Douglas Reuter v. Jax Ltd., Inc.
2013 U.S. App. LEXIS 6672
| 8th Cir. | 2013Background
- Reuter granted Jax exclusive rights to manufacture and distribute Sequence in 1981.
- In 2006, parties agreed Walmart would not be a vendor without Reuter’s approval.
- In 2010, Jax learned of unauthorized Walmart sales in Canada; Jax sent a cease-and-desist letter via Anjar Co.
- Reuter independently learned of Walmart sales in February 2010 and provided evidence in May 2010.
- Reuter filed a two-count declaratory judgment action in February 2011; district court granted summary judgment for Jax in September 2011.
- Reuter sought to amend; district court stayed briefing, denied amendment as not meeting Rule 16 good cause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Jax breached by failing to apprise Reuter. | Reuter argues failure to apprise violated paragraph 8. | Jax contends no material or damages-based breach; mere notification failures not determinative. | No genuine issue; breach not material or damages-based. |
| Whether the breach was material to justify termination. | Even if not notified, termination justified by broader breaches and IP rights concerns. | Breach not material; primary contract purpose not violated by lack of apprise. | Breach not material; termination not justified on this basis. |
| Whether district court abused to deny leave to amend under Rule 15/16. | Amendments were not abandoned and claims were novel or at least not futile. | Amendments duplicative or futile; district court properly denied. | District court proper in denying amendment; futility supported. |
Key Cases Cited
- Jensen v. Duluth Area YMCA, 688 N.W.2d 574 (Minn. Ct. App. 2004) (damages required for contract claims)
- Hinz v. Neuroscience, Inc., 538 F.3d 979 (8th Cir. 2008) (damages required to prove contract loss)
- B & Y Metal Painting, Inc. v. Ball, 279 N.W.2d 816 (Minn. 1979) (causation and calculable damages standard)
- Boatwright Constr., Inc. v. Kemrich Knolls, 238 N.W.2d 606 (Minn. 1976) (material breach considerations)
- Steller v. Thomas, 45 N.W.2d 537 (Minn. 1950) (breach materiality considerations)
- BOB Acres, LLC v. Schumacher Farms, LLC, 797 N.W.2d 723 (Minn. Ct. App. 2011) (breach materiality and performance excusal)
- Sherman v. Winco Fireworks, Inc., 532 F.3d 709 (8th Cir. 2008) (futility and amendment standards)
- Wisdom v. First Midwest Bank, of Poplar Bluff, 167 F.3d 402 (8th Cir. 1999) (affirmance on alternate basis)