• February 15, 2010

The only word that comes to mind to capture the long fight between Louis E. Kemp, Superior Seafoods, its lawyers, and Tyson Foods is “clusterf**k.”  Over the years, the dispute was litigated in California, in Minnesota state court, in Minnesota federal court, involves a concurrent lawsuit for legal malpractice against Plaintiff Kemp counsel, at least one bankruptcy (Tyson), several sales and assignments, trademark infringement claims, and a previous trip up to the U.S. Court of Appeals for the Eighth Circuit (on a trademark issue).  As such, discussion of this litigation, which stretches back to the last millennium is daunting.  We could not dream of reporting on all of the twists and turns, the allegations of wrong-doing, recriminations, and reversals.

On the other hand, how can one pass up noting a case in which the U.S. Court of Appeals (Judge Wollman) asks defense counsel (that is, counsel for appellee) at the start of his oral argument, “Why should our opinion reversing the district court not be prefaced by the words, ‘This case represents an example of a lawyer who was too clever by half,'” and follows up by asking, “Why shouldn’t our standard of review be, ‘We don’t like what happened here…’?”

The basic facts that underlie this appeal:  as Plaintiff Louis Kemp did battle on multiple fronts against defendants, the adversaries reached an agreement, in broad strokes, to settle some of the litigation (in California) and narrow the remaining litigation (in Minnesota, before U.S. District Court Judge John Tunheim).  It appears the parties agreed that, pursuant to a contract of sale (stock acquisition agreement) entered into between Kemp and Oscar Mayer in 1987, defendants could use the marks “LOUIS KEMP” and “LOUIS KEMP SEAFOOD COMPANY” on “surimi-based” products and no others.  Thereafter, lawyers for the parties negotiated and drafted a consent judgment which plainly read that defendants owned all “right, title, and interest” in and to the Marks and had no such limitation to surimi-based products (?!).

Then, after lengthy negotiations and drafting during which issues were raised, revisions were made, issues were dropped (or were they?), counsel for all of the parties appear to have come before the court and represented what they agreed to (that is, NOT the plain meaning of the consent judgment submitted to the Court and, indeed, inconsistent with it).  Then, counsel for Kemp sent the stipulated consent judgment to the court under a cover letter to the Court basically saying, “Here is the signed consent judgment and, oh, by the way, it does not really mean what it says.  It means what an earlier court order said (which is inconsistent with the attached) and what the lawyers told the Court we’d all agreed to.”

Now, almost ten years later, Judge Tunheim has rejected Plaintiff Kemp’s “fraud on the court” theory to avoid the plain meaning of the consent judgment, essentially saying to Kemp, “You might have been tricked, but the Court wasn’t.  The consent judgment says what it says…”  “Nothing communicated to the Court impacted its decision about whether to enter the consent judgment, and, accordingly, nothing in the record is legally sufficient to demonstrate a fraud on the court.”

The legal issue, as framed by counsel for Kemp, is that Judge Tunheim erroneously held that the legal standard is that the court must have committed an act of judicial discretion in reliance on the wrong-doing.  Rather, Kemp counsel argued, the plaintiff must only show that the Court was deceived and, counsel continues, plaintiff has offered sufficient evidence of that.

Judges Hansen and Melloy questioned both the amount of time that Kemp took to challenge the consent judgment and also questioned whether Kemp actually possessed the rights that he claims to have been wrongfully deprived of.

It is impossible to predict how this will play out and difficult to draw practice pointers from such an imbroglio aside from what should be self-evident: it is imprudent to enter into a stipulation (all the more so for a consent judgment) without 100% clarity as to (1) client acceptance of the terms, and (2) unanimity of understanding as to the material terms.  Of course, this is far easier said than done.

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