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Dorsey & Whitney Out of Danger
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Gavel.The 8th U.S. Circuit Court of Appeals threw out a decade old case on Thursday, relieving the Dorsey & Whitney law firm from the threat of $4 million in malpractice suits.

In 1999, an investment bank in Minneapolis, called Miller & Schroeder, which is now non-operational, packaged about $12 million in bonds, selling them to over thirty different banks. Those banks turned that money over to become direct lenders to a Mohawk Native American tribe located in New York State. The tribe used that money to invest in a casino.

The illegality comes because Miller & Schroeder hadn’t received the green light from the National Indian Gaming Commission to go ahead on the loan for the casino. It was proven that Dorsey was aware that this could endanger the investment, and ignored it.


The casino went under, and the loans went into default in 2000. The Mohawk tribe claimed they weren’t obligated to repay the loans because of the fact that the gaming commission never gave approval.

Miller & Schroeder sued the casino management as well as the Mohawk tribe in bankruptcy court. Dorsey encouraged Miller & Schroeder to release the tribe from the suit, and in 2007, a federal district court decided that Dorsey only wanted them released from the suit because they wanted to keep their own mistakes from being revealed.

Two federal courts – a bankruptcy court and a federal district court— ruled against Dorsey in judgments that accumulated up to $900,000.

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However, on Thursday, a majority of the 8th Circuit decided that Dorsey did not, in fact, commit malpractice. All charges against the firm were dropped.


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