Wells Fargo Bank, N.A. v. WMR E-Pin, LLC
2011 U.S. App. LEXIS 18283
| 8th Cir. | 2011Background
- Wells Fargo, N.A. formed a long-running relationship with Synoran and e-Pin via the SLA and later the DIXE Consulting Agreement, preserving identified IP rights with a central switch approach owned by e-Pin.
- In 2004 Wells Fargo licensed patented DIXE-related tech from e-Pin through a Patent License Agreement, incorporating arbitration procedures from the SLA for disputes.
- Arbitration proceeded in 2008; the three-member Panel found Wells Fargo breached the SLA and misappropriated DIXE trade secrets, awarding Wells Fargo $1,265,000 in attorneys’ fees and $600,000 in costs and permanently enjoining Synoran and e-Pin from using the DIXE trade secrets.
- Wells Fargo sought confirmation of the arbitration award in district court; appellants objected that the Panel exceeded its authority by granting injunctive relief, determining inventorship, and awarding fees.
- The district court confirmed the award and entered judgment for Wells Fargo, including a permanent injunction against the appellants; the appellants appealed challenging subject matter jurisdiction and other aspects.
- On appeal, the Eighth Circuit held Wells Fargo had subject-matter jurisdiction under § 1348 and affirmed the district court’s confirmation and the injunction, with a dissent arguing for lack of diversity because Wells Fargo is a citizen of both California and South Dakota.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court had subject-matter jurisdiction | Wells Fargo argued diversity existed consistent with § 1348 and its main office location. | Synoran argued Wells Fargo was also a citizen of California via principal place of business, destroying diversity. | District court properly had jurisdiction; Wells Fargo deemed citizen of the state where its main office is located. |
| Whether the Panel exceeded its authority by granting injunctive relief | Wells Fargo argued the Panel acted within its authority and that injunctive relief was requested by the parties. | Synoran argued the arbitration agreement forbade injunctions and the Panel exceeded its scope. | Appellants waived the right to challenge injunctive relief and the Panel acted within authority. |
| Whether the Panel could determine inventorship of DIXE trade secrets | Wells Fargo asserted ownership/inventorship for misappropriated DIXE trade secrets. | Synoran contended inventorship concerns were exclusive to USPTO, outside arbitration. | Panel satisfied its remit to resolve misappropriation; did not exceed its authority. |
| Whether attorneys’ fees could be awarded against e-Pin | Under AAA Rules, fees could be awarded if requested and authorized by law or agreement. | e-Pin argued it was not a party to the SLA with fee-award provisions; fees relied on a different SLA provision not incorporated. | Rule 43(d)(ii) permitted fee award; district court did not err in confirming. |
| Whether the permanent injunction could be maintained post-judgment | Injunction consistent with trade-secret protections and continued misappropriation concerns. | Patent filing/public domain status altered equity; injunction should terminate under Rule 60(b)(5). | District court did not abuse discretion; no changed circumstances warranted termination. |
Key Cases Cited
- Wachovia Bank v. Schmidt, 546 U.S. 303 (2006) (national banks not citizen of every state with branches; parity discussed)
- Firstar Bank, N.A. v. Faul, 253 F.3d 982 (7th Cir.2001) (jurisdictional parity for national banks under §1348)
- Horton v. Bank One, N.A., 387 F.3d 426 (5th Cir.2004) (jurisdictional parity for national banks; principal place debate)
- Burns v. American Nat'l Bank & Trust Co. (en banc), 479 F.2d 26 (8th Cir.1973) (historical view of §1348 and parity between national and state banks)
- American Surety Co. v. Bank of California, 133 F.2d 160 (9th Cir.1943) (location of national banks tied to principal place of business under §1348 predecessors)
- Leather Manufacturers' Nat'l Bank v. Cooper, 120 U.S. 778 (1887) (parity of national banks with state banks for jurisdiction)
- Mercantile Nat'l Bank v. Langdeau, 371 U.S. 555 (1963) (parity rationale for banks' jurisdiction)
- Continental Nat'l Bank v. Buford, 191 U.S. 119 (1903) (early articulation of national banks’ jurisdictional footing)
- Petri v. Commercial Nat'l Bank, 142 U.S. 644 (1892) (historical context on national banks’ jurisdiction)