This Is The Structure of a Schnabel Car
As I get older, I find maneuvering my natural gas turbine cycle plant (NGTCP) around the backyard fairly difficult but I suppose that is to be expected since it is a $35 million piece of machinery weighing roughly 734,127 pounds. Hard to imagine how I would get one all the way to Calgary, Alberta in Canada. I am pretty sure I’d have to pony up the cash to get my paws on a Schnabel car (diagram above – a specialized rail car to carry hella heaviness) and some other folks to pitch in.
Discerning readers will perhaps wonder why I would ever want to send my NGTCP to Calgary and, I confess, this is merely rhetorical. My NGTCP is staying put, for sure. It is hard enough to nudge it a few inches to accommodate my sprinkler. Mitsubishi Power Systems (MPS), on the other hand, hired Transportation Technology Services (TTS), Inc. to help haul its NGTCP from Duluth to Calgary. It did not work out very well.
Random Graphic Showing Price/Time Variables
The 1995 Private Securities Litigation Reform Act has gutted securities fraud class actions because the pleading requirements are quite stringent and hard to meet. So a great many cases are not brought that would have been brought in by-gone times. Many other cases are dismissed on the pleadings, which would have survived in the earlier era. The securities fraud claim against St. Jude brought in March, 2010 is a fairly rare post-PSLRA exception. St. Jude did not succeed on disposing of the case on a motion to dismiss. Now St. Jude takes another run at the complaint, this time with a motion for summary judgment.
What is the difference between pushing hard to meet projections by encouraging aggressive sales at the end of a quarter (perhaps offering discounts or being more flexible on returns if buyers find later they have over-bought), which, arguably, is business as usual in a great many businesses throughout our economy, and “channel stuffing,” which is defined as a kind of securities fraud?
Channel stuffing is “manipulative sales activity,” St. Jude counsel says. I think that means the difference is whether certain commercial transactions (i.e. sales) were more “make-believe sales” to pump up share price than they were actual arms-length sales made in good faith. (See this linked brief at p. 30 describing a number of channel stuffing cases. For an obvious instance channel-stuffing, consider where the goods are sold, purportedly shipped to buyer but placed in storage owned by seller, and then, eventually, shipped back to seller. This really happens.)
In the St. Jude securities fraud class action, the question probably comes down to whether ••••••••••••••••••••••• or ••••••••••••••••••••••• when ••••••••••••••••••••••• said ••••••••••••••••••••••• and defendants •••••••••••••••••••••••.
“A Tough Knot to Crack” (photo by Jay Fanelli)
Update (December 9, 2013): The Minnesota Supreme Court heard argument on this case this past week. Kay Nord Hunt argued for appellant AWUM. Tom Gunther argued on behalf of the Leiendeckers. There are many strands in this difficult legal knot so the Minnesota Supreme Court will have its hands full. The analytical challenge is off to a bad start when Minnesota’s “anti-SLAPP” statute requires that a party who invokes the statute come forward in response to a motion to dismiss with “clear and convincing evidence” to support its anti-SLAPP claim. As the Court pointed out, is it not a conundrum of a paradox of an enigma of a mystery that a jury might theoretically find for a plaintiff under a lower standard of “preponderance of the evidence” (the applicable legal standard for civil liability) but the trial court could theoretically throw the case out before it ever gets to a jury due to lack of “clear and convincing evidence” (not to mention before any discovery)?
Original Post (September 6, 2013): (modified) Leiendecker v. AWUM is a multi-year saga that includes lawyers suing lawyers for suing lawyers.
The Minnesota Supreme Court has recently granted the AWUM’s petition for review of the most recent Court of Appeals decision in this seemingly endless fiasco.
Update (December 6, 2013): On news of the win of the Mille Lacs Band of Ojibwe, Minnesota Litigator wondered out loud whether the Band, at the end of the day, would be able to cash in its chips (otherwise known as “enforce the judgment that it won”). The Band and its lawyers plainly share that concern.
Original Post (October 7, 2013): Minnesota Litigator has previously covered the legal battle between the Corporate Commission of the Mille Lacs Band of Ojibwe Indians and Money Centers of America (“MCA”) (here and here).
The case has gone badly for MCA all along and now the tribe has prevailed on summary judgment against MCA to the tune of $5,623,690.83, plus prejudgment interest at a rate of 10% per year. (Congratulations to the phalanx of Faegre lawyers, Jane E. Maschka and Michael Krauss and others, who have represented the tribe.) And MCA’s counterclaims against the tribe have been tossed out.
It seems that this lawsuit, started in the Spring of 2012, was never really close. This, in turn, might suggest that the challenge for the plaintiff was never whether it would prevail but whether it will ever collect. District of Minnesota Sr. U.S. District Court Judge Richard H. Kyle’s order on cross-motions for summary judgment has the faintest hint of the potential challenge, concluding that summary judgment was emphatically “against MCA only” (and not the individual defendants). MCA apparently did not have the cash to run its business with the Plaintiff properly, where will it come up with the cash now?
Image from Miss B’s Science Blog
Recently, I met someone socially whose distant relative was single-handedly responsible, the family lore goes, for federal truth in advertising laws some fifty years or so ago. The distant relative made his money selling “50 large new towels” for $1.00 (+ $ 0.25 postage), with a print promotion that included a photo of the “towels.” The image suggested something other than the small pile of fabric “wipes” that buyers received by mail if they pounced on this “unbelievable bargain.”
I imagine a crotchety consumer taking the “towel” seller to task and the seller answering, “Well, it might not be what you expected, but they’re towels. They work to dry things off and so on…” The Federal Trade Commission had to step in to protect consumers. Otherwise, who would bother to try to vindicate their rights for a loss of $1.25 (that is, about $14.50 adjusted for inflation)?
Actually, it is a significant challenge for an unhappy buyer to recover from a purchase that hovers somewhere between imperfect and useless even when the loss is in the 100,000′s of dollars.