Anna represents both plaintiffs and defendants in a wide range of commercial cases. She focuses her practice on tort & product liability, high-stakes civil litigation, complex business disputes, and investigations. After working in private practice for more than a decade, including as a Maslon partner, Anna dedicated several years to public service as a prosecutor in the Hennepin County Attorney's Office in Minneapolis. In that role, she managed a dynamic caseload that included homicide, sexual assault, financial crimes, and drug and property cases through all stages of prosecution. She subsequently managed litigation in house as senior legal counsel for a large pharmacy benefit manager.

Terri, a business attorney and mediator, focuses her practice on M&A, restructurings and shareholder business divorces, and mediation of commercial disputes. As a deal lawyer, rather than a litigator, she is unique among mediators because she brings her many years of experience negotiating deals to the mediation table—along with her trademark high energy, active listening skills, creativity, and pragmatic approach.

To learn more, see Minnesota Lawyer: Top Women in Law.

But there are a few less obvious circumstances in which companies and their officers may be subject to lawsuits in Minnesota courts. This article highlights two such circumstances, and offers key takeaways to keep in mind when navigating business risks in Minnesota.

Acts by Corporate Officers in Their Official Capacity

In Minnesota, officers/directors and shareholders/members are typically treated separately from the companies they manage or own for purposes of liability. For example, a limited liability company is an entity distinct from its members, and its liabilities do not become the liabilities of its members, managers, or governors by reason of them acting in their official capacity.[3] And for purposes of jurisdiction, an officer is not subject to suit in Minnesota merely because the court can exercise jurisdiction over the company.[4] So, one might assume that a nonresident officer whose only Minnesota contacts were undertaken on behalf of the company in a corporate capacity cannot be sued in Minnesota in his or her personal capacity. Think again.

The notion that a nonresident corporate agent should not be individually subject to a court’s jurisdiction based on acts undertaken on behalf of the corporation is sometimes referred to as the "fiduciary shield" exception. As a matter of federal law, the United States Supreme Court has long "rejected the suggestion that employees who act in their official capacity are somehow shielded from suit in their individual capacity."[5] Rather, the exception is a product of state law. And over the course of many years, Minnesota courts have declined to apply the exception, if not outright rejected it.[6] This means that, in Minnesota, even if an individual’s contacts resulted from activity in a corporate capacity, that individual still "may be subject to personal jurisdiction if minimum contacts are established."[7]

These principles were reiterated in a recent shareholder dispute in which Maslon served as lead defense counsel. There, minority shareholders of a Minnesota-based startup company sued another minority shareholder, a North Carolina-based company, and its CEO, a North Carolina resident. The court rejected the CEO’s argument that his Minnesota contacts should be disregarded in the personal-jurisdiction analysis because they were undertaken solely in his capacity as CEO, concluding this was the type of "fiduciary shield" exception that was not an element of constitutional due process and had never been adopted in Minnesota. Still, applying a traditional minimum-contacts analysis, the court dismissed the claims against the CEO because the record did not support the plaintiffs’ attempts to attribute the company’s activities in Minnesota solely to the CEO.

This case provides a helpful reminder that a nonresident corporate officer is not automatically insulated from suit in Minnesota merely because he or she was acting in a corporate capacity. The relevant inquiry remains whether the officer’s individual contacts with Minnesota are sufficient to create personal jurisdiction. (Learn more about our work in this case here.)

Forum Selection Clauses/Closely Related Doctrine

In addition to cases involving "minimum contacts," a nonresident defendant can be subject to personal jurisdiction in Minnesota by consent.[8] A frequent way in which nonresidents consent to personal jurisdiction is through contractual forum-selection clauses, in which the parties designate a specific court and location in which future disputes will be litigated. But what about a company or individual who never signed the contract—can they nevertheless be subject to personal jurisdiction in that forum? The answer is yes, but with an important caveat.

In general, a nonparty to a contract cannot be bound to the contract’s terms.[9] However, Minnesota courts have still exercised personal jurisdiction over a nonparty based on a forum-selection clause where the party is "so 'closely related' to the dispute that it becomes foreseeable that the party will be bound."[10] For example, in C.H. Robinson Worldwide, Inc. v. FLS Transportation, Inc., a corporation sued eight former employees and their new employer for breach of contract.[11] Five of those employees had signed an agreement with a forum-selection clause subjecting them to jurisdiction in Minnesota, while the agreements for the remaining employees did not contain such a provision. Despite this, the district court denied defendants’ motions to dismiss that challenged personal jurisdiction.

Citing federal case law as persuasive authority, the Minnesota Court of Appeals affirmed and concluded that the employees who were not subject to the forum-selection clauses were still sufficiently closely related to the dispute to be bound by them. The appellate court reasoned that the non-signatories were involved in the suit-provoking conduct and knew that the other employees were subject to a forum-selection clause, and that all defendants shared a common interest in their defenses and were represented by a common attorney. Under these circumstances, all defendants should have reasonably anticipated defending themselves in a Minnesota court, and the closely related doctrine subjected all defendants to personal jurisdiction.

Despite its acceptance among Minnesota’s lower courts, the closely held doctrine has not yet been adopted by the Minnesota Supreme Court. But this may change soon, as Minnesota’s highest court has agreed to review Medtronic, Inc. v. Lahn, a case in which the district court exercised personal jurisdiction over a California corporation by way of the forum-selection clause its employees had agreed to with their former employer.[12] As such, the fate of the closely related doctrine in Minnesota is still to be determined, and legal observers will await the Minnesota Supreme Court’s forthcoming decision. For now, companies and their officers should be aware of their potential exposure to lawsuits in Minnesota, even in cases where they did not directly consent to jurisdiction in Minnesota courts.

Key Takeaways

• Corporate capacity is not an automatic jurisdictional shield in Minnesota. Courts will still examine the officer's own conduct, even when undertaken for the corporation.
• Plead and prove individualized contacts. Allegations referring collectively to "defendants," or that attribute a company’s conduct to its managers or owners without supporting facts, will not establish jurisdiction over the individual.
• Parties can still be bound to a contract they did not sign if they are deemed sufficiently related to the dispute. Unless and until the Minnesota Supreme Court narrows the scope of the closely related doctrine, a nonparty may face litigation in Minnesota even if it did not directly engage with the state or sign an agreement with a Minnesota forum-selection clause. A nonsignatory’s involvement in the underlying dispute, awareness of the forum selection clause, and sharing a common interest/counsel with a named defendant are all relevant factors a court will consider when deciding whether the nonsignatory is subject to personal jurisdiction.

[1] Daimler AG v. Bauman, 571 U.S. 117, 137 (2014).

[2] Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985).

[3] Minn. Stat. §§ 322C.0104, subd. 1 & 322C.0304, subd. 1; see also Minn. Stat. § 302A.361, subd. 1 (officer of a corporation who discharges his or her duties in good faith, in the best interests of the corporation, and with due care "is not liable by reason of being or having been an officer of the corporation").

[4] Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 n. 13 (1984); State v. Cont’l Forms, Inc., 356 N.W.2d 442, 444 (Minn. Ct. App. 1984).

[5] Keeton, 465 U.S. at 781 n.13.

[6] See, e.g., Real Props., Inc. v. Mission Ins. Co., 427 N.W.2d 665, 668 (Minn. 1988) (rejecting notion that "any contacts with Minnesota as a [corporate] agent do not count" toward jurisdictional analysis, and stating that the member’s "own conduct does not merge or disappear when it wears [the company’s] hat"); M.G. Incentives, Inc. v. Marchand, No. 36-00-962, 2001 WL 96223, at *5 (Minn. Ct. App. Feb. 6, 2001) (fiduciary-shield exception "has never been adopted in Minnesota" and the "Minnesota Supreme Court has given no indication that it is inclined to do so."); see also Safco Prods. Co. v. Welcom Prods., Inc., 730 F. Supp. 2d 959, 966 (D. Minn. 2010) (recognizing that Minnesota has not adopted the doctrine).

[7] Stratasys, Inc. v. ProtoPulsion, Inc., No. A10-2257, 2011 WL 2750720, at *5 (Minn. Ct. App. July 18, 2011).

[8] Rykoff-Sexton, Inc. v. Am. Appraisal Assocs., Inc., 469 N.W.2d 88, 89–90 (Minn. 1991).

[9] State ex rel. Hatch v. Cross Country Bank, Inc., 703 N.W.2d 562, 569 (Minn. Ct. App. 2005).

[10] Fair Isaac Corp. v. Gordon, N. A16-0274, 2016 WL 7439084, at *2 (Minn. Ct. App. Dec. 27, 2016).

[11] 772 N.W.2d 528 (Minn. Ct. App. 2009).

[12] No. A25-1009, 2026 WL 570489 (Minn. Ct. App. Mar. 2, 2026).

Closely held companies are particularly vulnerable in such scenarios as they often have no trading market for their shares, no independent board, and often no clear separation between the roles of owner, employee, and manager. Owners who become unhappy cannot simply sell into the market and walk away. The same people frequently draw a salary, set strategy, and share in profits, so a single disagreement can simultaneously threaten their income, career, and investment.

Minnesota law recognizes this reality: Under the Minnesota Business Corporation Act (the "Corporations Act"), shareholders in a closely held corporation owe one another a heightened duty to act in an "honest, fair, and reasonable manner," and courts measure conduct against the "reasonable expectations" of the owners as they existed at the outset and developed over time (Minn. Stat. § 302A.751). Similarly, members of a Minnesota limited liability company ("LLC"), under Minnesota’s Revised Uniform Limited Liability Company Act (the "LLC Act"), owe one another a good-faith-and-fair-dealing obligation measured against the operating agreement, and owe the company a duty of loyalty and care (unless otherwise eliminated). (Minn. Stat. § 322C.0409, subds. 2-4.)

These standards cut both ways. They protect the minority owner who is squeezed out, while rewarding owners who take the time to write their expectations down—because written agreements in corporations are presumed to reflect those reasonable expectations (see Minn. Stat. § 302A.751) and members in LLCs are deemed to have assented to the written operating agreement.

The good news is that many of these disputes are preventable. A little planning at the beginning of a business relationship is often far less expensive than litigating that relationship years later. In this article, we share strategies related to the issues we see most often, as well as practical drafting tips to help you prevent each one from derailing your business later.

1. Carefully consider how you bring in other owners (equity is not the only option).

Business owners often treat equity as the default solution for incentivizing employees, advisors, consultants, and investors. In reality, ownership is only one option, and it is frequently the wrong one. Owners not only have the right to share in a company’s profits and losses or receive dividends or distributions, but they may also carry voting rights, fiduciary protections, statutory rights to inspect company books and records, and, in Minnesota, the ability to sue for a fair-value buyout if they later feel mistreated (See Minn. Stat. §§ 302A.751 and 322C.0701). Adding an owner is typically much easier than removing one.

Before issuing ownership interests, consider whether a cash bonus, a profit-sharing arrangement, phantom equity, or stock appreciation rights can accomplish the same objective. Phantom equity and stock appreciation rights are particularly attractive to closely held companies worried that a new minority owner could create friction at a critical moment, such as a sale, because they provide key employees with a real financial stake in the company’s success without handing over actual stock or voting or inspection rights. Phantom equity is simply a contractual promise to pay a future bonus measured by the value of a stated number of shares; a stock appreciation right pays only the increase in value over time. These arrangements do require careful attention to cash flow—since the company must be able to fund the payout when it comes due—as well as periodic valuations and compliance with deferred-compensation tax rules under Section 409A of the Internal Revenue Code. As such, they should be documented in a written plan.

For an LLC taxed as a partnership, another alternative is a profits interest—a grant that shares in future profits and appreciation but has no value if the company were liquidated the day it is issued. A profits interest can serve as a powerful incentive for a senior executive, but it carries a trap for rank-and-file employees: The recipient of partnership interest cannot also be a W-2 employee, so the grant converts salary into self-employment income, ends payroll withholding, and can cost the employee access to certain benefits. For a small grant, the administrative burden often exceeds the benefit.

The practical point is the same across all of these tools: Match the incentive to the objective, and reserve true equity for the people you actually intend to make long-term co-owners.

Drafting tips. If you do grant equity, never do it on a handshake or a casual line in an offer letter. Document the grant in a written agreement that addresses vesting, what happens to the equity if the relationship ends, and, critically, a mandatory repurchase right so the company or the other owners can buy the interest back when the employee leaves. Tie that repurchase to the buy-sell mechanics discussed in Strategy 5. The most common problematic scenario is the departed employee who is no longer contributing but still owns a piece of the company and retains a statutory right to demand its records.

2. Draft written governance documents and require that changes be agreed upon in writing.

Minnesota corporations and LLCs have substantial flexibility in structuring governance arrangements. (See Minn. Stat. §§ 302A.181 and 302A.457 (corporations) and Minn. Stat. § 322C.0110 (LLCs).) That flexibility is one of the chief advantages of the closely held form, but it can also create uncertainty if important agreements are never documented. The statute will fill the gaps with default rules—and as Strategy 3 explains, those defaults are frequently not what the owners assumed.

This issue is particularly important for LLCs. The LLC Act expressly provides that the operating agreement governs the relations among members, the rights and duties of managers and governors, the conduct of the company’s activities, and the means and conditions for amending the agreement itself (Minn. Stat. § 322C.0110). In other words, the statute supplies rules wherever the operating agreement does not. Although Minnesota’s LLC statute allows an operating agreement to be oral or implied (see Minn. Stat. § 322C.0110, subd. 17), the surest way to avoid litigation is to have an express written operating agreement that states that it is the sole such agreement of the company and can only be amended in writing signed by the parties.

The most common gaps we see are often basic questions the documents simply never answer: Who has authority to bind the company, and up to what dollar threshold? What vote is required for a major decision, and what counts as "major?" How is the agreement amended? What happens when an owner dies, divorces, or quits? When the documents are silent on these points, the disagreement becomes about the rules, not the business, and there is no referee in the room.

Drafting tips. Adopt comprehensive written governance documents (e.g., a shareholder control agreement and bylaws for a corporation, or an operating agreement for an LLC) and make sure they include these two clauses, which can be easy to overlook yet potentially costly when missing:

• An integration clause stating that the written documents constitute the parties’ entire agreement and supersede all prior oral or written understandings, so a partner cannot later claim that a lunchtime conversation modified the deal.
• An amendment clause requiring that any change to the document be made only by a signed writing approved by a specified vote of the owners (and/or, if required, board members), and that the document may not be amended or modified by oral agreements or course of conduct. Both corporations and LLCs are able to authorize such amendment without having a formal meeting via a written action of its managing parties (see 302A.239, 322C.0407).

A few extra pages on the front end can save significant time and expense later.

3. Limit voting rights for passive investors and clearly define who makes major decisions.

Many owners assume voting power automatically follows ownership percentage, but that is not always true, and the default rules may surprise you. A Minnesota company may establish different classes or series of equity with full, partial, or no voting rights, so long as the terms are set out in—or authorized by—the articles and terms provided in the governance documents to alter from the default assumption of voting and financial rights. (See Minn. Stat. §§ 302A.401, 322C.0110, and 322C.0407.) If the articles are silent, however, all equity is deemed to be a single class of voting common equity with equal rights in accordance with their ownership percentages (pro rata). (See id.)

By default, shares are the unit of ownership in a corporation, and economic and voting rights are allocated pro rata according to the number of shares owned. By contrast, LLC members’ rights are shared equally per capita, meaning that a member who contributed 90% of the capital and a member who contributed 10% would, by default, each have one equal vote, and the 10% member could veto many corporate actions.

However, the Corporations Act and the LLC Act both allow the articles and governance documents to deviate from the default rules. So LLCs that want voting power to track ownership, and corporations that do not, must say so in the applicable governance documents. In an LLC, one clean way to achieve distribution-weighted voting is to designate the company as board-managed: In a board-managed LLC, the statute provides by default that each member possesses voting power in proportion to the member’s distribution interest. (Minn. Stat. § 322C.0407, subd. 4, cl. (17).) By contrast, the member-managed and manager-managed defaults give each member equal (per capita) rights, so an LLC using either of those structures that wants voting to track ownership must instead provide for it directly in the operating agreement.

Not every investor needs the same level of control. Governing documents should clearly identify which decisions require owner approval and which may be delegated to management. Many disputes arise over disagreement about who the decision-makers are, and not necessarily the decision itself.

Drafting tips. Build a deliberate allocation of control rather than accepting the defaults:

• Use share classes or membership classes to separate economic rights from control. A passive investor can hold non-voting or limited voting interests that still carry full economic participation and, if appropriate, a preferred return. However, if the company is taxed as an S corporation, you can have only one class of equity (voting and non-voting classes are OK).
• Define "major decisions" by an enumerated list—such as issuing new equity, incurring debt above a threshold, selling the company, approving related-party transactions, amending the governing documents, etc.—and specify the vote each requires (majority (50%), supermajority (higher percentage, such as 75%), or unanimous (100%)). Delegate everything else to the management team so the business can run.
• Calibrate supermajority and protective provisions carefully. A supermajority or unanimity requirement protects a minority owner from being steamrolled, but it also gives minority owners a veto right, and a veto in the wrong hands is how deadlocks are born. (See Strategy 4.) A common compromise is to give a minority investor a narrow set of "protective provisions"—veto rights over a short list of fundamental actions that could harm their investment (e.g., dilution, a change in the business, or a sale below a floor)—while leaving ordinary operations to majority or management control. However, these protective provisions still limit the operation of the company and decision-making abilities of the majority owners and the management team, so these rights should be narrowly tailored (and avoided if possible).

4. Avoid even numbers and, if deadlocks cannot be avoided, establish procedures in the governing documents to break them without expensive litigation.

Deadlocks are among the most common and potentially damaging governance problems in closely held businesses, because the structures owners adopt for fairness (equal ownership, unanimity requirements, or mirror-image boards) are the very structures that produce operational paralysis. Although Minnesota law provides remedies in certain situations, including judicial remedies under Minnesota Statutes Section 302A.751 (corporations) and Minnesota Statutes Sections 322C.0701 and 322C.0702 (LLCs), litigation is rarely anyone’s preferred solution.

A court can dissolve the company, order one owner to buy out the other(s) at a judicially determined fair value, or fashion other equitable relief—but only after an expensive (and often long) lawsuit on terms the owners no longer control, and decided by a judge unlikely to have business experience. For a corporation, a court may even order a buyout on motion, and it will use the price and terms set in the company’s own buy-sell or shareholder control agreement unless it finds them unreasonable. (Minn. Stat. § 302A.751.) That is a powerful reason to set those terms yourselves, in advance.

If possible, you should avoid equal ownership and voting structures in the first place: A 51%/49% ownership split, an odd number of directors, or a tie-breaking director can prevent the problem entirely. If a 50/50 or veto structure is unavoidable, the governing documents should contain a pre-agreed mechanism to break the tie before it reaches a courtroom. Common tools include:

• Escalation and mediation. Require that a disputed major decision first go to the owners’ senior representatives (or a neutral mediator) for a defined period before any more drastic remedy is available. This is the lowest-cost mechanism and often resolves the matter without anyone exiting.
• A neutral tie-breaker. Provide for a casting of votes, an independent director, or a pre-named third party (e.g., an industry expert or the company’s accountant) to decide a defined category of deadlocked issues.
• Buy-sell/"shotgun" provisions. A buy-sell triggered by deadlock removes one owner from the business. In the classic "Russian roulette" or "Texas shoot-out" structure, one owner names a single price; the other owner then chooses whether to buy at that price or sell at that price. Because the initiator does not know which side of the deal they will end up on, the mechanism is designed to discipline them into naming a fair price. Variations include sealed-bid auctions and appraisal-driven floors.

Drafting tips. A shotgun buy-sell is elegant but dangerous when the owners are not evenly matched. If one owner has far deeper pockets or a much larger stake, that owner can name an artificially low price knowing the other cannot afford to buy (or sell at a steep discount), forcing a cheap exit. Where resources are unequal, a put/call structure priced by an independent appraiser is usually more fair. Whatever mechanism you choose, add guardrails so the deadlock provision is not abused as a back-door exit:

• Limit the trigger to a short list of genuinely fundamental decisions, not every disagreement.
• Require a cooling-off or escalation period (and ideally mediation) before the buyout right can be invoked.
• Consider a lockup so the mechanism cannot be triggered in the company’s fragile early years.

5. Plan for shareholder exits and ownership transfers before they occur (including buy-sell rights, rights of first refusal, and permitted transfers).

Ownership in a company is a personal property right, and the property is freely transferable unless there are restrictions on transfers in the governing documents. Owners of closely held businesses generally want to know (and control) the parties with whom they are doing business and will include extensive transfer restrictions in their governance documents. Minnesota law generally permits transfer restrictions and buy-sell arrangements when properly drafted. (See Minn. Stat. § 302A.429 (corporations) and Minn. Stat. §§ 322C.0502–.0503 (LLCs).)

For corporations, a written restriction that is "not manifestly unreasonable" and is conspicuously noted or referenced on the stock certificate is considered valid and enforceable against the holder and any transferee. However, such restriction is ineffective against someone who buys without knowledge of it, so the mechanics of notice matter. (Minn. Stat. § 302A.429.) For LLCs, a transfer that violates a restriction in the operating agreement is ineffective as to anyone with notice of the restriction, and in any event a "bare" transferee receives only the right to distributions, not management rights or access to information. (Minn. Stat. § 322C.0502.) These statutes give owners the tools to control who joins the ownership group; the job is to use them.

A well-designed exit framework answers three questions in advance: when an owner can or must transfer, to whom, and at what price:

• Triggering events. A buy-sell typically fixes purchase-and-sale terms on events such as death, divorce, disability, termination of employment, bankruptcy, or an unresolved deadlock. Each trigger deserves thought—the price and terms appropriate for a "good leaver" who retires may differ from those for a "bad leaver" terminated for cause.
• Transfer controls. A right of first refusal requires a selling owner who has a bona fide third-party offer to first offer the interest to the company or the other owners on the same terms. A right of first offer requires the seller to offer to the insiders first, before shopping the interest, and does not require a third-party offer at all. Use one or the other, not both—the procedures overlap and stacking them only adds delay. But be aware that a right of first refusal can have a chilling effect: A serious buyer may be unwilling to spend time and diligence dollars knowing the insiders can swoop in and match. Pair these with permitted-transfer carve-outs (for example, transfers to a family trust for estate planning) so ordinary, non-threatening transfers are not bogged down.
• Valuation. Among the most important concepts in any buy-sell is how "price" will be determined. Fix the purchase price methodology at the outset in the governing documents or buy-sell agreement, when the parties are getting along and no one knows who will be buying or selling, and interests are therefore aligned. Common approaches include: (1) a fixed price updated periodically by agreement, (2) a formula (such as a multiple of trailing-12-month EBITDA), or (3) an appraisal. If using an appraisal, specify how the appraiser is chosen, the timeframe, who pays, and whether minority or lack-of-marketability discounts apply. Leaving valuation to be negotiated at the moment of exit guarantees a fight, because by then the parties’ interests are directly opposed.

Drafting tips. In addition to the drafting concepts noted above, companies typically include a purchase option, first for the company (as a redemption where the company buys the departing owner’s interest), and if the company does not elect to purchase the equity, then for the other owners, who would have a right to a cross-purchase. Generally the company should not be obligated to redeem the interests, unless the owners agree that the situation would support a mandatory buyout (e.g., in the event of death or disability). Buy-sells funded by life insurance are common, but the funding structure now requires extra care: In Connelly v. United States, 602 U.S. 257 (2024), the U.S. Supreme Court held that a corporation’s obligation to use life-insurance proceeds to redeem a deceased shareholder’s stock does not reduce the company’s value for federal estate-tax purposes—which can inflate the estate-tax value of the very shares being redeemed. Owners relying on company-owned life insurance to fund a redemption should revisit the structure with tax counsel and consider a cross-purchase alternative. Finally, set the buy-sell price and terms with care, because under Minnesota law a court will generally honor them in a later buyout dispute. (Minn. Stat. § 302A.751.)

6. Establish clear information-sharing practices and follow them consistently.

Many owner disputes begin when expectations about access to information are unclear. Some owners expect detailed financial statements every month; others expect updates only when major events occur. Problems arise when those expectations do not align, and an owner kept in the dark is an owner who starts to suspect the worst.

Minnesota law does not leave information rights entirely to the owners’ goodwill. In a corporation that is not publicly held, a shareholder has an absolute right, within 10 days of a written demand, to inspect and copy the share register and core company records—including up to three years of board and shareholder proceedings, articles and bylaws, financial statements, and any shareholder control agreement. Other records are made available on a showing of a "proper purpose" reasonably related to the person’s interest as a shareholder. (See Minn. Stat. § 302A.461.)

For LLCs, timing requirements are less rigid and the rules more vague as to the type of information that can be requested—and they differ by management structure. In a member-managed company, members may inspect records material to their rights, and the company must even furnish material information without a demand. In a manager- or board-managed company, a member must make a particularized written demand stating a proper purpose, to which the company must respond within 10 days. (See Minn. Stat. § 322C.0410.) These rights cannot be drafted away entirely. An operating agreement may not "unreasonably restrict" them, though reasonable confidentiality conditions are permitted. (Minn. Stat. §§ 322C.0110 and 322C.0410.) The lesson is that fulfilling information requests is not an optional courtesy, and refusing a legitimate one can itself become the basis for a claim. Alternatively, in an LLC, members who want more fulsome information rights (more similar to those under 302A) may negotiate them in the operating agreement.

Drafting tips. Rather than deciding information requests on an ad hoc basis, build a predictable process into the governing documents that reduces misunderstandings and prevents owners from claiming they were intentionally kept in the dark. Suggested steps include:

• Specifying what owners receive and how often—for example, annual audited or reviewed financials, quarterly management reports, and timely notice of defined "material events" (e.g., a financing, a major contract, litigation, or a sale discussion).
• Setting a standard procedure for additional requests, including a reasonable response window and a confidentiality undertaking for sensitive information.
• Applying the policy consistently to all owners. Selective disclosure, such as giving the insiders information that a minority owner is denied, is the kind of conduct that supports a claim for oppression or unfairly prejudicial conduct.

7. Address issues regarding capital raises up front.

Decide now how future capital needs will be met and what happens to an owner who cannot or will not participate. Ask: Will additional capital come as mandatory contributions, optional contributions, or loans? If a round dilutes a non-participating owner, say so explicitly, and consider whether owners get preemptive rights (i.e., the right to buy enough of any new issuance to maintain their percentage) and investors get anti-dilution protections. Owners are far more accepting of dilution they agreed to in writing than dilution that arrives as a surprise.

Drafting tip. Build the financing and preemptive-right provisions into the governing documents at formation, not when a deal is on the table.

8. Discuss owner’s rights in a sale transaction before they become the subject of a dispute.

As noted above, the decision on when to sell a company is usually a major decision requiring a higher threshold of owner approval. Thus, disagreement about whether and when to sell is a classic deadlock in disguise. There are two drafting tools to include in the governing documents that will align the owners in advance:

• A drag-along right lets the controlling owners require the others to join a third-party sale on the same terms. This prevents a holdout from blocking a deal and, by delivering 100% of the company, eliminates the minority discount a buyer would otherwise demand.
• A tag-along (co-sale) right is the minority’s counterpart: If the controlling owners sell, the minority may participate pro rata on the same terms.

These are typically negotiated together, with a minority owner accepting the drag-along in exchange for the tag-along, so that no one is forced into a deal they cannot exit or left stranded when others cash out.

Drafting tip. Build the drag-along and tag-along provisions into the governing documents ahead of time, when the parties are in agreement.

9. Be aware of how Minnesota statutes handle conflicted transactions.

Transactions involving an owner, family member, or affiliated business are inevitable in closely held companies, but can constitute a conflict of interest and violation under Minnesota law if not properly handled. They are also a frequent precursor to disputes. However, Minnesota law provides a statutory process to insulate the impacted parties from potential claims from the other owners.

For corporations, a director’s conflicting-interest transaction is not void or voidable if any one of three conditions is met: (1) the transaction was fair and reasonable to the corporation; (2) the material facts and the director’s interest were fully disclosed and the transaction was approved in good faith by disinterested shareholders (two-thirds of the disinterested voting power) or unanimously; or (3) those facts were disclosed and a majority of the disinterested directors approved it in good faith, with the interested director neither counted toward the quorum nor voting. (See Minn. Stat. § 302A.255.) The statute also imputes to a director the financial interests of close family members, so a "spouse’s company" transaction is treated as the director’s own. (Id.)

LLCs have a parallel framework. Members or managers owe duties of loyalty and care and a contractual obligation of good faith. A conflicting transaction can be defended as fair to the company and, most usefully, it can be authorized or ratified after full disclosure of all material facts to the disinterested decision-makers. (See Minn. Stat. §§ 322C.0409 and 322C.04091.)

The LLC Act expressly authorizes modification, elimination, and/or exculpation of fiduciary duties in the LLC’s operating agreement (see Minn. Stat. § 322C.0110), while corporations are not able to redefine or eliminate fiduciary duties—only exculpate and reallocate governance authority. (See Minn. Stat. §§ 302A.251 and 302A.457.)

Drafting tips. Translate those statutory safe harbors into a standing conflict-of-interest protocol so the company does not have to improvise under pressure. This protocol should require advance written disclosure of any interested transaction, approval by disinterested owners or directors, recusal of the interested party from the vote, and documentation of the disclosure and approval in the minutes. Additionally, as discussed above, both LLCs and corporations may consider limiting fiduciary duties to the extent possible under the Corporations Act and LLC Act in their respective governance documents to permit governors and directors, respectively, to take certain actions, such as competing against the business or partaking in related-party transactions, if the disinterested board, managers, officers, or equity holders are made aware and vote to allow it.

10. Family owned businesses need formal governance documents, too.

Familial relationships do not eliminate the potential for disagreement; indeed, the overlap between personal, ownership, and management roles can make disputes more likely and more complicated, especially as additional generations become involved in the business. Clear, formal, written governance documents help set expectations, define decision-making authority, and provide an agreed-upon framework for resolving issues early.

Conclusion

Businesses that draft their most important documents with an eye towards the preventable issues above minimize their risk of becoming embroiled in costly disputes later. Minnesota courts have repeatedly stepped in where a majority owner frustrated a minority owner’s reasonable expectations—ordering buyouts and other equitable relief under Minnesota Statutes Section 302A.751. (Lund as trustee of Revocable Tr. of Kim A. Lund v. Lund, 924 N.W.2d 274 (Minn. Ct. App. 2019); Gunderson v. All. of Computer Pros., Inc., 628 N.W.2d 173 (Minn. Ct. App. 2001); Pedro v. Pedro, 489 N.W.2d 798 (Minn. Ct. App. 1992).) But by the time a court is involved, relationships, and often the value of the business, have suffered.

Finally, avoid "setting and forgetting" governing documents. Ownership changes, financing rounds, management transitions, and acquisitions are all good opportunities to review these documents and confirm they still reflect the parties’ expectations. This matters under Minnesota law specifically: Because written agreements are presumed to reflect the owners’ reasonable expectations (Minn. Stat. § 302A.751, subd. 3a.), outdated documents can be worse than no documents at all.

Thoughtful governance planning, clear documentation, consistent communication, and a periodic review of the documents you already have can go a long way in preserving important relationships and enterprise value.

This article is for general informational purposes and does not constitute legal advice. Governance, transfer, and tax provisions should be tailored to the specific company and reviewed with counsel.

To learn more, go to Minnesota Lawyer: 2026 Up & Coming Attorneys.

Mike’s practice focuses on litigating high stakes commercial disputes on behalf of our clients. He acts the first-chair trial attorney in contract, minority shareholder, and business disputes. While Mike maintains a general commercial litigation practice, he has developed a national reputation in litigating corporate trustee disputes for large financial institutions. In this capacity, he has won favorable verdicts in several RMBS (Residential Mortgage-Backed Securities) trustee cases involving sums in excess of a billion dollars.

In addition to this highly successful specialty practice, Mike continues to try commercial disputes locally. Specifically, he recently successfully represented a longstanding Minnesota client in a “bet the company” shareholder dispute in state court.

Bryan is an experienced first-chair litigator who specializes in representing business policyholders with claims against their insurance companies. He has helped clients recover millions in insurance proceeds for claims. He is coverage counsel for Cambria in litigation against insurers, for a global manufacturer defending against a national portfolio of PFAS litigation, and for a major health care company seeking insurance recovery in connection with opioid litigation. He also served as lead counsel for Life Time in litigation for COVID-related business-interruption losses. In August 2025, the Minnesota Court of Appeals ruled in favor of Life Time, and the Minnesota Supreme Court declined further review, resulting in a $40 million recovery for Life Time.

Construction – Band 1
Notably, the Construction & Real Estate Litigation group and its co-chair, David Suchar, were ranked Band 1 in Minnesota, the highest possible rating. (David has been at the top rank for three consecutive years.) Only two other firms and five other attorneys attained that ranking in Minnesota. Jason Lien, who co-chairs the practice group with David, and Jevon Bindman were also ranked in Construction.

Product Liability Litigation – Band 1
The Tort & Product Liability group and its co-chairs, Katie Maechler and Stephanie Laws, were ranked Band 1 in Minnesota in Product Liability Litigation, a new category for Chambers. Only four other firms and seven other lawyers in Minnesota attained that ranking.

The 2026 edition of Chambers USA notes the following:

• Steve Schleicher was ranked Band 1 in White Collar Crime & Government Investigations for the fourth consecutive year and was also ranked in General Commercial Litigation.
• Susan Markey was ranked for the third year in a row for Corporate/M&A.
• Jon Septer was ranked for the third year in a row for Real Estate, the group he chairs.
• Bryan Freeman was ranked for the second year in a row in General Commercial Litigation; he co-chairs the firm’s Litigation practice group.
• The General Commercial Litigation and Corporate/M&A groups were ranked once again.
• The Real Estate group was newly ranked this year.

The rankings are the result of extensive client interviews and research to assess technical legal ability, client service, business understanding, value, team depth, and other qualities most valued by clients.

To view Maslon's full Chambers USA rankings, go to: Chambers USA Guide 2026.

About Chambers and Partners
Since 1969, London-based Chambers and Partners has published world-famous guides to the legal profession. A team of 200 editorial and research analysts conducted thousands of one-on-one interviews with in-house counsel and third-party experts for the Chambers USA Guide 2026.

Founded in 1920, the Federal Bar Association (FBA) is dedicated to the advancement of the science of jurisprudence and to promoting the welfare, interests, education, and professional development of all attorneys involved in federal law. The Minnesota chapter is one of the FBA’s largest.

To learn more about the organization’s work, go to: Federal Bar Association Minnesota Chapter.

At Maslon, Samantha specializes in government and internal investigations as well as complex business litigation at both the state and federal levels. With extensive trial experience, she leverages her deep expertise to represent both corporations and individuals in high-stakes matters, including investigations, white-collar criminal defense, and complex civil litigation.

PLAC brings together corporations and outside legal counsel with a common goal of managing risk throughout the product life cycle. Its conferences, webinars, industry discussion forums and action groups are by invitation only. Sustaining members represent the best and most experienced regulatory, trial, and appellate legal professionals from the U.S. and abroad.

Katie has successfully defended a wide variety of national and multinational product manufacturer clients of varying sizes in hundreds of matters across a range of product industries in federal and state courts throughout the country. She has significant experience in the medical device, consumer products, and chemical product industries, serving as national coordinating and trial counsel managing extensive portfolios of product liability filed litigation and unfiled claims, as a lead member in a “virtual law team” for clients managing defense of a mass tort, and as a go-to partner for Am Law 100 firms as local Minnesota counsel.

In 2025, Katie was named among the Top Women in Law in Minnesota Lawyer.

Jevon was presented with the award at the 2026 Annual Banquet, held on April 30. Past honorees include litigation Partner Erica Holzer and the late David Herr.

Jevon works with clients in a range of industries, with a focus on assisting policyholders in insurance coverage disputes and representing stakeholders in construction and real estate matters, as well as appeals. Among his many honors, he has been named an Up and Coming attorney in Minnesota for construction law in Chambers USA, 2024 Attorney of the Year in Minnesota Lawyer, and recipient of the national Holt Gwyn Writing Award from the American College of Construction Lawyers in 2025.

Jim represents clients in the areas of antitrust law, franchise law, and dealer/distribution law in multiple state and federal courts across the country. He has successfully tried cases to juries in antitrust, franchise, dealer termination, and breach of contract cases; responded to state AG, DOJ, and FTC investigations; worked on numerous arbitrations; and argued appeals in the Seventh and Eighth Circuit appellate courts in addition to several state appellate courts.

Jim also serves on Maslon's pro bono committee and devotes many hours to pro bono work each year, including as a volunteer attorney with the Children’s Law Center of Minnesota.

Jim served on the law review while studying for his J.D. at the University of Minnesota Law School, where he now teaches Antitrust Law.

The ACTL is an invitation-only fellowship that strives to preserve and enhance trial practice, civility, professionalism, and the administration of justice through support of an independent judiciary, the rule of law, trial by jury, and access to justice.

Steve is a renowned trial lawyer with deep experience in high profile cases. He concentrates his work on high stakes criminal and civil litigation, government and internal investigations, and appellate practice. In his white collar criminal defense practice, Steve represents individuals accused of financial crimes involving health care, agriculture, and corporate embezzlement. As a business litigator, he represented Polaroid in a $300 million breach of contract dispute, ultimately securing a complete defense verdict following a two-week jury trial in February 2024. His investigations practice has included a high-profile investigation of a private security company holding a contract at a major NFL venue that resulted in its termination; a data security breach and IP theft conspiracy at a major automobile manufacturer; and internal investigations and government compliance on behalf of health care providers.

In 2021, Steve served as pro bono special prosecutor in the internationally televised homicide trial of former Minneapolis police officer Derek Chauvin for the murder of George Floyd.

David is a partner, vice chair of Maslon's Board of Directors and Executive Committee, and co-chair of Maslon's Construction & Real Estate Litigation Group. A skilled trial attorney and former federal prosecutor, he regularly represents clients in construction and insurance coverage disputes and a variety of commercial litigation. David is a Fellow of the American College of Construction Lawyers and the American College of Coverage Counsel—one of just three lawyers in the U.S. invited to join both organizations. David was recognized by Chambers USA as one of seven Minnesota lawyers ranked Band 1 for Construction (2025) and Best Lawyers as the 2026 Lawyer of the Year (top ranked attorney) for Construction Litigation in the Minneapolis region. Who's Who Legal/Lexology named him one of nine U.S. attorneys to receive the 2026 Client Choice Award for excellence in construction law and described him as "an impressive trial lawyer whose practice spans the spectrum of construction matters from insurance to payment claims." David was also listed by Lawdragon in its 500 Leading Litigators in America ranking for 2026.

Jason, partner and co-chair of the Construction & Real Estate Litigation Group, focuses his practice on representing clients from the construction, real estate, financial services, food, and railroad industries. He regularly appears in federal and state court on behalf of design-build firms, general contractors, architects, engineers, specialty contractors, suppliers, property management companies, real estate owners, and lenders. Jason has also been ranked by Chambers USA in construction law since 2016. Prior to joining Maslon in 2002, Jason honed his trial and appellate skills as a Naval Officer with the United States Navy Judge Advocate General's Corps, where he led several courts-martial, administrative hearings, and military appeals.

Joe focuses his practice on product liability litigation, successfully defending manufacturers in all stages of dispute resolution and litigation. He has significant experience with federal preemption of claims involving drugs and medical devices and testing and analysis of products subject to litigation. He also represents clients in complex business, intellectual property, and insurance coverage litigation.

Joe first joined Maslon in 2010 after earning his law degree, magna cum laude, from the University of Minnesota Law School. In 2024, he left the partnership for a year-long RV trip with his family.

Katie has nearly 20 years of experience as a litigator defending complex product liability matters in state and federal courts, and has successfully represented clients of varying sizes across a range of product industries. Maechler currently co-leads the Maslon team serving as national trial and coordinating counsel for a major diversified water treatment company in personal injury and wrongful death claims arising from misuse of residential pool filters, as well as the written discovery team for a world-leading manufacturer’s national portfolio of PFAS litigation.

In 2023, Maechler was nominated for membership in the International Association of Defense Counsel (IADC), a select group of attorneys of “high professional standing” open by invitation only. Since then, she has participated regularly in the organization's meetings and is serving on the planning committee for the annual Product Liability Roundtable taking place next month in New Jersey, where she will be a presenter.

To learn more, see Minnesota Lawyer: Top Women in Law.

After working in private practice for more than a decade, including as a Maslon partner, Anna dedicated several years to public service as a prosecutor in the Hennepin County Attorney's Office in Minneapolis. In that role, she managed a dynamic caseload that included homicide, sexual assault, financial crimes, and drug and property cases through all stages of prosecution. She developed strong first-chair trial skills as she brought numerous violent felonies to jury verdict. She subsequently managed litigation in house as senior legal counsel for a large pharmacy benefit manager, where she oversaw a complex portfolio of litigation, arbitration, regulatory matters, internal investigations, and pre-litigation commercial disputes.

Anna earned her law degree cum laude from the University of St. Thomas School of Law after graduating summa cum laude from the University of Minnesota – Twin Cities with a B.A. in English and journalism.

Terry has extensive experience assisting clients with their intellectual property, e-commerce, and complex commercial litigation needs. He has successfully represented clients in state and federal courts throughout the country in a broad range of infringement matters involving patent, trademark, copyright, and trade dress as well as licensing disputes. Terry also serves as chair of the firm's Diversity, Equity, and Inclusion Committee. A 1995 graduate of William Mitchell School of Law, he joined Maslon as a lateral partner in 2015.

John is a highly skilled advocate with deep experience handling complex litigation, including product liability, business torts, and contract disputes. John helps clients navigate all stages of the litigation process and has significant experience representing large and small businesses in all forums: federal and state courts, arbitrations, and mediations. John joined Maslon in 2011 after earning his law degree from the University of Michigan Law School.

The Power List is a feature that examines the power brokers who lead and influence the Minnesota legal community, with a focus on those "whose mere presence on a case signifies the stakes, who have influenced the direction of the law, whose leadership in the community is pervasive, and whose respect within the bar is undeniable."

To read the features, go to: Minnesota Lawyer, "The Power List: David Suchar" and "The Power List: Jonathan Septer" (subscription required).

David is a skilled trial attorney and former federal prosecutor who regularly represents clients in construction and insurance coverage disputes and a variety of commercial litigation. He is a Fellow of the American College of Construction Lawyers and the American College of Coverage Counsel—one of three lawyers in the U.S. invited to join both organizations. Who's Who Legal/Lexology named David one of eight U.S. 2025 Global Elite Thought Leaders in the category of Client Choice-Construction and described him as "an impressive trial lawyer whose practice spans the spectrum of construction matters from insurance to payment claims."

David was recognized by Lawdragon in its 500 Leading Litigators in America ranking (2025), by Thomson Reuters® as a Stand-Out Lawyer (2025) based on its survey of more than 2,000 senior in-house counsel, and by Chambers USA as one of seven Minnesota lawyers ranked Band 1 for Construction (2024). David has developed a niche national practice representing commercial policyholders in insurance coverage disputes, including on many of the largest construction projects and claims across the United States.

Jon is one of the preeminent real estate attorneys in Minnesota as ranked in Chambers USA and has a proven track record as an exceptional transactional attorney, negotiator, and dealmaker. He represents developers, investors, and businesses in all aspects of the commercial and agricultural real estate life cycle, including acquisitions and dispositions; borrower-side financing and refinancing transactions; commercial leasing; real estate development, land use, and construction projects; 1031 exchanges; title and survey due diligence review; and environmental and regulatory compliance matters.

With years of experience under his belt, Jon excels at crafting practical, results-oriented solutions tailored to each client’s unique objectives. Whether structuring complex property deals or resolving intricate land use disputes, Jon’s sharp negotiation skills and ability to cut through the noise and deliver tangible outcomes makes him a go-to expert for anyone seeking a strategic partner in real estate law. Jon also partners frequently with the firm's litigators to enforce clients' rights, including in construction litigation, mechanics' liens disputes, commercial lease disputes, condemnation and eminent domain matters, receivership actions, and more.

Samantha joins Maslon after serving for six years as an assistant United States attorney with the U.S. Attorney’s Office for the District of Minnesota. In that position, she led successful investigations and prosecutions in a wide array of complex cases. These included racketeering conspiracies, civil rights violations, firearms trafficking, narcotics conspiracies, and violent crimes—most notably, her work on United States v. Derek Chauvin et al., which resulted in the conviction of four Minneapolis police officers for federal civil rights violations related to the death of George Floyd.

Prior to her work as an assistant U.S. attorney, Samantha prosecuted violent felonies for the Hennepin County Attorney’s Office in Minneapolis and the Wayne County Prosecutor’s Office in Detroit. She earned her law degree from Wayne State University Law School.

Samantha joins a growing investigations team at Maslon, currently staffed by several former state and federal prosecutors and experienced litigators. Led by former assistant U.S. attorney Steve Schleicher, Maslon’s Investigations & White Collar Defense Group leverages extensive government experience to represent corporations facing government inquiries, enforcement actions, and litigation. The Investigations & White Collar Defense group also uses its deep investigations experience to conduct privileged internal investigations in a variety of contexts and represents individuals facing complex criminal allegations.

Steve is known for his role as pro bono special prosecutor in the trial of Derek Chauvin for the murder of George Floyd and his successful representation of a Feeding Our Future defendant. The team also includes Stephanie Laws (co-chair of the Tort & Product Liability Group), former federal prosecutor David Suchar (chair of the Construction & Real Estate Litigation Group), former state prosecutors Emily Liebman Taylor and Haley-Rose Severson, and litigation attorneys Clayton Carlson, Anna Barton, and Abigail Maier.

Both were independently nominated as one of the three most outstanding lawyers their clients worked with as part of Thomson Reuters’ global research with senior in-house counsel.

David is a skilled trial attorney and former federal prosecutor who regularly represents clients in construction and insurance coverage disputes and a variety of commercial litigation. A Fellow of the American College of Construction Lawyers and the American College of Coverage Counsel, he is one of three lawyers in the U.S. invited to join both organizations. Who's Who Legal/Lexology named David one of eight U.S. 2025 Global Elite Thought Leaders in the category of Client Choice-Construction and described him as "an impressive trial lawyer whose practice spans the spectrum of construction matters from insurance to payment claims." He was recognized by Lawdragon in its 500 Leading Litigators in America ranking (2025) and by Chambers USA as one of seven Minnesota lawyers ranked Band 1 for Construction (2024).

Jason focuses his litigation practice on representing clients from the construction, real estate, financial services, food, and railroad industries. He regularly appears in federal and state court on behalf of design-build firms, general contractors, architects, engineers, specialty contractors, suppliers, property management companies, real estate owners, and lenders. Jason has been ranked by Chambers USA in construction law since 2016 and has been described as "an esteemed trial lawyer with a wealth of experience assisting with litigation mandates relating to construction defects and insurance coverage issues." Prior to joining Maslon in 2002, Jason honed his trial and appellate skills as a Naval Officer with the United States Navy Judge Advocate General's Corps, where he led hundreds of courts-martial, administrative hearings, and military appeals.

The organization conducts a rigorous vetting process prior to inviting a lawyer to become a fellow. Fellows include many of the most prominent members of the insurance law bar. Maslon Partners Margo Brownell and Bryan Freeman also are fellows of the ACCC.

A trial attorney and former federal prosecutor, David has built a broad construction and insurance coverage practice. He negotiates and litigates significant construction negligence, lien, and payment disputes throughout the Midwest and has one of the top insurance coverage for construction practices in the country.

David is one of only seven lawyers to receive the highest possible Band 1 ranking from Chambers USA in its 2024 guide for Construction in Minnesota. Who's Who Legal/Lexology named him one of eight U.S. 2025 Global Elite Thought Leaders in the category of Client Choice-Construction and described him as "an impressive trial lawyer whose practice spans the spectrum of construction matters from insurance to payment claims." David has served in various leadership roles with the American Bar Association Forum on Construction Law, and in 2023, he was chair of The Trial Network, a national network of 24 leading trial law firms. David was recently elected as a Fellow of the American College of Construction Lawyers (ACCL) as well—he is one of three lawyers in the U.S. invited to join both the ACCL and ACCC.

Working out of both California and Maslon's primary office in Minneapolis, Melissa focuses her practice on the full spectrum of employment counseling and litigation matters in addition to business disputes involving non-competition and non-solicitation agreements, trade secrets, business contracts and torts, and unfair competition and trade practices. Melissa also maintains a robust employment investigations practice.

Melissa earned her law degree, cum laude, from the University of Minnesota Law School.

As a result of this decision, owners of trade secrets should consider whether they are able to bring DTSA claims even if nearly all of the alleged misappropriation occurred outside of the United States. Motorola is a significant decision in the global context of trade secrets, where cross-border litigation is increasingly common.

What Happened in Motorola?

Motorola and Hytera were direct competitors in the market for two-way digital mobile radios. In 2007, after struggling to produce a superior radio, Hytera poached three engineers from Motorola. Before their departure, the engineers downloaded thousands of Motorola documents— which contained trade secrets and source code—which they took to Hytera at Hytera’s direction. Hytera then used this stolen material to produce radios that were “functionally indistinguishable” from Motorola’s radios, which were then marketed and sold worldwide.

After the passage of the DTSA in 2016, Motorola sued Hytera, alleging that Hytera violated the DTSA, among other things, and sought to recover Hytera’s profits stemming from the misappropriation of Motorola’s trade secrets. The district court held that DTSA applied extraterritorially and awarded Motorola $135.8 million in compensatory damages and $271.6 million in punitive damages on the DTSA claim. The district court’s damages award included damages for sales outside the United States. The district court also found that the Hytera’s use of the “alleged trade secrets occurred in the United States because Hytera had advertised, promoted, and marketed products embodying the stolen trade secrets at numerous trade shows in the United States.”

Seventh Circuit’s Ruling

In a case of first impression, the Seventh Circuit affirmed in part, reversed in part, and remanded the case. In relevant part, the court of appeals affirmed the district court’s determination that the DTSA applies to conduct outside of the United States after applying conventional tools of statutory interpretation. The court of appeals also determined that 18 U.S.C. § 1837(2) imposes the only limit on DTSA’s extraterritorial reach: “[A]n act in furtherance of the offense [must have been] committed in the United States.” Thus, after finding that Hytera’s marketing of its products at trade shows in the United States constituted domestic acts of misappropriation, the Seventh Circuit concluded that the district court properly awarded Motorola damages based on “Hytera’s worldwide sales of products furthered by that misappropriation, regardless of where in the world the remainder of Hytera’s illegal conduct occurred.”

Implications for Trade Secret Owners

The Seventh Circuit’s extraterritorial application of the DTSA provides owners with a powerful tool for enforcement even when the core acts of misappropriation take place abroad. As long as a defendant takes some action in the United States in furtherance of the misappropriation—such as marketing, selling, or promoting products that were produced from stolen trade secrets—DTSA claims may be brought in U.S. courts.

This decision underscores the growing importance of safeguarding trade secrets in an increasingly interconnected global economy, where cross-border trade secret litigation is becoming more common. Moreover, a plaintiff may also be able recover damages based on a defendant’s foreign sales as long as the U.S. acts are “in furtherance” of the misappropriation.

Conclusion

The Seventh Circuit’s ruling in Motorola could have significant effects, especially for multinational companies, as it offers a practical option for addressing trade secret misappropriation that occurs in the global marketplace.

We Can Help

If you have questions about how to protect your business interests, confidential information, and trade secrets in the midst of fierce global competition, please contact Maslon’s competitive practices and intellectual property attorneys.

¹ As noted in Motorola, the First Circuit previously acknowledged in dicta that “Congress was concerned with the theft of American trade secrets abroad and intended to have extraterritorial reach.” Motorola, 108 F.4th at 480 n.7 (quoting Amyndas Pharms., S.A. v. Zealand Pharma A/S, 48 F.4th 18, 35 (1st Cir. 2022)).

Bryan has helped his policyholder clients recover millions of dollars in insurance proceeds in disputes over coverage for directors and officers; employment practices; product, environmental, professional, and fiduciary liability; as well as in litigation over first-party coverage for fidelity and crime loss, property loss, business interruption, and cyber loss.

Bryan earned his law degree from the University of Minnesota Law School, where he served for several years as an adjunct professor for the university's Insurance Law Clinic, which provides students with the opportunity to provide pro bono services to policyholders who have disputes with their insurance companies.

Jevon is an experienced trial lawyer who works with clients in a range of industries, with a focus on assisting policyholders in insurance coverage disputes and representing stakeholders in construction and real estate matters. Jevon was named an associate fellow of the Construction Lawyers Society of America in 2022. He also serves on the Minnesota State Bar Association’s construction section council and the contracts committee of the Associated General Contractors of Minnesota.

To learn more, visit: 2025 Lawdragon 500 Leading Litigators in America.

Steve, chair of Maslon's Investigations & White Collar Defense Group, is a renowned trial lawyer with deep experience in high profile cases. He concentrates his work on high stakes criminal and civil litigation, government and internal investigations, and appellate practice. Steve is well known for his role as a pro bono special prosecutor in the trial of former Minneapolis police officer Derek Chauvin for the murder of George Floyd. A former federal prosecutor, Steve has defended individual clients in a wide variety of serious matters, including murder, drug, and white collar cases, and has represented businesses in high-profile investigations by state and federal entities around the country. Steve is ranked Band 1 in Minnesota in Chambers USA for White Collar Crime and Government Investigations, sharing that honor with only four other attorneys.

David chairs Maslon's Construction & Real Estate Litigation Group and serves as vice chair of the firm board of directors and executive committee. A skilled trial attorney and former federal prosecutor, he regularly represents clients in construction and insurance coverage disputes, government and internal investigations, and a variety of commercial litigation. David was elected in 2024 as a Fellow of the American College of Construction Lawyers. He is one of only seven Minnesota lawyers ranked Band 1 in Chambers USA for Construction. Who's Who Legal named him a Global Leader in Construction and described him as "an impressive trial lawyer whose practice spans the spectrum of construction matters from insurance to payment claims." David recently served as national chair of The Trial Network, a professional network of trial lawyers from 24 leading law firms across the United States, including Maslon.

Following a seven-week trial, a federal jury in Minnesota acquitted defendant Said Shafii Farah on June 7 of all nine charges in what federal officials claimed to be the nation’s largest fraud case arising from the COVID-19 pandemic. Steve and Clayton represented Farah, one of only two defendants among the seven on trial who were found not guilty. The attorney for the other defendant found not guilty, Andrew Garvis, will also receive the award.

The acquittal was an exceedingly rare result, as only 0.4% of defendants in federal criminal cases were found not guilty at trial in 2022, according to The Pew Research Center.

Steve is a renowned trial lawyer with deep experience in high profile cases. He concentrates his work on high stakes criminal and civil litigation, government and internal investigations, and appellate practice. Steve is well known for his role as a pro bono special prosecutor in the trial of former Minneapolis police officer Derek Chauvin for the murder of George Floyd. A former federal prosecutor, Steve has defended individual clients in a wide variety of serious matters, including murder, drug, and white collar cases, and has represented businesses in high-profile investigations by state and federal entities around the country. Steve also has experience in military courts, having served as a JAG Corps Officer in the United States Army Reserve for 10 years.

Clayton works with individuals and corporations to help them navigate their interactions with the government. Focusing his practice on criminal defense, government and internal investigations, and complex civil litigation, Clayton has represented both individuals and corporations in a wide variety of both civil and criminal litigation. He has experience defending people accused of crimes in both state and federal court, ranging from DWI, assault, and drug-related offenses, to white collar crimes and murder.

Minnesota Association of Criminal Defense Lawyers (MACDL) is a statewide organization that fosters the integrity, independence, and expertise of criminal defense lawyers.

ACCL fellowship is extended to those who are found to have mastered the practice or the teaching of construction law and dispute resolution in the complex technical and legal fields pertaining to the built environment, whose professional careers have been marked by the highest standards of ethical conduct, scholarship, professionalism, and collegiality, and who have demonstrated a commitment to “give back” to the construction industry. Fewer than 240 other attorneys from the U.S., Canada, Britain, Australia, and France are Fellows in the organization.

Membership in the college is by invitation only upon nomination and election. Prospective members must be proposed for membership by a Fellow in good standing, seconded by at least two other Fellows who have personal knowledge of the nominee, and nominated by the Membership Committee. Their election by the Board of Governors is then ratified by the entire membership. To be eligible for election into the college, a lawyer must be admitted to practice law before the highest court of his or her respective state, territory, or country and have been actively and continuously engaged in the full time practice or teaching of law for a combined total of at least 15 years.

A trial attorney and former federal prosecutor, David has built a broad construction law practice. He negotiates and litigates significant construction negligence, lien, and payment disputes throughout the Midwest and has one of the top insurance coverage for construction practices in the country.

For example, in 2020, David settled claims brought against a large international structural engineering firm related to the $1.1 billion U.S. Bank Stadium Project—the largest construction project in Minnesota history. His niche national practice representing commercial policyholders in insurance coverage disputes has included many of the largest construction projects and claims across the United States. Recent matters include the LaGuardia Airport Central Terminal Reconstruction Project (NYC); Apple Campus (Cupertino, CA); Las Vegas Raiders (Allegiant) Stadium; SeaTac Airport; Long Beach International Gateway (Gerald Desmond) Bridge; Second Avenue Subway (NYC); claims on Millennium Tower, Transbay Transit Center, and Salesforce Tower (San Francisco); and the Florida International University bridge collapse (Miami).

David is one of only seven lawyers to receive the highest possible Band 1 ranking from Chambers USA in its 2024 guide for Construction in Minnesota. Who's Who Legal named him a Global Leader in Construction and described him as "an impressive trial lawyer whose practice spans the spectrum of construction matters from insurance to payment claims." Suchar has served in various leadership roles with the American Bar Association Forum on Construction Law, and in 2023, he was chair of The Trial Network, a national network of 24 leading trial law firms.