Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Articles Posted in Business Law
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The case involves the Reporters Committee for Freedom of the Press, a nonprofit organization that sought to unseal court filings from federal criminal investigations. The District Court in Minnesota dismissed the application for lack of jurisdiction, and the case was appealed to the United States Court of Appeals for the Eighth Circuit.The Reporters Committee's application aimed to unseal electronic-surveillance filings, which were required to be filed under seal by a local rule. The District Court believed the request was too broad since the majority of the materials requested become unsealed after six months. The court suggested negotiations with the United States Attorney’s Office to reach a solution.The Reporters Committee subsequently filed an amended application, seeking an order directing the clerk of the court to presumptively unseal warrants and related documents after 180 days and to begin docketing the government’s applications for electronic surveillance regardless of whether a judge granted them. The Committee claimed these duties arose under the First Amendment and the common-law right of access to public records and documents.The District Court dismissed the application, concluding that the Committee lacked standing because all it had was a “generalized, abstract interest” in unsealing the records. This decision was affirmed by the Appeals Court, which held that the Committee failed to establish it suffered a “concrete” and “particularized” injury. It was also noted that the Committee did not sue anyone who could provide the relief it sought, hence there was a lack of adversity necessary for federal court adjudication. View "Reporters Comm. for Freedom of the Press v. United States" on Justia Law

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The City of Richmond Heights, Missouri filed a claim with Mt. Hawley Insurance Company under a commercial property policy for losses of tax revenue due to government-mandated COVID-19 closures. Mt. Hawley denied the claim and sued for a declaratory judgment that it was not obligated to cover the losses. Richmond Heights counterclaimed with five counts: (1) breach of contract, (2) vexatious refusal to pay, (3) fraudulent inducement and misrepresentation, (4) negligent misrepresentation, and (5) breach of fiduciary duty. The United States District Court for the Eastern District of Missouri dismissed the counterclaims, denied amendments to two of them, and granted declaratory judgment to Mt. Hawley. On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the decision of the lower court.The appellate court held that the insurance policy required "direct physical loss of or damage to property" for coverage which was not met by the COVID-19 shutdowns. The court also rejected the city's argument that the Additional Covered Property Endorsement in the policy removed the "physical damage or loss" requirement for losses of sales tax revenues. Furthermore, the court found that the city's claims of fraud, misrepresentation and breach of fiduciary duty were not distinct from its breach of contract claim and thus were properly dismissed by the district court. Lastly, the court affirmed the district court's denial of the city's motion to amend its breach of contract and vexatious refusal claims, concluding that the proposed amendments would not have survived a motion to dismiss. View "Mt. Hawley Insurance Company v. City of Richmond Heights" on Justia Law

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In this case before the United States Court of Appeals for the Eighth Circuit, Jet Midwest International Co., Ltd. (Jet Midwest International) sought attorneys’ fees and costs from Jet Midwest Group, LLC (JMG) and other defendants (collectively referred to as the Ohadi/Woolley defendants). The request was made in connection with a fraudulent transfer action filed under the Missouri Uniform Fraudulent Transfer Act (MUFTA), following a term loan agreement between Jet Midwest International and JMG which JMG failed to repay. The district court awarded attorneys’ fees and costs against the Ohadi/Woolley defendants, who were not parties to the term loan agreement, based on its finding that they conspired with JMG to violate the MUFTA.On appeal, the Eighth Circuit found that the district court erred in awarding attorneys’ fees and costs against the Ohadi/Woolley defendants based on the term loan agreement since they were not parties to that agreement. However, the court held that the district court's finding of "intentional misconduct" by the Ohadi/Woolley defendants in conspiring with JMG to violate the MUFTA could justify an attorneys’ fees award under the "special circumstances" exception to the American Rule (which generally requires each party to bear its own attorneys’ fees).The court vacated the award and remanded the case back to the district court to calculate a reasonable attorneys’ fee using the lodestar method (multiplying the number of hours reasonably expended by the reasonable hourly rates), and to determine the extent to which the claimed costs are recoverable under the relevant statute. The court's holding did not limit JMG’s ultimate responsibility for attorneys’ fees and costs under the term loan agreement. View "Jet Midwest International Co. v. Ohadi" on Justia Law

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Contitech USA, Inc., a division of tire manufacturer Continental AG, contracted with a trucking company, McLaughlin Freight Services, Inc., and its owner, Dan McLaughlin, to deliver rubber between two of its facilities. The fee schedule included a base rate and a higher "rounder" rate, which required pre-approval from Contitech. Over three years, McLaughlin submitted 645 unapproved "rounder" bills to the third-party payments administrator, using fraudulent emails that purported to show pre-approval from Contitech. Contitech discovered the scheme and sued for fraud, unjust enrichment, and breach of contract.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that there was sufficient evidence for a reasonable jury to find for Contitech on the fraud and unjust-enrichment counts. The court rejected McLaughlin's argument that Contitech failed to prove proximate cause and damages, noting that under Iowa law, a defrauding defendant cannot claim that its misrepresentations did not cause any damages to the plaintiff. Furthermore, McLaughlin was contractually obligated not to charge rounder rates without pre-approval from Contitech. Thus, a reasonable jury could have found that the difference between the contractual base rate and the actual billed amount was the amount of money McLaughlin received, which in equity and good conscience belonged to Contitech.The court also affirmed the district court's decision to remit Contitech's unjust-enrichment award to $0 and to remit McLaughlin’s damages award to prevent double recovery. The court reasoned that while a party is entitled to proceed on various theories of recovery, it is not entitled to collect multiple awards for the same injury. Furthermore, the court held that the district court did not abuse its discretion in granting pre-judgment interest to Contitech, and that postjudgment interest is mandatory under 28 U.S.C. § 1961 and should be awarded regardless of whether the district court orders it. View "Contitech USA, Inc. v. McLaughlin Freight Services, Inc." on Justia Law

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The United States Court of Appeals for the Eighth Circuit ruled in a case brought by the State of Missouri against several Chinese entities, including the government of the People's Republic of China, the Wuhan Institute of Virology, and others. Missouri accused the defendants of negligence in relation to the COVID-19 pandemic, alleging that they allowed the virus to spread worldwide, engaged in a campaign to keep other countries from learning about the virus, and hoarded personal protective equipment (PPE). The court decided that most of Missouri's claims were blocked by the Foreign Sovereign Immunities Act, which generally protects foreign states from lawsuits in U.S. courts. However, the court allowed one claim to proceed: the allegation that China hoarded PPE while the rest of the world was unaware of the extent of the virus. The court held that this claim fell under the "commercial activity" exception of the Foreign Sovereign Immunities Act, as it involved alleged anti-competitive behavior that had a direct effect in the United States. The case was remanded for further proceedings on this claim. View "The State of Missouri v. The Peoples Republic of China" on Justia Law

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The case before the United States Court of Appeals for the Eighth Circuit involved Allen Thomas Bloodworth, II, a business owner who operated two towing businesses in Kansas City. Bloodworth alleged that the Kansas City Board of Police Commissioners and fourteen officers of the Kansas City Police Department conspired to stop him from running his businesses and shut down his ability to conduct business in Kansas City. He brought 17 state and federal claims, including defamation, tortious interference with contract and business expectancy, intentional infliction of emotional distress, and negligent hiring, training, supervision, or retention. He also alleged Fourth Amendment violations for an unlawful warrant search and seizure of his residence and business, the shooting of his dog during the search, and the seizure of business records.The district court granted summary judgment in favor of the defendants. On appeal, the Eighth Circuit affirmed the ruling. The appellate court concluded that Bloodworth failed to link the specific conduct of individual defendants to the alleged constitutional violations, and his claims were based on general assertions mostly. It also ruled that Bloodworth failed to establish that the defendants' conduct was extreme and outrageous to support his claim for intentional infliction of emotional distress. The court further found that Bloodworth failed to establish a constitutional violation resulting from the official policy, unlawful practice, custom, or failure to properly train, retain, supervise, or discipline the police officers. Therefore, there was no basis for municipal liability against the Kansas City Board of Police Commissioners. View "Bloodworth v. Kansas City Board of Police Commissioners" on Justia Law

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In this case, the United States Court of Appeals for the Eighth Circuit affirmed the decision of the United States District Court for the Southern District of Iowa to dismiss the lawsuit of Iowa-based livestock feed seller Hawkeye Gold, LLC against China National Materials Industry Import and Export Corporation, also known as Sinoma, for lack of personal jurisdiction. Hawkeye Gold sued Sinoma to recover an unpaid default judgment it obtained against Sinoma's now-defunct wholly owned United States subsidiary, Non-Metals, Inc., for breach of a contract to purchase livestock feed. After six years of litigation, the District Court dismissed the case because it did not have personal jurisdiction over Sinoma, a decision which Hawkeye Gold appealed. The Appeals Court, after reviewing the evidence, agreed with the District Court's conclusion that Sinoma had insufficient minimum contacts with Iowa to support personal jurisdiction. The Court also rejected Hawkeye Gold's argument that Sinoma was a party to the contract or that Non-Metals was the alter-ego of Sinoma. Furthermore, the Court affirmed the District Court's denial of Hawkeye Gold's request for sanctions against Sinoma for alleged discovery violations. View "Hawkeye Gold, LLC v. China National Materials" on Justia Law

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Breadeaux’s Pisa, LLC (“Breadeaux”) initiated this action against its franchisee, Beckman Bros. Ltd. (“Main Street Pizza”), in federal court seeking a preliminary injunction, a permanent injunction, and a declaratory judgment. After litigating its preliminary injunction, mediating, and participating in discovery proceedings, Breadeaux filed a demand for arbitration in which it sought to relitigate its preliminary injunction and avoid the court’s adverse discovery rulings. Breadeaux then moved to stay all proceedings pending completion of arbitration. The district court denied Breadeaux’s motion.   The Eighth Circuit affirmed. The court explained that Section 3’s stay provision is mandatory when “the issue involved in such suit or proceeding is referable to arbitration” under a valid arbitration agreement. 9 U.S.C. Section 3. The court wrote that it is unpersuaded by Breadeaux’s assertion that the only reasonable reading of the arbitration provision in the Agreement is that all claims or disputes, besides Breadeaux’s equitable claims, must be arbitrated. Additionally, Breadeaux elected to enforce the Agreement by judicial process, not through mediation and arbitration. Under these circumstances, Breadeaux’s claims are not referable. View "Breadeaux's Pisa, LLC v. Beckman Bros. Ltd." on Justia Law

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Land O’Lakes and Commercial Bag entered into a “Packaging Materials Supply Agreement.” Under the Agreement, Land O’Lakes agreed to “make best reasonable efforts” to buy fifteen to twenty percent of its annual polypropylene bag volume from Commercial Bag. Due to concerns with the new manufacturer, however, Land O’Lakes decided to purchase a portion of its polypropylene bags from a domestic manufacturer instead. Land O’Lakes informed Commercial Bag of this decision, and said that it would “result in a discontinuation of the business relationship between Land O’Lakes and Commercial” for polypropylene bags. Land O’Lakes gave Commercial Bag 90 days’ notice that it was terminating the Agreement. Commercial Bag sued, alleging that Land O’Lakes breached the contract by terminating the Agreement without cause, reducing its purchases of polypropylene bags from Commercial Bag, and refusing to pay Commercial Bag’s invoice for plates and artwork. The district court granted summary judgment for Land O’Lakes.   The Eighth Circuit affirmed. The court explained that it agreed with the district court that the term “Agreement” in Amendment #2 is not ambiguous. Land O’Lakes was permitted under the contract to terminate the agreement without cause. Amendment #1 added the “without cause” termination provision to Section 2 of the Agreement, and Amendment #2 did not remove that provision. So the “Agreement” to which Amendment #2 referred was necessarily the original agreement as amended by Amendment #1. The court concluded that because Commercial Bag produced no evidence that it actually incurred costs for plates and dies, the district court correctly granted judgment for Land O’Lakes on this claim. View "Commercial Bag Company v. Land O'Lakes, Inc." on Justia Law

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In March 2020, Concord Baptist Church of Jefferson City, Inc. (Concord Baptist) sustained damage to its facilities in a severe storm. After disagreements with its insurer, Church Mutual Insurance Company (Church Mutual), regarding the amount of loss, Concord Baptist initiated this action, alleging breach of contract and vexatious refusal to pay. The district court granted summary judgment in favor of Church Mutual, concluding that the undisputed facts demonstrated that Concord Baptist failed to comply with a cooperation clause contained in the insurance policy, which precluded coverage. Concord Baptist appealed.   The Eighth Circuit affirmed. The court explained that because Concord Baptist admits that it materially breached the policy, the court need not address Concord Baptist’s argument regarding whether the failure to submit to an EUO was a material breach. However, the court noted that Missouri courts have found a material breach where an insured failed to submit to an EUO before commencing an action against the insurer. Regarding the second element, whether Church Mutual suffered substantial prejudice from Concord Baptist’s material breach, the court agreed with the district court that the undisputed facts show that it did. Finally, as to the third element, whether Church Mutual exercised reasonable diligence in attempting to procure Concord Baptist’s cooperation, the court again agreed with the district court that the undisputed facts demonstrate Church Mutual’s diligence. View "Concord Baptist Church of Jefferson City v. Church Mutual Insurance Company" on Justia Law