• September 29, 2015

CatAndMouseChaseJeorenMoeszturkey-520632_1280Update (September 29, 2015): Linked is U.S. District Court Judge Ericksen’s pretrial order in the St. Jude v. Grubiak lawsuit, discussed below.

A couple of things are notable: (1) Motions in limine are due right before Thanksgiving and responses to motions in limine are due right after. In light of the litigation styles on both sides of St. Jude v. Grubiak, one can predict a slew of motions to draft and to respond to. Time for these trial teams to call in reinforcements for the feast preparation. Time to pull the plug on all out-of-town trips; (2) Note that this pretrial order actually applies to two different lawsuits at the same time. So, as much work as this looks like for St. Jude and Grubiak lawyers, the Court (which has far fewer lawyers) is doing double-time (though we have to assume that the other case will not generate the paperwork of the Grubiak case).

As I tuck in my bib, loosen my belt, and tighten my goggles before throwing myself into the Thanksgiving feast this year, among my many blessings, I will count not being involved in either of these cases…

Update (September 11, 2015) (under the headline: St. Jude v. Grubiak: The “Duty to Rat” And Top Card Minnesota Civil Litigator Combat): St. Jude brings a motion for partial summary judgment and a motion to exclude a Grubiak expert. Grubiak brings a motion for summary judgment and a motion to exclude a St. Jude expert. U.S. District Court Judge Joan N. Ericksen denies them all this week. Priceless.

Well, maybe not priceless. In fact, undoubtedly very pricey. Should the litigants be annoyed with their lawyers for the pointless (in hindsight) lawyers’ fee fest? 20/20 hindsight is always dicey and we will never know the extent that decisions were client-driven or lawyer-driven (or a combination with informed consent). Plus, who knows what kind of fee arrangements are in place? Maybe the money’s coming out of the lawyers’ pockets for all we know. (I doubt it.)

Having said that, I have to say I envy the large firm lawyers with the well-heeled clients who do not seem too bothered by paying for losing motions. I have to assume that because, in my view, at least one of these motions was a real stretch.

I also note a nestled “zinger” or “bench slap” in the order at pp. 8-9 where Judge Ericksen appears to chide Grubiak counsel, “The Court’s own research revealed cases that are inconsistent with the authority cited by Grubiak….The issue is not adequately briefed. The Court declines to dismiss SJMSC’s claims at this time…” (OUCH.) (In fact that’s maybe a little slap to all counsel in the case, right? Grubiak seems to be chided for failing to come up with “inconsistent authority” but the Court makes it seem like St. Jude’s counsel missed the cases as well?)

Original post (June 9, 2015): If XYZ Company Executive A learns that XYZ Company Executive B is plotting her escape to a competitor (which we will call, say, Biotronik), does Company Executive A have a fiduciary duty of loyalty to rat out the defector to their mutual employer? What if Executive A  is a corporate “officer”? Does that make imposing a so-called “duty to rat” more compelling?

I think that Defendant Grubiak in the lawsuit of St. Jude Medical v. Grubiak might have the edge on the answer to that question. I think the answer is probably, “No.” I am betting the Court will not find a “duty to rat.”

It seems that the lawyers in St. Jude v. Grubiak might agree with my skepticism. This would explain why Grubiak argues that this “duty to rat” is St. Jude Medical’s entire case against him. This also explains why St. Jude’s response is that Grubiak’s portrayal of St. Jude’s claims against Grubiak grossly mischaracterizes and largely ignores St. Jude’s entire case.

George Bellows, Dempsey v. Firpo, 1924

George Bellows, Dempsey v. Firpo, 1924

I have covered this case quite a bit over the past 18 months. Why not? The case pits two of the finest civil litigation law firms against one another and there is no question this is a high stakes case by which I mean that the lawyers are slugging it out hard.

(As for the fortunes of St. Jude, this case is undoubtedly a drop in the bucket. And even if the cost is several million and the recovery less than the cost, its display of litigation strength might be a long-time reminder to other St. Jude employees and executives “to commit to being a part of St. Jude Medical,” to “being a team player,” and to think twice before scurrying around in the shadows with St. Jude competitors.)

The quality of the linked briefs is very high (and undoubtely did not come cheap) (here and here). An issue of particular interest is the measure of damages for Grubiak’s alleged breach of fiduciary duty. Disgorgement? That’s what St. Jude seeks (see here at p. 21). This seems like it might be a disproportionate remedy but maybe it is fitting (see here at p. 26)?

I was initially intrigued by Grubiak’s argument that St. Jude Medical’s case owed its origin to earlier litigation against the other former St. Jude executive, “the defector.” Grubiak argues that St. Jude’s entire case is premised on St. Jude’s violation of a state court protective order, which limited the use of documents to “attorneys’ eyes only” and to the earlier lawsuit. But, on further reading, I was no longer intrigued.

St. Jude addresses Grubiak’s “protective order” argument here (see pages 26-31) and, in my opinion, guts it.

Perhaps these initially serious allegations, revealed (to my mind) to be baseless, biases my judgment as to the outcome of the cross-motions for summary judgment so I might be proven wrong on my prediction, but I predict Grubiak will lose on his motion.



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