathy for him a notch or two.)

Unfortunately for Mr. Owens, there is some ambiguity as to whether the AAA (who removed one of three arbitrators, post-award under opaque circumstances (described below)) can and should be held liable or whether Hennepin County Judge Thomas Sipkins (who vacated the arbitration award due to the removal of the arbitrator) was responsible.

And, in the latter case, maybe the correct route to justice was via appeal of Judge Sipkins decision, which Mr. Owens successfully sought and then, for reasons unknown, dropped (perhaps a variant of the “settle and sue” model at work?).

Original post (August 25, 2015)“The problem with arbitration is that it is arbitrary…,” Minnesota Litigator has repeatedly quoted a senior seasoned trial lawyer as having said years ago.

Complain all you’d like about our state and federal court systems but the process is sanitized by sun-light (by which I mean that it is public, it is more subject to public scrutiny). And the judges do not charge the litigants by the hour. And there are fairly comprehensive rules of procedure and evidence that have been developed and refined over literally hundreds of years (and courts generally apply them in more or less uniform fashions while, with arbitrators, who knows (and there is no recourse if rules are not followed)?).

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Poker ChipsI recently posted about a weak employment case in which the plaintiff, Mr. Schaefer, unsuccessfully argued that the horse-play at work, which included kicking and hitting fellow employees in the groin, constituted “sexual abuse,” warranting a longer statute of limitation (six years) than Minnesotans get for the intentional tort of battery (two years).

Only a week later Mr. Schaefer’s lawyer, Adrianna Shannon, knocked the ball out of the park for other clients of her firm, Curtis Anthony and Pro Logistics.

Anthony sold his business to Qwinstar. Qwinstar sued Anthony, claiming that he had misrepresented what he was selling. Sr. U.S. District Court Judge Richard H. Kyle, Sr. (D. Minn.) awarded summary judgment to Anthony and Pro Logistics on their counterclaim to the tune of $800,000 plus atttorneys’ fees (yet to be determined).

The variety of experience in the job of a civil litigator can be a great thing. While dramatic reversals of fortune can be traumatic and losses can be humiliating, almost all trial lawyers have several on-going unrelated cases at any one time so, over time, a disappointment in one case is likely to be balanced by a win in another. Congratulations to §hannon Law this time around at least!

 

Minnesota Litigator - Stacks_of_moneyUpdate (November 16, 2016): Unlike the Minnesota Supreme Court’s decision discussed below, drawing a sharp distinction between “discovery depositions” and “depositions to preserve trial testimony,” the linked decision in the Sorin v. St. Jude lawsuit (discussed previously here) makes clear that “there is no difference between discovery depositions and deposition for use at trial” as far as the federal court for the District of Minnesota is concerned (Decision at p. 6). “Accordingly, if a party wishes to take a deposition prior to trial, standard discovery rules apply, including compliance with the pretrial scheduling order.”

This is great news for lawyers with time on their hands and unfortunate news for clients because the rule drives up the expense of discovery. The rule forces parties to take depositions that otherwise could be made contingent on later developments in a lawsuit (like postponing depositions until after a decision on summary judgment).

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megaphone-150254_1280The Minnesota Board of Professional Responsibility is looking for an experienced lawyer (at least 10 years’ experience – must include civil litigation or prosecution experience).

Deadline tomorrow!

pinkie_pie_bubble ponyUpdated post (November 14, 2016): Plaintiff Bubble Pony hopes for a more receptive audience before Sr. U.S. District Court Judge David S. Doty (D. Minn.) than BP got before U.S. Mag. Judge Franklin L. Noel on BP’s second motion to amend its complaint.

As discussed below, Plaintiff BP (Mr. Patrick Glynn), a digital game programmer, exchanged text messages with Defendant Facepunch discussing the financial terms of Glynn’s work for Facepunch. Glynn seeks to hold Facepunch to “the deal” allegedly negotiated in the text message exchanges. Judge Noel denied Glynn’s motion to amend his complaint, essentially concluding that, even with the newly discovered evidence, the alleged offer and the alleged acceptance were still too vague to establish a legally enforceable contract as to profit-sharing.

Here linked is Facepunch’s response to Glynn’s objection to Noel’s decision denying Glynn’s motion to amend. And here linked is BP/Glynn’s reply.

I predict that Facepunch will win before Judge Doty, as it did before Judge Noel. Here’s why: our civil justice system can and should set incentives for people and businesses to negotiate and to adhere to clear-cut agreements. Setting up a system in which a party can cobble together a supposedly binding contract from text message snippets exchanged over years, and the like, should be discouraged. It is an open invitation to protracted and expensive disputes.

It may be true that Facepunch got more than it deserved from the work that BP/Glynn did for Facepunch. But maybe BP/Glynn is responsible for its failure to make the rules of the engagement clearer from the start.

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Money FightThe world’s largest legal search firm, Major Lindsey & Africa, has published its 2016 Compensation Report (linked here) and it is generally good news for large firm lawyers. And good news for these lawyers means good news for all lawyers in private practice.

Average compensation for all respondents was reported as $877,000, up 22% from 2014 ($716,000). Median compensation also supposedly rose dramatically, climbing 21%, from $475,000 in 2014 to $575,000 in 2016. The average billing rate for all respondents was $685, up $77 (+13%) from 2014 ($608).

Dig into the 121-page report for details. Who gets paid more, men or women? White people vs. people of color or “Mixed Races”?  You already know the correct answers to these questions. But you might find the specifics and deeper detail interesting.

One caveat: this survey was sent to thousands of lawyers and MLA got responses from just 3%. And there is no indication of any kind of verification or validation of the information provided by this non-random sample. Do you imagine that this sub-group, the 3% survey respondents, yields accurate data for the entire group? I am not trained in statistical validation but it seems to me important to keep in mind that this information might be skewed (and particularly inflated and inaccurate as to the Minnesota market, in particular).

 

fig-1703628_1280No. Kicking a man in the testicles is not “sexual abuse,” as the term is used in Minn. Stat. 541.073 (“Actions for Damages Due to Sexual Abuse”) according to the Minnesota Court of Appeals in an unpublished decision this week. Therefore, the court held, Plaintiff Mark Schaefer’s claim against his past employer for the crotch kick he endured (by fellow employee Donovan Schultz) was subject to the two-year statute of limitation for battery, rather than the six-year term for “sexual abuse.”

The allegations in this employment decision are strange. Apparently striking one another in the testicles was a form of “play” for at a least a couple of workers at Cargill Kitchen Solutions, Inc.

The analysis in the decision of how a kick to the groin is NOT sexual abuse also strikes me as a little odd.

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BedBack in January, we covered an on-going battle between Minnesota-based bed behemoth, Select Comfort, and a smaller competitor (one of many such battles that Select Comfort has waged to protect its Sleep Number™ empire).

Game on. Trial is set to begin on November 29, 2106. (Happy Thanksgiving 2016 to the warring lawyers!)

That means that the litigants are now setting the stage for trial, launching their barrages of motions in limine, trying to blow up some of the “evidence” proposed for use at trial by the other side.

Many questions arise, for example, is it in fact evidence that defendants conducted some of their business using pseudonyms? Should they get to exclude any such information at trial?

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Slimed Person cropped SLIMESylabus [sic]

When the business entities that were utilized in a Ponzi scheme filed for bankruptcy, a plaintiff lender-investor lacks authority to bring fraud-related claims arising out of the Ponzi scheme against an earlier lender-investor, absent an allegation of an injury separate and distinct from an injury suffered by the entities. Such fraud-related cause of action [sic] is derivative and belongs to the bankruptcy estate.

The quote is the summary of a published Minnesota Court of Appeals decision this week ruling against a lender called Greenpond South LLC (“Greenpond”) in Greenpond’s lawsuit against another lender, General Electric Capital Corporation (“GECC”).

The description of the legal holding is bland and technical but the decision reflects underlying allegations of serious wrongdoing by the GECC, the winning party to this lawsuit.

To summarize, GECC was a lender to Minnesota’s most famous swindler, Tom Petters. GECC caught on to Petters’ fraud. GECC allegedly kept Petters’ secret until it had recovered the money it lent. GECC also knowingly provided Petters with a “To Whom It May Concern” letter praising Petters’ character, knowing that the praise was undeserved and that Petters would use that letter to defraud other potential lenders. Although the decision does not say so, it does not appear that GECC did anything to stop Petters’ ongoing fraud once it had gotten its own money out.

The basic holding of the Greenpond v. GECC case, however, is not that GECC did nothing wrong. Roughly, it is that the Bankruptcy Trustee brought its own action against GECC, which it settled. In other words, at least in theory, GECC already paid the piper for its alleged role in the scheme. Greenpond cannot sue GECC a second time.

 

St_Jude_Medical_pacemaker_with_ruler2As we said last month, St. Jude Medical has brought a complaint against short-seller Muddy Waters Consulting and others for false advertising, conspiracy and the resultant manipulation of the public markets. Essentially, St. Jude’s 33-page lawsuit alleges that Muddy Waters’ business model is to malign companies, like St. Jude Medical, with false or misleading public criticism of their business practices or products, so that Muddy Waters, which has “shorted” stock in the target company (see below), can make money.

The basic idea of shorting  or short-selling is that an investor sells stock he does not actually own on Date 1, with a promise to the buyer that he will deliver the stock on later Date 2. If the share price drops between Date 1 and Date 2, the short-seller makes money because buyer, who is correspondingly going “longer” on the stock, is bound by the Date 1 sale price. If the share price goes up between Date 1 and Date 2, the short seller takes a loss. The details of short-selling are, of course, more complicated.

At issue in St. Jude v. Muddy Waters, are statements by Muddy Waters people questioning the safety of St. Jude implantable cardiac rhythm management (“CRM”) devices, colloquially known as pacemakers. Was this merely a ploy to drive St. Jude’s price down? Muddy Waters has now filed its answer.

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