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

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

Ortiz, a native of Mexico, became a lawfully-admitted permanent resident of the U.S. in 2002. In 2006, Ortiz pled guilty to obstruction of legal process—a crime committed when he was 18 years old. Ortiz was sentenced to 1 year in a workhouse—with a 2-year stay on 320 days of the sentence—and a $50.00 fine. More than seven years later, DHS charged Ortiz as removable under 8 U.S.C. 1227(a)(2)(A)(iii) for committing an “aggravated felony” and under 8 U.S.C. 1227(a)(2)(A)(i) for committing a crime involving “moral turpitude.” The IJ found Ortiz’s conviction was an “aggravated felony” because it was a “crime of violence.” The BIA upheld the IJ’s determination. The Eighth Circuit vacated. Minnesota precedent plainly shows the words “force or violence,” in the statute under which Ortiz was convicted, encompass a broader scope of conduct than the “physical force” required to be a categorical “crime of violence” under 18 U.S.C. 16. View "Ortiz v. Lynch" on Justia Law

Duit, an Oklahoma highway contractor, contracted with the Arkansas State Highway and Transportation Department (ASHTD) to reconstruct I-30 between Little Rock and Benton. Duit encountered soil conditions that, it alleges, differed materially from information provided by the ASHTD during bidding. Duit’s claims for compensation were denied by the ASHTD, the Arkansas State Claims Commission, and the General Assembly. Duit sued under 42 U.S.C. 1983, citing the “in re Young” exception to Eleventh Amendment immunity. Duit alleged violations of the Federal Aid Highway Act, 23 U.S.C. 101, and the Due Process and Equal Protection clauses and sought to “enjoin Defendants from accepting federal aid … until . . . they fully comply with the federally mandated differing site clause.” The court dismissed the FAHA claim because that statute is enforced exclusively by an executive agency, dismissed the due process claim because Duit’s interest in future highway contracts is not a protected property interest and because the state appeals process for claim denials satisfies procedural due process requirements. The court declined to dismiss the equal protection claim, concluding Duit sufficiently alleged that the Commission treated out-of-state-contractor Duit differently from similarly situated in-state contractors without a rational reason. The Eighth Circuit held that Duit lacks standing to bring its equal protection claim and that the court erred in not dismissing that claim. View "Duit Constr. Co. Inc. v. Bennett" 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

Castleman was charged with conspiracy to manufacture methamphetamine, maintaining drug premises, and conspiracy to possess chemicals and equipment used to make methamphetamine. Some evidence came from a traffic stop in Walnut Ridge, Arkansas and a later search of open fields on Castleman's property. The court denied motions to suppress the evidence. At trial the government also introduced evidence that he had murdered a coconspirator to prevent him from testifying. This testimony was offered over Castleman's objection as evidence of his consciousness of guilt. The jury returned a guilty verdict on all counts. At sentencing the court found that Castleman had murdered the coconspirator, applied the higher base offense level for first degree murder under U.S.S.G. 2A1.1; 2D1.1(d)(1), and sentenced him to 40 years imprisonment. The Eighth Circuit affirmed. Castleman did not show that any expectation of privacy he had in trash bags, which were visible in the open field, was objectively reasonable. Castleman admitted that the evidence as a whole was legally sufficient to support the convictions, and the jury was properly instructed regarding the value of the consciousness of guilt evidence. It was within the court's discretion to determine that the probative value of the contested evidence outweighed the danger of unfair prejudice under Rule 403. View "United States v. Castleman" on Justia Law

Calkins pled guilty to bank fraud, 18 U.S.C. 1344, and was sentenced to 66 months imprisonment and 8.6 million dollars in restitution. The Eighth Circuit affirmed Calkins' sentence. Calkins then filed an 28 U.S.C. 2255 petition alleging ineffective assistance of counsel. The Eighth Circuit affirmed denial of Calkins' petition, rejecting a clam that her trial counsel should have challenged the loss amount calculated in the sentencing report and requested an evidentiary hearing to determine whether each of the individual investors whose losses were included in the total loss amount had relied on Calkins' fraudulent financial statements. The record established that Calkins' trial counsel reviewed the government's evidence on loss before recommending that she request leniency, based on Calkins's advanced age and ability to pay restitution, under section 3553(a) rather than "risk losing a . . . reduction for acceptance of responsibility by disputing" loss amount. The strategy was effective. By contesting loss amount, Calkins could at most have secured a two point decrease in her offense level; by making the strategic choice to accept responsibility and request lenience, Calkins obtained a three point offense level decrease and a 12 month downward variance. View "Calkins v. United States" on Justia Law

After the merger of NationsBank and BankAmerica, shareholders filed class actions alleging violations of securities laws. The district court appointed Oetting as lead plaintiff and the Green law firm, as lead counsel. The litigation resulted in a $333 million settlement for the NationsBank class. The Eighth Circuit affirmed approval of the settlement over Oetting’s objection. On the recommendation of Green, the court appointed Heffler as claims administrator. A Heffler employee conspired to submit false claims, resulting in fraudulent payment of $5.87 million. The court denied Green leave to file a supplemental complaint against Heffler. Oetting filed a separate action against Heffler that is pending. After distributions, $2.4 million remained. Green moved for distribution cy pres and requested an additional award of $98,114.34 in attorney’s fees for post-settlement work. Oetting opposed both, argued that Green should disgorge fees for abandoning the class, and filed a separate class action, alleging malpractice by negligently hiring and failing to supervise Heffler and abandonment of the class. The court granted Green’s motion for a cy pres distribution and for a supplemental fee award and denied disgorgement. The Eighth Circuit reversed the cy pres award, ordering additional distribution to the class, and vacated the supplemental fee award as premature. The district court then dismissed the malpractice complaint, concluding that Oetting lacked standing. The Eighth Circuit affirmed that collateral estoppel precluded the rejected disgorgement and class-abandonment claims; pendency of an appeal did not suspend preclusive effects. View "Oetting v. Norton" on Justia Law

Figueroa-Alvarez, a citizen of Mexico, pleaded guilty to illegally reentering the U.S. following removal, 8 U.S.C. 1326(a), a violation punishable by “not more than 2 years” imprisonment. Section 1326(b) authorizes imprisonment “not more than 10 years” if the prior removal “was subsequent to a conviction for commission of . . . a felony,” and “not more than 20 years” if removal was subsequent “to a conviction for commission of an aggravated felony.” Figueroa-Alvarez admitted a pre-removal Iowa conviction for committing third-degree attempted burglary, an “aggravated misdemeanor” punishable by up to two years in prison. He did not admit he committed a “felony.” The court determined that his advisory guidelines sentencing range was 46-57 months in prison, applying an increase in U.S.S.G. 2L1.2(b)(1) for removal following a “felony” conviction because the Guidelines define “felony” as “any federal, state, or local offense punishable by imprisonment for a term exceeding one year.” The court granted a downward departure and variance, and sentenced Figueroa-Alvarez to 36 months in prison. The Eighth Circuit affirmed. Though Iowa classified third-degree attempted burglary as an aggravated misdemeanor, it was punishable by up to two years in prison, and was a felony, as that term is used in 8 U.S.C. 1326(b). View "United States v. Figueroa-Alvarez" on Justia Law

Four days before the statute of limitations expired, the Barners filed a complaint in Arkansas state court against T/C Inc. and T/C LLC, based on injuries allegedly sustained on October 15, 2010. T/C Inc. had merged into T/C LLC before the Barners filed suit. Under Arkansas law, they had 120 days to serve the defendants with the complaint and summons. Their attorney sent to CT Corporation, the registered agent for Inc., the complaint and summons for each party. CT returned two receipts, showing that service had been completed for both defendants on January 24, 2014; however, CT was not the registered agent for LLC. On February 14, after the 120-day period had expired, the defendants filed notice of removal. On April 8, the Barners served the complaint and summons for LLC on its registered agent. The court found that the claims against LLC would have been dismissed with prejudice had the case remained in state court, so the Barners could not complete service post-removal, and that Inc. was no longer a legal entity capable of being sued. The Eighth Circuit affirmed the dismissal of Inc., but reversed dismissal against LLC. Had the case remained in state court, it would have been dismissed, but without prejudice; the Barners would have had a year to refile under the savings statute. View "Barner v. Thompson/Center Arms Co." on Justia Law

The U.S. Commodity Futures Trading Commission (CFTC) sued Arrington, Kratville, Welke, Elite Holdings, and MJM, alleging that they fraudulently induced more than 130 individuals to invest $4.7 million in commodity pools, in violation of the Commodity Exchange Act (CEA), 7 U.S.C. 1. The district court granted summary judgment against Kratville. The Eighth Circuit affirmed, upholding denial of his request for more time to review purportedly new evidence; consideration affidavits from investors who signed releases and from investors who allegedly lacked credibility; refusal to consider the affidavit of an expert opining on the authenticity of emails; summary judgment on the CFTC's claim that Kratville committed fraud and related violations of the CEA and CFTC regulations in soliciting persons to invest and maintain funds in commodity investment pools; and a determination that the litigation strategy of Kratville's attorney was not excusable neglect warranting relief under FRCP 60(b)(1). Kratville's misrepresentations and omissions related to potential profit and risk, the identities of brokers, and ownership of a proprietary trading system were material. He hid from investors that pool funds were being sent out of the country and that the Nebraska Department of Banking and Finance had ordered Elite Pools to be closed and participants’ funds to be returned. View "Commodity Futures Trading Comm'n v. Kratville" on Justia Law