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

In April 2011, while its patent application was pending with the USPTO, U.S. Water Services, which “sell[s] water treatment and purification equipment, materials, and services,” especially “to ethanol process technologies,” sued its competitor, ChemTreat, for misappropriation of trade secrets. In October 2011, the USPTO issued the 244 patent covering a method to reduce the formation of insoluble scale deposits during the production of ethanol using enzyme, phytase, in its “pHytOUT® system.”Three days before U.S. Water and ChemTreat settled the misappropriation claim, ChemTreat filed counterclaims requesting declaratory judgments of noninfringement and invalidity of the 244 patent. The suit was filed before the Leahy-Smith America Invents Act, 125 Stat. 284, took effect, so the counterclaims independently did not establish appellate jurisdiction for the Federal Circuit. The district court granted ChemTreat summary judgment as to the noninfringement counterclaim and dismissed the invalidity counterclaim. The Eighth Circuit affirmed. Evaluating the “totality of [the] circumstances,” the district court did not err in finding the misappropriation action, together with U.S. Water’s statements to its customers and supplier, produced an objective, “reasonable apprehension of suit,” and did not err in concluding declaratory judgment subject matter jurisdiction existed. The decision did not constitute an advisory opinion. View "U.S. Water Servs., Inc. v. ChemTreat, Inc." on Justia Law

Lumber, a tax-exempt insurance trust (26 U.S.C. 501(c)(9)), purchased life insurance issued by GAMHC. GAMHC converted from an insurer owned by policyholders to one owned by stockholders. In 2003, Lumber received a $1,474,442.30 liquidating distribution and a statement that the entire “initial distribution . . . will constitute long-term capital gain.” Lumber reported the gain on its return for fiscal year 2004 and paid capital gains tax of $200,686. Lumber received additional distributions of $285,647 and $213,567, which it reported as taxable capital gains on its 2006 and 2008 returns. The IRS had adopted the position that a policyholder’s proprietary interest in a mutual insurance company had a tax basis of zero. In 2008, the Claims Court rejected that position. Lumber sought refunds for 2004, 2006, and 2008. The IRS delayed a ruling until the Federal Circuit affirmed, then allowed Lumber’s claims for 2006 and 2008 and refunded $42,847 and $32,035, but denied Lumber’s claim for 2004, citing the three-year limitations period. The district court granted Lumber summary judgment, concluding that the mitigation provisions, I.R.C. 1311-1314, permitted correcting the erroneous recognition of gain. The Eighth Circuit reversed. Allowing taxpayers to reopen closed tax years based upon a favorable change in, or reinterpretation of, the laws would be inconsistent with the congressional intent in enacting the mitigation provisions to “preserve unimpaired the essential function of the statute of limitations.” View "Ill. Lumber & Material v. United States" on Justia Law

Stephens visited the Oaklawn Club for gambling. After winning, playing slot machines, Stephens cashed out and left the casino. He returned later that evening and purchased another ticket for use in the slot machines. He was approached by uniformed security personnel and Jessup, a uniformed Hot Springs police officer. They accused Stephens of stealing the cashed-out ticket and detained Stephens while employees reviewed surveillance footage. Stephens alleges that Jessup threatened to “take him to jail immediately” if he did not return the money. Jessup recited Miranda warnings, escorted Stephens to his vehicle, and retrieved the money. An Arkansas state court granted Oaklawn summary judgment. Neither Jessup nor Amtote was a party to that action. Stephens then filed a federal suit against Jessup and Amtote, alleging the same causes of action against these new defendants. The court dismissed, citing issue preclusion. The Eighth Circuit reversed in part, finding that Stephens did not perfect an appeal with respect to Amtote. The court expressed no view on the merits of the Jessup claims, stating that the record is not clear that Stephens is trying to relitigate an issue that was previously decided or that Jessup and Oaklawn represent the same legal right. View "Stephens v. Jessup" on Justia Law

By quitclaim deed, 27 acres in Branson passed to Tori, Inc. Tori was dissolved, and, by quitclaim transactions, Rea acquired the land. Rea quitclaimed to Missouri Branson. Coverdell also claims ownership, based on a 1999 quitclaim from Tori. Coverdell's claim spurred state lawsuits, funded by Elfant, a businessman, who operates a Delaware LLC, Nekome, from his Florida home. In 2013, Missouri state courts rejected Coverdell's claim. In 2014, Nekome acquired Missouri Branson, days after receiving tax advice that merging Missouri Branson into an out-of-state corporation would avoid Missouri state taxes. Nekome became the sole member in a newly form company, Florida Branson. Missouri Branson merged into Florida Branson, transferring Missouri's claim of ownership to Florida. Days later, Florida Branson filed suit in federal court asserting diversity jurisdiction based on its Florida citizenship and the defendants’ Missouri citizenships, and alleging that the city, the electric company, and developers infringed on its rights by breaking ground on its land in 2004, to develop Branson Landing, a mixed-use retail, residential, and entertainment complex. Elfant admits that the only business that Florida Branson conducts consists of directing and funding the lawsuits." The Eighth Circuit affirmed dismissal, finding that Florida Branson's corporate maneuvers were done to manufacture diversity in violation of 28 U.S.C. 1359 and that the purported tax purpose for merging was pretextual. View "Branson Label, Inc. v. City of Branson" on Justia Law

On August 20, 2013, Lee, an Arkansas citizen, sued VTI and 10 John Does, alleging that while preparing for a welding project on August 21, 2010, he attached a newly purchased oxygen tank to his existing pressure regulator, manufactured by VTI. Lee “tried without success to adjust the regulator pressure” when “[s]uddenly, and without warning, the metal crimped end of the oxygen hose came loose from the metal handpiece, striking him in the right eye” and causing blindness in that eye. On December 18, 2013, Lee dismissed VTI and moved for leave to amend his complaint to substitute Airgas LLC and Airgas-Mid South (the alleged supplier of the tank) for two Doe defendants. The district court denied the motion, noting Lee failed to allege Airgas-Mid South’s principal place of business, the citizenship of Airgas LLC’s members, and the citizenship of any John Doe defendants. The order imposed a deadline by which Lee was to correct these errors. The district court permitted amendment as to Airgas Mid-South but ultimately dismissed. The Eighth Circuit affirmed, agreeing that Lee’s claims against Airgas Mid-South were time-barred and the district court lacked diversity jurisdiction over the claims against the John Does. View "Lee v. Airgas - Mid South, Inc." on Justia Law

PR sued Windmill in Missouri state court, but did not serve Windmill with the complaint. More than two years later, Windmill moved to dismiss for lack of prosecution. After PR responded to the motion but before the state court ruled on it, Windmill filed a notice of removal. In federal court, PR moved to remand, arguing that Windmill had waived its right to remove when it filed the state court motion to dismiss. The district court granted PR’s motion. The Eighth Circuit reversed. The 28 U.S.C. 1446 right to remove a case filed in state court to federal court based on diversity jurisdiction can be waived by actions the defendant takes in state court. A defendant waives the right “by taking some substantial offensive or defensive action in the state court action indicating a willingness to litigate in that tribunal before filing a notice of removal with the federal court.” The right to removal is not lost by participating in state court proceedings short of seeking adjudication on the merits. Windmill’s motion was based on PR’s failure to complete service; it neither addressed nor sought adjudication on the merits and did not clearly and unequivocally demonstrate willingness to litigate in state court. View "PR Grp., LLC v. Windmill Int'l, Ltd." on Justia Law

Debtors filed a Chapter 13 bankruptcy petition. CP Medical’s collection agent timely filed a proof of claim. The Chapter 13 plan, proposing monthly payments of $124.00 over 36 months and pro rata distribution to unsecured creditors, was confirmed. Debtors fell behind on payments and converted to a Chapter 7. After confirmation, but during the Chapter 13 case, Debtors filed an adversary proceeding against CP, seeking damages For violation of the Fair Debt Collection Practices Act, 15 U.S.C. 1692. The complaint indicated that CP's proof of claim was for medical services provided in February 2011, that the bankruptcy and proof of claim filings were beyond Arkansas’ two-year statute of limitations for medical debt collection, and that by filing a claim on a debt that is time-barred, CP engaged in a “false, deceptive, misleading, unfair and unconscionable” debt collection practice. The bankruptcy court granted CP summary judgment, holding that no FDCPA violation occurs when a debt collector attempts to collect a potentially time-barred debt that is otherwise valid unless there is actual litigation or the threat of litigation. The Eighth Circuit Bankruptcy Appellate panel affirmed. CP's proof of claim was a simple attempt to share in any distribution made to listed creditors in bankruptcy, not actual or threatened litigation. View "Gatewood v. CP Medical, LLC" on Justia Law

Alpine repairs automotive glass and, under Minnesota law, receives from insured vehicle owners the right to seek payment from insurance companies for repairs performed. Alpine and several insurers had disputes regarding the amounts paid for 482 separate claims. Minnesota law mandates arbitration of these disputes. The district court determined many claims were barred by a two-year statute of limitations included in some of the insurance policies; 248 claims either were not governed by the two-year statute of limitations or were timely. The court consolidated these claims for one arbitration and ordered arbitration. Alpine appealed the consolidation order. The Eighth Circuit dismissed for lack of jurisdiction, finding that the consolidation order was not an appealable final judgment. The parties pursued arbitration of one claim in which Alpine sought reimbursement for an alleged underpayment of $398.77. Arbitration resulted in a ruling in favor of the insurance company. ​The district court confirmed the award. The Eighth Circuit again dismissed an appeal for lack of jurisdiction View "Alpine Glass, Inc. v. Country Mut. Ins. Co." on Justia Law

In 2003, the Meyers signed a revolving credit note and agreement and later signed term notes and loan agreements with U.S. Bank, to finance their swine production business. In 2006, the Meyers transferred all their business assets to a revocable trust, naming themselves as grantors and trustees. The revolving credit loan went into default in 2008. U.S. Bank agreed not to exercise its default rights. The lending relationship continued until the Meyers withheld proceeds from the sale of collateral (hogs). U.S. Bank filed suit; the Meyers sought Chapter 11 bankruptcy protection in 2010. In 2011 the Meyers, individually, sued U.S. Bank, alleging breach of contract, fraud, violations of the Nebraska Uniform Deceptive Trade Practices Act, and unjust enrichment. The Eighth Circuit affirmed dismissal. The Trust then commenced another suit, alleging that U.S. Bank tortiously interfered with the Trust’s contractual relations with a feed supplier. The district court granted summary judgment and imposed a $5,000 sanction against the Trust and its attorneys. The Trust appealed. U.S. Bank sought additional sanctions under Federal Rule of Appellate Procedure 38, arguing that appeal was frivolous. The Eighth Circuit affirmed the rulings, held that appeal was not frivolous but was frivolously argued, and granted double costs as a Rule 38 sanction. View "David M. Meyer & Nancy R. Meyer Trust v. U.S. Bank Nat'l Ass'n" on Justia Law

Eighteen years after Nissan and Wayzata entered into an agreement which established Wayzata as an authorized Nissan dealer, Nissan informed Wayzata that it intended to establish a new dealership in Eden Prairie, eight miles from Wayzata. Nissan sought a declaratory judgment that the Eden Prairie dealership neither violated their dealer agreement nor infringed Wayzata's "relevant market area" under Minn. Stat. 80E.14. One month later, Wayzata sued Nissan in Minnesota state court, alleging the new dealership violated its dealer agreement and the statute, and moved to dismiss the federal action for lack of subject matter jurisdiction. The district court granted the motion to dismiss after concluding that the parties were not diverse under 28 U.S.C. 1332. The Eighth Circuit affirmed. A district court may dismiss or stay a declaratory judgment action when it determines that the question in controversy would be better handled in state court. It would be duplicative and uneconomical for a federal court to decide a case substantially similar to one which has been pending for over a year in state court. View "Nissan N. Am., Inc. v. Wayzata Nissan, LLC" on Justia Law