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

The SEC brought a civil action against defendant alleging that, as an outside director of Engineered Support Systems, Inc. (ESSI), he violated numerous federal securities laws by participating in the grant of backdated, "in-the-money" stock options to ESSI officials including his father. At issue was the district court's grant of defendant's Fed. R. Civ. Pro. 50(a)(1) motion for judgment as a matter of law. The court agreed with the district court's conclusion that the SEC had failed to prove the requisite elements of scienter and negligence. The court also held that there was no clear abuse of discretion in excluding any reference to the Incentive Stock Option Agreement between defendant's father and ESSI. Accordingly, the court affirmed the judgment of the district court.

This case stemmed from a distributor agreement (Agreement) granting Southern Wine & Spirits of Nevada (Southern) "the exclusive right to sell and distribute" bottled water products supplied by Mountain Valley Spring Company (Mountain Valley) within a seventeen-county region around Las Vegas, Nevada. The parties appealed in part the district court's judgment. The court held that the district court did not err when it determined that the Agreement was for a perpetual term where the parties contemplated the duration of their relationship and agreed to a term that ended only by mutual consent or specific acts of default and when it denied Mountain Valley's renewed motion for judgment as a matter of law on Southern's implied covenant of good faith and fair dealing claim. The court held, however, that the district court erred when it set aside the jury's verdict on Mountain Valley's claim for breach of the implied covenant of good faith and fair dealing. Accordingly, the court affirmed in part and reversed in part.

This case involved a type of insurance fraud known as "Stranger Originated Life Insurance" (STOLI), "whereby," as plaintiff described, "high face amount insurance polices insuring senior citizens are obtained for the benefit of investors with no insurable interest in the life of the insured." At issue was whether the district court erred in applying the procured-by-fraud exception to the general rule that "rescission required the return of unearned premiums." The court held that, based on Minnesota Supreme Court precedents, the court affirmed the district court's decision recognizing plaintiff's right under the Minnesota law to retain the premiums paid on a fraudulently procured insurance policy. Accordingly, the judgment of the district court was affirmed.

Plaintiffs sued defendant over the sale of an automated hunting and fishing licensing system, alleging that defendant misrepresented the capabilities and costs of its software system, as well as information about key programming personnel. Both parties appealed the judgment of the district court, which awarded plaintiffs $965,000 and designated its post-trial order as a final judgment pursuant to Federal Rule of Civil Procedure 54(b). The court held that, due to the close factual and legal relationship between the fraud, warranty, and good faith and fair dealing claims, Rule 54(b) certification was inappropriate where plaintiffs' unadjudicated claims shared the same facts as the certified claims and where, under Missouri law, fraud and breach of warranty claims shared similar elements and the same conduct could support both theories. The court also held that the district court correctly dismissed defendant's cross-claim against Active Network, Inc. (Active Network) and its assessment of the equities was not clearly unreasonable. Accordingly, the court held that the district court properly certified its order dismissing the cross-claim against Active Network. As there was no final judgment on all claims or a proper 54(b) certification as to the claims between plaintiffs and defendant, the remainder of the appeals were dismissed without prejudice, and the case remanded for further proceedings.

This appeal stemmed from an action filed by nine professional football players and one prospective football player (Players) against the National Football League and its 32 separately-owned clubs (NFL or League). On March 11, 2011, a collective bargaining agreement between the League and a union representing professional football players expired and the League made known that if a new agreement was not reached before the expiration date, then it would implement a lockout of players, during which athletes would not be paid or permitted to use club facilities. The Players, aware of the League's strategy, opted to terminate the union's status as their collective bargaining agent as of 4:00 p.m. on March 11, just before the agreement expired. Later that day, the Players filed an action in the district court alleging that the lockout planned by the League would constitute a group boycott and price-fixing agreement that would violate Section 1 of the Sherman Antitrust Act, 15 U.S.C. 1, and alleging other violations of the antitrust laws and state common law. The League proceeded with its planned lockout on March 12, 2011 and the Players moved for a preliminary injunction in the district court, urging the court to enjoin the lockout as an unlawful group boycott that was causing irreparable harm to the Players. The district court granted a preliminary injunction and the League appealed. The court held that the injunction did not conform to provisions of the Norris-LaGuardia Act (Act), 29 U.S.C. 101 et seq., where Section 4(a) of the Act deprived a federal court of power to issue an injunction prohibiting a party to a labor dispute from implementing a lockout of its employees. Therefore, the court vacated the district court's order and declined to reach the other points raised by the League on appeal.

Monarch Fire Protection District of St. Louis County (Monarch) appealed several adverse rulings in favor of Freedom Consulting & Auditing Services, Inc. (Freedom), Freedom's owner, and a Freedom employee. The International Association of Firefighters Local 2665 (Firefighters Union), representing Monarch employees, requested an independent audit of Monarch's self-funded group health plan because union representatives believed that Monarch's board of directors had illegally approved a non-covered medical procedure for a plan member. Monarch hired Freedom to conduct the audit and Monarch subsequently sued Freedom, alleging that protected health information (PHI) had been improperly disclosed to Firefighters Union attorneys in violation of the Business Associate Agreement (BIA) between Monarch and Firefighters Union. Monarch subsequently appealed the district court's dismissal of its conversion claim and underlying claim for punitive damages, the district court's decision that the BAA's indemnity clause did not entitle Monarch to attorneys' fees and costs, and that the district court's denial of its motion for sanctions. The court held that Monarch could not show that Freedom deprived it of the right to possession, which it must do to establish conversion under Missouri law. The court also held that Freedom was not contractually obligated to pay the attorneys' fees and costs that Monarch incurred in the litigation and that Monarch could not survive summary judgment on its claim that the indemnity clause entitled it to attorneys' fees. The court further held that the district court did not abuse its discretion by declining to impose a sanction on the Freedom employee when the case did not proceed to trial because nothing in the record suggested that the district court based its ruling on a legal error or a clearly erroneous assessment of the evidence. Accordingly, the court affirmed the judgment of the district court.

ABF sued YRC, the International Brotherhood of Teamsters and two of its locals (collectively, Union), and the bargaining representatives of YRC and the Union (collectively, defendants) for violation of a collective bargaining agreement. At issue was whether the district court properly dismissed ABF's complaint for lack of subject matter jurisdiction, ruling that ABF lacked standing to sue because it did not show by a preponderance of the evidence that it had rights under the collective bargaining agreement. The court held that ABF had constitutional standing where it satisfied each element necessary to demonstrate an injury-in-fact to a judicially cognizable interest and that the injury was fairly traceable to defendants' challenged conduct. The court also held that because the district court had original jurisdiction, the district court had subject matter jurisdiction over ABF's claims. The court further held that the case did not turn on primarily representational issues but whether defendants breached any contractual duties to ABF. The court finally held that the district court's Federal Rule of Civil Procedure 12(b)(1) ruling resolved factual issues that courts could not resolve on motions under Rule 12(b)(6) and did not provide proper notice of such a conversion. Accordingly, the district court's judgment was vacated and remanded for further proceedings.

This lawsuit arose from the dispute between the parties about how much appellant was obligated to pay appellee for auto-glass goods and services rendered on behalf of appellant's insureds. Appellants appealed from the district court's orders dismissing its counterclaim that appellee violated Minnesota's anti-incentive statute, Minn. Stat. 325F.783, granting summary judgment in favor of appellee on appellant's counterclaim for breach of contract, and denying appellant's motion to vacate the arbitration award. The court held that, given the plain language of the statute and the ordinary meaning of the terms of rebate and credit, appellee's practice did not violate the anti-incentive statute. The court also held that even if the blast faxes at issue constituted offers to enter into unilateral contracts, appellee rejected the offers when its actions failed to conform to the terms of the offer. The court further held that the arbitration award did not require reversal or new proceedings because the award was based on the finding that appellant failed to pay the competitive price standard set forth in the applicable endorsement and Minnesota law.

Appellee sued appellant for breach of contract stemming from an agreement between the parties under which appellant would produce, package, and deliver a rice milk product to appellee. At issue was whether the district court erred in denying appellant's motion for new trial because the court failed to give jury instructions regarding the proper standard of breach of an installment contract and the law pertaining to delegation of a contract. Also at issue was whether the district court erred in denying appellant's motion for judgment as a matter of law because appellee failed to prove a breach of the entire installment contract. The court held that the jury instructions, taken together, fairly and adequately submitted the breach of contract issue to the jury and that the district court properly declined to instruct the jury on the issue of delegation because the issue was irrelevant to the case presented to the jury. The court also held that appellant failed to preserve the issue of whether there was insufficient evidence to prove a breach of the entire installment contract and therefore, the court had no power to review this issue. Accordingly, the judgment of the district court was affirmed.

Saint Francis Medical Center ("St. Francis") brought a class action suit against C.R. Bard, Inc. ("Bard"), a supplier of medical supplies, alleging that Bard's contracts with Group Purchasing Organizations violated the Sherman Act, 15 U.S.C. 1, 2, section 3 of the Clayton Act, 15 U.S.C. 14, and Missouri antitrust law, Mo. Rev. Stat. 416.121.1. At issue was whether the district court properly granted summary judgment for Bard. The court held that, based on the precedent of Concord Boat Corp. v. Brunswick Corp., and specifically Saint Francis's failure to identify a relevant submarket, the judgment of the district court granting summary judgment to Bard was affirmed.