You are forgiven for not remembering our post from nearly two years ago in the case of Patrick Spearman and many others versus Glen Taylor and many others related to Envoy, a company once run by Mr. Spearman (as CEO) and in which Minnesota billionaire, Mr. Taylor (owner of the Star Tribune and the Minnesota Timberwolves NBA basketball team) was (and remains) a major (maybeTHE major) investor. (Re-read the old post linked here. It holds up (for the most part)).
We have been quietly following this bitterly fought and protracted dispute for nearly two years from a distance but we have spared you, our readers, from following the seemingly countless skirmishes and disputes between the lawyers. This lawsuit has made quite a few lawyers quite a lot of money! It has done very little else and nothing good, it seems to us, for anyone else.
The recent motion to assert punitive damages against Mr. Spearman caught our eye, however, and we thought it worth sharing as a strong piece of advocacy and one that might interest our readers (if anyone is interested in this lawsuit aside from the parties and their lawyers (and this law blog)).
In our experience, under Minnesota law, it is extremely difficult to persuade Minnesota judges to allow for a claim of punitive damages. As many of our lawyer/judge readers know (maybe 1-2 others?), one cannot claim punitive damages in Minnesota until given permission by the court. (We believe it is far too difficult but that should be the subject of another post some other time.)
Are the Counterclaim Plaintiffs (Glen Taylor, Franz Altpeter, Chuck Brynelsen, David Fabry, Ed Flaherty, Allen Lenzmeier, Brent Lucas, Roger Lucas, Randy Nitzsche, and Paul Waldon) in the Spearman case going to succeed and get permission to seek punitive damages against Mr. Spearman? Time will tell.
Regardless of whether they win on the motion, they succeed with the motion in painting an unflattering picture of Mr. Spearman, though (to put it mildly). Counterclaim Plaintiffs’ lawyers (led by David Marshall of Fredrikson & Byron) introduce the motion by suggesting that Mr. Spearman believed “he could defame Taylor with impunity” (here at p. 1) and “knowingly and intentionally engaged in a malicious scheme to publish false statements” to pressure their adversaries into “settling this case” (id. at p. 2). There follows a lengthy recitation of facts of Taylor’s transactions with the company (portraying them as completely legitimate and carefully vetted by a qualified and objective third-party) and facts of Mr. Spearman termination “supported by…serious misconduct” (and Ms. Amann’s termination (former COO under Spearman)) (id. at p 6-8), and Mr. Spearman’s efforts to be rehired as CEO (id. at 8-26).
It is a well-written brief. It should be. It is built on a foundation of hundreds of thousands of dollars, if not seven figures, worth of legal work by many excellent lawyers (and excellent support staff) over the past two years. Even if the motion is denied, arguably, they win (or at least scores points for the Counterclaim Plaintiffs) by painting such an unflattering image of Mr. Spearman before Ramsey Count Judge Patrick C. Diamond.
We will see how Mr. Spearman’s team counter-punches in their response, of course. No doubt it will be another massive undertaking in this bruising battle, which apparently must play itself out before the parties can dedicate their time and money to something more positive and productive. We hope that day is soon; in our view, this slug-fest is a noxious quagmire.
[9/18/2022 UPDATE OF 9/9/22 Post]: Mr. Spearman’s lawyers filed their response under seal, unfortunately (unfortunately for us, that is, the SRO Peanut Gallery). Defendants/Counterclaim Plaintiffs (Glen Taylor, Franz Altpeter, Chuck Brynelsen, David Fabry, Ed Flaherty, Allen Lenzmeier, Brent Lucas, Roger Lucas, Randy Nitzsche, and Paul Waldon) , on the other hand, did not have similar confidentiality concerns, apparently, and filed their reply memo for all to see (here).
Tantalizingly, they refer to Spearman’s “rebuttal evidence” but do not elaborate. (Rebuttal evidence, as the Defendants/Counterclaim Plaintiffs point out, is not part of a motion to amend to add a claim for punitive damages, which is based on a prima facie case. Basically, to win on such a motion, the movant says, “Here is my evidence,” and the court has to rule whether that evidence, without regard to any rebuttal evidence, would suffice to warrant punitive damages. That is what prima facie means (“based on the first impression; accepted as correct until proved otherwise“).
As far as we are concerned, Judge Diamond’s decision will hinge on whether this case is more like Longbehn (which we’d describe as holding that “generic trash-talking is not defamatory” or something like that) or like other cases that Defendants/Counterclaim Plaintiffs cite at p.6 of their reply. In our view, this is not an easy call; we’ll sit tight, hold back on a prediction, and see how Judge Diamond answers it.