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

This case arises out of the business relationship Joseph H. Whitney entered into with John R. Morrison. The court discussed the relationship and the various corporations in a prior opinion. See Whitney v. The Guys, Inc., 700 F.3d 1118, 1121–23 (8th Cir. 2012). In this appeal, Whitney argues that he was a shareholder of the several companies and that the district court erred in holding otherwise. He also argues that the district court erred in its statute-of-limitations analysis because he was not on inquiry notice prior to October 2007. The court concluded that Whitney was on inquiry notice when he knew he was not being treated as a shareholder. Therefore, a reasonable jury would be compelled to conclude that the July 20, 2007 email and the accompanying deposition testimony show such notice. Accordingly, the court affirmed the judgment. View "Whitney v. The Guys, Inc." on Justia Law

Plaintiff requested payment for the one year remaining on his employment contract, but the FDIC advised that the payment was a prohibited “golden parachute,” under 12 U.S.C. 1828(k) and 12 C.F.R. 359.1, which the bank could not make without prior agency approval. Plaintiff, a former executive at Reliance Bank, filed suit against the bank and the FDIC, alleging a breach of contract under Missouri law and sought a declaration that federal law does not prohibit the payment. The district court upheld the FDIC determination and granted summary judgment to the bank. The court rejected plaintiff's argument that the agency determination is not worthy of deference because it is inconsistent with FDIC positions taken elsewhere. Rather, the court concluded that Chevron and Auer deference is irrelevant because the agency treats the word "contingent" as unambiguous and relies on its dictionary meaning. The court concluded that one could reasonably characterize the payment obligation as contingent on either plaintiff’s termination or his continued employment. In this case, plaintiff alleged the bank came to owe the payment because of his termination, not because of services he rendered. Therefore, the agency determined the payment was contingent on termination, and the court found this finding was neither arbitrary nor capricious. The court concluded that the bank’s obligation to pay plaintiff was rendered impossible when the FDIC determined the payment was a golden parachute. The court rejected plaintiff's remaining claims and affirmed the judgment. View "Rohr v. Reliance Bank" on Justia Law

Plaintiff filed suit under Sarbanes-Oxley, 18 U.S.C. 1514A(a)(1)(C), and Dodd-Frank, 15 U.S.C. 78u-6(h)(1)(A)(iii), after Oracle terminated his employment in retaliation for reporting that Oracle was falsely projecting sales revenues. The district court granted summary judgment to Oracle. The court joined the Second, Third, and Sixth Circuits and adopted the "reasonable belief" standard in Sylvester v. Parexel Int’l LLC standard, rejecting Platone v. FLYI, Inc.'s "definite and specific" standard, in determining that the employee must simply prove that a reasonable person in the same factual circumstances with the same training and experience would believe that the employer violated securities laws. Under the Sylvester standard, the court concluded that plaintiff's belief that Oracle was defrauding its investors was objectively unreasonable where missed projections by no more than $10 million are minor discrepancies to a company that annually generates billions of dollars. The court also concluded that plaintiff's claim under Dodd-Frank fails because he did not make a disclosure protected under Sarbanes-Oxley. Accordingly, the court affirmed the judgment. View "Beacom v. Oracle America, Inc." on Justia Law

Cargill and American Home filed suit against Greater Omaha, alleging breach of contract and warranties based on allegations that Greater Omaha sold raw beef trim tainted with E.coli O157:H7. Greater Omaha counterclaimed for tortious interference with business relationships and expectancies. The district court granted summary judgment in favor of Cargill on Greater Omaha’s counterclaim. A jury returned a verdict for Cargill, awarding $9 million in damages. Greater Omaha appealed. The court concluded that there was no error in the admission of expert testimony from Dr. Harrison and Dr. Singer where the district court did not abuse its discretion in determining that the expert evidence met the standard for admissibility and that the evidence of the Ohio cases was best used for impeachment and cross-examination; the district court did not err in admitting the original and revised December 2007 Notice of Intended Enforcement (NOIE) and Greater Omaha’s response thereto, and there was no clear and prejudicial abuse of discretion; the court rejected Greater Omaha's challenge to the district court's jury charge and instruction; there was no abuse of discretion in the district court’s decision to forego instructing the jury on exclusion or modification of implied warranties; the jury did not reach an impermissible compromise verdict; and the district court did not apply the wrong standard of proof or otherwise err in granting Cargill’s motion for summary judgment. Accordingly, the court affirmed the judgment. View "American Home Assurance Co. v. Greater Omaha Packing Co." on Justia Law

TCF filed suit against Market, alleging claims concerning the statutes of limitations for fraud, contract, and negligence. TCF had entered into a contract with Market under which TCF purchased Field Asset Verifications for Minnesota properties in 2002. The district court granted summary judgment for Market. The court held that the district court properly held that TCF discovered sufficient facts so that the limitations period for TCF’s fraud claims expired before TCF filed suit in September 2011. The court also held that the non-fraud claims accrued more than six years before TCF filed suit and that the limitations period was not tolled to prevent expiration prior to September 2011. Accordingly, the court affirmed the judgment. View "TCF Nat'l Bank v. Market Intelligence, Inc." on Justia Law

American Century, a mutual fund, offers investment portfolios, including Ultra Fund. Ultra Fund invested in PartyGaming, a Gibraltar company that facilitated internet gambling. In 2005, PartyGaming made an initial public offering of its stock, which was listed on the London Stock Exchange. In its prospectus, PartyGaming noted that the legality of online gaming was uncertain in several countries, including the U.S.; 87 percent of its revenue came from U.S. customers. PartyGaming acknowledged that “action by US authorities … prohibiting or restricting PartyGaming from offering online gaming in the US . . . could result in investors losing all or a very substantial part of their investment.” Ultra Fund purchased shares in PartyGaming totaling over $81 million. In 2006, following increased government enforcement against illegal internet gambling, the stock price dropped. Ultra Fund divested itself of PartyGaming, losing $16 million. Seidl, a shareholder, claimed negligence, waste, and breach of fiduciary duty against American Century. The company refused her demand to bring an action. Seidl brought a shareholder’s derivative action. The Eighth Circuit affirmed summary judgment for the defendants, concluding that Seidl could not bring suit where the company had declined to do so in a valid exercise of business judgment. The litigation committee adopted a reasonable methodology in conducting its investigation and reaching its conclusion. View "Seidl v. Am. Century Co., Inc" on Justia Law

Graco manufactures fast-set spray foam equipment (FSE) and sells it to distributors, who resell to consumers like Insulate. In 2005 and 2008 Graco purchased competing FSE manufacturers, ultimately raising its market share “to above 90%.” In 2007, Graco sent a letter to its distributors citing the “best efforts” clause in its distributor agreements, stating: It is our opinion that taking on an additional competitive product line may significantly reduce the “best efforts” of a Graco distributor.” In 2009, Foampak, a Graco distributor, considered carrying Gama products but chose not to after Graco threatened to end its distributorship. Graco sued Gama, alleging theft of trade secrets; Gama counterclaimed that Graco had unilaterally monopolized the FSE market (Sherman Act, 15 U.S.C. 2). In 2013, the FTC accused Graco of unlawfully acquiring its competitors (Clayton Act, 15 U.S.C. 18). Graco and the FTC entered a consent agreement which confirmed Graco would not engage in any practice “that has the purpose or effect of achieving Exclusivity with any Distributor.” The agreement did “not constitute an admission by [Graco] that the law ha[d] been violated.” Insulate filed suit. The Eighth Circuit affirmed dismissal on the pleadings. Insulate did not adequately plead concerted action in the existence of written anticompetitive contracts or implied exclusivity agreements. View "Insulate SB, Inc. v. Advanced Finishing Sys., Inc." on Justia Law

Kevin and Lisa Nutt worked at Osceola Nursing Home. Funds were withheld from their paychecks as “pre-tax insurance.” After Kevin was injured, they learned that Osceola had not paid premiums. Their policy had lapsed; the Nutts owed $233,000 for medical services. The insurer told Lisa that it could reinstate the policy and pay the bills if Osceola made the delinquent premium payments. Osceola did not do so. Osceola then entered into a contract with Cooper, who specialized in turning around financially troubled nursing homes. Cooper’s company, Berryville, ultimately took title to the property. Before the closing, Cooper could assume management under a temporary lease. Cooper assigned this lease to OTLC, created for the project and owned by Hargis. Though OTLC was independent, Hargis regularly worked with Cooper in nursing-home ventures. OTLC operated the facility for Cooper and Berryville for three years. Nutt told Hargis about the outstanding bills. Days later, OTLC fired both Lisa and Kevin. They sued. The court entered default judgment against Osceola under the Employee Retirement Income Security Act, 29 U.S.C. 1001; found that they could not provide adequate relief; and, on a theory of successor liability, held OTLC liable. The Eighth Circuit reversed, stating that if successor liability required only subsequent operation, it would discourage the free transfer of assets to their most valuable uses. OTLC was not a party to the unlawful practices of Osceola and operated without significant connection to the culpable parties. View "Nutt v. Osceola Therapy & Living Cntr., Inc." on Justia Law

Grand Rios purchased a Brooklyn Park, Minnesota hotel and waterpark, assuming $4.61 million of the debt owed to Northeast Bank by the original owner, and purchased insurance from Hanover Insurance. The roof was damaged by a snowstorm. Sill was hired to handle the claim. Hanover issued checks totaling $350,000 made jointly payable to Grand Rios, Northeast, and Sill. Without Northeast’s endorsement, knowledge, or consent, Wells Fargo Bank paid the full amount of the checks to Grand Rios. Months later, Northeast and Grand Rios entered into a Settlement Agreement under which Grand Rios agreed to a voluntary foreclosure, assigned all insurance proceeds to Northeast, paid $50,000 to Northeast, and allowed a state court to appoint a receiver for the hotel and waterpark. Hanover made additional insurance payments of approximately $1.2 million. Ultimately Northeast received approximately $200,000 more than the debt Grand Rios owed and sold the property to CarMax. Northeast sued Hanover and Wells Fargo. The district court dismissed Hanover and granted summary judgment in favor of Northeast against Wells Fargo.. The Eighth Circuit reversed. While the payment constituted conversion under the UCC, Minn. Stat. 336.3-420, Northeast has not suffered any damages because it was subsequently paid the full amount of the debt for which the checks were security. View "Northeast Bank v. Wells Fargo Bank, N.A." on Justia Law

Tipton, Gilbert, and Padgett worked for Treadway, under agreements that contained a noncompete provision: when you leave Treadway’s employ, for whatever reason, you will not compete with Treadway … by soliciting or accepting business from Treadway’s customers within your territory … for at least one (1) year after leaving; and . . . you will not solicit the employment of any Treadway representatives for at least one (1) year after leaving. Irby bought Treadway with an assignment of Treadway’s contracts, in 2012. Tipton, Gilbert, and Padgett became Irby employees, keeping essentially the same benefits and seniority. In 2013, the three left Irby to work for Wholesale. Tipton apparently spoke to Gilbert and Padgett about the move in advance. Irby sued, asserting claims for breach of fiduciary duty, breach of contract, civil conspiracy, and tortious interference with a contract. The district court granted summary judgment and awarded the defendants in excess of $200,000 in attorneys’ fees and costs. The Eighth Circuit reversed, finding genuine disputes of material fact about whether Wholesale recruited and hired Tipton, Gilbert, and Padgett so that they would solicit or accept business from Irby customers in their former territory within one year. View "Stuart C. Irby Co., Inc. v. Tipton" on Justia Law