REGIONAL— A three-judge panel of the state Court of Appeals has affirmed a lower court ruling dismissing, with prejudice, a lawsuit filed by Cook News Herald and Tower News owners Gary and Edna Albertson against Timberjay majority owners Marshall Helmberger and Jodi Summit. The decision almost certainly brings to an end a legal claim that two courts have now found lacks any basis in fact or law.
The appellate court issued its unpublished decision on Tuesday, finding that District Court Judge James Florey was right to dismiss the Albertsons’ claims last December on summary judgment. Albertson attorney John Colosimo had argued that the decision was improper because summary judgment can only be granted when there are no disputes over genuine facts in the case. But the appellate court had challenged Colosimo on several occasions during oral arguments to identify the disputed facts or a basis in law for his appeal, which Colosimo was unable to do.
Time and again in their 13-page ruling, the appellate judges noted that the Albertsons’ claims had “no basis in Minnesota law or the Timberjay’s articles of incorporation or bylaws,” and stated that “no rational fact-finder could find that the Albertsons’ subjective hopes and desires were reasonable under the circumstances.”
While the Albertsons have the choice to request an appeal to the state’s Supreme Court, the high court accepts only a small fraction of the appeals it receives, and usually limits its time to cases involving substantive issues. “We’re quite confident this is the end,” said Timberjay Publisher Marshall Helmberger. "This was a baseless case from the beginning and the high court would recognize that fact right away," he added.
The Albertsons are both direct competitors to the Timberjay as well as minority shareholders in the company. They bought their shares 20 years ago from former shareholder Madonna Ohse, purportedly as an investment, but did so without ever speaking to the majority owners to determine if their objectives were compatible with the vision of the majority owners. The Albertsons have attempted to exert control over the Timberjay over the years through frequent threats of legal action, but their threats have had no impact on the newspaper’s operations.
Helmberger said it appeared that the Albertsons did not understand the limited rights that come with a minority stake in a small corporation and that, as competitors, they could not properly have any management role in the operations of the Timberjay.
The Albertsons filed their action in December 2015, with a wide range of general allegations, including fraud, illegal activity, failure to provide financial information, and squandering corporate assets. The Albertsons were hoping to use a state law that allows a court to break up a corporation or force the majority owners to buy out a minority shareholder at well above the market value of their stock, when the minority can demonstrate some kind of wrongdoing on the part of the majority owners.
The Albertsons’ complaint offered few specifics and Colosimo acknowledged in writing that the Albertsons had no documents to support their allegations, although he had hoped to find evidence through discovery. But the hundreds of pages of corporate and personal records that the Timberjay and its majority owners provided to Colosimo as part of the lawsuit's discovery process included no such evidence. In the end, Colosimo used a single affidavit signed by Gary Albertson to make their case in a motion for a forced buyout. Yet the only actionable claim in Albertson’s sworn affidavit was proven to be false by voluminous correspondence and Albertson’s own answers to interrogatories— information which Colosimo had in his possession.
Making false statements under oath is a felony, although it is rarely prosecuted in civil cases.
The baseless nature of the lawsuit has posed questions about the real motivations underlying the case. The Albertsons, who own several small newspapers in northeastern Minnesota, have sought to sell their newspapers, according to informed sources in the industry, but have no interested buyers. Gary Albertson, the publisher of the Cook News Herald and the Tower News, is 76. The Timberjay has proven to be substantial competition for the Albertsons, so the elimination of the newspaper would likely have increased the value of their competing newspapers.
And Colosimo may have had a motive of his own to take on such a meritless case. Colosimo served the complaint back in December 2015, six months after a decision by the Office of Administrative Hearings that found that the St. Louis County School District had failed to report tens of thousands of dollars in campaign expenditures stemming from an effort to promote passage of a 2009 bond referendum. The OAH subsequently fined the district and ordered it to produce a new campaign finance report.
Colosimo represented the school district in that complaint, which was filed after Colosimo had advised the school district to ignore repeated requests by Helmberger and others to amend the district’s campaign report to include the full amount of its spending. Colosimo made it clear during proceedings in that case that he blamed Helmberger for instigating the complaint, which exposed Colosimo’s questionable legal advice to the district.
“While the Albertsons may have other motives, it seems pretty clear to me that for Colosimo, this was simply retaliatory,” said Helmberger. During depositions last year, Colosimo questioned Helmberger at length about the lawsuit against the school district, the Timberjay’s lawsuit against Johnson Controls over access to public data, and about his work to establish a charter school in Tower. “None of this had any legitimate connection to their supposed claims,” said Helmberger. “It was really inappropriate.”
Despite the questionable nature of the lawsuit, it proved costly nonetheless. To date, the newspaper has spent in excess of $25,000 on its legal defense, although donations from dedicated readers have covered roughly half of that amount. The district court did not address the Timberjay’s request for attorney’s fees, although the Albertsons will have to reimburse the company for some statutory court costs, totaling approximately $1,000.