You’ve received a warrant by fax or email saying a federal law enforcement officer or an attorney for the government wants to arrest you. Charges may be for money laundering or bank fraud, or missed jury duty. To avoid arrest, the warrant says, send money.
Hello. Yeah, uh, this is probably a stupid question, but, um, I got some legal papers here, someone gave ’em to m
e, but, they got my name on there, but, there’s no court file number listed. It’s just blank. So, like, this is fake, right? I mean, it’s just another scam, or fraud, or something. But it ain’t real with no court number on there, is it?
A common question from a potential client not realizing they were just served with a real lawsuit in Minnesota state court.
Yeah, I gotta question for ya. My client was served with papers down here from some lawyer in Minnesota. But they haven’t filed it, see?. So, we figure, the attorney is just trying to scare us. Bluffing. I’m not planning on answering it, ‘cause, ya know, there isn’t a file number to file it with. Does this sound right to you? They’re just hoping we’ll pay and don’t really wanna litigate, ya know?
–A common question from an out of state lawyer with a client being sued in Minnesota state court.
People are always bewildered to hear in Minnesota we can sue someone without filing anything with the state court. All it takes is for an attorney to draft, sign and serve a summons on a defendant (with a complaint) to start a lawsuit.
It can be confusing. If you don’t think it is real without a court file number printed on it, think again, before it becomes a default judgment (with a Court File Number and dollar amount on it). And don’t bother calling the court. There will not be a record of it there. The court will have no idea A lawsuit was commenced, because the lawsuit began when the summons was served and the court was not involved. This is commonly known as “hip pocket service,” despite some legal commentators calling it “hip pocket filing.”
Under Rule 3.01(a) of the Minnesota Rules of Civil Procedure, “A civil action is commenced against each defendant . . . when the summons is served.” Compare that to what Rule 3 of the Federal Rules of Civil Procedure provides: “A civil action is commenced by filing with the court.” A small difference in wording, with a large impact on when a lawsuit begins.
Our current Rule 3 was a statute in Minnesota as early as 1866, when actions at law and equity were merged so that only one procedural type of civil action existed. Minn. Gen. Stat. ch. 66 (1866)(Minn. Stat. Ann. § 540.01 superseded by Rules); and Bond v. Pennsylvania R. Co., 124 Minn. 195, 144 N.W. 942 (1914)(discussing this history).
Minnesota’s statutes progeny began in 1851 when we were still a territory and continued after Minnesota became the 32nd state in 1858. Id. In the 1866 version of Minnesota’s Rule 3, it was spread out among two sections. See Section 13 and 14, c. 66, G. S. 1866. The two sections were combined into one through the 1905 revisions to Minnesota’s statutes (Revised Laws). See Section 4102, R. L. 1905.
I searched but could not find “hip pocket service” or “hip pocket filing” used by a Minnesota appellate court, although it is used by the advisory committee in comments to Rule 12 of the General Rules of Practice in 2009. Suffice it to say the procedure has been around a long time. I will leave the exact origin of the affectionately used slang term a mystery for now.
Only North and South Dakota have the same procedure as Minnesota. In some other states you can serve a summons before filing, but the case must be filed shortly after service is complete (from a little over a week to a few months later). The majority of states follow the federal rule and require you to file (and pay the fee) to start a lawsuit.
Pocket service can save you from immediately paying the filing fee for a lawsuit. This is nothing to scuff at with the filing fees for a civil action at about $325.00, unless you want a jury, then add on another $102.00. Other benefits are significant and be attractive for many cases.
After service (about $60 to $100), you have an active lawsuit not under court supervision and no court-imposed deadlines apply, but you can engage in discovery and the case can proceed with all of the civil procedure rules applying. Not filing can be beneficial in settling cases early with less expense. Sometimes it can be abused by a plaintiff with a weak case looking for a nuisance value settlement. But still not without a counterbalance: A defendant can file the case at anytime too.. As defense counsel, I’ve filed first many times to call a plaintiff’s apparent bluff.
Since the case is not filed, there is no way to count how many lawsuits are actually are pending. If a suit is timely served, it could have remained pending indefinitely. In 2011, it was estimated (guestimated) by collection attorneys (usually suing people for credit card debt) that 50,000 un-filed consumer credit cases had been served in the state while the Great Recession was ongoing.
That was more than twice as many as the collection law firms had filed. When New York ended hip pocket filing in the early ‘90s, it saw court filings swell by about 20%. The number of un-filed cases in Minnesota is unknown a
nd unknowable, but it’s a safe bet there are more than a few and maybe a lot more.
A great benefit of hip pocket service is it allows a lawsuit to be filed without being publicly disclosed. I worked on one case where it was about 6-7 years from the time it was served and neither party had any desire to file it. They were not interested in a public airing of their grievance.
They were both professionals and one of them had transmitted a loathsome disease to the other. They each had claims accusing one another of spreading the pre-existing condition to each other. Maybe it was a mutual infection? The case sat at a stalemate and lingered. I tried to find a way as a law clerk to resolve it, but could not dismiss it without filing it with the court for the whole world to see. That was not acceptable. As far as I know, that case may still be out there pending, and has been for about 20 years by now.
Effective July 1, 2013, Rule 3.01 was amended and now requires all cases to be filed within one year after they were served. Rule 5.04 deems a case dismissed with prejudice (the case over and can never be started again) if is not filed within a year. Perhaps as a nod to privacy, the parties can waive the one year limit and keep the case active indefinitely.
For all of the older pending cases, the clock began to run on the effective date and the one year limit is up July 1, 2014. If not filed, your case will be automatically dismissed and you can never bring the same claim again. Great news for defendants, not so much for the tardy or absent minded plaintiff.
If you have a real good reason, act promptly, have a legitimate claim and it won’t be too unfair to the person being sued, Minn. R. Civ. P. 60 may work to reopen a dismissed case. But don’t count on Rule 60 saving the case if you were negligent, inexcusably tardy, have a questionable case and/or the defendant will be at a disadvantage. It should be used only when these factors are present.
It will be interesting to see how many old cases are filed in June, especially how many are filed the last week of the month. I am sure we will hear about the numbers once they are in and I may post them here after I do. In the meantime, make sure you review all of your cases served before July 1, 2013 and get them filed ASAP or keep your head low and hope the clock runs out on any claims outstanding and un-filed. Right now, I need to go inventory my older files.
“Whenever you see a successful business, someone once made a courageous decision.” ― Peter F. Drucker, Getting Started
Every new venture is as unique as the people trying to start it up and each new business has its own distinct needs and challenges. One thing they all have in common is the people who are willing to take risks.
There are few universal truths in anything , but one that runs through all businesses, is to make sure your personal assets are not at stake. In order for a new business to have the best chance of succeeding, it must start with a rock solid foundation that allows it to take risks and hopefully reap great rewards. In case the risk does what it is inclined to do, there must be built in protection for the risk-taking owners’ personal assets. The key to that protection is to form a business entity to run under before the first Open sign is hung.
Most people that call me about starting up a new business already understand that running it as corporation (Inc.) or a limited liability company (LLC) is what they must do to protect their personal assets. If the business is organized as a corporation or LLC, the possibility of the owners being personally responsible for the business’s debts and liabilities is much diminished. The best way to build in this protection is to take advantage of the liability shields authorized under state law. These laws, usually statutory, authorize the creation of a separate legal entity to conduct business through that will bear the burdens that may befall. On the flip side, the Inc./LLC also bears the benefits, which the government is happy to see created since it gets to relieve you of some of the burdens of those benefits, i.e., taxes.
The owners of a corporation or LLC can be protected from personal liability for the business’s debts as long as the business is formally organized, operated and maintained under their state’s laws governing businesses. This personal liability protection is commonly called a “liability shield” or “corporate shield” and can be extremely valuable if the new business does not do well.
For instance, if a business has one deal go wrong at the worst time possible (when else does it happen?) it could be financially ruinous to the company. It may force the business to file for bankruptcy. Or if things are bad enough, two or more creditors could file petition for an involuntarily bankruptcy against your company, forcing your business into bankruptcy court so the creditors would have a better chance of recouping what they are owed (at least some). Under either of these scenarios, if the liability shield has been maintained so it is intact and enforceable, your business’s creditors would be unable to get a judgment against the you as the owner personally. This helps to encourage people to take chances and start businesses, something the government sees as a valuable to society.
A number of businesses I represent seem to be increasingly formed without a lawyer’s assistance. Especially by anyone who has been involved with the ownership of an incorporated/organized small business (or LLC) before. In law school, my Corp Prof explained how you only had to fill out a few lines on a postcard, check a couple of boxes and then pay a fee to form a Minnesota corporation, I was flabbergasted! (Yeah, I said a postcard. And flabbergasted. At the time, the form was the size of a large postcard. And the State didn’t have many decent or useful websites either. I don’t have any excuse for flabbergasted).
For a single owner just going out and doing her own thing, forming a corporation or LLC in Minnesota is easy and can be done without a lawyer. In fact, the page, “Starting a Business or Nonprofit” at the Minnesota Secretary of State’s website, that has some great information for startups, only mentions the word “lawyer” once, the same number of times it uses “accountant.” If you have the right forms from the Secretary of State, a link to the business filing website and a credit card that is about all you will need (You can use your checkbook, a stamp and a paper application, but it is on 81/2” X 11″ paper—larger than a postcard).
If there is more than one owner, I always recommend getting an attorney involved. Usually to make sure the new business gets an operating agreement, control agreement or a buy-sell agreement in place right away that will define the owners’ mutual rights and responsibilities and address how any future disputes will be addressed and handles (a business prenup). After all, business partners get along great when they are broke and just opening the doors to an exciting, promising and unknown future. The fussing and feuding never starts until after they taste some success, want more and ain’t gonna share. Once that point is reached, it can be impossible to agree on anything, let alone how to resolve any disputes like the one going on now!
Here are some more resources to help you startup your Minnesota business so it has a solid foundation and you can feel a bit better about the risks you want to take.
Organizing. Planning. Financing. Licensing. Hiring. Managing. Growing.
The Minnesota Department of Employment & Economic Development’s Division’s Small Business Assistance’s website maintains a handy directory of license and permit information. SMALL BUSINESS ASSISTANCE” also puts put out numerous helpful publications for the new business, including an awesome book everyone thinking about starting a business in Minnesota should have, and it is even more awesome as a digital download: “A Guide to Starting a Business in Minnesota.” Simply essential.
In order to pay for all the awesomeness, we cannot forget about the really useful tax info (forms, schedules, instructions, etc.) at the websites for Uncle Sam and Aunt Minnie.
DEPARTMENT OF EMPLOYMENT & ECONOMIC DEVELOPMENT or DEED (MN Unemployment Insurance Program);
DEPARTMENT OF LABOR & INDUSTRY affectionately called DOLI (pronounced “Dolly”)(Worker’s Compensation & Trades Licensing for Boiler operators, Building officials, Contractors, Electricians, Elevators and more!); and last but not least:
DEPARTMENT OF COMMERCE (Licensing info for Banks, Credit Unions, Insurance, Securities, you know “commerce” stuff).
Now go forth and start your own business! (and if you get sued, I know this guy that’s a business litigator . . . I think this is that lawyer’s website).
“The Right to be Let Alone— the Most Comprehensive of Rights and the Right Most Valued by Civilized Men.”1
Tomorrow, the US Supreme Court hears arguments over the constitutionality of searching a person’s cell phone without a warrant. This Fourth Amendment area of law is complex and always nuanced. Warrantless search cases usually boil down to whether or not the person has a reasonable expectation of privacy at the time of the search. If there is a reasonable expectation, then the search may be found unconstitutional because it violates the Fourth Amendment’s protections.
In the two cases the Court hears tomorrow, Riley v. California and United States v. Wurie, the former involves a smartphone and the latter a flip phone. The big difference between the two is the amount of data they may store and the advanced functions one is capable of performing. This results in one device conceivably having more confidential and private data than the other. On the flip side, how confidential and private do you consider your phone’s data? Do you ever leave it out of reach? Do you 
charge it in an open place that’s accessible by others? Is it password protected? Is it encrypted?
I am unsure if the Court is well-equipped to decide technology cases. It was only 4 years ago they decided a sexting case involving a warrantless search of a government employee’s pager. City of Ontario vs. Quon, 130 S.Ct. 2619 (2010). Yes, a pager in 2010. Last summer Justice Sotomayor stated the Justices do not use e-mail – even internally (but their staff does). In another technology case involving streaming TV earlier this month, Justice Scalia didn’t seem to understand HBO is not a broadcast TV channel you must pay to obtain. Chief Judge Roberts, whose initial drafts of decisions are written longhand in pen and on paper instead of with a word processor on a computer, asked during oral arguments in the 2010 pager case what is the difference between an email and a pager.
In prehistoric technological times, the Court decided we had a lower expectation of privacy in our gas powered, internal combustion vehicles (Motor Vehicle Exception) than in our homes. Carroll v. United States, 267 U.S. 132 (1925). Armed with only probable cause, a search of your car without a warrant is permitted. Id. More recently, but still in a technologically antiquated time, the Court decided a person in a telephone booth had a reasonable expectation of privacy (Hey, does anyone remember telephone booths? Or payphones?). Katz v. U.S., 389 U.S. 347, 350 (1967). But a person does not have a reasonable right to privacy in the actual numbers they have dialed to call someone on the phone. Smith v. Maryland, 442 U.S. 735 (1979).
A business cannot expect privacy. California Bankers Ass’n v. Schultz, 416 U.S. 21, 65 (1974). However, the government is not allowed to gather evidence against you via surgery—yes—medical surgery. Winston v. Lee, 470 U.S. 753, 758 (1985). Reasonably expecting your garbage is private would be a mistake. California v. Greenwood, 486 U.S. 35 (1988). In 1990, the Court said sobriety checkpoints are a reasonable way to search and seize (and catch drunks driving). Michigan Dept. of State Police v. Sitz, 496 U.S. 444 (1990). If you work for the government, your office is not private if your are suspected of work-related misconduct. Samson v. California, 547 U.S. 843 (2006). Although the rule established may be a “freedom-destroying cocktail” that encourages “malevolent” tipsters to make false reports, an anonymous tipster can now call 911 and the cop is authorized to stop you and search your car (despite your obedient driving skills) without anything more. Navarette v. California, __ U.S. __ (2014).
You have to wait until sometime around June 2014 to find out if the US Supreme Court thinks your cell phone data is private. But in the meantime, below is a poll to indicate how private you believe your cell phone is. Let’s at least find out how people that actually use computers, cell phones, the internet and all kinds of modern electronic wizardry believe the right to be let alone is.
1 Olmstead v. U.S., 277 U.S. 438, 478 (1928) (Brandeis,J., dissenting) and see The Right to Privacy, “Samuel Warren and Louis Brandeis, 4 Harvard L.R. 193 (Dec. 15, 1890)
MKT
What is this? A Pol with a real apology? He’s reading it, but it sounds heartfelt. I giveth thee the benefit of my doubt, Charlie. You picked the wrong guy to swipe a song from, but hey, at least you have good taste!
I love the creative settlement term that seems to fit the offense. If you used the song on YouTube without licensing it, then you should apologize on YouTube for doing so. Seems apt.
What bothers me is our “lawmakers” either: 1) Don’t know much about the law (less than a typical teenager in this case); 2) Don’t care what the law is if it gets in their way; 3) Don’t believe it applies to them; or/and 4) Are so dumb they don’t think they’ll get caught using a song publicly for a political campaign. All of the above?
MKT
“I was the only jailed journalist in the Western Hemisphere for 2013” After spending five months locked up for contempt of court, an Alabama blogger was released from the Shelby County jail on March 26, 2014. Roger Shuler writes and publishes a blog on Alabama law and politics called “Legal Schnauzer.” He had been accused of defamation and was ordered to stop writing about a prominent Alabama attorney, Robert R. Riley, the son of a former Alabama Governor. Mr. Riley was rumored to be planning a run for Congress at the time.
Mr. Shuler asserted he was never personally served with the Court’s “gag order” and had continued writing about the potential future congressman. Mr. Shuler’s posts alleged Mr. Riley was having an extra-martial affair and impregnated a local lobbyist named Liberty Duke (can’t make this up). Mr. Riley filed a Petition with the Court and requested Mr. Shuler and his wife be locked up for violating the Court’s Orders by continuing to post defamatory statements.
Shortly after Mr. Shuler was jailed in late October 2013, the Reporters Committee for Freedom of the Press (RCFP), a non-profit legal assistance organization, sent a letter to the presiding Judge. The RCFP’s letter requested The Honorable Claude D. Neilson to reconsider his decision that censored and confined the blogger. The RCFP argued Mr. Shuler’s jailing for contempt of court was an unconstitutional prior restraint on speech in violation of the U.S. Constitution’s First Amendment.
Prior Restraint is when the government makes you shut your mouth before you can even open it–more descriptively called “Pre-Publication Censorship.” The RCFP’s letter succinctly laid out the law for one of the most egregious types of censorship and First Amendment violation:
The Supreme Court has never upheld a prior restraint, or a government prohibition on speech. In Nebraska Press Association v. Stuart, it found these bans on speech presumptively unconstitutional and called them “the most serious and the least tolerable infringement on First Amendment rights.” 427 U.S. 539, 558-59 (1976). See also Near v. State of Minnesota ex rel. Olson, 283 U.S. 697, 713 (1931) (calling prior restraint “the essence of censorship.”) The Supreme Court has speculated that prior restraints may only be allowed to prevent disclosure of information that would provide troop locations in wartime or “set in motion a nuclear holocaust.” Id. at 716.
First Amendment Freedom Fighters
The blogger’s wife had to take down the blog posts to spring Mr. Shuler out of jail. Mr. Shuler writes well, but I’ll tell you, his posts about the alleged illicit affair were not as torrid, dangerous or inflammatory as an actual nuclear holocaust.
Shuler plans to sue.
More Sources
A daughter violated the confidentiality clause in her father’s Settlement Agreement with a braggadocio posting on Facebook. Inevitably, the young lady’s post eventually drew the attention of the defense counsel in the employment discrimination case.
“Mama and Papa … won the case against Gulliver,” she wrote referencing the the employer. “Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”
The trial court did not find the post a breach of the agreement. However, on appeal to Florida’s Third Circuit Court of Appeal, the appellate court reversed the trial court stating, “[B]efore the ink was dry on the agreement, and notwithstanding the clear language … mandating confidentiality, [he] violated the agreement by doing exactly what he had promised not to do.” Apparently, the daughter had 1200 friends on the site so there was no claiming it was a private message or not intended for public consumption.
After finding the terms of the agreement clear and unambiguous, the Court held:
In this case, the plain, unambiguous meaning of … the agreement between [the father] and the school is that neither [he] nor his wife would “either directly or indirectly” disclose to anyone (other than their lawyers or other professionals) “any information” regarding the existence or the terms of the parties’ agreement.
They disclosed it to their daughter and she disclosed to at least 1200 other people on-line with the Facebook post. This is a real expensive way to learn the internet is a public forum. It also is an expensive way to find out how easily a confidentiality agreement is breached.
Read the appellate decision here and more info from the news story is below.
MKT
This one was cool. I was litigation counsel at the district court level in an adversary proceeding challenging a Chapter 7 case due to fraud in US Bankruptcy Court in the Minnesota District. For evidence reasons (i.e. lacking), we did not move to amend the Adversary Complaint until less than a week (5 days) before trial. The claim we intended to add would alter the legal standard we needed to prove (used the loan proceeds to pay a tax debt under 11 U.S.C. § 523(a)(14)) to prevail and have the debt exempt from discharge. It was short notice and on the eve of trial, but the amendment would not have involved any delay or further discovery. So I said.
We appealed on a complex bankruptcy ground (debt found not exempt under 11 U.S.C. § 523(a)(2)(A) or (B)) to the 8th Circuit’s Bankruptcy Appellate Panel (BAP) but to no avail (clear error standard with de novo review). I insisted on raising the simpler, procedural error claim the Rule 15 motion to amend was wrongfully denied (abuse of discretion standard though). As the appellate court said in the beginning of the Opinion, with an abuse of discretion standard they had to be left with a, “definite and firm conviction that the bankruptcy court committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors.” A high bar to meet.
In denying the motion to amend before trial, the Judge did not mince words and it always sucks to read words like that about your conduct. As the BAP, citing the order denying the motion for leave to amend so it may live on forever provided in part:
None of these factual or legal issues are necessarily obvious and it would be unfair on the literal verge of trial to require the defendant to defend that claim. The plaintiff either intentionally or negligently failed to plead this cause of action originally or anytime prior to trial and it would be inequitable to allow her to do [so] (sic) now.
I never did understand why anyone would have intentionally left out the claim that wins in the end. But by the time the trial was over, it was obvious that if we could have amended the pleading and added the tax-related claim, we would have won. Hence, the necessity of the appeal.
After quoting the stinging rebuke in the trial court’s order, the Appellate Panel shot right back, “We take exception to several of these points.” After that, the BAP went through the analysis they thought should apply.
They found the fact the debtor withheld discovery so we didn’t get the evidence needed to assert the claim until late in the game (and brought the motion the same day–5 days before trial) weighed in our favor. It was a fairly straightforward claim (for bankruptcy cases), that as usual the”§ 523(a)(1) claims turn on a simple determination of whether the tax debt paid arose from a tax year for which a return was due after three years before the date of the filing of a debtor’s bankruptcy petition.” If you followed that, go to law school.
The appellate court also found the amendment would not have resulted in unfairness or inequity to the Debtor, especially considering he was partly responsible for the delay in filing the motion to amend since he didn’t produce a check to the I.R.S. until well after it was due. And they were worried the debtor would get screwed?
But to top things off, the Appeal concludes the analysis with:
Finally, from a practical standpoint, it would have been a simple (and fair) matter to continue the trial to permit the Debtor to adequately prepare a defense to the § 523(a)(14) claim in light of the facts that this matter proceeded to trial less than five months after the complaint was filed, no previous continuances had been sought, and the only witnesses called to testify at the trial were Peterson and the Debtor.
In the end, the wise appellate panel of Judges decided a reversal of the order denying the motion for leave to amend was what lady justice said had to be done. Discretion was abused. The case was remanded back to the bankruptcy court and where we waited for a new trial date to be set.
Instead of getting a date, the Trial Judge promptly reversed himself. By applying the same facts he already found at the trial to the new claim (technically not even plead out yet) he entered judgment in our client’s favor and the debt was excepted from discharge. It was nice to win. And I, for one, don’t mind winning when no one is looking since who else really understands what went on anyway unless they are directly involved. But the written opinion will live on!
There is a lot to be said about a truly efficient, no-nonsense Judge!
MKT
Court Records–More Than You’d ThinkMinnesota Trial Court Public Access websites, mote commonly known as “MNCIS,” (Minnesota Court Information System), are a powerful and cost-effective tool for discovering information on anyone involved in the Minnesota trial court system. MNCIS has docket information for Minnesota civil and criminal court cases, judgment records and court calendars. All of these records can be used to determine if an individual has existing, unpaid judgments, is being sued, or has been sued, if there is a criminal court case open, at least one that has resulted in a conviction or guilty plea, if there has been a divorce, child custody case, adoption, name change, probate proceeding and what time and where a court appearance is through the court calendars, and other information.
Although MNCIS on the web (Click HERE for Access) is not reliable enough for comprehensive searches and should not be used as your only criminal background check tool (more to come, but in the meantime enjoy this try www.mncriminals.com instead, technically still “free” but slowly and surely being overrun with ads and pay options) it can tell you if a warrant is out for someone. You only need to know the person’s name, but not necessarily even the correct spelling. When performing a search by Party name, try checking the box for Soundex-a “sounds like” search in English for use when you do not know the proper spelling of a name).
Although you used to be able to get more information, privacy concerns have restricted some data available over the internet on MNCIS, However, when one hand taketh the other hand giveth: A lot of the records that are not available on the web version of MNCIS can be obtained by going to a courthouse and using (for free) the court’s public access computer terminals.
As a non-exclusive example, you can get some home addresses this way with a just name search if the person has been through the court system in a civil or criminal matter. On the web-based MNCIS, you cannot get pre-conviction records (“innocent until proven otherwise”). But at the courthouse you can get the pre-conviction records for criminal, traffic and petty misdemeanor cases. Likewise, the Violence Against Women Act, a federal law, prevents MNCIS on the internet from displaying information on harassment and domestic abuse cases, but these records can be obtained at the courthouse.
There are errors, people have the same names, records are not always reliably entered or available and the search engine in MNCIS makes you appreciate Google on a whole new level. The current civil court case records are pretty reliable and accurate but be careful of how much you relay on any single source of public data always confirm the information through another source. Or three if possible.
MKT
A Litigator's Blog | MKT Law, PLC 
