The Blubber

One of Minnesota's long-standing bankruptcy law firms has filed for Chapter 11 bankruptcy protection following a five-year legal battle with another bankruptcy law firm over allegations of false advertising and "click fraud."

LifeBack Law Firm, based in St. Cloud and with eight offices across Minnesota, filed for protection from creditors on Saturday in U.S. Bankruptcy Court in Minnesota. The filing reveals that LifeBack owes $290,000 to Hoglund, Chwialkowski & Mrozik, a part of Hoglund Law in Roseville.

Efforts to reach LifeBack President Wesley Scott for comment were unsuccessful.

According to the bankruptcy filing, the debt owed to Hoglund originates from a court-sanctioned arbitration award.

The bankruptcy filing marks the end of a legal dispute that began five years ago.

In January 2019, Hoglund initiated a lawsuit against LifeBack in Hennepin County District Court, alleging false advertising, unfair enrichment, contract interference, and deceptive trade practices.

Hoglund's primary claim was that LifeBack, previously known as Kain & Scott, had engaged in "click fraud," a costly scheme where Scott allegedly clicked excessively on specific internet trigger words. This action aimed to repeatedly display Hoglund's paid advertisements, disrupting its online marketing efforts and depleting its Google advertising budget rapidly, rendering its ads ineffective.

Hoglund claimed that approximately 63% of its bankruptcy practice revenue came from Google Ads online marketing, which it had been using for almost 15 years.

LifeBack denied the accusations and counterclaimed against Hoglund with similar allegations.

In February 2023, the case proceeded to arbitration.

During arbitration, LifeBack claimed that Hoglund had engaged in false advertising by being listed on Google with over 200 law office addresses in multiple states, despite Robert Hoglund having just one law office in Roseville.

On May 15, 2023, the arbitrator, retired Hennepin County District Judge Thomas Fraser, ruled in favor of Hoglund, stating that LifeBack had indeed committed click fraud. Fraser issued a monetary award in Hoglund's favor.

Fraser's ruling acknowledged the incorrect addresses listed online for Hoglund but attributed the error to Google, not Hoglund. Fraser also noted that Hoglund had invested significant time and money in rectifying Google's inaccurate listings.

Following an appeal by LifeBack, Hennepin County District Court Judge Francis Magill upheld the arbitration ruling in late January 2024. Judge Magill also denied LifeBack's request to dismiss the award and various aspects of Hoglund's original lawsuit, ruling in favor of Hoglund's right to be reimbursed attorney fees.