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

The Eighth Circuit affirmed the district court's grant of summary judgment in favor of PepsiCo in an action brought by Northern, alleging that PepsiCo failed to protect Northern's interests under their exclusive bottling contracts. Applying New York common law, the court concluded that it is evident PepsiCo did not owe a duty to prevent transshipping under the express terms of the bottling contracts, and thus Northern's breach claim fails as a matter of law. The court also concluded that Northern cannot rely on an implied duty to create obligations that are not expressly included in the bottling contracts, and that duty cannot provide a basis for Northern's breach of contract claim.Furthermore, because the bottling agreement is unambiguous and fails to confer a contractual duty on PepsiCo to prevent transshipping, and given Northern's inability to establish that PepsiCo owed a duty to prevent transshipment of products into Northern's territories, there is no genuine dispute of material fact and Northern's breach of contract claim was properly disposed of on summary judgment. Finally, the court agreed with the district court that no genuine dispute of material fact exists as to Northern's tortious interference claim. View "Northern Bottling Co., Inc. v. PepsiCo, Inc." on Justia Law

After he sent a sexually explicit text message to a customer, the other members of Synergies expelled Jeffery White as a member of the company. White and White Communications filed suit against Synergies, claiming that the expulsion was a breach of the assumption agreement and the operating agreement between the parties. At trial, the jury found in favor of White Communications on its breach of implied contract claim, but found in favor of Synergies on all other claims.The Eighth Circuit affirmed the district court's denial of White's motion for judgment as a matter of law because the jury had a legally-sufficient basis to find that Synergies terminated him for cause. In this case, it was within the purview of the jury to determine whether White's actions led to instant or deferred irreparable harm to Synergies' reputation or its economic interests. The court also concluded that the district court did not abuse its discretion in permitting prior bad acts evidence of defendant's previously-sent texts of the same nature. Furthermore, there was no abuse of discretion in permitting alleged hearsay evidence to show its impact on the listener. The court further concluded that the district court did not err by denying White's motion for a new trial where there is more than sufficient evidence to support the finding in favor of Synergies on the breach of contract claim. Finally, the court upheld the jury's award of damages on plaintiff's breach of implied contract claim. View "White Communications, LLC v. Synergies3 Tec Services, LLC" on Justia Law

Daredevil filed suit against ZTE for breach of contract, fraud, and unjust enrichment. After the case went to arbitration in Florida, Daredevil sought to add ZTE Corp., the parent company of ZTE USA, to its arbitration claims. The arbitrator rejected the request to add ZTE Corp., ruling that Daredevil's claims against ZTE Corp. were outside the scope of arbitration. Daredevil then filed this suit against ZTE Corp., alleging breach of contract, fraud, unjust enrichment, and tortious interference with contract. The arbitrator ultimately denied each of Daredevil's claims against ZTE USA. The arbitration award was confirmed by the United States District Court for the Middle District of Florida and affirmed by the Eleventh Circuit Court of Appeals. Daredevil subsequently reopened this case in the Eastern District of Missouri against ZTE Corp.The Eighth Circuit affirmed the district court's decision to apply Florida law, holding that Daredevil's claims met the requirements for claim preclusion and were therefore barred. The court explained that Daredevil's current and previous claims share identity of the parties and identity of the cause of action, and Daredevil does not dispute that Florida's other two requirements are satisfied. In this case, privity exists between ZTE Corp. and ZTE USA where ZTE Corp. and ZTE USA are parent and subsidiary. Furthermore, Daredevil's current claims are so closely related to its arbitration claims and thus the identity-of-cause-of-action requirement has been met. Accordingly, Daredevil's claims against ZTE Corp. are barred by the decision in its prior arbitration against ZTE USA. View "Daredevil, Inc. v. ZTE Corp." on Justia Law

Plaintiff filed suit against HealthEast and others, alleging multiple causes of action related to peer review determinations stemming from his practice of neurosurgery. After the district court granted defendants' motion for judgment on the pleadings, three claims remained against appellees: defamation, tortious interference with prospective economic relationship, and tortious interference with contract. Appellees moved for summary judgment on the remaining claims and the district court granted their motion.As to the defamation claims, the Eighth Circuit concluded that only three statements are before the court on appeal because plaintiff did not amend his complaint to incorporate the additional allegedly defamatory statements identified during discovery and, given the requirement that defamation claims be pleaded with specificity, only the statements included in the amended complaint can form the basis of plaintiff's claim. As to the first remaining statement, the court concluded that it was waived. In regard to the two remaining statements, the court concluded that Minnesota peer review immunity applies.As to the tortious interference claims, the court concluded that to the extent these alleged interferences occurred solely through the peer review process itself, appellees are entitled to peer review immunity. In the event peer review immunity does not fully shield appellees, these claims failed on the merits. Accordingly, the district court properly concluded that appellees were entitled to summary judgment on all of plaintiff's claims, and the court affirmed its judgment. View "Sherr v. HealthEast Care System" on Justia Law

The Eighth Circuit affirmed the district court's dismissal of a complaint brought by plaintiff against Employers Mutual and Defendant Kelley, asserting a claim for breach of fiduciary duty. Plaintiff was a minority shareholder of EMC, a spin-off from Employers Mutual. Defendant Kelley was the CEO and director of both EMCI and Employers Mutual. Plaintiff alleges that Employers Mutual structured EMCI as a shell company, preventing it from becoming a valuable company or acting independently from Employers Mutual. Plaintiff alleged in the complaint that, in the years leading up to the squeeze-out merger initiated by Employers to purchase EMCI's remaining shares, defendants breached fiduciary duties owed to him as a minority shareholder of EMCI.The court concluded that plaintiff's claim did not arise in the context of a contractual relationship; his alleged injury arose only from his status as a shareholder of EMCI; and this was insufficient under Iowa law to plausibly plead a special duty arising out of a contractual relationship. Furthermore, plaintiff did not adequately plead that his injury arose from a special duty. The court also concluded that plaintiff did not allege that his voting rights were ever affected by Employers Mutual and Kelley's alleged mismanagement. Even if this were Iowa law, plaintiff would not meet this exception.Accordingly, because plaintiff's claim is derivative in nature, he must satisfy federal and Iowa requirements for a filing a derivative action, which he has failed to do so. In this case, the complaint did not state with particularity plaintiff's efforts to enforce minority shareholder rights in the years leading up to the squeeze out. Furthermore, the complaint did not allege that he petitioned the directors or other shareholders in writing, or that 90 days have expired since delivery of the demand and EMCI rejected his request, or irreparable injury would result by waiting for the expiration of the ninety days. View "Shepard v. Employers Mutual Casualty Co." on Justia Law

After plaintiff purchased licenses for RCI non-thermal, pulverizing, and drying system technology (PAD), he alleged that the capabilities of the PAD System were misrepresented to him. Two federal law suits were filed, one in Iowa and one in Missouri.In this consolidated appeal, the Eighth Circuit affirmed the Iowa judgment, rejecting RCI's argument that it is entitled to judgment as a matter of law because the jury awarded no compensatory damages. The court concluded that punitive damages were recoverable under Iowa law because the jury necessarily found that plaintiff suffered actual damages when it found fraudulent misrepresentation. Furthermore, the jury could award punitive damages without an award of compensatory damages, and the punitive award was not unconstitutionally excessive. The court also concluded that plaintiff is not entitled to equitable relief and the district court neither erred or abused its discretion as to plaintiff's equitable counterclaims. Finally, the court found that the method used and reasons given by the district court for the reduction in costs were well within its discretion, and the district court did not abuse its discretion in awarding attorney fees.The court remanded the Missouri judgment for further proceedings, concluding that the district court erred by applying federal law, rather than Iowa law, to determine whether plaintiff's claim was precluded. The district court also erred by determining that Missouri law on the economic loss doctrine would bar plaintiff's misrepresentation claims. The court also noted that plaintiff's conspiracy claim should be reinstated and the district court's attorneys' fee award to Resource as the prevailing party is set aside. View "Dunne v. Resource Converting, LLC" on Justia Law

Azarax filed suit against defendant and his law firm, alleging legal malpractice and breach of fiduciary duty. Azarax claimed that defendant and his firm were negligent in their representation of Convey Mexico and that Azarax had claims against defendant and his firm as a successor by merger to Convey Mexico.The Eighth Circuit affirmed the district court's dismissal of the complaint and agreed with the district court that Azarax was not a valid successor in interest to Convey Mexico. In this case, the summary judgment record established that the shareholders of Convey Mexico did not unanimously provide written consent for the merger with Azarax Holding, so the merger was not valid. Therefore, Azarax lacked standing to sue defendant and his law firm. The court modified the judgment to dismiss the complaint without prejudice. View "Azarax, Inc. v. Syverson" on Justia Law

FEI, Crop Venture's successor-in-interest, filed suit alleging that the individual defendants took proprietary information they developed at Crop Ventures after they left the company and co-founded Farmobile (the corporate defendant). Specifically, FEI alleges that the individual defendants' behavior constituted a breach of explicit or implicit contracts with the company; defendants were obligated to assign to their employer the ownership rights of products they worked to develop; the individual defendants breached their duty of loyalty to their employer; and the individual defendants misappropriated trade secrets. The district court denied in full FEI's motion, and granted in part and denied in part Farmobile's motion.The Eighth Circuit affirmed and held that because no contract bound the parties during Defendant Nuss' term of employment, Nuss was not in breach of an explicit contract; FEI has not shown that any of the individual defendants was similarly "specifically directed" during their product-development process, so no implied contracts were created under the hired-to-invent doctrine; FEI failed to show the individual defendants breached their duty of loyalty to their employer; FEI cannot maintain a trade secret claim under the Nebraska Trade Secrets Act (NTSA) or the federal Defend Trade Secrets Act (DTSA); and the remaining claims are unpersuasive. View "Farmers Edge Inc. v. Farmobile, LLC" on Justia Law

MPAY, a Massachusetts corporation that develops and owns payroll-processing software that it licenses to its customers, appealed the district court's denial of its motion for a preliminary injunction against appellees. MPAY claimed that it was entitled to such relief based on its copyright-infringement and trade-secrets-misappropriation claims.The Eighth Circuit affirmed in part and vacated in part, holding that appellees demonstrated that their copying, disclosure, and possession of the source code were authorized by the Software Development and License Agreement that MPAY signed with its business partner. Therefore, MPAY has not shown a likelihood of success on the merits of its copyright infringement or trade-secrets-misappropriation claims, and the district court did not err in so concluding. The court also held that MPAY's assertion, that the district court erroneously concluded MPAY's harms were compensable with money damages and so were not irreparable, lacked merit. Furthermore, the balance of the equities and the public interest do not favor an injunction. The court remanded for further proceedings on the question of whether the contractors wrongfully sublicensed use of the software. View "MPAY Inc. v. Erie Custom Computer Applications, Inc." on Justia Law

Plaintiff, a member of the Board of Directors of Eagle Forum, filed suit against Eagle Forum and others, alleging violations of the organization's bylaws and breach of fiduciary duties in connection with the organization's attempt to remove plaintiff and others from the Board.The Eighth Circuit held that plaintiff waived the Bylaws claim set forth in his original complaint; the district court did not err in dismissing plaintiff's claim that Eagle Forum violated Illinois law by not permitting proxy voting; the district court acted within the scope of its "informed discretion" by awarding attorneys' fees by relying on its inherent power, because Federal Rule of Civil Procedure 11 was not "up to the task" in this situation; the district court did not abuse its discretion in awarding attorney's fees to Eagle Forum under its inherent power as a sanction against plaintiff for acting in bad faith; the district court provided a reasoned basis for its award of $9,851.25 in attorneys' fees to Eagle Forum by relying on and analyzing the invoice submitted by Eagle Forum. View "Schlafly v. Eagle Forum" on Justia Law