Winthrop attorney Tom Boyd and Kyle Kroll recently edited two chapters in the newest edition of the Eighth Circuit Appellate Practice Manual, designed to be a primary resource for attorneys representing clients in its namesake jurisdiction.  Written with an eye for comprehensiveness and edited to serve as a quick reference tool, the manual offers indispensable aid, both in the office and the courtroom itself.

Interested in learning more about recent developments in Mergers & Acquisitions law? The Business Law Section of the American Bar Association recently released its Summer 2024 “Annual Survey of Judicial Developments Pertaining to Mergers and Acquisitions.” This overview of relevant caselaw and judicial opinions focuses on matters with the greatest significance and potential impact on M&A practitioners.

Contributing authors, Jacob Woodard, counsel, and Mike Fadden, associate, provided the overview and analysis of the court’s decision in 26 Capital Acquisition Corp. v. Tiger Resort Asia Ltd. (Del. Ch. Sept. 7, 2023). This matter of contract interpretation is one of many decisions highlighted in this insightful survey, which also features statutory caselaw updates and decisions governing fiduciary duties.

Read the full survey on the ABA website.

This month, our appellate team comprised of Gerry Fornwald, Kyle Kroll, and Cianna Halloran prevailed at the Third Circuit Court of Appeals in obtaining victory for our client, an American distributor. The case involved a dispute with a German manufacturer of medical devices. Previously, our trial team obtained a jury verdict for our client in the District of Delaware. The German manufacturer appealed, seeking reversal of the jury verdict in our client’s favor on claims for breach of contract and trademark infringement. The Third Circuit agreed with the jury and our arguments on all counts.

Breach of Contract by the German Manufacturer: The jury had found that the German manufacturer wrongfully terminated its contract with our client. On appeal, the German manufacturer argued that it was allowed to terminate the Distribution Agreement because the American distributor alleged misused trademarks and tried to rebrand products as its own. The Third Circuit found there was substantial evidence that the American distributor never attempted to register the trademark or challenge the German manufacturer’s ownership of it. We prevailed in showing the American distributor only used the trademark to promote and sell products, and the German manufacturer’s claims of adverse effects on their trademark rights were unsupported.

Trademark Infringement Counterclaims: The German manufacturer also claimed that the American distributor’s actions constituted trademark infringement and that the District Court wrongly instructed the jury on a defense to this claim. The Third Circuit held that the defense was properly presented to the jury and did not mislead them. Our client had timely raised the defense, and the German manufacturer failed to show any prejudice resulting from this instruction. We prevailed in showing the jury’s conclusion that our client did not infringe the German manufacturer’s trademark was reasonable and supported by evidence.

Other Rulings: The German manufacturer also sought to challenge other rulings, ranging from exclusion of certain evidence to denial of transfer of trademark registrations following trial. The Third Circuit ruled the evidentiary rulings were immaterial and that the German manufacturer was not entitled to the trademarks held by our client. In summary, we obtained complete affirmance of this jury trial win on appeal.

A full copy of the decision can be found at this link. Our team is grateful to have represented the American distributor, at both the trial and appellate levels, in this complex case.

To master the art of answering questions at oral argument, delve into this article published in the Minnesota State Bar Association’s Bench and Bar magazine authored by our lawyers, Steven Vogel and Kyle R. Kroll

From seizing questions as opportunities to educate judges to upholding composure and professionalism, these tips are indispensable for attorneys at all levels. Remember, it’s not merely about regurgitating briefs—it’s about fostering dynamic discussions that shape opinions. Explore invaluable insights into preparation, direct response, and courtroom navigation by reading the article here.

Deadline is Here

The 2024 Legislative Session will end with no time to spare. Legislative leaders have rationed the allotted 120 session days so that every last one will be used, with day 120 coinciding with the constitutionally-mandated last possible date for session, Monday, May 20. The legislature will be in session today, Saturday, and Sunday to pass bills, with a final gathering on Monday to hear retirement speeches from those who won’t be back next year.

No Agreement

With less than 60 hours left to pass bills, bipartisan agreement remains elusive. Without an agreement, the DFL controlled legislature will continue to pass more than a dozen remaining conference committee reports on omnibus bills. However, any bills that require minority party votes to pass will likely be left undone—including a capital investment (bonding) bill, sports betting bill, and an Uber/Lyft bill.

Trump in Town

While the 2024 Legislature is in its final throes, the Republican Party will conduct its state convention from the capital city. This evening, former President Donald Trump will headline the GOP’s large fundraising dinner, the Lincoln Reagan Dinner, as part of his visit to St. Paul.

State Revenue Collections Leveling Off

After announcing a surplus of $3.7 billion in the February Forecast and an increase in revenue collections of $241 million for February and March, Minnesota Management and Budget has now announced that net general fund revenue collections in April totaled $16 million above what was forecasted in February. Net receipts from individual income and sales taxes for the month were less than forecast, while net corporate and other tax revenues were higher than expected. This leveling off of revenue collections will be monitored by state officials in the months to come.

See You in 2025

This is the last Top 5 of 2024. Prior to a change passed in 2023, the Legislature started session in odd-numbered years on the first Tuesday following the first Monday in January (as early as January 2), but the 2023 statute change pushed out the start date an extra week. The 2025 Legislative Session will begin on Tuesday, January 14.

In December 2021, the Consumer Financial Protection Bureau (CFPB) released research criticizing banks for charging overdraft and related fees to consumers, and the CFPB director, Rohit Chopra, stated the agency would renew its focus on investigating these fees.[1] As I predicted at that time, this regulatory focus on overdraft fees inspired civil litigation and increased legal risk for banks and financial institutions.[2] Plaintiffs filed several lawsuits in Minnesota (and elsewhere) against large and small institutions alike. Since then, Minnesota courts have issued their first decisions, each time handing victory to the banks.

The first Minnesota state court decision was issued in Stubbs v. Spire Credit Union,[3] followed shortly thereafter by Palfi v. Spire Credit Union.[4] In both cases, the plaintiffs alleged claims for breach of contract and breach of the implied covenant of good faith and fair dealing. In Stubbs, the plaintiff also alleged a violation of the Minnesota Deceptive Trade Practices Act. The allegations in each case were similar: Spire Credit Union assessed improper overdraft fees on what are called “authorized positive, purportedly settled negative” (known as “APPSN” or “APSN”) transactions.[5] These are fees charged on debit transactions that are authorized by the bank based on sufficient available account balances at the time of the request from the merchant, but later settled when there are insufficient funds. The plaintiffs alleged that Spire Credit Union also improperly charged fees each time that a merchant initiated a transaction, including “retries,” but there were insufficient funds (known as “non-sufficient funds” or “NSF” fees).

Recently, in the first Minnesota federal court decision, Churlik v. Gate City Bank,[6] the plaintiff alleged claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and violations of the Minnesota Consumer Fraud Act.[7] The plaintiff challenged the same kinds of fees as the plaintiffs in Stubbs and Palfi.

In each case, the court’s reasoning and decision centered on the contractual language governing the plaintiffs’ accounts. The Spire Credit Union account documents fully disclosed the processes and mechanisms the credit union would use when implementing overdraft services, including that it would charge fees based on available, not actual, balances. Thus, the agreements specifically allowed APPSN fees when an account’s available balance was sufficient at the time of the merchant’s transaction, even though the account’s actual balance was insufficient at the time the credit union settled the same transaction. Further, the agreements specifically stated the credit union could charge NSF fees when the available balances were insufficient at the time of a transaction, including on a merchant’s “retry” transaction. In Stubbs, the court specifically noted that there was no “regulatory or governing agency advisory opinion…prohibiting or otherwise criticizing Spire’s fee practices.”[8] Because Spire Credit Union acted consistent with the account agreements, it was not liable to the plaintiffs.

Similarly, in Churlik, the “Account Agreement” distinguished between authorization of a transaction and later payment at settlement.[9] The agreement did not contain any promise that the bank would only assess fees based on the account balance at the time of authorization, rather than settlement, or to sequester held funds to pay specific transactions that were authorized. The court focused on the use of the words “pay” and “payment” in the agreement, which referenced when fees would be assessed, along with language distinguishing “holds” from payment. The court held that the agreement expressly permitted Gate City Bank to charge APSN fees, as well as NSF fees. Because there was no breach of contract, the other claims failed as well.

These are the first overdraft decisions in Minnesota state and federal courts since the CFPB set its sights on regulating overdraft fees, but they likely will not be the last. The CFPB earlier this year proposed a rule requiring large banks (over $10 billion in assets) that offer overdraft credit services to comply with the Truth in Lending Act (TILA), which would require additional disclosures to consumers.[10] Plaintiffs can bring private actions under TILA.[11] As an alternative to complying with TILA, the CFPB is also proposing maximum overdraft fees of $3, $6, $7, or $14—or the actual cost for providing overdraft services if the bank discloses its cost data. These changes, if adopted, would go into effect on October 1, 2024, and could inspire new lawsuits. As such, banks should continue to stay abreast of any new CFPB regulations and continue to evaluate their overdraft programs for regulatory compliance and litigation risk.

Winthrop & Weinstine is grateful to have represented financial institutions in these kinds of matters and obtained successful dispositions, including at the early motion to dismiss phase. Members of our team who have experience in this area of law include Matthew R. McBride, Joseph M. Windler, Quin C. Seiler, and Kyle R. Kroll.

We express special thanks to Abby Sokolowski for her research assistance and contributions to this update.

[1] CFPB Research Shows Banks’ Deep Dependence on Overdraft Fees, CFPB (Dec. 1, 2021), https://www.consumerfinance.gov/about-us/newsroom/cfpb-research-shows-banks-deep-dependence-on-overdraft-fees/; Prepared Remarks of CFPB Director Rohit Chopra on the Overdraft Press Call, CFPB (Dec. 1, 2021), https://www.consumerfinance.gov/about-us/newsroom/prepared-remarks-cfpb-director-rohit-chopra-overdraft-press-call/.

[2] Kyle R. Kroll, CFPB Renews Focus on Bank Overdraft Fees, Likely Increasing Litigation Risk, Winthrop & Weinstine (Dec. 8, 2021), https://winthrop.com/bold-perspectives/cfpbs-renews-focus-on-bank-overdraft-fees-likely-increasing-litigation-risk/.

[3] No. 62-CV-22-2282, 2023 WL 1460269 (Minn. Dist. Ct. Jan. 31, 2023).

[4] No. 62-CV-22-1831, 2023 WL 2589186 (Minn. Dist. Ct. Mar. 16, 2023).

[5] See also supra note 2 (describing APPSN and related transactions).

[6] No. 23-CV-0637, 2024 WL 453606 (D. Minn. Feb. 6, 2024)

[7] Id. at *1.

[8] Stubbs, 2023 WL 1460269, at *6.

[9] Churlik, 2024 WL 453606, at *1-2.

[10] See CFPB Proposes Rule to Close Bank Overdraft Loophole that Costs Americans Billions Each Year in Junk Fees, CFPB (Jan. 17, 2024), https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-rule-to-close-bank-overdraft-loophole-that-costs-americans-billions-each-year-in-junk-fees/.

[11] See 15 U.S.C. § 1640.

In the past decade, drag queen fame has skyrocketed due to increased exposure and the proliferation of fandom social media, where many drag ’performers glitter and thrive. Drag performers are booming, building increasingly-valuable entertainment personae. With success comes imitation and appropriation by free riders—and there are some indications that misappropriation of drag queen creativity has already started to occur. Intellectual property law provides limited protections against those who would misappropriate and infringe upon a drag queen’s image.

Filling this void, however, is a patchwork of lesser-known state-law intellectual property rights clocked as the “right of publicity.” But no court has addressed whether the right of publicity extends to drag queen personae. Nevertheless, in this article, Kyle Kroll provides an analysis of precedent to-date that suggests there is a strong basis for extending legal protections to all aspects of a drag performer’s stage identity and persona.

Read the article Drag Queens Right of Publicity Article – OUTside Influence Fall 2020 (Dec. 18 2020).

Timothy Sitzmann and Megan Miller co-wrote a chapter in the ZMidwest IP Institute Manual & IP Book 2022 EAccess, “Key Trademark Decisions of 2021–2022.”

For more information and to purchase the book, please visit the Minnesota CLE website.

Timothy Sitzmann and Megan Miller co-wrote a chapter in the IP Book 2023, “Key Trademark Decisions of 2022–23.” The book covers case law and developments in all major intellectual property areas. Its easy-to-read style makes it an ideal quick-reference tool that perfectly sums up this year’s significant intellectual property law developments.

For more information and to purchase the book, please visit the Minnesota CLE website.

Michael Fellerman and Bob Box wrote an article in Tax Credit Advisor titled, “Legally Speaking: Do You Have a Solar Strategy?”

The Inflation Reduction Act of 2022 (IRA) provides a broad range of new incentives to install solar energy equipment, many of which are available to Low Income Housing Tax Credit (LIHTC) projects and some that are uniquely available for affordable housing. As you begin the development process for a project, do you have a strategy that identifies the potential financial and non-financial benefits of solar, how are you going to monetize those benefits and what are the potential drawbacks and risks associated with installing solar energy equipment in your project?

For many LIHTC projects, the benefits received from the ITC may only be “gravy,” but having a good solar strategy in place before you start your development can reduce operating costs, increase loan proceeds, reduce utility costs to tenants and decrease the use of fossil fuels all at little to no cost to a LIHTC project.

The full article can be found here.