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

Medtronic, a medical device company, allocated profits from its class III devices and leads among its U.S. and Puerto Rico subsidiaries through intercompany licensing agreements. The dispute centers on the appropriate method for determining arm’s length royalty rates for intangible property transferred between Medtronic US and Medtronic Puerto Rico for the 2005 and 2006 tax years. The Internal Revenue Service (IRS) challenged Medtronic’s use of the comparable uncontrolled transaction (CUT) method and instead applied the comparable profits method, resulting in a tax deficiency. Medtronic contested the IRS’s adjustment, leading to litigation.The United States Tax Court initially rejected both parties’ proposed methods and conducted its own valuation, ultimately favoring a modified CUT method based on a patent-licensing agreement with Siemens Pacesetter, but with adjustments. The Tax Court’s decision was vacated by the United States Court of Appeals for the Eighth Circuit in Medtronic, Inc. & Consolidated Subsidiaries v. Commissioner, 900 F.3d 610 (8th Cir. 2018), which remanded for additional factual findings regarding the best transfer pricing method. On remand, the Tax Court abandoned the CUT method, rejected the Commissioner’s comparable profits method, and adopted a three-step unspecified method, resulting in a new profit allocation and tax deficiencies for Medtronic.The United States Court of Appeals for the Eighth Circuit reviewed the Tax Court’s decision, holding that the Tax Court erred in using the Pacesetter Agreement under both the CUT and unspecified methods because the intangible property involved did not have similar profit potential. The Eighth Circuit also found that the Tax Court applied incorrect legal standards and made insufficient factual findings regarding the comparable profits method, asset bases, functions, and product liability risks. The Eighth Circuit vacated the Tax Court’s order and remanded for further proceedings consistent with its opinion. View "Medtronic, Inc, etc. v. CIR" on Justia Law

Anthony Browne was convicted in Iowa in 1991 of willful injury causing serious injury, a Class C forcible felony, and criminal gang participation, a Class D felony. After completing his sentence in 1998 and maintaining a law-abiding life, Browne sought to possess firearms for hunting, target shooting, and home defense. Iowa law prohibits felons, especially those convicted of forcible felonies, from possessing firearms or obtaining a permit to acquire a handgun, and does not allow restoration of firearms rights for such individuals except through a gubernatorial pardon.Browne filed suit in state court against the Governor of Iowa and the Sheriff of Johnson County, arguing that the statutory prohibition on restoration of firearms rights for forcible felons violates the Second Amendment as applied to him. The defendants removed the case to the United States District Court for the Southern District of Iowa. Browne requested a declaratory judgment that the statute is unconstitutional, and injunctions against enforcement and denial of a handgun permit without an individualized determination of dangerousness. The district court dismissed Browne’s federal claim for failure to state a claim, finding the statute constitutional, and remanded his state constitutional claim to state court.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s decision de novo. The appellate court held that Browne had standing because applying for restoration or a permit would be futile under current law. On the merits, the court affirmed the district court’s dismissal, holding that Iowa’s lifetime prohibition on firearm possession by forcible felons, subject to the possibility of a gubernatorial pardon, is consistent with the Nation’s historical tradition of firearms regulation and does not violate the Second Amendment. The judgment of the district court was affirmed. View "Browne v. Reynolds" on Justia Law

Randolph Jay Forrest worked at a used car dealership in Iowa from 2012 to 2021, where he and the owners engaged in a scheme to roll back odometers on dozens of vehicles, alter their titles, and resell them without disclosing the true mileage. After the scheme was discovered, Forrest was indicted on multiple counts, including odometer tampering, mail fraud, and wire fraud. He ultimately pled guilty to one count of wire fraud under a plea agreement, which required him to pay full restitution to all victims harmed by his conduct.The United States District Court for the Northern District of Iowa was tasked with determining the appropriate amount of restitution. Several methodologies were presented: Forrest’s expert suggested calculating loss based on average vehicle value using industry guides, resulting in a total loss of $38,070; the probation office recommended a 40% loss valuation, totaling $76,690; and the government proposed using either the total purchase price paid by victims or the estimated profit from the scheme. The government’s expert, Howard Nusbaum, calculated loss based on the diminished use value of the vehicles, considering the impact of branded titles and misrepresented mileage, arriving at a total loss of $140,178.56. The district court adopted Nusbaum’s methodology, finding it reasonable and supported by the evidence, and rejected Forrest’s arguments regarding salvage value and the reliability of purchase prices.On appeal, Forrest challenged the district court’s adoption of Nusbaum’s methodology, arguing it was insufficiently individualized and did not account for the actual value retained by purchasers. The United States Court of Appeals for the Eighth Circuit reviewed the restitution award for abuse of discretion and clear error. The court held that the district court did not abuse its discretion or clearly err in its loss estimation, given the complexity of the scheme and the evidence presented. The judgment of the district court was affirmed. View "United States v. Forrest" on Justia Law

A black employee of the United States Department of Veterans Affairs alleged that his supervisors failed to provide adequate training, assigned him tasks outside his job description, denied him the ability to work from home during the early COVID-19 pandemic while allowing a white employee to do so, and pressured him to write a false report about another black employee. He also described incidents where he was charged as absent without leave, received a negative performance appraisal, was suspended for workplace conduct, and was assigned to less desirable work shifts. The employee claimed these actions were motivated by racial discrimination and retaliation for prior protected activity.The United States District Court for the Western District of Missouri granted summary judgment in favor of the Secretary of Veterans Affairs. The district court found that the employee failed to establish that he suffered an adverse employment action based on race, that the alleged comparators were similarly situated, or that the employer’s stated reasons for its actions were pretextual. The court also concluded that the evidence did not support a claim of a racially hostile work environment or unlawful retaliation.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo and affirmed the district court’s judgment. The appellate court held that the employee did not present sufficient evidence to create a genuine dispute of material fact regarding disparate treatment, hostile work environment, or retaliation under Title VII. Specifically, the court found that the negative performance appraisal and other alleged actions did not constitute adverse employment actions affecting the terms or conditions of employment, that there was no evidence of similarly situated comparators, and that the employer’s explanations were not shown to be pretextual. The court also determined that the alleged conduct was not severe or pervasive enough to establish a hostile work environment, and that the timing and evidence did not support a claim of retaliation. The district court’s grant of summary judgment was affirmed. View "Woods v. Collins" on Justia Law

Police officers in Bella Vista, Arkansas, responded to a home shared by the Welters and Hutchins families after a suspected drug overdose, where they found pills, including fentanyl, in areas accessible to children. A week later, another overdose occurred at the same residence, resulting in a fatality while children were present. Months later, officers discovered traces of THC in the home’s trash, and a subsequent search revealed marijuana and drug paraphernalia throughout the house, including a still-smoking bong. During an interview, one parent admitted that adults regularly smoked marijuana in the home, though they tried to keep the children out of the room. Police notified the Arkansas Department of Human Services about possible child endangerment. Shortly after, Detective Wilson and other officers took the minor children for forensic interviews without a warrant, over the parents’ objections, and warned the parents they would be arrested if they interfered. The children were later returned to their parents.The United States District Court for the Western District of Arkansas granted summary judgment to Detective Wilson on the parents’ Fourth Amendment claims, finding she was entitled to qualified immunity. The court determined that the parents had not alleged a violation of their own Fourth Amendment rights and that the claims on behalf of the children did not overcome qualified immunity. The parents appealed, focusing solely on the Fourth Amendment claims.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo and affirmed the district court’s decision. The Eighth Circuit held that Detective Wilson was entitled to qualified immunity because, under the totality of the circumstances, a reasonable officer could have believed there was reasonable suspicion that the children were in danger. The court also declined to adopt a new standard requiring probable cause and exigent circumstances for such removals, noting that existing precedent did not clearly establish such a right. View "Welter v. Wilson" on Justia Law

Maurice Rose was convicted by a jury for attempting to kill a government witness in a federal drug and firearms case, intending to prevent the witness’s testimony against an associate. He was found guilty of two offenses: attempting to kill a person to prevent testimony in an official proceeding, and using a firearm during a crime of violence. Rose’s conviction resulted in a 330-month sentence, which was previously affirmed on direct appeal.After unsuccessful prior attempts at post-conviction relief, Rose sought permission to file a successive motion under 28 U.S.C. § 2255, relying on recent Supreme Court decisions—Sessions v. Dimaya and United States v. Davis—that changed the definition of “crime of violence” under 18 U.S.C. § 924(c). The United States Court of Appeals for the Eighth Circuit granted leave to file without addressing the merits. Rose then moved to vacate his firearm conviction, arguing that, under United States v. Taylor, witness tampering by attempted murder does not qualify as a “crime of violence.” The United States District Court for the Eastern District of Missouri denied the motion, finding that attempted killing remains a crime of violence, but issued a certificate of appealability due to the debatable nature of the issue.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed de novo whether Rose’s offense was a “crime of violence” under the elements clause of § 924(c). The court held that attempted murder, including attempted killing of a witness under § 1512(a)(1), categorically qualifies as a crime of violence because it requires the attempted use of physical force. The court distinguished this from the Supreme Court’s holding in Taylor, which addressed attempted Hobbs Act robbery. The Eighth Circuit affirmed the district court’s denial of Rose’s motion to vacate his conviction. View "Rose v. United States" on Justia Law

A Nebraska software company entered into a lease agreement with a financial technology firm for the use of proprietary software designed to facilitate electronic transactions. The agreement required the tech firm to pay substantial annual fees upon acceptance of the software, with installation dependent on the tech firm’s cooperation. The parties also entered a separate agreement for preinstallation services, which were paid in full. After initial delays and a temporary suspension due to the COVID-19 pandemic, the tech firm ultimately terminated the project, citing incompatibility of the software with its infrastructure.The software company filed suit in Nebraska state court, alleging breach of contract and breach of the implied covenant of good faith and fair dealing, seeking damages equal to the unpaid lease fees. The case was removed to the United States District Court for the District of Nebraska. The district court granted summary judgment for the tech firm, holding that a limitation-of-liability clause in the lease agreement barred the software company from recovering the damages sought. The court found that the clause limited recovery to fees actually paid, not fees owed, and that the clause was neither unconscionable nor rendered the contract meaningless. The court also determined that the Uniform Commercial Code did not apply, and even if it did, the contract did not fail of its essential purpose.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court’s decision. The appellate court held that, under Delaware law, the limitation-of-liability clause was enforceable as written, limiting damages to fees paid and barring recovery of unpaid fees. The court also found the clause was not unconscionable and that the contract did not fail of its essential purpose. The judgment in favor of the tech firm was affirmed. View "Baldwin Hacket and Meeks, Inc. v. Early Warning Services, LLC" on Justia Law

West Central Agri Services operates a grain handling facility in Missouri, where employees load grain into railcars by accessing the tops of the cars, which are about fifteen feet above the ground. Employees open and close lids on the railcars to facilitate grain transfer, and a Trackmobile moves the railcars into position. An OSHA inspector, investigating an unrelated explosion, discovered that employees frequently worked atop railcars without wearing fall protection personal protective equipment (PPE), despite the facility having a fall protection system in place on one track and safety training instructing use of such equipment. Supervisors were aware of the lack of PPE use, and employees were not disciplined for noncompliance.Following the investigation, the Secretary of Labor cited West Central for a willful and serious violation of 29 C.F.R. § 1910.132(d)(1)(i), which requires employers to ensure employees use appropriate PPE for identified hazards. After a three-day evidentiary hearing, an administrative law judge (ALJ) of the Occupational Safety and Health Review Commission upheld the citation and imposed a penalty of $122,878.80, finding that West Central recognized the fall hazard and failed to enforce PPE use. The Commission denied discretionary review of the ALJ’s decision.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that the Federal Railroad Administration (FRA) has exercised statutory authority over the working conditions on top of railcars, specifically through its 1978 policy statement asserting jurisdiction over walking-working surfaces and employee protection around railcars. As a result, the FRA’s authority preempts OSHA’s jurisdiction under 29 U.S.C. § 653(b)(1). The court vacated the citation and reversed the ALJ’s order, concluding that OSHA cannot enforce its PPE regulation for employees working on top of railcars at this facility. View "MFA Enterprises, Inc. v. OSHRC" on Justia Law

A train conductor and other women working at a Nebraska railyard alleged that they were subjected to frequent sex-based harassment by coworkers and supervisors. The allegations included unwelcome sexual advances, derogatory comments about women’s abilities, sexually explicit jokes, persistent sexual graffiti in work areas, unsanitary restroom conditions intentionally created to harass women, and the display of sexually explicit images. The employer’s supervisors allegedly failed to address complaints, sometimes responding dismissively or with humor. The Equal Employment Opportunity Commission (EEOC) investigated these claims, found reasonable cause to believe that Title VII had been violated, and, after unsuccessful conciliation, filed suit on behalf of the named conductor and a group of similarly aggrieved women.The United States District Court for the District of Nebraska dismissed the EEOC’s claims on behalf of the group of women, holding that the EEOC failed to plead that the group suffered the same type of harassment as the named conductor and did not adequately specify the class size. The court later granted summary judgment to the employer on the individual claim, finding that the alleged harassment was not sufficiently severe or pervasive to constitute a hostile work environment under Title VII, and that conduct outside the statutory limitations period was not part of a continuing violation.The United States Court of Appeals for the Eighth Circuit reversed both the dismissal and the summary judgment. The appellate court held that the district court erred by imposing heightened pleading requirements not supported by law, and that the EEOC’s complaint plausibly alleged a hostile work environment for the group. The Eighth Circuit also found that there were genuine issues of material fact regarding the severity and pervasiveness of the harassment and whether pre- and post-limitations conduct formed a continuing violation. The case was remanded for further proceedings. View "EEOC v. BNSF Railway Company" on Justia Law

A fire occurred on September 27, 2018, at a multi-building apartment complex in Birmingham, Alabama, owned by Maxus Metropolitan, LLC. The fire destroyed one building and damaged others, including causing soot and water damage. Maxus was insured by Travelers Property Casualty Company of America under a policy covering physical loss or damage and lost business income. After the fire, Maxus and Travelers disagreed over the extent of coverage, particularly regarding remediation costs for microscopic soot and water damage. Maxus hired experts who found widespread soot contamination, prompting evacuation and remediation. Travelers disputed the necessity of remediation and delayed coverage decisions.Maxus sued Travelers in Missouri state court for breach of contract and vexatious refusal to pay, and Travelers removed the case to the United States District Court for the Western District of Missouri. At trial, the jury found for Maxus, awarding substantial damages, additional damages for vexatious refusal, and attorneys’ fees. The district court granted Maxus’s motions for attorneys’ fees and prejudgment interest, including fees for pre-suit work and paralegal support. Travelers moved for judgment as a matter of law and for a new trial, arguing issues with coverage, sufficiency of evidence, jury instructions, and calculation of damages and fees.The United States Court of Appeals for the Eighth Circuit reviewed the case. It affirmed the district court’s denial of Travelers’ motions for judgment as a matter of law and for a new trial, holding that microscopic soot can constitute “direct physical loss or damage” under Missouri law if it renders property uninhabitable, and that sufficient evidence supported the jury’s findings on coverage and vexatious refusal. The court also affirmed the attorneys’ fees award. However, it vacated the prejudgment interest award, finding the calculation method improper, and remanded for recalculation based on the dates payment was demanded from Travelers. View "Maxus Metropolitan, LLC v. Travelers Property Casualty Co." on Justia Law