Sturgis Area Business Alliance

12/04/2020

12/19/2018

A brief summary of the latest action on the SMRI lawsuit VS Rushmore Photo and Gift re licenses and marks.

Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc., No. 17-2731 (8th Cir. 2018)

Annotate this Case
Court Description: Arnold, Author, with Wollman and Kelly, Circuit Judges] Civil case - Trademarks. In this action for violation of plaintiffs' trademarks on the Sturgis Motorcycle Rally, the court has independently reviewed the record and has found no alternative ground to support a finding that plaintiffs have been the substantially exclusive users of the "Sturgis" word mark in relation to the rally or rally-related products and services; if the jury could not make that finding, it also had no basis to infer that the mark had become so associated in the public mind with the plaintiffs' goods that the mark serves to identify the source of the goods and distinguish them from those of others; the trial record thus does not support a finding that plaintiffs own the rally or its intellectual property or that the Sturgis mark is valid; the jury's finding that defendants diluted the Sturgis mark is overturned; the jury's verdict that defendants cybersquatted must also be overturned as it based on a determination that the mark is valid; the jury was not presented with sufficient proof to conclude plaintiff SMRI's unlicensed marks "Sturgis Motorcycle Rally" and "Sturgis Rally & Races" are valid and protected; the evidence was sufficient to support the jury's finding that plaintiff's mark "Sturgis Bike Week" was valid; the trial evidence supports the finding that plaintiffs' "Monahan Composite Mark" was widely used in connection with the rally and that defendants' infringement of the mark was willful and intentional; however, the differences between the design of a shot glass and the mark are so obvious that the jury did not have any basis in the record for its finding that the defendants had produced a counterfeit of the Monahan mark; plaintiffs' claims for deceptive practices, false advertising and unfair competition were not time-barred; there was sufficient evidence from which the jury could find plaintiffs were injured by the practices and that actual damages existed; defendant JRE, a defunct corporation did not have any undistributed assets, and under South Dakota law, plaintiffs had no enforceable claim against it; the district court order granting defendants the defenses of laches and acquiescence is vacated in light of this court's determinations that certain goods were not infringing; the court's permanent injunction is reversed and remanded for further proceedings consistent with this decision; the court did not abuse its discretion in denying plaintiff SMRI an award of attorney's fees under 15 U.S.C. Sec. 1117(a); on remand the court may wish to revisit the issue of costs and fees.

01/05/2018

Thanks to the Sturgis Voice link here is some information that may be of interest to Sturgis Citizens with regard to the issues facing the Ambulance and Volunteer Fire Department .

ANALYSIS OF STURGIS
AMBULANCE & FIRE SERVICES
November 2017
Overview
At its November session, the Sturgis City Council discussed establishment of two separate tax districts to
fund fire and ambulance services.
In that session, Sturgis City Manager Dan Ainslie said these two tax districts would help offset increases
in ambulance call volume and reductions in reimbursements provided by private and government
insurance providers.
Ainslie claimed the ambulance service receives a significant number of calls for service outside of
Sturgis city limits, even though both fire and ambulance services are primarily funded by the City of
Sturgis and its taxpayers. In answer to his assertions, the City Council passed two resolutions approving
establishment of the new taxing entities. If the districts are formed, they will not take effect until
January 1, 2019, according to reports.
Contrary to assertions by Ainslie, a review of the last six annual reports prepared by the Sturgis
Ambulance Service reveals that 85% of its calls for service are for patients within city limits or at Fort
Meade VA facilities. In more recent years, a significant number of other calls for service outside
Sturgis are attributable to cooperating agreements the Ambulance Service has made with other
entities, including Lead-Deadwood Hospital, and for transport services made in agreement with the
Veterans Administration. This includes transporting patients from Fort Meade to other VA medical
facilities as far away as Denver.
Call volumes and financial data related to the Sturgis Volunteer Fire Department are not available
online, and have been requested from SVFD Chief Tom Triggs.
To date, no evidence of significant increases in call volumes outside Sturgis city limits for either the
Ambulance Service or the Fire Department have been presented by city officials. A review of
Ambulance Service annual reports over the past six years does not reflect or delineate any significant
increase in call volume outside city limits.
Furthermore, with the exception of the 75th Sturgis Rally in 2015, when double the number of bikers
descended on Sturgis compared to an average year, call volume for Ambulance Service during the Rally
actually decreased in 2016. Statistics for 2017 have yet to be released by the city, even though they
certainly have been tallied.
Upon request, we have reviewed available information from the Sturgis Ambulance Service and
requested unavailable statistics related to the Sturgis Volunteer Fire Department. Following are our
initial observations, which will be updated as further information becomes available.
2
Executive Summary
 Despite references by Sturgis City Manager Dan Ainslie that ambulance calls for service outside
city limits have “increased significantly” in recent years, the city has provided no evidence of
that.
 Similarly, as no fire department statistics are available online at the official City of Sturgis
website, it is impossible to determine whether these assertions are true in relation to this
department.
 City statistics included in annual reports for the Sturgis Ambulance Services provide no
corroborating evidence that calls from outside Sturgis have significantly increased.
 In fact, according to its own reports, a full 85% of all calls for ambulance services in 2016 were
attributable to calls originating in Sturgis (70.65%), or calls originating at Fort Meade VA
(15.92%).
 Due to additional mutual aid or cooperating agreements with entities such as Lead-Deadwood
ambulance services, Sturgis Ambulance may be stretching resources too thinly.
 From a review of six most recent annual reports, there is no evidence presented that the dire
financial condition of Sturgis Ambulance has been created or exacerbated by increased calls
from patients outside city limits or by nonpayment from those same patients. In fact,
payments made by those outside-of-city residents may well be supporting the ambulance
service.
 Ambulance service calls attributable to the Sturgis Rally have not experienced significant
increases and, in fact, decreased in 2016, and were down from 2014, and on par with 2013.
The city has not released the number of 2017 service calls, perhaps for a reason.
 With write-offs averaging 44% in recent years, something unsustainable for any private entity,
Sturgis Ambulance in fact is a victim of its own inability to secure payment for services
rendered, including low Medicaid, Medicare and VA reimbursements.
 Review of the Sturgis Ambulance Service most recent annual reports, and statements by city
officials notwithstanding, it appears that the City of Sturgis seeks to create two taxing districts
to generate funds from county residents to offset its own inability to collect reimbursements
from patients and governmental entities who have availed themselves of its services in the past.
3
Observations From Sturgis Ambulance Service Annual Reports
The Sturgis/Meade County Ambulance Service provides 24-7 Advanced Life Support emergency
response. The Service has seen a significant growth in calls for service over the last nine years.
Calls for Service
Year Calls for Service
2009 1,076
2010 1,191
2011 1,385
2012 1,593
2013 1,769
2014 2,028
2015 2,187 (75th Rally)
2016 2,137
2017 1,743 through 10/31
FISCAL 2011
In 2011 the department responded to 1,385 calls for service, had 1,422 patient contacts and logged over
76,000 miles. Since January of 2002, when the department took over operations of the ambulance
service from Meade County; the service has responded to 11,481 calls for service.
Today the annual per capita City of Sturgis citizen expense is less than $29. Nationally statistics show the
average per capita fire department cost is $118.45 per citizen served.
In this annual report, then-Chief Roan Koan stated: “I am also happy to advise the council, since
ambulance operations were transferred, the service has been self-supporting and no tax burden has
been placed on the citizens of Sturgis or Meade County. Prior to 2002, the ambulance service required
taxpayer assistance to cover the expenses incurred for operations.”
2011
Number of calls: 1,411
Accounts receivable: $889,456.67
Amount collected: $609,044.15
Write-offs to date: $151,972.26
Collections remaining: $128,440.26
FISCAL 2012
Unavailable online
4
FISCAL 2013
The Ambulance Service was dispatched out for 1,769 calls in 2013, an increase of 11.05% versus 2012
call volume. Each year since 2011, the Service has seen its call volume increase in double digits. As a
result, the Service has increased its staffing in order to meet the increased need of the community.
The 2013 Sturgis Motorcycle Rally was a busy season for the Sturgis Ambulance Service. The total call
volume in 2013 was up 7.77% versus the 2012 call volume for the same day of the week. The 2013 call
volume was up 19.17% versus the same days in 2011.
In 2013, the decision was made to internalize billing. The Service had previously contracted with DB
Billing in Castlewood, South Dakota. DB Billing had been the billing provider since at least 2008. Staff
began auditing procedures and had concerns. For example, between 2010 and 2012, 150 runs were not
billed and all bills were processed at the EMT ‐ B service level (even if a higher level of care provided).
The level of service is very important as the City bills each patient depending on the maximum level of
care provided by staff that the patient required. For example, for patients receiving critical care
Medicare will pay an additional $1,000 for more advanced life support care.
2013
Number of calls: 1,769 up 11.05% from previous year
Accounts receivable: $1,120,929.54
Amount collected: $875,893.40
Write-offs to date: $686,207.56
2014
65.65% of the calls originated in Sturgis. 18.30% originated at Fort Meade VA facilities.
58.57% of our call volume was 911 Emergent.
80.95% of the time, EMS staff transport the patient
As usual, the 2014 Sturgis Motorcycle Rally was a busy season for the Sturgis Ambulance Service. The
total call volume in 2014 was up 9.84% versus the 2013 call volume for the same day of the week. In
2014, the Ambulance Service again staged an ambulance out east of Sturgis during the Sturgis
Motorcycle Rally and that decreased response time. This practice was started in 2013. We also provided
support to the Buffalo Chip in the form of backboards in order to ensure better patient care and faster
transfer when our crews arrived on scene. The Buffalo Chip also agreed to run under the Sturgis
Ambulance Service’s medical protocols for the same reasons.
In 2014, billing was handled internally be Department staff. The Service received its Medicare
certification in March 2014 after more than a year of documentation filing and paperwork. Two EMS
employees have been cross trained and certified as Certified Ambulance Coders (CAC) to handle billing
responsibilities.
2014
Number of calls: 1,956 up 10.57%
Net accounts receivable: $272,252.84
Gross accounts receivable: $1,067,224.93 (Estimate that $793,970.55 is uncollectable)
Amount collected: $994,264.93
Write-offs to date: $793,970.55
5
Note: At the end of 2014, the staff began steps to send uncollected claims to small claims court,
partnering with the City Attorney’s office.
FISCAL 2015
68.32% of the calls in 2015 originated in Sturgis.
17.73% originated at Fort Meade VA facilities.
64.80% of our call volume was 911 Emergent.
79.94% of the time, EMS staff transport the patient.
2015
Number of calls: 2,273 up 16.21%
Net accounts receivable: $368,835.99
Gross accounts receivable: $1,341,486.91 (Estimate that $793,970.55 is uncollectable)
Amount collected: $1,184.123.46
Write-offs to date: $945,650.92
FISCAL 2016
70.65% of the calls in 2016 originated in Sturgis (which includes Blucksberg and other locales around
Sturgis but not necessarily within City limits).
15.92% of our calls in 2016 originated at the Fort Meade VA facility.
During the 76th Rally, of the 204 calls that we responded to, only 143 (70.10%) were transported and
treated by EMS. 172 calls (84.31%) were 911 emergent response to a scene.
184 calls were ALS Ground Transport (90.20%).
The average distance to scene is 6 miles.
2016
Number of calls: 2,136 down 6% from 2015
Net accounts receivable: $309,786.57
Gross accounts receivable: $980,108.78
Amount collected: $1,093,421.95
Write-offs to date: $670,322.21
Write-offs require transfer of funds:
In 2016, “we have been requiring to transfer money from the Water Fund of the City of Sturgis to
balance at year end, as required by State law. In 2016, this amount was $141,513.66. This situation is
unsustainable in the long term. Further, there is a tax equity concern that the property tax-paying
residents of the City of Sturgis are significantly subsidizing the service costs for the county residents who
also rely on the Ambulance Service. As such, the City has begun conversations in 2017 to discuss
solutions with the Meade County Commission.”
6
Reimbursement Challenges Noted in 2016 Annual Report
It is important to note that industry wide, 40 to 60% of accounts receivable are considered
uncollectable. The City of Sturgis estimates approximately a 44% uncollectable rate. This percentage is
based on our historical revenue and the Ft. Meade (federal) revenue stream. The Service must still bill
the full rate; however, actual reimbursements are established via contracts with private insurance
companies, Medicaid and Medicare. These rates are far lower than the billed rate, resulting in
reimbursements that are actually lower than the total billed.
In early summer 2016, we contracted with AAA Collections out of Sioux Falls to handle collection on
delinquent accounts. AAA Collections was selected because they specialize in medical collections. We
continue to struggle with reimbursement rates from private insurance and Medicare. But, Medicaid
reimbursement rates are terrible.
Most seriously, in recent years, the State’s Medicaid reimbursements have dropped drastically and are
not sufficient to sustain an ambulance service. In many instances, the rate of reimbursement does not
fully cover the fuel and personnel costs utilized to treat and transport the patient. This continued lack of
funding results in reduced expenditures by the Ambulance Service (i.e. on equipment or new
ambulances). This trend will result in significantly reduced emergency medical services to the State’s
residents, especially rural residents. In early 2017, we are beginning to see this locally (specifically Faith
and even Piedmont, which is supported by an ambulance district).
And, not only does Medicaid pay at a significantly lower percentage, it does not pay more for a higher
level of service provided. This, in conjunction with a shortage of Paramedics Statewide, will force
ambulance services to become Basic Life Support only services (with EMTs only and no Paramedics).
While a BLS Service does result in a reduction in patient care, it is better than no service at all. For both
reasons (poor reimbursement rates and lack of ALS providers), the Faith Ambulance Service is in the
process of converting from an ALS to a BLS service in March 2017.
Unfortunately, this conversation about Medicaid funding challenges with our legislators is one that was
not resolved and will continue in the 2018 session.
Other Write-offs
The Ambulance Service also regularly financially writes off the following accounts, in accordance with
existing policy:
-- Death of patient
-- Death of Current Payer
-- Patient’s declaration of bankruptcy
-- Patient is incarcerated and all private pay billing options have been exhausted, leaving Meade County
Jail as the “Current Payer”. (Under our current relationship with Meade County Jail, we do not bill the
jail for emergency medical services rendered.)
-- Statute of limitations on billing to Medicare, Medicaid, and/or private insurance has lapsed
-- Discretionary write-off due to internal appeal process
-- Accounts declared “Uncollectible” by AAA Collections
-- Accounts that have aged beyond 4 years (per our internal audit controls)
7
2017
The 2017 Annual Report will be published by March 15, 2018
TOTAL RALLY CALLS
Interestingly, recognizing that statistics note that the 75th Rally was an anomaly with nearly twice the
visitation of normal Rally years, calls made for ambulance services during the week of the Sturgis Rally
actually decreased in 2016 from 2014, and were on par with 2013. And, the City of Sturgis has not
chosen to release the number of calls experienced during the 2017 Rally, which they surely have tallied.
2016 -- 204
2015 -- 382 (extended dates for 75th)
2014 -- 212
2013 -- 193
2012 -- 178
2011 -- 156
After formal request to SVFD Chief Tom Triggs, I can now report the following:
Calls to the Sturgis Volunteer Fire Department seem to support the contention by city
officials that calls from outside of city limits are significant. In fact, they exceed calls
from inside city limits in each of the last three years.
Members of the Sturgis Volunteer Fire Department serve and protect the community of
Sturgis as well as a 580 square-mile area of Meade and Lawrence Counties. The
response area includes Sturgis, the Fort Meade VA Medical Complex, the historical Fort
Meade Recreation Area, Bear Butte State Park, and the northern edge of the Black Hills
National Forest.
The department serves a primary population of 13,000 and provide mutual aid to more
than 25,000 people in Meade and Lawrence Counties.
CALLS FOR SERVICE
2014
178 calls -- 87 city limits; 91 county
2015
215 calls -- 95 city limits; 120 county
2016
217 calls -- 83 city; 134 county
CITY BUDGET FOR SVFD
2017 city budgeted $ 152,908
2016 city budgeted $145,048
2015 city budgeted $147,986
2014 city budgeted $152,144