Update (March 11, 2015): St. Jude’s win, described below, has been affirmed by the U.S. Court of Appeals for the Eighth Circuit.
The hidden “practice pointer” is that one cannot appeal to the Court of Appeals a discovery order by a Magistrate Judge, if one failed to object to that decision and failed to raise the issue before the District Court. This is very frustrating from a litigant’s point of view who would prefer to keep costs down and put them off to a later day (that is, in the event of appeal). But appellate courts have their own budgets to care about and they do not let you on the ride unless your ticket has been punched by the district court….
Update (June 2, 2014): A recent $10,000+ award of costs caught my attention recently because I had covered the simple claim of St. Jude late last year (described below). St. Jude’s simple claim took a far-from-simple course, through and including a hung jury but finally St. Jude was redeemed on its renewed motion for judgment as a matter of law.
Congratulations to Ed Fox and the lawyers at Bassford Remele for the win. Sympathies to St. Jude for the arduous slog that it had to endure to reach the desired result and best of luck with what I expect might be a difficult on-going march to collect on the judgment.
(Original post (October 14, 2013): (Under the subject line: More on the Market for Human Capital: Damage Control When Top Draft Picks Bomb): Following up on this past Thursday’s post on the high stakes of the human capital market and, in particular, in the world of medical device sales superstars, this week Minnesota Litigator noted a second case involving the Minnesota company of St. Jude Medical which has not gone quite so well as its fight with Biosense.
St. Jude lured Medtronic rockstar, Tom Tormey, to come to St. Jude to sell its products over ten years ago. It seems St. Jude did everything right in terms of navigating its way around Tormey’s non-compete with Medtronic. It does not appear to have fully appreciated the risk that came to fruition, Tormey’s wife was stricken with cancer and St. Jude’s recruit did not come up with the millions of dollars of sales, it seems, that he had been able to do at Medtronic. So St. Jude fired him.
In an extremely simple (one might have thought unbeatable) complaint, St. Jude sued Tormey because St. Jude had enticed Tormey with an interest-free $680,000 loan that Tormey, ultimately, did not repay when due.
(Do yourself a favor and never refer to any contract as “airtight” or “unbeatable.” It tempts fates.)
Tormey answered St. Jude’s complaint. He was not going down without a fight (to put it mildly).
Not deterred, St. Jude undoubtedly expected that U.S. District Court Chief Judge Michael J. Davis (D. Minn.) would not be swayed by the tragic circumstances of Tormey’s wife’s fatal disease (emotionally overwhelming but legally irrelevant) but, rather, St. Jude knew Judge Davis would see the iron-clad undisputed promissory note and Tormey’s failure to pay it back. Based on that, St. Jude may have thought it pretty certain that it would win summary judgment. However, Judge Davis was less influenced by Mr. Tormey’s terrible loss of his wife than he was by the obvious point that the St. Jude promissory note was part of a package, not a stand-alone agreement. Consequently, Judge Davis denied St. Jude’s motion for summary judgment.
So then came trial last month…
And the jury wanted to know what “practicable” meant in October of 2001.
That’s a bad sign. And, indeed, it turned out to be a hung jury.
There can be very little doubt that the cost of St. Jude’s fight with Mr. Tormley exceeds the amount of the promissory note on which St. Jude originally sued. No one could have predicted that. Even if they could have, maybe St. Jude would have made the same decision because the market for human capital at St. Jude does not begin and end with Mr. Tormey. St. Jude might want to “send a message” that it expects top performance when it pays up front for top performance and it will not walk away if it does not get what it wants.