Justia Business Law Opinion SummariesArticles Posted in US Court of Appeals for the Eighth Circuit
Dunne v. Resource Converting, LLC
After plaintiff purchased licenses for RCI non-thermal, pulverizing, and drying system technology (PAD), he alleged that the capabilities of the PAD System were misrepresented to him. Two federal law suits were filed, one in Iowa and one in Missouri.In this consolidated appeal, the Eighth Circuit affirmed the Iowa judgment, rejecting RCI's argument that it is entitled to judgment as a matter of law because the jury awarded no compensatory damages. The court concluded that punitive damages were recoverable under Iowa law because the jury necessarily found that plaintiff suffered actual damages when it found fraudulent misrepresentation. Furthermore, the jury could award punitive damages without an award of compensatory damages, and the punitive award was not unconstitutionally excessive. The court also concluded that plaintiff is not entitled to equitable relief and the district court neither erred or abused its discretion as to plaintiff's equitable counterclaims. Finally, the court found that the method used and reasons given by the district court for the reduction in costs were well within its discretion, and the district court did not abuse its discretion in awarding attorney fees.The court remanded the Missouri judgment for further proceedings, concluding that the district court erred by applying federal law, rather than Iowa law, to determine whether plaintiff's claim was precluded. The district court also erred by determining that Missouri law on the economic loss doctrine would bar plaintiff's misrepresentation claims. The court also noted that plaintiff's conspiracy claim should be reinstated and the district court's attorneys' fee award to Resource as the prevailing party is set aside. View "Dunne v. Resource Converting, LLC" on Justia Law
Azarax, Inc. v. Syverson
Azarax filed suit against defendant and his law firm, alleging legal malpractice and breach of fiduciary duty. Azarax claimed that defendant and his firm were negligent in their representation of Convey Mexico and that Azarax had claims against defendant and his firm as a successor by merger to Convey Mexico.The Eighth Circuit affirmed the district court's dismissal of the complaint and agreed with the district court that Azarax was not a valid successor in interest to Convey Mexico. In this case, the summary judgment record established that the shareholders of Convey Mexico did not unanimously provide written consent for the merger with Azarax Holding, so the merger was not valid. Therefore, Azarax lacked standing to sue defendant and his law firm. The court modified the judgment to dismiss the complaint without prejudice. View "Azarax, Inc. v. Syverson" on Justia Law
Farmers Edge Inc. v. Farmobile, LLC
FEI, Crop Venture's successor-in-interest, filed suit alleging that the individual defendants took proprietary information they developed at Crop Ventures after they left the company and co-founded Farmobile (the corporate defendant). Specifically, FEI alleges that the individual defendants' behavior constituted a breach of explicit or implicit contracts with the company; defendants were obligated to assign to their employer the ownership rights of products they worked to develop; the individual defendants breached their duty of loyalty to their employer; and the individual defendants misappropriated trade secrets. The district court denied in full FEI's motion, and granted in part and denied in part Farmobile's motion.The Eighth Circuit affirmed and held that because no contract bound the parties during Defendant Nuss' term of employment, Nuss was not in breach of an explicit contract; FEI has not shown that any of the individual defendants was similarly "specifically directed" during their product-development process, so no implied contracts were created under the hired-to-invent doctrine; FEI failed to show the individual defendants breached their duty of loyalty to their employer; FEI cannot maintain a trade secret claim under the Nebraska Trade Secrets Act (NTSA) or the federal Defend Trade Secrets Act (DTSA); and the remaining claims are unpersuasive. View "Farmers Edge Inc. v. Farmobile, LLC" on Justia Law
MPAY Inc. v. Erie Custom Computer Applications, Inc.
MPAY, a Massachusetts corporation that develops and owns payroll-processing software that it licenses to its customers, appealed the district court's denial of its motion for a preliminary injunction against appellees. MPAY claimed that it was entitled to such relief based on its copyright-infringement and trade-secrets-misappropriation claims.The Eighth Circuit affirmed in part and vacated in part, holding that appellees demonstrated that their copying, disclosure, and possession of the source code were authorized by the Software Development and License Agreement that MPAY signed with its business partner. Therefore, MPAY has not shown a likelihood of success on the merits of its copyright infringement or trade-secrets-misappropriation claims, and the district court did not err in so concluding. The court also held that MPAY's assertion, that the district court erroneously concluded MPAY's harms were compensable with money damages and so were not irreparable, lacked merit. Furthermore, the balance of the equities and the public interest do not favor an injunction. The court remanded for further proceedings on the question of whether the contractors wrongfully sublicensed use of the software. View "MPAY Inc. v. Erie Custom Computer Applications, Inc." on Justia Law
Schlafly v. Eagle Forum
Plaintiff, a member of the Board of Directors of Eagle Forum, filed suit against Eagle Forum and others, alleging violations of the organization's bylaws and breach of fiduciary duties in connection with the organization's attempt to remove plaintiff and others from the Board.The Eighth Circuit held that plaintiff waived the Bylaws claim set forth in his original complaint; the district court did not err in dismissing plaintiff's claim that Eagle Forum violated Illinois law by not permitting proxy voting; the district court acted within the scope of its "informed discretion" by awarding attorneys' fees by relying on its inherent power, because Federal Rule of Civil Procedure 11 was not "up to the task" in this situation; the district court did not abuse its discretion in awarding attorney's fees to Eagle Forum under its inherent power as a sanction against plaintiff for acting in bad faith; the district court provided a reasoned basis for its award of $9,851.25 in attorneys' fees to Eagle Forum by relying on and analyzing the invoice submitted by Eagle Forum. View "Schlafly v. Eagle Forum" on Justia Law
Inline Packaging, LLC v. Graphic Packaging International, LLC
Inline filed suit against its competitor, Graphic, alleging antitrust and tortious interference claims related to the susceptor-packaging market. The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Graphic, holding that the district court did not err concluding that there was no genuine dispute of material fact regarding whether Graphic fraudulently procured patents on packaging concepts and designs through false claims of inventorship of the asserted patents and fraudulently concealed prior sales of drawing sample sleeves. In this case, Inline cannot establish that Graphic committed knowing and willful fraud and thus his monopolization claim under 15 U.S.C. 2 failed. Because Inline did not evidence fraud related to Graphic's procurement of the asserted patents and its prior sales of drawing sample sleeves 50019D/F, it has not established why the same set of facts and evidence would render Graphic's patent-infringement litigation objectively baseless. Therefore, the court affirmed the district court's dismissal of the sham-litigation claim.The court affirmed the district court's dismissal of the discount-bundling claim because Inline failed to show that Graphic held sufficient monopoly or market power, and the district court adequately assessed the record and did not abuse its discretion in dismissing Inline's economic expert's untimely market opinion. Finally, the court held that the district court did not abuse its discretion in rejecting Inline's exclusive dealing claim and tortious interference claim. View "Inline Packaging, LLC v. Graphic Packaging International, LLC" on Justia Law
Ritchie Capital Management v. JP Morgan Chase & Co.
The Ritchie entities filed suit seeking to recover millions of dollars they loaned Tom Petters, a convicted fraudster, and two of his companies. The Ritchie entities alleged that defendants helped conceal the fraud so that they could recover millions they had tied up with Petters' companies. The district court dismissed the claims as time-barred.The Eighth Circuit first held that the district court had subject matter jurisdiction under the Edge Act, and the court need not decide whether the district court also had subject matter jurisdiction under 28 U.S.C. 1334(b). Furthermore, the district court was correct to apply New York choice-of-law principles to determine that Illinois law applied to the question of whether the action was time-barred.The court also held that the district court erred in concluding that Illinois's statute of limitations applied to three of the plaintiffs because the pleadings do not definitively establish their claims accrued in Illinois. The district court did not err in finding that the remaining claims were untimely under Illinois law and that the doctrines of discovery rule, equitable estoppel, and equitable tolling did not apply. The court also held that the district court did not abuse its discretion by failing to grant the Ritchie entities leave to amend their complaint yet again because the Ritchie entities failed to submit a motion to amend or indicate what a proposed amended pleading would have stated. Finally, the court reversed the dismissal of the Ritchie Cayman entities' claims against JP Morgan Europe in order for the district court to permit jurisdictional discovery if it deems necessary to determine whether it has personal jurisdiction over JP Morgan Europe. View "Ritchie Capital Management v. JP Morgan Chase & Co." on Justia Law
CRST Expedited, Inc. v. Transam Trucking, Inc.
CRST filed suit against TransAm, alleging that TransAm wrongfully recruited and hired several long-haul truck drivers who were under contract with CRST. The district court granted TransAm's motion for summary judgment and dismissed all of CRST's claims with prejudice.The Eighth Circuit held that the district court erred with respect to the causation element but did not err with respect to the existence of a valid contract element, and that the record contains sufficient evidence to support the intentional and improper interference element. The court also held that the district court erred in granting TransAm's motion for summary judgment on CRST's unjust enrichment claim. Finally, the court held that the district court did not abuse its discretion in finding the drivers were not indispensable parties. Accordingly, the court reversed and remanded the district court's order granting TransAm's motion for summary judgment and affirmed the district court's determination that the drivers are not indispensable parties to the proceedings. View "CRST Expedited, Inc. v. Transam Trucking, Inc." on Justia Law
Infogroup, Inc. v. DatabaseUSA.com LLC
The Eighth Circuit affirmed judgments against DatabaseUSA for copyright infringement and Vinod Gupta for breach of contract. After Gupta founded Infogroup, he and the company entered a separation agreement. Then Gupta found DatabaseUSA two years later.The court held that a reasonable juror, based on the evidence at trial, could have found Infogroup owned a valid copyright; a reasonable juror could have concluded that DatabaseUSA copied the original elements of Infogroup's work; and, because of spoliation, DatabaseUSA's two arguments against copying fail. Finally, the court affirmed the $11.2 million award for the copyright infringement claim and the $10 million award for the breach of contract claim. View "Infogroup, Inc. v. DatabaseUSA.com LLC" on Justia Law
Jet Midwest International Co. v. Ohadi
The Eighth Circuit affirmed the district court's order granting Jet Midwest and PMC's motion for a preliminary injunction to prevent Appellant Ohadi and Woolley from foreclosing on the assets of JMG until the parties conduct an expedited trial on the merits of the underlying fraudulent transfer act.The court held that the district court properly applied the Dataphase factors and did not abuse its discretion in making the reasonable decision to grant the preliminary injunction to maintain the status quo and expedite the trial to further develop the record. In this case, the district court did not abuse its discretion in determining that Jet Midwest demonstrated a likelihood of success on the merits where there was no dispute that the sale initially contained parts from Jet Midwest's Aircraft and that Jet Midwest had a purchase money interest in the Aircraft; Jet Midwest would suffer irreparable harm if Ohadi and Woolley were allowed to proceed with the foreclosure sale; Ohadi and Woolley's burden is outweighed by the serious potential harm Jet Midwest would face if Ohadi and Woolley conducted a foreclosure sale of its possible interests; and the district court did not abuse its discretion in finding that the public interest favored enforcing the injunction to prevent fraud. View "Jet Midwest International Co. v. Ohadi" on Justia Law