• October 23, 2017

Update (October 23, 2017)Blue Cross & Blue Shield of Minnesota v. Wells Fargo, the multi-year lawsuit described below (and the Jesse Ventura v. Chris Kyle litigation, covered ad nauseam previously (see here, here and here)) should teach litigators some critical lessons.

Today’s winners are tomorrow’s losers and, the day after tomorrow, the opposite. Lather, rinse, repeat.

Blue Cross Blue Shield (BCBS), represented by fine lawyers at the Robins Kaplan law firm, got smoked after years of litigating, with a defense jury verdict after a hard-fought trial. After an appeal, however, BCBS and its lawyers are back in the battle and hitting hard (see here and here). Now maybe Wells Fargo and its lawyers are on the ropes?

These dramatic reversals of fortune can be difficult to endure for clients and lawyers, alike. In our view, they reflect serious problems in our legal system (lack of clarity, lack of predictability (in addition to the related punishing expense)). On the other hand, these 180-degree swings teach us resilience, patience, tenacity, and, we hope humility, civility, and empathy.

Update (June 12, 2017) (under the headline: We don’t talk, like, quite, well, um, we do sometimes, but not like we write sometimes…): Legal analysis can be complicated, which is why legal reasoning is generally transmitted in writing, rather than orally. Lawyers (and lawmakers and judges) must set out their words and ideas with great care.

But in trial, we all have to “think on their feet” and, of course, “speak on their feet.” It is sometimes painful that our spoken words are transcribed because they very often seem inarticulate.

During the Blue Cross Blue Shield v. Wells Fargo trial, U.S. District Court Judge Donovan Frank (D. Minn.) said:

But with respect to not submitting the [Deceptive Trade Practices Act claim] to the jury, what’s the procedural — I want to just make sure there’s a meeting of the minds by counsel, well, here’s — we agree to that but we don’t agree, or we do agree and here’s how that will be decided with or without the jury’s verdict.

Umm, what?

Judge continued:

Then that raises an issue in an entirely different case that actually—it’s a case—by just saying what I am about to say, people could figure out what case it is because it is about to get tried a third time. I am overly sensitive because I have been reversed one time on a jury verdict in 29 years, and it was a year and a half ago or whatever. That is exactly—on a separate issue that didn’t result—it was a very [un]usual state statute where I—the Eighth Circuit ruled, and it is the Vaidyanathan case is which one it is, the state statute, they ruled, is more like a criminal statute with specific intent. And I treated it more like a fraud statute, so now it was back, and the jury hung up on the second trial. Well, what does that got to do with this? Well, now, even though we’ve tried it twice—and it’s good faith arguments; I will just assume that for both sides. One side is saying, Judge, even though you threw out the Plaintiffs’ promissory estoppel, the equity claim that was tried to you as part of the jury case, even after the jury came back with a $2 million verdict that was then reversed by the Eighth Circuit, even though you did that, we now claim—this would be the Plaintiffs’ argument—we now claim that somehow that is inconsistent with the [jury verdict] —so you were bound by something that the—in the contract case. So, therefore, you have to try them together, even though we still agree it is all up to you, Judge. And even though I don’t agree with that, and I don’t believe the Eighth Circuit does either—that’s really why I raised—the question is, well, is there something the jury is going to do that the two of you don’t agree on the procedural effect? And maybe, obviously, if counsel agrees with what you just said, then it is a nonissue. If they don’t, I guess I will have to hear from you briefly.

(Emphasis in original at p.6.)

The lawyers responded:

[Plaintiffs’ counsel]: It is an injunctive count, and we think liability and relief is for the Court to decide….The standard is it is a different cause of action; it is injunctive relief only. It is a cause of action for the Court to determine.

THE COURT: [Defendant]?

[Defendant’s counsel]: Certainly wouldn’t disagree that the injunction lies with the Court. I just don’t understand where it fits in with this[.]

Now, relying in large part on those two ambiguous sentences by defense counsel, Judge Frank has decided that Defendant Wells Fargo waived it right to argue the benefit of the jury verdict in its favor binding the judge’s subsequent determinations of non-jury issues.

One has to have sympathy for a lawyer whose vague extemporized words at trial on June, 2013 (in a case that had been litigated for two years before that) are construed against his client four years later. All hope is not lost, of course. I strongly suspect that the U.S. Court of Appeals will have another opportunity to review this case in the coming months.

There are so many layers of irony in this case. Among others, the right to a jury trial in our legal system is so sacred, so enshrined, so fundamental a right. A defendant’s waiver of its right to a jury is treated with great care, to make sure that the waiver is knowing, voluntary, and informed. Here, the issue is waiver of the right to claim the collateral estoppel benefit of a jury verdict. It seems that the vigilant protection of one’s right to a jury verdict is somewhat relaxed after the jury decides in favor of the litigant? Maybe that is entirely appropriate for a litigant like Wells Fargo who did not seem to want a jury in the first place?

Update (May 15, 2017):(under the headline: Blue Cross v. Wells Fargo and the Challenge of Hybrid Jury/Bench Trials): In the case described below and in later Minnesota Litigator posts, we face an almost comic turn-around in which one litigant (Wells Fargo) fought to have a bench trial, lost that fight, and then won the case decisively before the jury.

The adversaries, Plaintiffs Blue Cross Blue Shield of Minnesota and other insurers (here, “BCBSM”) fought to have a jury trial, won that fight, and then lost their case before the jury.

Post-trial, U.S. District Court Judge Donovan W. Frank (D. Minn.) held that he would have found for the Plaintiff BCBSM but, he reasoned, his hands were tied. He thought he was bound by the jury’s finding in favor of Wells Fargo.

Plaintiffs appealed their loss at trial and also the judge’s decision that his hands were tied as to “non-jury” parts of the case by the jury verdict (that is, the parts for the judge and not the jury to decide). The Eighth Circuit held that “the district court failed to consider whether the parties waived the application of collateral estoppel.

In other words, can the Plaintiffs object to the jury verdict when they argued so strongly in favor of a jury? Can Wells Fargo object to the judge’s own determination of liability on “non-jury” questions when Wells Fargo argued so strenuously against a jury and for the judge’s decision?

On May 5, Wells Fargo made its plea for U.S. District Court Judge Donovan W. Frank (D. Minn.) to reconsider his March 14 decision that Wells Fargo “waived the jury verdict’s preclusive effect.

As we pointed out back in 2013, “waiver” is a malleable legal idea. Even if we put aside “constructive waiver” — which we might as well call “waiver in the absence of waiver” or “make-believe waiver” (for example, a U.S. Supreme Court holding that a state constructively waived sovereign immunity when the state had expressly disavowed waiver) —  what comprises “the knowing and voluntary surrender of a known right”? The concept can be hazy.

Certainly, if Wells Fargo had been queried while the jury was deliberating, “Will you agree that the judge is bound by whatever the jury decides,” and Wells Fargo answered, “No,” it would be fair to say that Wells Fargo couldn’t “change its mind” when the jury came back in its favor. But, of course, that did not happen.

“A Tough Knot to Crack” (photo by Jay Fanelli)

This, then, is one of those incredibly knotty problems that judges need to tease out (lucky them!). The chances of this lawsuit making a return trip to the U.S. Court of Appeals for the Eighth Circuit seem quite high.

Update (April 23, 2014): Below is a post from last month reflecting a loss of plaintiff Blue Cross (and others) in a case that Blue Cross, represented by the Twin Cities litigation powerhouse of Robins Kaplan Miller & Ciresi, brought against Wells Fargo Bank.

But, post-trial, U.S. District Court Judge Donovan W. Frank (D. Minn.) held that, in contrast to the jury, the Court would have found that Wells Fargo breached its fiduciary duties owed to the plaintiffs. He continued, however, that the Court was bound by the jury’s conclusion to the contrary (see linked doc, p. 7, ftn. 6).

This is too hard a nut to crack for Minnesota Litigator on a tight deadline, but I can appreciate a sense that the legal system’s integrity and legitimacy, its adherence to the ideal of “truth,” would appear to be in play if one can have a single trial in which (a) a single entity is found to have breached its fiduciary duties owed to plaintiffs, and (b) the same entity is found NOT to have breached its fiduciary duties on the same facts as to the same plaintiffs.

This would seem to be the upshot of accepting both the jury verdict and also the judge’s irreconcilable finding on the same question.

So, where a case is tried before both a judge and a jury and their conclusions conflict, whose truth trumps (or is there a place in our justice system and in our minds for quantum mechanical ambiguity)? (Blue Cross’ argument is here.)

Original Post (March 24, 2014) (Under the subject line: “Robins Kaplan Loses a Big One”): The brilliant lawyers of Robins Kaplan represented Blue Cross Blue Shield of Minnesota in a landmark case against “Big Tobacco” which enriched the firm in the hundreds of millions of dollars.

No such luck in another assault for Blue Cross against “Big Bank.”

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