Supreme Court Takes Up Two Cases from the Eighth Circuit

By: Administrator on March 3rd, 2014

By Ryan Leemkuil

This morning, the United States Supreme Court agreed to review two cases from the Eighth Circuit Court of Appeals.

In Holt v. Hobbs, the Court will consider the legality of the Arkansas Department of Corrections’ no-beard growing policy.  Gregory Holt (a/k/a Abdul Maalik Muhammad) challenged the ban, seeking permission to grow a half-inch beard consistent with his Muslim beliefs.  The state denied Holt’s request, citing security concerns (inmates might hide contraband in their beards or quickly change their appearance with a shave).  Last June, the Eighth Circuit upheld the policy as the least restrictive means of furthering prison security interests.  Holt, in a handwritten pro se petition, convinced the Supreme Court to take up his challenge to the beard-ban.

In the other case, Warger v. Shauers, the Court will consider whether juror testimony is admissible to show alleged juror dishonesty as the basis for a new trial.  Last year, the Eighth Circuit held the evidence was inadmissible under Federal Rule of Evidence 606, reasoning that “occasional inappropriate jury deliberations” are preferable to “relentless post-verdict scrutiny and second guessing.”  The panel did, however, acknowledge a circuit split on the issue, and the Supreme Court appears poised to resolve that conflict.

 


The Eighth Circuit Bar Association’s Winter Newsletter is Out

By: Ryan Koopmans on February 13th, 2014

The Eighth Circuit Bar Association’s winter newsletter is now available here.  It covers Eighth Circuit decisions on topics from NFL collective bargaining to the Truth in Lending Act, and it contains another profile of the Eighth Circuit’s newest member, Judge Jane Kelly.


Robert Bork v. Antonin Scalia, Tom Harkin, and the Iowa Supreme Court’s upcoming decision in Bertrand v. Mullin

By: Ryan Koopmans on January 28th, 2014

Last Thursday, the Iowa Supreme Court heard oral argument in Bertrand v. Mullin and the Iowa Democratic Party, a defamation case that stems from a state senate race out of Sioux City.  Shortly before the November 2010 elections, Republican Rick Bertrand sued  in response to an ad that his opponent, Rick Mullin, and the Iowa Democratic Party ran against him.

An ominous-sounding voice (you know the one) told the audience that “Bertrand doesn’t want you to know he puts his profits ahead of children’s health.”  “Bertrand,” the voice said, “was a sales agent for a big drug company that was rated the most unethical company in the world.”  And the “FDA singled out Bertrand’s company for marketing a dangerous sleep drug to children.”


The NFL Goes Back to the Eighth Circuit

By: Ryan Koopmans on January 14th, 2014

The decades-old battle between the NFL and its players is returning to the Eighth Circuit this morning, when  the NFL Players Association will ask a three-judge panel to reinstate its lawsuit against the teams and their owners for secretly setting a salary cap for the 2010 season, which was supposed to be uncapped.

In 1993, the players and the NFL entered into a settlement agreement in White v. NFL that governed the league’s labor relations until 2011.  That agreement allowed the NFL to set a salary cap, but it also provided that the “Final League Year”–the season before the agreement expired–would be uncapped.  The theory was that the owners’ fear of a salary-cap free season would entice them to extend the agreement into perpetuity.

It seemed to work.  The two sides extended the agreement in 1996, 1999, 2002, and 2006.  But a few years after the last extension, the NFL announced that it wasn’t going to play that game anymore; it was letting the agreement expire in the spring of 2011, meaning that the 2010 season would be uncapped.

Or at least it was supposed to be.  The players now allege that the owners agreed to a secret $123 million salary cap during the 2010 season.  There were a few rogues, as there often are.  The Redskins, Cowboys, Raiders, and Saints exceeded the unspoken payroll limit by$103 million, $53 million, $41 million, and $36 million, respectively.  But the league later punished those teams by taking salary-cap space from worst offenders (the Redskins and the Cowboys) for the 2011 and 2012 seasons and evenly distributing that amount to every other team, except the Raiders and Saints.

After the NFL doled out the punishments, some of the other owners were blunt about the reason.  New York Giants owner John Mara said that the Redskins and Cowboys had violated “the spirit of the salary cap” because they “attempted to take advantage of a one-year loophole”–meaning the 2010 uncapped season.

So the players  might have a case–if they can ever get to the merits. When the owners locked out the players after the 2011 season, the players disbanded their union and filed another antitrust action (Brady v. NFL).  The district court sided with players by enjoining the lockout, but the Eighth Circuit reversed and as a result the players and owners entered into a new collective bargaining agreement.  As a condition of that agreement, the owners made the players file a stipulated dismissal in the White v. NFL class action, which stated that the players and their association agreed to dismiss all potential claims for any breach of the 1993 agreement “known and unknown, whether pending or not.”

That dismissal includes the claim that the owners wrongly conspired to set a salary cap for the 2010 season, so the district court dismissed the players’ claim.  And that’s the issue the Eighth Circuit panel (Chief Judge Riley and Judges Wollman and Shepherd) will hear today.

The players argue that because the White case was a class action (meaning that some of the plaintiffs weren’t directly represented), the dismissal of all claims related to the 1993 White settlement couldn’t happen unless and until the district court held a fairness hearing and approved it under Rule 23(e).

The parties’ briefs are linked below.  The case will likely be decided sometime before the 2014 season begins.  If the Eighth Circuit reverses and sends the case back to district court, the NFL will face a potential $3 billion judgment.

Players’ opening brief
Owners’ brief
Players’ reply brief


Judge Colloton warns of Twombly and Iqbal embellishment

By: Ryan Koopmans on September 12th, 2013

Twombly and Iqbal aligned the case law with the Federal Rules’ pleading standards, they didn’t change them (nor could they).  That was Judge Colloton’s message last week in Horras v. American Capital Strategies, Ltd., an Iowa case about minority shareholder rights.

Thomas Horras owned a minority interest in a home healthcare business and the majority shareholder purported to sell out without telling him.  So Horras sued.  He claimed that the majority shareholder had a duty to disclosure the sale to him, especially because the majority shareholder represented that it was selling all of the company’s shares, not just a controlling interest.

The district court dismissed the lawsuit, and last week an Eighth Circuit panel affirmed that ruling 2-1. The majority of the panel, Judge Gruender writing, concluded that if given the chance, the Iowa Supreme Court would not require majority shareholder to tell the minority shareholder that he intended to sell the majority interest.  While the Iowa Supreme Court might very well recognize such a claim for a closely held company, Horras hadn’t pled that this was a closely held company.  And according to Judge Gruender (joined by Judge Benton) Twombly and Iqbal require that he plead it.

As for Horras’s claim that the majority shareholder purported to sell all of the company’s shares, Judge Gruender wrote that Horras hadn’t properly pled that either.  The breach-of-fiduciary-duty count stated only that the majority shareholder failed to notify Horras of “corporate activity [a]ffecting his shares.”  The part about purporting to sell off the shares was in a separate breach-of-contract count, which the district court also dismissed.  (That dismissal was unanimously affirmed.).

Judge Colloton dissented. In an interesting opinion about what Twombly and Iqbal do and what they don’t, Judge Colloton–who served on the Advisory Committee on Civil Rules from 2008-2013– concluded that Horras said enough to get by the motion to dismiss.  Here’s the relevant portion of his dissent:


Eighth Circuit Newsletter: Intra-Circuit Splits, the Twenty-First Amendment, and Judge Jane Kelly

By: Administrator on June 27th, 2013

The Eighth Circuit Bar Association’s summer newsletter is out, and  it contains two articles by Nyemaster Goode attorney and On Brief contributor Ryan Koopmans. The first article discusses the Eighth Circuit’s conflicting, same-day decisions in United States v. Bruguier and United States v. Rouillard.  (Our earlier coverage of those decisions is here and here.)

The second article analyzes a pending Eighth Circuit case that will decide the meaning of the Twenty-first Amendment.  (Yeah, the one that says we can drink booze.)  The three-judge panel includes two Iowans: Judge Steven Colloton and Judge Stephanie Rose, a newly confirmed district court judge who is sitting on the Eighth Circuit by designation.

The newsletter, which is edited by Briggs & Morgan attorney Scott Flaherty, also contains a profile of our newest Eighth Circuit judge, Jane Kelly (who also hails from Iowa). Read the the whole thing here.


BREAKING: Eighth Circuit Strikes Down Part of Iowa’s Election Laws As Unconstitutional

By: Administrator on June 13th, 2013

By Colin Smith

The opinion in Iowa Right to Life v. Tooker—a case we predicted would be a blockbuster—was handed down by the Eighth Circuit Court of Appeals this morning.  While I have only had the opportunity to skim the lengthy opinion at this point, the following appears to be the result of the case:


Two appellate-jurisdiction issues; two circuit splits. Next year’s moot-court competition?

By: Ryan Koopmans on February 14th, 2013

Yesterday, the Eighth Circuit decided Ruppert v. Principal Life Insurance Company and deepened circuit splits on two separate issues. First, the panel held that if a plaintiff voluntarily dismisses his remaining claim after receiving an unfavorable interlocutory ruling, there is no final appealable order unless the dismissal is with prejudice.  That ruling reinforces Eighth Circuit precedent and strengthens a long-lasting circuit split that most, if not all, federal courts of appeals have addressed.

Second, the court ruled that if a district court denies class certification and the putative class plaintiff voluntarily settles his underlying claim, then the plaintiff does not have standing to appeal the class-certification order.  In so ruling, the Eighth Circuit sided with the Fourth Circuit and split with the D.C. Circuit.  Moot-court boards take note: two issues; two circuit splits.  Sounds like the Eighth Circuit has written next year’s competition.

The case arises out of a  putative class action against Iowa-based Principal Life Insurance Company.  The plaintiff, Joseph Ruppert, alleged that Principal violated ERISA by receiving revenue-sharing payments from mutual funds and failing to disclose those payments to its customers.  A federal district court in Iowa denied class certification, and the Eighth Circuit rejected Ruppert’s request for interlocutory appeal.

Hoping to create a final, appealable order, Ruppert settled and dismissed his underlying claims against Principal, but with two caveats: Ruppert reserved the right to appeal the denial of class certification, and if the Eighth Circuit reversed, then Ruppert reserved the right to refile his claims on remand.  Likely realizing the jurisdictional hurdles that agreement would create, Ruppert and Principal agreed that Principal would not challenge the Eighth Circuit’s jurisdiction to hear Ruppert’s class-certification appeal.

Of course, that could not and did not stop the Eighth Circuit from deciding the jurisdictional issues itself.  And a three-judge panel, Judge Colloton writing, decided them both against Ruppert.

To begin, there was no final judgment because Ruppert dismissed his claims without prejudice.  Under the settlement agreement, the claims would, in Judge Colloton’s words, “spring back to life” if the Eighth Circuit reversed the denial of class certification.  The panel acknowledged the circuit split on the issue, citing several cases that cite several more.  But the panel reinforced the Eighth Circuit rule: “[U]nless the appellant’s claims are unequivocally dismissed with prejudice, there is no final appealable decision.”

But the Eighth Circuit went on, noting that even if it were “wrong about finality,” Ruppert settled his claims against Principal, so he doesn’t have Article III standing to appeal the class-certification ruling.  Under U.S. Supreme Court precedent, a class plaintiff may appeal the denial of class certification even if his individual claims are involuntarily dismissed because the plaintiff maintains an interest in collecting attorney fees and spreading the cost of the litigation throughout the class.  But the Supreme Court has left open the question whether a class-certification appeal becomes moot if the plaintiff settles his underlying claims.

The answer, according to the Eighth Circuit, is yes.  Splitting with the D.C. Circuit, but joining the Fourth Circuit, the court ruled that when a putative class plaintiff settles his claims, he lacks standing  to appeal an adverse class-certification order even if he retained the right to seek attorney fees. Under that scenario, the plaintiff does not maintain “a sufficient personal stake to maintain a case or controversy.”

Expect a cert. petition on both issues–though the presence of both issues might make this case a poor vehicle to address either one.


Eighth Circuit Panel Split Over Whether Statute of Limitations Binds Court’s Sua Sponte Authority

By: Ryan Koopmans on January 22nd, 2013

Last week in United States v. Daily, a majority of a three-judge panel ruled that a district court can resentence a criminal defendant sua sponte even though the statute of limitations has passed for post-conviction relief.

Carlous Daily was convicted of armed robbery, among other crimes, and sentenced to 444 months in prison.  The Eighth Circuit affirmed the conviction, and Daily filed for post-conviction relief under 28 U.S.C. § 2255 within the one-year limitations period.  Later, and after the limitations period expired, Daily  moved to amend his § 2255 motion to challenge the calculation of his guidelines sentencing range.  Seeing that the amendment was untimely, the district court rejected it.  That wasn’t the end of case, though: On further investigation, the court noticed a different sentencing error and sua sponte reduced Daily’s sentence to 420 months.

The government appealed, arguing that the court had no authority to grant relief  outside of the statute of limitations.  A majority of the Eighth Circuit agreed with the district court, reasoning that it may be “desirable” to put a “time limit on when a district court can notice an error in a habeas,” but ultimately concluding “that is a matter for an appropriate rule-making authority, not this court.”

Judge Colloton dissented:

If Carlous Daily had sought to supplement his pending 28 U.S.C. § 2255 motion based on the same ground raised by the district court on the same date that the district court raised it, then the district court would have been required to reject Daily’s request as untimely. See 28 U.S.C. § 2255(f). Under the majority’s approach, however, a district court may deny an untimely movant’s request to supplement but then immediately grant relief sua sponte on the same ground. I disagree that a district court has such authority to circumvent the statute of limitations, and I would reverse the district court’s sua sponte modification of Daily’s sentence.

Assuming the majority opinion stands (the government has already asked for an extension to file a petition for rehearing en banc), judges in the Eighth Circuit will now have discretion to waive the statute of limitations, so long as the defendant has made at least one timely § 2255 argument.  If the defendant raises additional issues after the limitations period expires, the district court must reject the amendment but can still take up the argument sua sponte.   Of course, some judges will be more willing to exercise that discretion than others.


Eighth Circuit Validates Class Action Waivers in FLSA Cases

By: Administrator on January 9th, 2013

By Tom Cunningham

The U.S. Court of Appeals for the Eighth Circuit presented employers with a New Year’s victory on Monday when it issued its decision in Owen v. Bristol Care, Inc., 2013 WL 57874 (8th Cir. Jan. 7, 2013). The Court held that an arbitration agreement that contained a class action waiver provision prohibiting the employee from arbitrating claims on behalf of a class was valid and enforceable. 

Sharon Owen was employed as an administrator at an elderly residential care facility operated by her employer, Bristol Care, Inc., in Cameron, Missouri.  When Owen was hired, she signed an agreement in which the parties agreed to resolve all disputes that might arise between them by binding arbitration.  The agreement expressly included within its scope any claim for violation of the Fair Labor Standards Act (“FLSA”) and state wage and hour laws.  The agreement also contained a waiver that prohibited the parties “from arbitrating claims subject to the agreement as, or on behalf of, a class.”  Finally, the agreement clearly stated the employee did not waive the right to file a complaint with the EEOC or any other federal, state or local agency designated to investigate complaints of harassment, discrimination, and other statutory violations.

A few years later, Owen initiated a lawsuit against Bristol Care alleging on behalf of herself and other similarly situated current and former employees that Bristol Care had misclassified facility administrators like herself as exempt employees for purposes of the overtime provisions of the FLSA and state law.  She sought overtime compensation for herself and the putative class members.  Bristol Care moved to stay the federal court case and compel arbitration in accordance with her agreement and the Federal Arbitration Act (“FAA”).  The district court denied Bristol Care’s motion to compel, holding that the agreement was invalid because it contained a class action waiver.  The district court distinguished the U.S. Supreme Court’s recent decision in AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011), which upheld the enforceability of a class action waiver in a consumer contract, on the grounds that Concepcion was not controlling in the employment context.  Instead, the court relied in part on the decision of the National Labor Relations Board in D.R. Horton, Inc., 357 NLRB No. 184 (2012), appeal pending, No. 12-60031 (5th Cir. filed Jan. 13, 2012).  The district court concluded that class action waivers are invalid in FLSA cases because the FLSA expressly provides the right to bring a class action.  We discussed the D.R. Horton case last year in this blog post.


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