A Little Contract, a Little Latin, a Little Property

In Legal Interpretation, Minnesota Appellate Decisions, Property by Joseph PullLeave a Comment

(Unenforceable Terms, Expressio Unius, and the Right of Redemption) Minnesota courts enforce contracts.  Someone who signs an agreement cannot later escape it by saying he never read it,[1] and or that it is harsh.[2] A little hyperbolically, Minnesota courts occasionally explain that contracts must be enforced or else “chaos would prevail in our business relations.”[3] And yet. In certain circumstances, a Minnesota court will refuse to enforce the plain terms of a contract. One example of particular importance to borrowers and lenders is the statutory right of redemption of foreclosed property. The Minnesota Court of Appeals has decided this right cannot be waived. If the borrower signs an agreement waiving it, the waiver is not enforceable.[4]

SEC Patrols the Bakken: “Making” Statements about Stocks

In Legal Interpretation, Oil & Gas Investments, Securities Fraud by Joseph PullLeave a Comment

Securities fraud litigation bubbles up with the oil in the Bakken. For example, the U.S. District Court for the Southern District of New York[1] was presented with the question whether defendant Eric Dany, an established stock commentator with his own “Stock Prospector” brand and newsletter, could be held responsible under the SEC’s Rule 10b-5 as the “maker” of allegedly misleading statements about the stock of Norstra Energy Inc., a would-be Bakken player. A third party paid Dany for the use of his name in publishing a statement in promotional materials: My name is Eric Dany. I’m editor and publisher of Eric Dany’s Stock Prospector, Main Street Research . . . Now I’m predicting that NORX could be my best ever call! I believe the company’s estimated 8.5 billion barrels of oil in place could easily fetch $25 a share in a takeover! Act now, before a takeover move, and you could make a fortune! . . . Don’t wait! As you’ll see when you read on, I believe one of the majors may be reading a takeover offer that, the minute it leaks out, could send this stock flying! The SEC sued Norstra Energy, its CEO, and Dany, alleging the statement (and others) was misleading. Exchange Act Rule 10b-5(b), 17 C.F.R. § 240.10b-5(b), prohibits making untrue statements of material fact in connection with the purchase or sale of securities. Dany argued that, as a matter of law, he could not be held responsible because he did not “make” the statement, since it was published by someone else. The Supreme Court decided in 2011 that “[f]or purposes of Rule 10b-5, the maker of a statement is the person or entity with ultimate authority over the statement.”[2] Accordingly, showing that someone else published an allegedly fraudulent statement is not enough to escape responsibility. …

Elements of Fraud: The I-Stole-from-Her-But-Lied-to-Him Defense

In Claims, Fraud, Legal Interpretation, Supreme Court by Joseph PullLeave a Comment

An elementary principle of litigation is keeping an eye on the elements. A federal appellate court decided in August that the federal mail and wire fraud statutes allow a defendant to be convicted for engaging in a “scheme to defraud” even if the defendant’s deceptive statements were made to different people than the victims who actually lost their money.[1] The defendant had argued that the conduct he was accused of engaging in – lying to banks and credit card processors about unauthorized credit card charges, and using unauthorized credit card charges to obtain money from customers – was not wire fraud because he lied to different people than he stole from. The court’s decision to reject the I-stole-from-her-but-lied-to-him defense may seem obvious, but it’s a little more complicated than it looks. The reason requires an understanding of the legal principle of “elements.”

Mining “or” for Grammatical Immunity

In Legal Interpretation, Minnesota Appellate Decisions, Supreme Court by Joseph PullLeave a Comment

In a dispute over whether a defendant could claim immunity from being sued, the Minnesota Supreme Court recently relied upon a principle of grammar to determine the meaning of the word “or” in the applicable statute.[1]  The Court deployed the terms “conjunctively” and “disjunctively” to explain its decision, and the cases cited in the Court’s opinion show that legal disputes concerning the meaning of “or” arise with some frequency — which means “conjunctively” and “disjunctively” are apt to recur as well.[2] What, exactly, do these grammar terms mean?