Litigation Risks Arising from Hidden or “Junk” Fees

Hidden fees that consumers learn about late in the process of completing a transaction are increasingly targeted in state and federal legislation.  Using names such as “junk fees” and “drip pricing”, these laws create new litigation risks for companies. This episode covers the new statutes as well as FTC regulations, application in common scenarios, pending litigation claims, all to better understand how businesses and those who advise them can avoid these lawsuits. SharkCast host Kent Schmidt interviews Dorsey attorneys Matt Ralph and Alex Hake on these issues, including what these developments mean for class action risks.

This podcast is not legal advice and does not establish an attorney-client relationship or create any duty of Dorsey & Whitney LLP or those appearing in this podcast to anyone. Although we try to assure that the content of this podcast is accurate, comprehensive, and reflects current legal developments, we do not warrant or guarantee those things. The opinions expressed in this podcast are the opinions of those appearing in the podcast only and not those of Dorsey & Whitney. This podcast is considered attorney advertising under the applicable rules of certain states.

Transcript

Voiceover

[00:00:03] Welcome to another episode of the SharkCast on litigation risks management, where we explore why businesses are so frequently sued and how to mitigate and navigate the dangers lurking in these risky waters.  Join us now as we welcome our host, Kent Schmidt, litigation partner at the law firm of Dorsey & Whitney.

Schmidt

[00:00:26] Well thanks for joining us today for another episode of SharkCast.  Today I’m very happy to welcome to the podcast virtual studios my long-time friend and partner, Matt Ralph, and a newer friend and colleague, Alex Hake.  Welcome Matt and Alex.  Glad to have you on SharkCast both for the first time.

Ralph

[00:00:51] Well it’s great to be here, Kent, although I was hoping this interview would take place on the old Merv Griffin set.

Schmidt

[00:00:57] No, we’re moved beyond that, those decade-old relics.  So speaking of old, Matt and I have been around Dorsey for a long time.  Matt, when did you start at Dorsey in the Minneapolis office?

Ralph

[00:01:10] I started in the fall of 2002.

Schmidt

[00:01:13] Okay.  So that’s about four years after I started.  So we’re both old timers as you can see by the gray beards.  Alex is a newer addition and Alex, you just joined a year and half ago.  Is that right?

Hake

[00:01:29] Not even that far, way back in September 2024 was when I come on.

Schmidt

[00:01:32] Okay.

Hake

[00:01:33] So.

Schmidt

[00:01:34] Alright.  Well it’s good to have both new friends and old friends to join us on SharkCast, and I asked Alex and Matt to join us today in part because I saw an article that they authored at the end of the year last year about a topic that I’ve been paying some attention to out here in California on junk fees and drip pricing.  There’s new law in Minnesota which is where both Matt and Alex are based on junk fees, and we of course have our version of that out here in California.  We, of course, just came out of a presidential election and junk fees and various iterations of that concept even became a topic in the campaign.  And I think the reason is because it’s very, very popular with consumers.  We all have perhaps an experience or two where we go into a transaction and we get right up to check out, and we realize oh, there’s some extra fees that are attached and they’re very, any number of tags or titles to those fees, but the bottom line is you’re going to be paying a little more perhaps then you thought of at the beginning of the transaction, and because that resonates with consumers and the electorate for that matter, I think there’s going to be a lot of consumer class action in this area.

Schmidt

[00:03:08] So I think it’s important for companies to understand this emerging area of the law, and we’re gonna go through some of the statutes, including some FTC activity in this area, so we can be proactive and prophylactic in addressing these things.  So why don’t we start with what you guys have covered already in written form in Minnesota.  Can one of you give me a summary of what happened last year in the legislature and what the Minnesota Attorney General is providing on junk fees in Minnesota?

Ralph

[00:03:48] Yeah, sure.  Thank you, Kent.  And just to clarify your remarks, a junk fee is a fee that a seller intends to be part of the final price but that the seller doesn’t disclose in the advertised price.  And the reason they’re effective is because they’re a part of a bait and switch tactic.  The advertised price lures consumers into the transaction and then after the consumer spends some time and effort completing it the junk fee is tacked on to the end.  And at that point many consumers submit to the junk fee rather than start over and try to find a substitute product.  So in Minnesota, the new law requires that the advertised price include all mandatory fees.  It’s no longer enough now to disclose a base price and other mandatory fees separately.  You cannot make the consumer do the math in Minnesota.  You have to advertise the total final price, but there are some key exceptions to that.  In Minnesota you don’t have to disclose taxes on a transaction.  You don’t have to disclose shipping costs that will be incurred by the consumer.  And when it comes to automatic and mandatory gratuities charged by restaurants, bars or hotels that are expressed as a percentage of the transaction, it’s enough that that mandatory gratuity be disclosed that it’s going to be charged but not the final amount.  And finally, one interesting wrinkle here in Minnesota, and this is not expressed in the law, but the Minnesota Attorney General has taken the position that credit card fees are not to subject to disclosure if the consumer can reasonably avoid those fees by paying cash.  There’s going to be the case in both situations.

Schmidt

[00:05:24] So what are some areas that you think that companies non-intending to violate the new regulation could have, you know, whether we call the foot fault or a minor deviation and be looking at some legal action as result?

Ralph

[00:05:46] Yeah, that’s a good question.  I would say that the two types of industries that leap to mind are retail markets online, you know, like the Amazons or other platforms of the world because very often when you get to the end you see a list of itemized charges that are tacked on.  I think there’s gonna be a question in many people’s minds.  Which of those were mandatory fees that were known in advance that will go effect the final price?  I think too industries with complicated bills.  I’m thinking here telecommunications bills that I’ve seen where it often seems like there’s a whole lot of mandatory fees that are assessed that frequently look like they’re government charges, not necessarily taxes but government charges, and many companies have worded junk fees in ways that make it look like they are taxes or government charges, and I think that companies that do that need to be on the lookout.

Schmidt

[00:06:37] Yeah, and I don’t know if you have an answer to this or if there’s been any clarity provided by the AG, but you mentioned earlier an exemption for shipping costs.  What about that very vague concept of handling, shipping and handling cost which can be a profit center for some companies that can jack up those handling charges pretty significantly.  Do you know if that’s exempted under the Minnesota statute or is that something left for the courts to clarify?

Ralph

[00:07:10] I don’t know.  I don’t think that’s expressly addressed, but I think the analysis would be if the handling is part of the shipping, which people understand to be handling the product, wrapping it in the appropriate packaging and putting it in the mail, that’s probably going to be covered as part of the mandatory shipping, but if there’s some fee for some additional movement of the product it’ll be viewed with skepticism.

Schmidt

[00:07:31] Okay.  Well let’s move from Minnesota for a moment.  We might come back to that shortly, and Alex, let’s get you in here and pivot our conversation to how this plays out in real life litigation.  I think that there’s a general understanding that certainly regulators, state or federal, can bring various enforcement actions for violation of a consumer protection statute, but regulators often sit back and rely on our friends, and I use that term in air quotes, our frenemies in the consumer class action space, the plaintiff consumer class action space to do their job.  So how do these types of issues come into play in consumer class actions, Alex?

Hake

[00:08:27] Yeah.  So I think that’s exactly right.  You are seeing there’s some opportunities now for private individuals and then organizations, you know, may be consumer advocacy groups to start enforcing some of these new rules on behalf of consumers.  I think one of the interesting cases right now is coming out of the DC Superior Court where there are Travelers, which is a non-profit kind of traveler advocacy group, is bringing a class action on behalf of people who had reserved hotel rooms in this hotel chain, Sonesta, and they filed this complaint in 2023 on behalf of these consumers on claims that basically Sonesta was charging junk fees in violation of DC’s Consumer Protection Procedures Act or CPPA.  Really the claim is that Travelers alleges that Sonesta uses kind of a two-step method, to hide its true hotel reservation prices from consumers.  So first, Sonesta does something called partition pricing, where it splits the actual price that it plans to charge into two parts.  One part is advertised as the reservation part and then the other part is later withheld and shown later as the destination fee.

Schmidt

[00:09:42] And I see, by the way that phrase partition pricing used a lot in this area, so that’s a concept that is not unique to DC and it’s a good descriptive phrase.  Breaking down this price...

Hake

[00:09:59] Yes.

Schmidt

[00:10:00] …to lure in the consumer.

Hake

[00:10:02] Yeah.  Yeah.

Ralph

[00:10:03] Just to jump with one other point.  I believe the same organization sued a different hotel chain, the Hyatt chain, in 2020 on very similar allegations.  So it’s something that they’ve done more than once.

Schmidt

[00:10:14] Yeah.

Hake

[00:10:15] Yeah, correct.  And I think, especially with, and what you were saying, Matt, too about big retail chains, a lot of these complaints could almost be copied and pasted from one to another if they’re doing what seems to be a very common practice of including these fees.  And also going back to the terminology, there’s multiple words being thrown around here, junk fees, partition pricing, another one that they bring in is this idea of drip pricing, which is kind of the second thing that they accuse of Sonesta of doing, which withholding that destination fee until right before the consumer is about to pay.  So it makes it more likely that they just accept that increased cost rather than start the whole reservation process over again somewhere else.  But I think really they all kind of amount to, boil down to the same concept where it’s that you are not revealing the entire price at the beginning and withholding that until closer to the point of transaction.  So in Travelers’ complaint they use an example of somebody who thinks they’re going to book a hotel room for say $189 per night.  They end up eventually paying $253 per night at checkout once taxes and fees are applied, and about 40% of that difference is just coming from what Sonesta has qualified as this destination fee.  Even though, of course, Sonesta included, intended that to be included in the original price from the beginning and the consumer had no ability to avoid incurring that fee, but it’s only disclosed towards the end of the process.

Schmidt

[00:11:46] And so let’s just break that down with some hypotheticals.  You’re not too far from law school so this won’t be too shocking to you.  Destination fee, just a sort of make term I assume for just adding something on, but if it was an upgrade fee or if it was a fee in order to use the gym or in order to use something else, the consumer has an option as to whether or not they want that upgrade, and therefor that is not something that would have to be disclosed.  It’s the unavoidable.  Correct me if I’m wrong.  It’s the unavoidability of the fee that triggers most of these statutes, right?

Hake

[00:12:29] Yeah.  That’s correct, it is, and it will depend on what law you’re looking at and, you know, we have Minnesota state law, we have California state law, we have the new federal rule, and there is this common concept of mandatory fees, mandatory charges, some laws will go into more steps to define that, some leave it a little bit more vague.  Obviously, I think that is probably going to become a big point of contention as these cases start to get litigated, you know, what is or is not mandatory, what does the consumer have actual power to change.  What’s interesting about this case in DC is that it’s actually not brought under one of these new junk fee laws that have come about in the last couple of years or so, but it’s brought under DC’s more generic prohibition on deceptive trade practices, which in DC prevents companies from misrepresenting or admitting a material fact which might have a tendency to mislead the consumer.  So in this case Travelers is kind of stretching that generic consumer protection to cover this junk fee area.

Schmidt

[00:13:32] And I just want to interject a California analog here that I’ve looked at the DC statute or ordinance and it’s very similar to California’s Consumer Legal Remedies Act.  And that’s where the California junk fee provision has been codified.  It’s codified, there’s a list of 20-some prohibited practices, some are very specific, some are incredibly general and vague, and they just decided to add it to that rather than an entire new statutory scheme dedicated to junk fees.  So I think you’re going to see that a lot because a lot of states have followed that framework of, you know, listing prohibited transactions.  And so, California and DC are examples of that.

Hake

[00:14:26] I think that may also play into how it’s enforced and what the penalties can be because if you have that existing framework of who can bring a case under these, you know, in the DC case they have this very specific part of that law that allows a company like Travelers to sue on a class basis and represent a class of consumers even though Travelers itself never made any of these reservations, you know, they never incurred this harm.  So I think those, amending these junk fee provisions into those existing consumer protection laws may also then trigger some of the other more general parts of that law.

Schmidt

[00:15:03] So tell us, Alex and/or Matt, where those DC hotel charge cases are in the process?  Are they getting past motion to dismiss?  What’s the status of those cases as of today?

Hake

[00:15:21] Well the Sonesta case, and I was just talking about that, has actually been recently granted class certification.  So that is one of the most far along cases that we’ve seen on this topic.  The Hyatt case, which was also filed by Travelers using again a very similar complaint, that case was removed to federal court and it’s currently hanging in kind of motion to dismiss limbo.  So we’re still waiting to see what happens there.

Schmidt

[00:15:48] Okay.  Well, you know, for a case to get to class certification, it’s, you know, survived challenge and motion to dismiss and it’s well on its way to being, you know, heard on the merits, so we’ll have to keep an eye on both of those cases and see how they unfold and whether case law’s going to be made that might be cited in some of these other cases.  Matt, turning back to Minnesota, I notice in your article that you both published last, late last year, that you link to the Minnesota Attorney General’s guidance on the Minnesota Statute, which I always think is super helpful.  I think when an enforcer, such as a state Attorney General or some other entity, can give examples and can provide clarity as to what at least their position is as to what violates the law and what is not, it can provide very important clarity and a safe harbor for companies.  Can you tell us anything more about what the AG’s guidance has provided?

Ralph

[00:16:59] Yeah.  Well, I agree with you 100%.  In the absence of any guiding case law, I think that even the courts will probably be looking to the AG’s website for insight into what the AG thinks about this law.  I think it’s important to note, under the AG’s guidance, that the Minnesota law does not affect the amount of prices that can be charged.  It doesn’t affect discounts that are made from prices.  All it does is regulates the disclosure of mandatory fees and says that they have to be included in the advertised price.  There are in fact other laws that the AG’s guidance reminds of related to discounting and fair advertising, so it’s important to forget that those do exist.  And I think too that another advantage of the AG’s website is it gives some concreate examples, like Alex was mentioning in the lawsuit where there were screen shots of what the consumer sees when they’re buying the hotel room.  The AG gives examples of what are compliant and non-compliant prices.  They’re pretty simple examples but they’re good illustrations for anybody who wants to, you know, get familiar with what the AG is thinking.

Schmidt

[00:18:15] That’s very good.  Let’s talk about one area that I can see companies falling into in this junk fee or drip pricing area, and that is aggregated social media marketing, or search engines that go out and get prices and advertise for the company.  So I can envision a situation where in-house council takes a look at this and goes through the company website, if it’s an e-commerce or if it’s a hotel booking site or whatever the service or product is being offered, and they focus intently on what the consumer’s experience is and make sure that price doesn’t include any, the price that’s advertised on the website includes any junk fees, but they overlook that their marketing folks have come up with all sorts of ideas to have prices put out in pop ups, although we don’t have those quite as much as we used to, but in social media feeds and other marketing aggregators that are out there that don’t list the price, or maybe just have an asterisk that says, you know, additional charges or whatever, but doesn’t list the price.  And I think it’s important to understand that what the regulators are getting after is not just that process on the company website before the credit card information is entered, but all sorts of advertisements that are out there that would have a price but not the full price.  Thoughts on that issue.

Ralph

[00:20:12] Yeah.  That’s a really good point, Kent.  The Minnesota Statute is directed towards the advertiser which we presume to be the seller, but it could be different, and you could incur liability under the Minnesota Statute but passing along advertised prices even when it isn’t necessarily your responsibility for them not paying the final full price.  You know, your examples also raise the point that the lack of uniformity nationwide in these new laws related to junk fees can also be a trap for the unwary, and it might behoove companies to look at and start from the most restrictive laws out there.  So for example, in states where you can advertise the mandatory fees separately from the base price as long as those fees are in close proximity to and look comparable to the base price so that it’s clear from the way it’s positioned that they’ll all be added together into a final price.  That’s permissible perhaps in some states, but not in Minnesota.  And so, you know, if those prices are passed along by social media, or algorithm, or an aggregator it might be compliant in one state but not another.  Matter of fact, it poses significant problems for advertisers.

Schmidt

[00:21:27] Well speaking of the challenges of disparate statutory schemes in, you know, 50 states plus the District of Columbia, there has been some activity by the FTC in this space.  Can we turn to that for moment?  I know we’re at the beginning of a new administration and it seems like everything is in flux as to what regulations and what initiatives at the end of the Biden administration are going to survive, but we can only deal with what we have today.  What’s the status of what the FTC is doing in this area right now?  I don’t know if anyone wants to venture pull out their crystal ball and take a guess as to what’s going to happen in the future.  I certainly am not.  But what are the thoughts on what’s happening on the federal level with junk fees and related issues?

Hake

[00:22:24] So I can speak a little bit to some of the federal developments lately.  Basically in late, late 2024, last December, the FTC finalized a rule that it had been considering for a long time, and that rule now is if everything stays the same, it’s set to go into effect on May 12, 2025, this year.  Basically kind of what some of what that rule does is it is just like these other junk fee statutes.  It forces companies to disclose the total price of their goods whenever they put out price, whenever they make a price representation anywhere, whether that’s in an advertisement or in a communication, any part of that process.  But a very key restriction to this FTC rule is it only applies to the sale of live event tickets and short-term lodging.  So when, if, people may remembering it was being discussed earlier, it used to be way broader and then they severely narrowed it for the final rule.  Basically, it requires business to clearly and conspicuously disclose the total price.  So just like the Minnesota law, the FTC defines what must be included in that total price calculation, fees that can, again it goes back to the idea of what is mandatory and what is not.  So if it is a mandatory fee, it has be disclosed.  If it’s not mandatory, it doesn’t.  And I think what you were saying, Kent, about trying to read the tea leaves here, I can’t do that either, but I can at least may be lay out a few things for consideration that kind of may hint at where this is going.  So when this rule was finalized back in 2024, there was one lone member of the FTC who dissented, and that was Andrew Ferguson, who is now the chair of the FTC under the Trump administration.

Schmidt

[00:24:19] So to be clear, he dissented from the rule being enacted at all, or he dissented from it being narrowed to the two industries that you identified?

Hake

[00:24:29] So he dissented it from it being enacted at all.

Schmidt

[00:24:32] Okay.

Hake

[00:24:33] But what’s interesting the grounds for his dissent, if you look at that, he’s not, he’s saying that he’s not dissenting on the merits of whether he thinks this is a good rule or a bad rule, but he was just opposed to the idea that there was this rule making coming so late in the previous presidential administration.

Schmidt

[00:24:47] I see.

Hake

[00:24:48] So that doesn’t really provide us a lot to work on because again he said his dissent wasn’t based on the merits of the rule.  Now, again, like I said earlier, the rule is set to go into effect in May.  We haven’t seen anything that is indicating that something’s going to come and mess up that process.  There’s always the Congressional Review Act where Congress has the power to basically prevent this from going into effect, but I think the most likely outcome, I would say, is that it does go into effect unless something changes.

Schmidt

[00:25:25] So far Elon Musk hasn’t Tweeted on it and given his position, so we’ll wait for those tea leaves to emerge.

Ralph

[00:25:35] Just to jump in with a thought on that.  The FTC is a bipartisan commission, and I think that the extreme narrowing of the final rule reflected a compromise at the FTC level.  And there’s another, there’s an interesting concurring statement by one of the commissioners who approved of the, you know, rule, Rebecca Kelly Slaughter.  She did think that a broader rule was warranted, and her statement gives examples of different kinds of hidden fees that aren’t as well known, and one example that she cited specifically, it sounded particularly interesting.  Apparently in rental markets it’s become very common for landlords to tack on fees in addition to rent.  They’ll advertise the rent, but once you sign the lease along come the additional fees, including fees on processing payments, and in this particular example the tenant had no option to pay by any means where there would no fee.  In other words, there was going to be an extra fee tacked onto any method of payment used by the tenant.  So, that’s another market I think to keep our eye on in terms of how these

Schmidt

[00:26:40] It’s interesting how that process at the FTC ending up narrowing to two industries as opposed to being generally applicable.  One has to wonder if it’s the lobbying dollars hard at work that resulted in that, and I know these types of things are, they take a long time and there’s a lot of activity and things that go on behind the scenes.  You mentioned the, which is a great example, the charges associated with payment in the rental example and not having the option to get around that by paying, for example, by check.  I could see that tripping up companies where there’s a processing fee for a credit card payment, and yet they don’t want to mess with having checks sent, so it becomes unavoidable by virtue of that mechanism in place, or that policy that’s implemented that all of a sudden triggers arguably, you know, these types of statutory prohibitions.

Ralph

[00:27:53] Exactly.

Schmidt

[00:27:54] Well let’s just maybe finish off this discussion with any more practical guidelines that we might be able to offer in order to avoid litigation in this area.  As you know, that’s my mantra of what I am constantly thinking about and talking about with clients.  What are the prophylactic steps that you can take?  We’ve talked about a few of those just in the ordinary course in our conversation, but do you have any additional ideas or thoughts on how a company not intending to violate one of these statutes or regulations might inadvertently fall into at least a gray area and create a consumer class action claim?

Ralph

[00:28:48] Yeah.  I guess my rule of thumb, Kent, would be, you know, when in doubt disclose and try to be as transparent as possible and as early in the process as possible.  In Minnesota has a bright line rule now, it’s got to be in the advertised price.  So there’s not a whole lot of ambiguity about that.  When it comes to fees like, you know, mandatory tips that are gonna be created as a percentage of a transaction whose total price you don’t know, you know, that’s an example where I think the guidance that you need to disclose that you’re going to be charging that kind of a fee, even if you don’t know what the amount is.  The fact that you are going to be charging it should be disclosed early enough and not in the smallest font.

Schmidt

[00:29:32] Very good.  Very good thought.  Alex, anything for you to add?

Hake

[00:29:35] I mean, I would just reiterate something that you mentioned earlier, Kent, about traps that I think it’s easy to fall into with these laws where they’re so focused on disclosing the total price and as a company I might think well of course I’m disclosing the total price eventually.  But the idea that you have to be very conscious of anywhere that a price for a good or service appears, and that might not just be on the page where the consumer has already clicked and they want to buy it.  It might be on all sorts of imaginable places where your price for you product might be posted.  That I think is potentially a key trap for these laws.

Schmidt

[00:30:09] That’s very helpful too.  Let me just maybe just round this out with one thought of my own, and that is what I have referred to as the veracity of the charge.  You know, we heard, what was the term that was used in the hotel, the charge?  What do they call that?

Hake

[00:30:29] They had partition pricing, drip pricing, [UNINTELLIGIBLE].

Schmidt

[00:30:32] What they called it.

Hake

[00:30:33] What they qualified the charge as was a destination fee.  [UNINTELLIGIBLE] vague.

Schmidt

[00:30:36] A destination fee, whatever that is.  But sometimes I think, you know, this might not come into direct contact with prohibition, might not be directly prohibited, but more in the generalized area of deceptive business practice where you have a fee that is grossly disproportionate to the cost.  I mentioned earlier handling charges, shipping and handling charges, and I’ve litigated in this area even apart from these types of statutes where it’s an inflated charge.  It cannot really be justified in terms of the actual or even approximated cost associated with that aspect of the service.  I think I’d be very nervous about some type of charge that you can’t back up with at least an approximate accounting that justifies that charge.  Otherwise it just looks like a hidden and almost deceptive cost center.  Any thoughts on that?

Ralph

[00:31:44] Yeah, I agree 100%.  You know, the Minnesota, the new Minnesota Statute itself expressly says, and the AG’s guidance on expressly says, we’re not trying to regulate the price itself.  We don’t care about the price.  But under other consumer protection laws that the AG does enforce, that kind of practice would be considered deceptive.  And I think you’re right that it’s not a practice that’s likely to stand up well in court if it’s put under a microscope.  So I would be very wary of engaging in practices like that.

Schmidt

[00:32:15] Well very, very helpful comments, incredibly useful discussion.  As many things that we discuss on SharkCast, it’s an evolving situation, so I’m sure we’ll be continuing to communicate and monitor on this issue.  That’s about all the time, however, that we have to discuss hidden fees and junk fees today.  We are now at the segment of SharkCast episode that we call the Deeper Dive, that we like to learn a little bit more about our guest, and we do this at the end of each episode.  And today I’d like to return to one of my favorite Deeper Dive topics, which is the topic of movies.  And I’d like to specifically ask you both to give a movie recommendation, even if it’s not something that is not new, even a classic movie that, you know, you would go back to, like a must watch.  Like anyone that you would come in contact with you’d say you gotta see this movie.  And before you do, I’ll just tell you that part of what inspires this question is I just watched, rewatched Schindler’s List about three or four weeks ago.  It is a long movie.  It’s a difficult movie, but it’s one of the best movies I think ever made and absolutely gripping story of the conflicting and challenging choices that were made by Schindler in connection with some of the compromises he made, but the ultimate good that he did in saving so many lives.  And I think I would put that on my short list of movies that you really do have to see.  And it’s not, not all of it’s pleasant to see, but it’s a very, very moving epic piece of work by Spielberg.  So who wants to go first and tell me what sort of that, what one or two movies that just is almost live changing, or something you would go back to and watch multiple times?

Ralph

[00:34:31] Well I’ll jump in on this because with the recent passing of Gene Hackman, I was inspired to rewatch some of his movies, and one performance of his that I love and it’s a great movie, is Unforgiven, the Client Eastwood western.  And, you know, so many westerns are based on the hero who ultimately satisfies the audience by taking vengeance on all the bad guys and gunning them down, and that really takes a different perspective on good guys versus bad guys and justifiable use of violence in a setting where there are just fabulous and ambiguous characters.  Client Eastwood is essentially a murderer turned into a good guy who’s forced to avenge a friend who is unjustly killed.  And Gene Hackman is a sheriff with a sterling reputation, and he’s incredibly brave, but he also strays into complete brutality enforcing law.  It’s an excellent movie that’s very thought-provoking and just a timeless classic.

Schmidt

[00:35:32] Well I’m going to take you up on that recommendation ‘cause that is one that I did not see.  In honor of Gene Hackman, last weekend, I did watch the French Connection for the first time.

Ralph

[00:35:40] I just watched that last night too.

Schmidt

[00:35:41] Oh did you?  Yeah, so it’s a great one, and he’s truly one of the greats and will be missed.  How about you Alex?  A movie that grips you.

Hake

[00:35:51] Yes.  Well now I’m questioning whether my taste in cinema is refined as both yours is.  I think for me it’s, for me it always go back to nostalgia and thinking about my childhood.  For me that meant one of the big things in my life was back when the Peter Jackson Lord of the Rings trilogy came out.  I just thought that was very, very great point in my life, but I think looking back on it now too just thinking that, you know, I feel like those were really big community effort that went into making that huge undertaking, and I just don’t think you see that so much anymore where it’s just kind of team of really dedicated, passionate people who all come together to make something they really care about.

Schmidt

[00:36:33] Yeah.

Ralph

[00:36:34] Well I second that opinion.  I read Lord of the Rings probably ten times and the Hobbit five.  I love all those movies, and I think too I’d like to recommend the Rings of Power spinoff series that has two seasons.  It’s really well done.

Schmidt

[00:36:46] Alright.

Hake

[00:36:47] I’ll get back to your recommendation, and I won’t approach that topic.

Schmidt

[00:36:51] Well I’m going to spring a bonus question on both of you in our Deeper Dive.  And so I’m going to start with you Alex.  As a newly-minted Dorsey lawyer, can you give me something that has been a pleasant surprise, we’ll keep it all in the positive, about what the practice of law is like in your very formative years at Dorsey?  Let’s keep it on the positive.  I’m sure there are some unpleasant surprises, but tell us anything about your practice that sort of surprise from how you envisioned things in law school.

Hake

[00:37:28] I would say the most pleasant surprise for me is just how quickly you can start to get the hang of things.  I think from going from square zero effectively with never having done, you know, everything is just a giant list of well, I’ve never done that, I’ve never done that, I’ve never done that before, and then you do it for the first time, and then at the pace of things here, week five or six well I’ve already done that three times now.  And so I’m a big lifelong learner and that’s something I love about this job is it gives me the opportunity to be continually learning, but I think the flip side of that is you also build experience really quickly.

Schmidt

[00:38:02] Okay.  Well that’s great and we’re all lifetime learners which is partly why I enjoy doing this podcast.  Alright Matt, question for you that’s the bonus question out of the blue.  You’ve been at this almost as long as I have.  What’s something that you have learned as a partner, so this will be a benefit to Alex, that may be you didn’t fully appreciate as an associate in terms of the craft of practicing law?

Ralph

[00:38:34] Well here’s what I would say to Alex and the young lawyers, what I think is one of the most important things you learn as a trial partner.  Don’t panic, because almost any situation you can handle, you can correct, you can get out of, provided you don’t lose your mind or lose your self-control and make it worse.  And so I’ve been reminded of this because my wife, who used to be a Dorsey partner, went in-house and deals with executives and it can be very stressful and they often need to have an easy button for solutions.  And I think in contrast when there are emergencies at Dorsey in the trial department, when you’re leading a case, you have to be the one with the easy button who’s gonna calm everybody down and provide the answer, so.

Schmidt

[00:39:26] Well there’s certainly many opportunities for panic to arise in a busy, complex litigation trial practice.  That’s for sure, so that’s really great advice.  Very succinct and very appropriate for our conversation today.  With that I’d like to thank you both for being guests here on SharkCast today.  I’d also like to thank our listeners for participating and listening to this interesting conversation.  As always I’m indebted to the extraordinary team at Dorsey for making this podcast and episode possible.  For more resources on this and other litigation risk go to litigationsrisks.com where more information can be found, including a book on managing litigation risk written by yours truly.  Until next time, my friends, this yet another reminder that there are a lot of sharks swimming out there in the murky waters, so swim safely.

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[00:40:20] This podcast is not legal advice and does not establish an attorney-client relationship or create any duty of Dorsey & Whitney LLP or those appearing in this podcast to anyone.  Although we try to assure that the content of this podcast is accurate, comprehensive and reflects current legal developments, we do not warrant or guarantee those things.  The opinions expressed in this podcast are the opinions of those appearing in the podcast only and not those of Dorsey & Whitney.  This podcast is considered attorney advertising under the applicable rules of certain states.