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

Barges separated from an Artco towboat, damaging a lock and dam. Artco sought limitation of its liability to the government or exoneration under FRCP F. The court enjoined prosecution of separate suits against Artco or the vessel and directed potential claimants to file claims by June 15, 2011. The government argued that its claim, alleging violation of the Rivers and Harbors Act (RHA), 33 U.S.C. 408, was not subject to the Limitation of Shipowners’ Liability Act, 46 U.S.C. 30501, and need not be litigated in the Rule F proceeding. The government never filed a timely claim in the limitation proceeding. On remand, the district court denied Artco’s motion for a decree of exoneration, reiterating that the government’s claims were not subject to the Limitation Act and that the government could pursue a remedy for its RHA claim. The court concluded that its prior injunction was overbroad and denied Artco’s motion to hold the government in contempt, to impose sanctions, and to direct dismissal of the government’s separate suit. As there were no claims filed in the limitation action, the court denied the government leave to file a late claim and directed dismissal of the limitation action. The Eighth Circuit reversed dismissal of Artco’s limitation action, affirmed denial of Artco’s motion to hold the government in contempt and for sanctions, vacated the order as to the remaining motions, and remanded. View "Am. River Transp. v. United States, Corp of Eng'rs" on Justia Law

Defendants, naturalized U.S. citizens living in Minnesota, are from Somalia. In 2008, the FBI learned that Ali had contacted al Shabaab, a terrorist organization in Somalia. Both women were charged with conspiring to provide material support to al Shabaab, 18 U.S.C. 2339B(a)(1); Ali with 12 counts of providing material support; and Hassan with making false statements, 18 U.S.C. 1001(a)(2). The government informed defendants that it intended to offer evidence obtained under the Foreign Intelligence Surveillance Act (FISA), 50 U.S.C. 1801. They requested disclosure and suppression of all FISA-obtained evidence. The government filed a declaration by the Attorney General that disclosure of the materials or an adversary proceeding would harm national security. After ex parte review, the court denied the defense motions. At the final status conference, Ali remained seated when court was convened. The court issued ordered all parties to stand when court was called to order. Despite counseling by “learned clerics” she continued to refuse to stand. The court cited Ali for 20 instances of contempt. After a 10-day trial the jury returned a guilty verdict on all counts. For Ali, the court calculated a guidelines range of 360 months to life in prison and imposed a sentence of 240 months’ imprisonment. For Hassan, the court calculated a guidelines range of 360 to 372 months and imposed a sentence of 120 months’ imprisonment. The Eighth Circuit affirmed. View "United States v. Ali" on Justia Law

B&B, manufacturer and seller of "Sealtight," sued Hargis, manufacturer of "Sealtite," claiming trademark infringement and unfair competition. Hargis counterclaimed for false advertising and false designation of origin. The jury rejected B&B's claims but found in favor of Hargis on its counterclaims. The Eighth Circuit concluded that the district court properly refused to apply collateral estoppel to the Trademark Trial and Appeal Board's (TTAB) decision concerning likelihood of confusion; rejected B&B's argument that the TTAB's factual findings from a trademark registration case were entitled to deference; and concluded that the district court did not abuse its discretion in excluding the TTAB's decision from the evidence presented to the jury. On remand from the Supreme Court the Eighth Circuit vacated and remanded, holding that the ordinary elements of issue preclusion were met, and the usages of the mark adjudicated before TTAB were materially the same as the usages before the district court. On remand, the district court should give preclusive effect to the decision of the TTAB on likelihood of confusion. View "B & B Hardware, Inc. v. Hargis Indus., Inc." on Justia Law

In April 2014, two consumers filed a class action against BF Labs, asserting “deceptive and unconscionable business practices” in marketing and selling Bitcoin mining machines. Five months later, the Federal Trade Commission sued BF for unfair and deceptive acts, 15 U.S.C. 45(a). The court stayed pending suits and imposed a receivership. The stay was subsequently lifted. The two consumers were denied leave to intervene in the FTC action. The Eighth Circuit affirmed, agreeing that the interests of the consumers’ proposed class are subsumed within the public interest because the FTC, on behalf of consumers, sought relief for the same “deceptive and unconscionable business practices” alleged by the consumers. The consumers have not made the necessary “strong showing of inadequate representation.” View "Alexander v. Fed. Trade Comm'n" on Justia Law

Simmons and Gyurica were fishing on a bridge near Bowden’s property. Bowden shouted to the men to identify themselves; he fired a shotgun from his deck when they failed to respond. Bowden and Simmons then had a verbal altercation, with Bowden holding his shotgun. Each called the police. Deputy Martin first spoke with Simmons and Gyurica at the residence of Simmons’s grandmother, Voyles. They reported that Bowden shot at them. Bowden said that he shot away from the men. Martin relayed these circumstances to his supervisor, who ordered Martin to seize the shotgun and to draft a probable cause statement averring that there was probable cause that Bowden had unlawfully used a weapon. The parties dispute involvement by the circuit clerk, a friend of Voyles. Martin later admitted that he did not think that Bowden had violated Missouri law. The Jefferson County prosecutor obtained an arrest warrant. A Missouri court held a preliminary hearing and determined that there was probable cause. Bowden was acquitted. In Bowden’s suit alleging violation of his Fourth Amendment rights, the court denied the defendants summary judgment based on qualified immunity. The Eighth Circuit reversed, finding that the facts, in the light most favorable to Bowden do not show violation of his constitutional rights. View "Bowden v. Martin" on Justia Law

The Lapideses renewed a loan from Venture Bank secured by a third mortgage on their home. Howard subsequently filed for Chapter 7 bankruptcy. After Howard’s personal debts were discharged, the Lapideses executed two “Change in Terms Agreements,” each of which extended the maturity date of the loan for six months. When Howard ceased making payments under these agreements, Venture Bank sought a declaratory judgment that the agreements were valid and enforceable. Howard counterclaimed that Venture Bank’s efforts to obtain payments after his discharge violated the discharge injunction under 11 U.S.C. 524(a)(2). The bankruptcy court denied Venture Bank’s claim for a declaratory judgment and awarded Howard damages and attorney’s fees. The district court and Eighth Circuit affirmed, upholding a finding that Howard’s payments were not voluntary within the meaning of section 524(f) and did not comply with the requirements of a reaffirmation agreement under section 524(c). The post-discharge agreements served no purpose other than reaffirmation agreements in which Howard agreed to repay all of his discharged personal debt and lacked consideration. View "Venture Bank v. Lapides" on Justia Law

American manufactures and Southland sells iron castings. After operating under a verbal agreement for years, the companies entered into a written “Exclusive Representation Agreement” in 2010. American was aware Southland represented other foundries. The contract incorporated lists of American’s active and potential customers and identified the companies with which Southland had an existing relationship, but did not define covered “products.” Both agreed to noncompete clauses. In 2011, Southland obtained $32.5 million in new sales —80% of American’s total new sales. In 2012, American CEO Fuller began advocating for replacement of Southland with an internal sales team. Fuller later determined that Southland was providing quotes that he considered to be a breach of the contract, but did not immediately address the issue. American began to organize an internal sales force. Meanwhile, Southland continued seeking orders and obtained $24 million in new business for American. After several months, American notified Southland that American considered Southland in breach and sent a termination letter. American did not explain and discontinued paying commissions. Southland sued, alleging American breached the contract by not providing adequate notice of breach or the opportunity to cure and by not paying continuing commissions. American alleged Southland had committed an incurable breach such that notice and the opportunity to cure were not necessary. The district court denied summary judgment, finding the contract ambiguous with respect to the terms “Products” and “compete.” The Eighth CIrcuit affirmed findings that American breached the contract and owed Southland $3.8 million in damages based on the sales during the post-termination period. View "Southland Metals, Inc. v. Am. Castings LLC" 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

Waters obtained a job at West. Cafesjian was a senior executive. Cafesjian later moved to Florida; retired; sold his shares for $250 million when West was sold; started a foundation and the GLC family office; and hired Waters to manage GLC in Minneapolis. Cafesjian opened a personal account with Northern Trust in Florida. Both men were signatories, Waters opened Minneapolis US Bank account. Both men were signatories. Transfers from Cafesjian’s Northern account funded the US Bank account. Between 1999 and 2004, Waters wrote more than 120 checks on the US Bank account, generally for exactly $5,000, $6,000, or $7,000, totaling $1,373,525. Waters ensured that no one else saw the bank statements and instructed GLC’s bookkeeper on how to record transactions. Much of the money went through accounts held by Waters’ girlfriend, his daughters, and an exchange student. When Waters resigned and was investigated, Waters claimed that Cafesjian was incompetent and that the money was related to deferred compensation. Civil suits were stayed when Waters was charged with mail fraud, wire fraud, and tax-related crimes. Convicted, Waters was sentenced to 108 months. The court found Waters embezzled between $2.5 and $7 million, used sophisticated means to perpetrate the fraud, and obstructed justice. The Eighth Circuit affirmed, rejecting challenges to the sufficiency of the evidence, loss calculations, and sentencing enhancements. View "United States v. Waters" on Justia Law

Creative, an Iowa corporation, designs and sells beauty products. LF, a Hong Kong corporation, with its principal place of business in Hong Kong, provides services, including product development, shipping oversight, and production planning. LF contacted Unger, President of Creative, in Iowa, seeking to manage Creative’s operations in China and e-mailed a presentation describing proposed services. Unger traveled to Hong Kong to execute the contract. LF managed Creative’s supply chain; the companies communicated extensively electronically and by telephone for two years. As required by the contract, LF shipped pre-production and production samples (made in China by third party factories) to Iowa. LF received payments from Creative’s customers on its behalf, and sent proceeds, less deductions, to Iowa. No LF agents or employees visited Iowa and LF has no connection with Iowa outside of this business relationship. Creative filed suit in Iowa, alleging that LF breached the contract by sending samples that could not be used because they were defective. The district court dismissed for lack of personal jurisdiction. The Eighth Circuit reversed, stating that a reasonable jury could find that LF had sufficient contacts with Iowa to justify the exercise of personal jurisdiction and that the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice. View "Creative Calling Solutions Inc v. LF Beauty Ltd." on Justia Law