Curtis Lumber Co., Inc. v. Louisiana Pacific Corp.

Second, the record indicates that drug quantity determina- sales. district court’s clearly proceeds erroneous. Zierke controlled the of Zierke tion was drug Finally, transactions. Ill’s Leadership E. Section SBl.l III, phone call between Zierke and Zierke Enhancement testimony, supports as well as Zierke Ill’s controlled, directed, finding that Zierke Finally, contends that while Zierke believed, in per- if even intimidated Zierke III testimony, may Ill’s Zierke that he his son with formance of acts in furtherance of their supplied establish direct, orga- activity. he methamphetamine, did not criminal nize, or his endeavors. supervise III. Conclusion

“The district court’s factual judgment affirm the of the district We findings, including its determination of court. offense, defendant’s role are re Its application

viewed for clear error. guidelines to the facts is reviewed de Vasquez-Rubio, States v.

novo.” United (8th Cir.2002) (internal omitted).

citations arguments un Again, Zierke’s are COMPANY, INC., CURTIS LUMBER 1.1(b) persuasive. Section 3B doing business as Caldwell Lumber provides that the defen “[i]f Guidelines Company, Plaintiff-Appellant/Cross- (but manager supervisor dant was a or Appellee, leader) organizer and the criminal activity participants involved five or more CORPORATION, LOUISIANA PACIFIC extensive, or was otherwise increase dant-Appellee levels.” to that section fur Comment Defen /Cross-Appellant. provides qualify ther for an ad “[t]o section, justment under defendant 09-2602, Nos. 09-2692. leader, organizer, must have been Appeals, United States Court of manager, supervisor of one or more Eighth Circuit. § cmt. participants.” other U.S.S.G. 3B1.1 case, 2. In this the record contains sub Submitted: June 2010. establishing stantial evidence that Zierke Aug. Filed: First, directed Zierke III. the record re exclusively flects that Zierke supplied his methamphetamine subsequent

son with starting Svoboda testified that in mid-Octo- Zierke III testified that he saw Zierke sell- 27, 2008, ber to November she sold Zierke 8- ing methamphetamine every day after he be- methamphetamine daily. balls of Svoboda gan living with his father. Zierke III also further testified that Zierke would often re- early stated that at least as December day. turn a second time in the same Svoboda selling methamphetamine he was for Zierke also testified that she sold Zierke half-ounce day. every supplied Zierke alone Zierke III methamphetamine amounts of on two or methamphetamine. with Zierke III said that Finally, three occasions. Svoboda said that per day would sell about an 8-ball or two he starting mid-January, she sold Zierke an 8- for Zierke. Zierke and Zierke III also used couple gram quantities ball of times and methamphetamine together. other occasions. Horn, Mem- argued,

Daniel Warren Van TN, appellant. for phis, argued, Ryan Michael Puryear, Jeff Wil- son, brief, Jonesboro, AR, appel- on the lee. MELLOY, HANSEN, and

Before SMITH, Judges. Circuit MELLOY, Judge. Circuit (“LP”) Corporation Pacific Louisiana building manufacturer of materi- a national promotion a rebate als. This case involves LP to builders and contrac- offered purchased a certain amount of tors who siding products. Curtis Lumber LP’s (“Curtis Lumber”), a Inc. retail Company, materials, building presented of supplier many of its cus- promotion to LP’s rebate of those customers Eighty-two tomers. siding products purchased or ordered LP’s pay that LP would expectation with $2,400. After the up worth rebates applications, customers submitted rebate also sub- LP that the customers demanded had siding products proof mit sur- requirement installed. That been customers, large majority prised many of whom cancelled orders with Cur- Lumber, Lumber, pay refused to Curtís tis Lum- a rebate from Curtis or demanded end, allegedly Lumber ber. Curtis acts, $100,000 as a result lost over Lumber’s customers but none expenses. Curtis out-of-pocket suffered diversity action brought Lumber against granted Upon learning LP. The district court of the promotion, rebate summary judgment to LP on all of Lumber Curtis Curtis solicited orders from its claims, Lum- who Lumber’s from which Curtis customers were builders and contrac- By promotion’s deadline, asserts a tors. appeals. ber now LP conditional cross-appeal, claiming products that Curtis Lumber Lumber sold SmartSide standing party eighty-two and is not the real of its expec- lacks customers with the LP dispute. interest for this affirm in tation that would a rebate worth We $2,400 part. up to each part and reverse customer. Most of $2,400, the orders were close to so the Background I. expected customers to receive the Smart- products Side out-of-pock- with little no early In late 2006 or LP an- et cost. placed Curtis Lumber orders with a rebate for a promotion nounced line of distributor, Cascade, LP’s wholesale Boise siding products called SmartSide. The to fulfill its customers’ orders. Curtis purpose promotion encourage was to helped also most of the customers builders and to install contractors Smart- complete rebate applications and submit LP products. Side offered rebates for them to LP along with the in- required siding several types products —trim voices. expected Curtis Lumber to make ($500), ($300), ($800), lap panel soffit roughly $2,400 in profit on each pur- $600 ($800) $2,400. a maximum rebate of —for chase of products. SmartSide promotion applied The rebate to orders acknowledged received and between Janu- LP was suspicious of the applica rebate ary May 2007 and tions from Curtis Lumber’s customers be LP relied on they batches, wholesalers and retailers to cause were submitted in promotion, market the rebate guid- and for written the same handwriting, and were ance, it distributed an information sheet at or near the minimum purchase amount listing promotion’s details. The infor- for the maximum rebate. was also qualifications: mation sheet listed two concerned applications because the were promotion “This open to new sequentially Builders submitted with numbered in purchase Contractors who at least one voices that not purchases did indicate of house worth of products,” SmartSide and building other materials. These charac (2) will receive checks among teristics were unusual nearly the “Builder/Contractor upon purchases.” addition, 1,000 based In the applications rebate LP received from information sheet stated that LP required builders and contractors across coun the invoice Therefore, 25, 2007, documentation for a try. rebate to be on June LP sent paid. LP also application distributed an a all applicants letter to of the rebate who for builders and to complete purchased contractors products SmartSide from Curtis Lumber, and submit. Under heading “Terms requesting the following informa Conditions,” (1) and application rebate tion in process order to their rebates: stated: “Please products picture indicate used and showing of the home SmartSide rebate, $2,400 (2) expected with a products, maximum.” the street address of the Following home, (3) this instruction newly was a chart for responses sided and ato an applicant to write in much questionnaire. how of each short If applicant a rebate category siding product use, of proof he or she or- did not submit of then would dered. pay not a rebate.1 that, appears exception, It with one LP did not send the June 25 letter or a similar letter (4) misrepresentation/fraud. letter, intentional appli- rebate receiving Upon alleged A Lumber LP’s acts to Curtis Lumber. Curtis complained cants $100,000 in applicants purchased just over caused it to suffer majority of for future use and profits lost from the products damages, including SmartSide prod- yet sales, not installed had with car- therefore cancelled costs associated complaining Lumber told the inventory prod- ucts. Curtis of rying large SmartSide respond to to the June not customers ucts, that Curtis Lumber the value of sales pay LP should it believed letter since collect, costs of rebates to and was unable an additional imposing of rebates instead Further, Lum- Curtis paid to customers. On promotion. the rebate requirement for pay attorneys’ that LP fees requested ber Lumber’s counsel sent Curtis July punitive damages. and LP, detailing to customers’ an email to federal court LP removed this case process LP to complaints, requesting summary judgment and moved for rebates, threatening to sue LP if it did and (1) Curtis Lumber lacked grounds: three to the customers. not rebates standing party was not the real end, nine Curtis Lumber’s only (2) interest, Lumber’s claims were Curtis 25 letter responded to the June customers meritless, precludes law Arkansas paid of use. LP rebates proof with alleged damages. The district court along with one other those nine customers rejected challenges but LP’s threshold (Habitat respond who did customer summary judgment, granted partial find- seventy- Humanity). remaining The For misrepresenta- ing negligent their either cancelled applicants two rebate fraud claim failed on the tion/construetive Lumber, demanded orders with Curtis merits. The remainder of Curtis Lum- Lumber, or refused to from Curtis rebate questions claims survived ber’s because Lumber. Cur- pay invoices sent Curtis Lum- material fact remained as to Curtis with its customers’ complied tis Lumber claims-specifically, ber’s fraud and ADTPA Forty-one orders SmartSide requests. “proof of a of use” whether LP’s omission prior delivery. cancelled products were in the rebate documents was requirement paid rebates to seventeen omission, a material whether the omission customers, losing [the “out of concern for intentional, whether it caused a result other business and as customers’] Also, damages. the court Curtis Lumber’s having presented program Lumber could amend its held Lumber was unable to col- them.” Curtis allege promissory estoppel complaint on fourteen of the lect the amount due the ADT- and two additional claims under Lum- sales. None of Curtis SmartSide However, PA. the court limited the avail- any out-of-pocket customers incurred ber’s that Arkansas’s damages, concluding able reimbursed, they which were not costs for voluntary payment prohibited rule Curtis has filed suit in connec- and no customer the value of rebates seeking Lumber from promotion. the rebate tion with SmartSide customers, that paid and the refunds LP Lumber April Curtis sued puni- a support evidence was insufficient to court, asserting four in Arkansas state damages tive award. (1) of the Arkan- of action: breach causes reconsideration, (“ADT- LP con- then moved Practices Act Deceptive sas Trade (2) that the district court overlooked PA”), tending negligent misrepresentation/eon- (3) in the fraud, “products terms used” rebate equitable estoppel, and the structive purchased products from other retailers. applicants Smart- Side to rebate who teleconference, Wildlife, 560- During a the 504 U.S. application. Defenders of given (1992). acknowledged that it had Cur- court 112 S.Ct. 119 L.Ed.2d the a infer- tis Lumber benefit of favorable although LP that Lumber’s argues Curtis Nonetheless, that question. on the ence injured, were potentially customers Curtis granted reconsidera- court LP’s motion for does not it standing Lumber because tion, concluding that LP included “use” voluntarily paid rebates and refunds its program its rebate docu- requirement Lumber’s Accordingly, customers. Curtis such, ments. As the court dismissed the injuries alleged fairly are not traceable to claims and remainder Curtis Lumber’s The LP’s acts.2 district court concluded held that the rule voluntary payment also Lumber that Curtis has shown that sus- recovery precludes profits. of lost Curtis damages upon tained based LP’s actions. appeals of all of dismissal its novo, Reviewing City de see v. Hodak claims and the district court’s limitations Peters, (8th Cir.2008), St. damages. conditionally LP cross-ap- on , —U.S.-, cert. 129 S.Ct. denied peals the district court’s determinations (2009), 173 L.Ed.2d 589 we conclude standing that Curtis Lumber has and is bring Lumber has standing party in the real interest. Our discussion lawsuit. begins challenges with LP’s threshold and addresses the Curtis Lum- then merits of inju- Lumber has alleged distinct damages. ber’s claims and the available ries that would not have had LP occurred paid owed to Spe- rebates the customers. Analysis II. cifically, alleges Curtis Lumber it lost Standing A. expected profits on cancelled sales products it paid of SmartSide and that

“Standing inquiry is a threshold costs related to invento- carrying large jurisdictional prerequisite must ry it ordered reliance on the rebate reaching be resolved before the merits of a actual, injuries promotion. par- These are Bayer Corp., Medalie v. suit.” F.3d Lumber, ticularized to Curtis (8th traceable Cir.2007) (internal quotations acts, omitted). (1) LP’s verdict in redressable Standing requires injury (2) such, Curtis Lumber’s favor. fairly As in fact traceable to the defen standing requirements actions likely dant’s to be re are satisfied. See by Lujan Lujan, 560-61, dressed favorable decision. at 504 U.S. 2130. S.Ct. reply groups argu- placed Curtis Lumber's brief the lower court on its order to standing real-party-in-inter- ments and the determine substance and effect of the or- rule, est and LP contends that Curtis Lumber der.”). Given that the district order court’s standing therefore waived the issue. Howev- arguments blended these issues and that the er, arguments on these two issues are intertwined, closely are we decline to hold Indeed, virtually the same. district court standing that Curtis Lumber waived the issue. adjudicated appears standing to have is- cites, cry is a This case far from case issue, along real-part-in-interest sue with the Burke, (8th Heerman v. 266 F.2d 935 Cir. though they concepts.” even are "distinct 1959), appellee where an this Court held that Prods., States, Mitchell Food Inc. v. United 43 precluded rehearing asserting was from a on 369, (Fed.Cir.2002) Fed.Appx. (unpub- 369 procedural challenge preservation as to error lished). implicit We believe it in the only it took issue merits because with the of court's district order that Curtis Lumber has appeal original hearing. the in the Id. at 940. standing pursue to this lawsuit. See United event, any standing In issue is threshold (8th Taylor, v. 544 349 States F.2d Cir. obligated are that we to scrutinize. Roberts v. 1976) ("[T]he examining court in an order Wamser, (8th Cir.1989). 883 F.2d 620 appealed from can look behind the label

771 to use cants could prin- LP’s invitation the have asserted breach-of-con- We decline standing against tract claim it ciple of to enforce LP after refused to constitutional However, voluntary payment undisputed rule. rebates. is Arkansas’s Lumber can the that none of suffered applicants recover those Whether Curtis therefore, injury, is a no risk paid question rebates it to customers there is of such, applicable duplicative litigation. better left to the substantive As II-D-(2). Lumber is the in party law. Section real interest. See infra Party B. in Interest Real C. Curtis Lumber’s Claims Rule of Civil Federal Procedure nowWe turn to whether the district 17(a) provides every “action must court erred in LP’s motion granting name of the real prosecuted party in the summary judgment as to Curtis Lumber’s of this The function rule “is interest.” “Summary causes four of action. judg- simply the defendant protect against appropriate genu- ment is when there is no subsequent by party actually action ine issue material fact and the moving recover, and to insure generally entitled to party judgment entitled to as a matter judgment proper will its Inc., Airlines, law.” Landon v. Nw. 72 17(a) judicata.” effect Fed.R.Civ.P. as res (8th Cir.1995). F.3d Like the (1966). advisory committee note Accord court, give nonmoving par- district we 17(a) ingly, requires that plaintiff Rule Lumber, ty, Curtis of all benefit rea- under “actually possess, substantive sonable from the evidence in inferences law, to be right sought enforced.” Hulm, the record. Kukla v. F.3d Corp. v. Am. Trade United Healthcare (8th Cir.2002). 1046, 1047-48 Our stan- (8th Co., Ltd., 563, 569 Ins. 88 F.3d Cir. novo, we may dard review is de 1996). issues, legal inquiry presents This any affirm on summary judgment basis Records, Inc., see In 586 F.3d re Isbell by Baycol supported the record. re (5th Cir.2009), 336-37 which we review de (8th Litig., Prods. 596 F.3d Cir. novo, Nagin, v. see Manion F.3d 2010). (8th Cir.2004). applies LP that the law appli contends rebate Arkansas case. interest, parties cants the real not We are bound decisions of the Arkansas are merely Supreme meaning Court of Ar Curtis Lumber. Curtis as to seeking Progressive recover on the kansas law. N. Ins. Co. customers’ (8th claims, McDonough, and thus the Cir. argues, real-party- LP 2010). necessary protect “If Supreme rule is the [Arkansas Court] in-interest not must liability. attempt from The district court has decided an issue we double rejected predict Supreme argument, concluding [Arkansas how the issue, forth causes would with deci Court] Curtis Lumber set of action resolve courts damages allegedly being based sustained sions intermediate state itself, applicants. persuasive authority.” Id. Where Arkan not the rebate We con 17(a) may law is we also undeveloped, clude that Rule does bar Curtis sas “look analogous precedent, al to ‘relevant state de Lumber’s lawsuit. Curtis Lumber has cisions, dicta, any leged that the customers could not considered other injuries on the reliable data’ how Su allege e.g., profits lost cancelled to determine — preme associated with Court of would construe [Arkansas] sales and the costs unsold Conceivably, inventory. appli- the rebate law.” In re W. Iowa Lime- [Arkansas] (8th stone, Inc., time that applications Cir. ed the the rebate (citation omitted). 2008) merely LP have were submitted. could words to the sheet: added two information 1. Fraud “Qualifications: promotion open This is to law, purchase Builders or Under Arkansas fraud re new Contractors who “(1) at worth representation a false of mate and install least one house of quires: (2) fact; represen Instead, the knowledge products.” rial that SmartSide LP’s inter- “used,” is pretation tation is false or that there insufficient is premised on the word upon repre which to make the appears evidence which a small font in the middle (3) sentation; intent to action or application. Viewing induce the rebate the upon representa in reliance inaction “whole context” of the information rebate (4) tion; justifiable on the repre reliance application “particu- sheet and rather than sentation; and damage suffered as a phrases,” lar person words could Smith, of result the reliance.” v. reasonably misrepresented infer that LP Goforth (1999). Ark. or omitted material term the rebate of Fraud also of ma extends concealment Bank, promotion. Regions Coleman v. terial information and of cer nondisclosure (2005). 364 Ark. 216 S.W.3d pertinent tain information. Farm Bureau Second, LP’s the re- interpretation of Policy Holders & Members Farm Bu bate documents is It is un- untenable. Inc., Ark, reau Mut. Ins. Co. 335 Ark. of disputed that some of Curtis Lumber’s (1998). 6, 14 had customers received SmartSide products by the they time submitted the litigation

The central focus of this applications. delivery rebate actually misrepre has been whether LP Without products, promotion. SmartSide it would have sented terms of the rebate impossible been for those Based on the word in the customers “used” rebate (“Please products. have “used” the application SmartSide products indicate used delay ”), ordering Given the between expected rebate ... LP contends products delivery, and distribution application that the rebate included an proffered interpretation requirement “obvious” that the builder re- requirements bate In- actually contractor installed unreasonable. deed, Ben products Skoog, the LP employee SmartSide in order to receive a charge the rebate argues program, rebate. also testified word products that customers who (“Purpose: “trial” on the ordered the information sheet Encourage promotional late in the would period Builders and Contractors implicitly qualify program they trial rebate if in- products”) SmartSide indi products LP’s intent that stalled the “within a reasonable applicants cated install the time.” products. disagree argu We with LP’s

ment for several reasons. Third, if argument even we credit LP’s

First, that LP prior information sheet use was required in order to provided to qualify wholesalers and retailers listed for the promotion, rebate the re- limits, qualifications, and documentation say applicants bate documents did not requirements promotion. for the rebate would have to proof (e.g., submit of use Yet, address) photos, information sheet never men- in order to a re- receive a requirement reasons, tioned that the SmartSide bate. For these we conclude products had to be a certain a question installed there as material fact date, much they less that to be install- misrepre- had whether LP’s rebate documents

773 question, including material in the short or omitted a term duration sented promotion. plaintiffs employment rebate the and the reasons plaintiffs and circumstances for the termi- that, Alternatively, LP argues nation). Moreover, LP has consistently misrepresen if the documents even rebate its interpretation maintained the rebate term, there is a material insufficient ted requirements, promotion unlike situations misrepre that it knew about the evidence fraud can inferred from where be a defen- fraud, prove In order to Curtis sentation. representation dant’s contradiction of the i.e., scienter, Lumber must demonstrate See, Becton, in v. question. e.g., Morrill material that “made a false statement Co., 1217, & 747 F.2d 1222-23 Dickinson knowing that false at the time (8th Cir.1984) misrepresenta- that (holding Gildersleeve, McAnally v. 16 F.3d made.” (8th may tions be actionable fraud in Cir.1994); based 1493, 1497 see also South Co., part on internal from memoranda the de- Inc. W. 315 County, v. First Loan 325, (1994) 722, company that Ark. 871 326 fendant contradicted the S.W.2d (“Proof rep of a mere naked falsehood or in representations question). enough though is not even resentation argues Lumber Curtis LP’s knowl relied on it and sus complaining party a false can be edge of statement inferred but, thereto, damages, in tained addition (1) Skoog’s testimony from LP intend must have know the false statement been rely ed retailers customers to made.”) intentionally (quotation ingly (2) documents, program rebate LP intend omitted). element, satisfy To this proof-of-use requirement to a ed include put forth “direct required not (3) program, the rebate the re positive testimony” of fraud. evidence program incomplete bate documents are Co., Purchasing Eng’g Receivables Inc. v. they did specify require because (8th ervs., Inc., S 844 & Prof'l “ ment that rebate applicants must install Cir.2008). can evidence ‘Circumstantial products by a certain date. SmartSide jury a fraud provide basis for to infer However, Skoog’s testimony, even when it ... circumstances are inconsis

where ” light is construed most favorable to (quoting tent with honest intent.’ Id. Lumber, merely amounts to an ad Sanders, Ark. App. v. 66 987 Stine (1999)). hindsight mission in that the rebate docu However, n. 3 S.W.2d incomplete. ments were The mere admis strong “the circumstances must be so of a is not clearly enough fraud.” sion misstatement well connected as show Demuth, Ark. presume Allred fraudulent state mind. See (1994). (“Fraud Houser, 835 S.W.2d at 873 is nev affirmatively er must presumed, and agree We that evidence of scienter is ”). most, proved.... Skoog’s testimony At lacking in case. Curtis Lumber has that the supports inference omission any suspicious not identified unusual or product the rebate documents was of an surrounding conduct or circumstances mistake, honest which is insufficient from which we could rea- statements Morrill, prove fraud. 747 F.2d at sonably infer mind. a fraudulent state of (some misrepre the defendant’s Servs., Freeway Inc. v. Interstate Cf. sentations could not be actionable fraud Houser, 310 Ark. only of scienter was where evidence jury infer (holding that could testimony that inaccuracies hon “were of fraud based on several circum- proof mistakes”). testimony offer This falls short surrounding employment stances est 774 party fraud which that will bear burden of proving burden for

of the elevated trial.”). proof at evidence. by circumstantial that Lumber also contends scien- Curtis 2. Constructive Fraud3 the fact inferred from that LP ter can be fraud is doctrine Constructive procedures process- from for deviated its of “limited reach” that Arkansas courts applications sending the ing rebate liability. to broaden tort Re used demanding proof of June 25 letter use. at Purchasing, ceivables 843. As June 25 Even if we assume that the letter section, explained previous in the tradition procedures, from LP’s we was a deviation al to deceive and requires fraud intent fail to see how this fact assists Curtis knowledge misrepresenta that a material anything, case. If the fact that Lumber’s fraud, by tion is false. Constructive com processing LP procedures established parison, deceptive not in require does a that applications, knowledge falsity. Knight rebate followed tent or of v. 402, 300, Day, nearly all in- 343 Ark. 36 S.W.3d 303 procedures those other (2001). test for constructive fraud stances, “[T]he that was no fraudu- shows there ... making has been defined as the of lent scheme at work. who, misrepresentations by one not know sum, present- has not Curtis Lumber not, ing they whether are true or asserts light ed to shed on LP’s state of evidence knowledge them to true without of be then- mind it issued rebate when documents. falsity without or in guilt moral evil such, no As reasonable fact-finder could County, tent.” at 327. South 871 S.W.2d that falsely represented conclude Thus, a that is not representation fraudu promotion terms of the rebate with knowl- may lent the traditional sense be con edge falsity. Accordingly, of such sum- strued as fraudulent “because of its ten mary judgment appropriate as to Cur- dency Knight, to deceive others.” 36 tis Lumber’s fraud claim. See Celotex 303; Rachel, at see S.W.3d also Lane v. Catrett, 317, 322, Corp. v. 477 106 U.S. (1965) 621, 239 Ark. 389 S.W.2d 624 (sum- S.Ct. 265 L.Ed.2d (“[R]epresentations are construed to be mary judgment “against is mandated fraudulent when made who either one party showing fails to make suffi- who knows the assurances to false or else cient to establish the existence of an ele- verity not knowing asserts them to be true.”).4 case, ment party’s essential that and on hand, originally titled its second tiff and defendant. On one Arkansas action, Misrepresenta- "Negligent cause of courts have said fraud constructive involves correctly legal duty,” tion.” The district court stated that equitable e.g., “a breach of a Smith, recognize negli- does not a tort City Arkansas of Miskimins v. Nat'l Bank Fort gent misrepresentation, County, (1970); South see 248 Ark. analyzed S.W.2d at and then Curtis Lum- Beatty Haggard, App. 87 Ark. (2004), ber's claim under the doctrine of constructive and that "Construc- Arkansas, fraud, cognizable which is a tort in tive fraud can exist in cases rescission of Giving id. at 327. Curtis Lumber the benefit fiduciary deeds and contracts or breaches doubt, duties,” Bureau, we also construe second Farm 984 S.W.2d at 14. We however, note, cause of action as a claim for constructive that the Arkansas courts have fraud. expressly types defined the of relation- may ships trigger con- transactions Additionally,

4. There is confusion Arkansas law as structive fraud. the Arkansas within Supreme requires par- recently to whether constructive fraud Court has stated more type relationship plain- fiduciary relationship between the of a ticular existence is not (“[T]he alleged Supreme Arkansas Court would complaint Lumber’s wholesaler, by LP’s liability made hold that for fraud attaches statements Cascade, false. The district were knowledge Boise where a defendant lacked cases allega- correctly concluded that this court representation that his or her was false evidentiary support. Ac- without tion was know it was true or but did not whether proper was summary judgment cordingly, not.”). in previous As we stated sec- constructive extent Lumber’s to the Curtis tion, in the evidence the record demon- alleged misrep- on claim was based fraud misrepresentation that strates LP’s was by Boise Cascade. resentations merely negligent or the result of an honest argument appeal, Curtis Lumber’s A jury reasonably mistake. could not find however, ignored that the district court that LP’s rebate documents were reckless- an of its constructive fraud claim— aspect ly Accordingly, summary judgment false. by LP committed constructive fraud that appropriate was as to the constructive misrepresenting the terms of the rebate fraud claim. that Curtis Lumber contends promotion. fraud claim should have

the constructive ADTPA 3. summary for the same judgment survived that the fraud claim should have reason alleged Curtis Lumber has support, In Curtis Lumber re- survived. LP’s deceptive prac acts constitute trade in Arkansas cases lies on the statements tices or unlawful acts under the ADTPA in fraud has all of the ele- that constructive First, LP ways.5 knowingly five made a intent to deceive. ments of fraud without representation false as to the characteris Downum, 101 Ark. E.g., App. Downum v. in goods, tics and benefits of violation of (2008). S.W.3d 4-88-107(a)(l). Second, § Arkansas Code LP goods advertised with the intent not to We believe that Curtis Lumber advertised, sell them as in of Ar violation fraud. The doc misconstrues constructive 4-88-107(a)(3). Third, § kansas LP Code misrep all material apply trine does not employed advertising bait-and-switch con regardless resentations of the defendant’s sisting of an attractive but insincere offer case, If that were the then state of mind. product in truth sell LP did not encompass negli fraud would constructive sell, intend or desire to evidenced well, which gent misrepresentations as requirement of an undisclosed condition law. precluded result Arkansas precedent purchase, to the violation of Rather, County, 871 at South 326. 4-88-107(a)(5)(B). § Arkansas Code merely constructive fraud extends tort lia Fourth, acts in business and com bility recklessly false statements. See LP’s unconscionable, false, at Purchasing, Receivables 843 merce were and de filed, however, always complaint element of constructive essential because County, subsequently granted fraud. South 871 S.W.2d at 327. We district court mo relationship between LP and assume tion for and dismissed all of reconsideration general param- Although Curtis was within the Lumber's the latter claims. eters of constructive fraud. yet pleaded, two ADTPAclaims have to be they properly does not contend that are not event, complaint alleged only any analysis Lumber’s this Court. In our before summary parallels three ADTPA first claims our theories. its of the latter two ADTPA order, claims, judgment granted analysis original the district court ADTPA thus, complaint clarify opportunity leave to amend the to add the we take the which summary judgment §§ claims under Arkansas Code 4-88- claims should survive af 107(a)(5)(B) and 4-88-108. No amended ter a remand. matter, § subject object of Arkansas 4- to be ac ceptive, violation Code 88-107(a)(10). served, Lastly, complished, purpose LP concealed or to be remedy provided, legislative omitted a material fact connection with his tory, goods appropriate the sale of with the intent that oth- and other means that omission, rely upon light subject.” the concealment or throw on the ers & Saforo Assocs., § Corp., in violation of Arkansas Code 4-88- Inc. v. Porocel 337 Ark. 108(2). (1999). 117, 124 Co., Design Chicago 'ls Ins. Co. v. Ins. granted summary The district court Prof (8th Cir.2006). 906, 910 judgment on Curtis Lumber’s ADTPA finding claims based on the that LP includ- It is clear from the ADTPA text requirement appli- ed a “use” in the rebate that Curtis Lumber’s first three theories disagree. supra pp. cation. 772- We require that the knowingly defendant claim, however, 73. As with the fraud our intentionally engage in a deceptive trade analysis 4-88-107(a)(l) continues to the state-of-mind re- § practice. See Ark.Code quirements Although under the ADTPA. (“Knowingly making representation false issue, the district court not reach this ....”) did added); (emphasis § id. 4-88- 107(a)(3) we must the state-of-mind element address (“Advertising goods or ser- dispositive because it is a issue. If the vices with the intent not to sell them as requires ADTPA Lumber to prove advertised”) added); (emphasis § 4- id. knowing/intentional deception, then sum- 88-107(a)(5) (“The employment of bait- mary judgment just should be affirmed as advertising consisting and-switch of an at- with the fraud claim. tractive but insincere prod- sell a offer uct or service which the seller in truth require The state-of-mind ...”) does not intend or desire to sell ments for ADTPA claims under the would added); (emphasis see also Gen. Steel Do an impression issue first for the Sales, Hartson, Hogan mestic LLC v. & Supreme interpret Arkansas Court. To LLP, 1275, 230 P.3d 1281-83 (Colo.Ct.App. ADTPA, we adhere to Arkansas’s can 2010) (holding that the bait-and-switch ad- statutory interpretation: ons of vertising prohibition in the Colorado Con- a term in a Where statute is clear and sumer Protection Act includes the element unambiguous, given it will be its ordi deceive). words, of an intent to In other nary Ark. meaning. Cash v. Comm’n on requirement the state-of-mind for those Pollution Ecology, Control & 300 Ark. three theories mirrors the state-of-mind (1989). 317, 606, 778 S.W.2d 607 A stat requirement for traditional fraud. And utory ambiguous term is when it is capa genuine dispute since there is no of fact constructions, ble of two or more or that LP knowingly misrepresented or when it is so unclear that reasonable promotion, omitted a term of the rebate minds disagree could or be uncertain as summary judgment was appropriate on Enter., meaning. its R.K. L.L.C. v. Curtis Lumber’s first three ADTPA theo- Inc., 565, Pro-Comp Mgmt., 356 Ark. ries. (2004). 685, 688 When exists, ambiguity interpret reasons, the court will though, For several provision way in a pursuant consistent with we conclude that claims to Ar 4-88-107(a)(10) legislature’s §§ intent. Cent. & S. Cos. kansas Code and 4-88- Weiss, 108(2) v. require 339 Ark. 3 297 knowing S.W.3d do not or intention (1999). may First, That deception. provision intent be divined al neither statute, looking language “to the requires its face an intent to or deceive

777 representation deceptive practices, that a is false. “unfair or acts or in knowledge easily legislature cluding could not limited to ... The Arkansas but conceal “knowingly,” ment, the word “intentional- suppression added or omission of such ma 88—107(a)(10) §§ “willfully” to ly,” fact, rely terial with intent that others 4— 4-88-108(2), just as it did under several concealment, upon suppression 4-88-107(a).6 Accordingly, § portions material fact ... omission such ” the absence of one of these terms is evi any trade or conduct of commerce.... legislature dence that the Arkansas did not Ill. Comp. Stat. Illinois courts 505/2.8 4-88-107(a)(10) §§ 4- intend to limit have stated the seller’s intent to de 88-108(2) knowing decep intentional or thereof) (or ceive lack is immaterial for a Owens, Arkansas Ark. tion. Cf. claim under because ICFA innocent (2007) (“Had misrepresentations are also actionable. legislature years intended for the five to See, Leiter, e.g., Cripe v. 184 Ill.2d only run the initial order of condition from (1998); Ill.Dec. 703 N.E.2d easily al it have said so release could Inc., Realty, Duhl v. Nash 102 Ill.App.3d statute.”). including language such 483, 904, 1267, 57 Ill.Dec. 429 N.E.2d 1277 (1981). Indeed, in a Second, plain case where the virtually states with laws identi 4-88-108(2)7 brought tiffs an claim against § ICFA cal to Arkansas Code exterminating company based on the overwhelmingly concluded that intent com- pany’s required is not under them analo failure to disclose material facts in a deceive gous provisions. example, inspection report, Appellate For the Illinois termite (“ICFA”) prohibits expressly rejected argument Consumer Fraud Act Court example, Jersey provides § New 6. For Consumer Arkansas Code 4-88-108 in its prohibits knowing, Fraud Act inter alia “the entirety: concealment, any suppression, or omission of When utilized in connection with the sale rely upon fact with intent that others material services, any goods, or advertisement of omission, concealment, suppression or such solicitation, following charitable shall in connection with the sale or advertisement be unlawful: any of merchandise or real estate.” N.J. Stat. (1) act, use, employment by any The added). (emphasis Accordingly, § 56:8-2 fraud, person any deception, or false concluded, Jersey New courts have “when the pretense; or alleged fraud consists an omis consumer concealment, (2) suppression, The or omis- sion, plaintiff a must show that the defendant any sion of material fact with intent that thereby knowledge, making acted with intent concealment, rely upon sup- others an essential element of the fraud.” Vukovich pression, Inc., 03-737, or omission. Haifa, v. Civ. Action No. 2007 655597, Feb.27, (D.N.J. 2007); WL at *9 see sure, distinguish 8. To be the Illinois Co., 2, statute is also Cox v. Sears Roebuck & 138 N.J. 4-88-108(2) § 454, (1994). able from Arkansas Code be 647 A.2d 462 expressly cause states that neither actual Similarly, the Kansas Consumer Protection Moreover, deception injury required. nor concealment, prohibits sup Act "the willful the statute also instructs that courts should pression or omission of a material fact.” interpret with the ICFA consideration for "the 50-626(b)(3) (emphasis § Kan. Stat. Ann. interpretations of the Federal Trade Commis added). Predictably, Kansas courts have held relating sion and the federal courts to Section that mere nondisclosure of material fact is 5(a) of the Federal Trade Commission Act.” insufficient to state a claim under the KCPA— differences, Comp. 815 Ill. Stat. These plaintiff 505/2. must show a omission of a willful however, See, Bell, are immaterial as to the issue for e.g., fact. Porras v. 18 material (1993); jurisprudence which we believe the Illinois Kan.App.2d 857 P.2d 678 Martin, persuasive requisite state of mind for a Kan.App.2d Heller v. 14 782 P.2d —the (1989). statutory violation. could be held liable the court held that the defendant’s mere the. defendant it did not intend under ICFA because report inspection submission the termite plaintiffs: to deceive the requisite intent” under “evinces This ... is no defense. Under the stat- purpose because the “sole for the ICFA ute, immaterial, state of mind is and a ... requested report plain was to assist by an defendant need not be motivated Id. Simi in securing financing.” tiffs VA good intent to deceive.... violator’s [A] judicial persuasive lar evidence exists important. or bad faith is not Even materially interpretations indistinguish misrepresentations may innocent ac- Arizona,9 protection able consumer laws terms, By tionable. its own the statute Delaware,10 Iowa,11 Minnesota,12 and Miss only requires violator intend for a concluding ouri.13 We see no basis for rely purchaser on his acts or omis- Ar interpret that Arkansas courts would A party sions. is considered to intend 4-88-108(2) differently § kansas Code necessary consequences of his own regard require with to the state-of-mind acts or conduct. ment. LeMay, Warren v. Ill.App.3d Third, legislature the Arkansas intended Ill.Dec. N.E.2d (internal omitted). citations Accordingly, proscribe more than traditional fraud 44-1522(A); Flag goods § 9. See Ariz.Rev.Stat. Ann. in the sale of consumer can be held Ctr., Sullivan, liable, F.Supp. Med. though specific Inc. even he had no intent staff 1325, (D.Ariz.1991), part consumer.”). falsely 1361-62 rev'd in mislead the (9th Cir.1992) grounds, other F.2d 962 879 ("It necessary specific is not to show intent to 407.020, 1; § 13. See Mo.Rev.Stat. subdiv. deceive; the intent to do the act involved is Co., Missouri ex rel. v. Webster Areaco Inv. 756 sufficient.”); ex rel. Babbitt v. Good Arizona 633, ("It (Mo.Ct.App.1988) S.W.2d 635 is the Co., 483, year Tire & Rubber 128 Ariz. 626 conduct, intent, defendant’s not his which de- 1115, (1981) (same). P.2d 1118 occurred.”); termines whether a violation has Mktg. ex rel. Missouri v. Unlimited Ashcroft 6, 2513(a); § 10. See Del.Code Ann. tit. Nash Am., Inc., 440, (Mo.Ct.App. 445 411, (Del.Su- Hoopes, 332 A.2d 413 1981) (same). ("The per.Ct.1975) only reference to 'intent' The Alaska Consumer Fraud Act and the in this section is that the outlawed action be Virginia West Consumer Credit and Protec rely upon done 'with intent that others such (“WVCCPA”) Act tion also state-of- contain concealment, suppression or omission virtually mind standards identical to Arkansas Fraudulent intent in with the connection mak- 4-88-108(2). § Code See Stat. Alaska ing practice requisite of such unlawful is not 45.50.471(b)(12); § § W. Va.Code 46A-6- availability to the of the remedies of stat- 102(7)(M). However, our research reveals no ute.”). analyzed in which a cases court has those regard with statutes to the state-of-mind re 714.16(2)(a); § 11. See Iowa Code Iowa ex rel. quirement. Admittedly, the Fourth Circuit Pace, (Iowa Miller v. N.W.2d 677 771 plaintiffs satisfy has stated that must the stan 2004) ("[I]t necessary prove is not ... that requirements dard for fraud in order to deceive, in the violator acted with an intent to as voke the WVCCPA. Jones v. Roebuck & Sears required is for common law fraud.... [T]he Co., (4th Cir.2008) Fed.Appx. 301 287 only required by intent the statute is that the curiam). However, (unpublished per rely act ' defendant 'with the intent that others opinion omissions.”) (internal analyzes language neither upon his omit- citations ted). any support WVCCPAnor cites case law proposition requires that the WVCCPA such, 325F.69, 1; respectfully § fraudulent intent. As See Minn.Stat. subdiv. we Inc., Bldg. Specialties, opinion guidance McNamara v. Nomeco find the to be of little in (D.Minn.1998) F.Supp.2d predicting Supreme how the 26 1171 Arkansas Court stated, making representations ("Simply interpret one would the ADTPA. by many federal court act or further buttressed “deceptive it the term used when provi- holding good in ADTPA’s catch-all that a defendant’s opinions practice” 88—107(a)(10) § Ark.Code a “deceptive sion. faith is immaterial to whether 4— unconscionable, “any other (proscribing § under 5 of the Federal act” has occurred false, practice act or busi- deceptive or Act because that stat Trade Commission trade”). Because, ness, commerce, “de- or require an intent to deceive.14 ute does is not defined ceptive practice” act or Along the lines of the Federal Trade Com statute, opin- regulation, or any Arkansas many deception, mission’s definition of ion, one of look elsewhere. Arkansas is we practices courts have defined trade as de deceptive many states enacted they likely if ceptive are deceive act, or a “little FTC practices unfair trade to deceive a reasonable consum capacity act,” majority or 1970s. The the 1960s (8th Dictionary er. See Black’s Law require with such laws do not of states ed.2004) (defining “deceptive act”: “As de deception in order knowing or intentional fined and most state stat [FTC] their an actionable claim under to state utes, likely conduct that to deceive a Carolyn L. Carter & respective acts. See acting reasonably consumer under similar Sheldon, Deceptive Jonathan Unfair circumstances.”).15 Practices, 4.2.4.1, § at 193-95 Acts and addition, § Arkansas Code 4-88- (7th ed.2009) authorities); Don- (collecting 108(1) deception lists both fraud and as Annotation, Zupanec, M. Practices ald unlawful acts. These terms cannot be co Trade Prac Deceptive Forbidden State terminous, as result would violate the Acts, Protection tice and Consumer that a principle basic statute must be con (1979); §at see also Wal A.L.R.3d every given so that strued word mean Co., Ark. lis v. Ford Motor effect, ing possible, if “so that no word (surveying other 161-62 void, superfluous insignificant.” is left in- consumer-protection statutes to states’ Bd., ADTPA). Rose v. Ark. State Plant 363 Ark. inter- terpret Those states’ (2005). 607, are 213 614 pretations deceptive practices trade S.W.3d Int’l, Ltd.., See, Verity practice e.g., F.T.C. v. 443 makes on the minds of the consum- 14. 48, (2d Cir.2006); ing public.”). Bay v. Area F.3d 63 F.T.C. Council, Inc., 627, (7th Bus. 423 F.3d 635 See, e.g., Average In re Pharm. Indus. Inc., Commc’ns, Cir.2005); v. F.T.C. Freecom 156, (1st Litig., Wholesale Price 582 F.3d 185 1192, (10th Cir.2005); n. 7 401 F.3d 1204 Cir.2009) (interpreting the Massachusetts F.T.C., Corp. Removatron Int’l v. 884 F.2d statute); protection consumer Doe v. Sex- 1489, (1st Cir.1989); Exterminat 1495 Orkin Search.com, 412, (6th Cir.2008) 418 551 F.3d F.T.C., 1354, (11th ing v. 849 F.2d 1368 Co. Inc., (Ohio); Group, Zlotnick v. Premier Sales F.T.C., 1988); Chrysler Corp. v. 561 F.2d Cir. 1281, Cir.2007) (Flori- (11th 480 F.3d 1284 357, (D.C.Cir.1977); Corp. 363 n. 5 Beneficial PLC, da); v. Glaxo Wellcome 246 F.3d Bober 611, F.T.C., (3d Cir.1976); v. F.2d 617 542 934, (7th Cir.2001) (Illinois); 938-39 Doe cf. Clifford, Shenfield, Doherty, Inc. v. Steers & Dallas, Inc., Boys v. Clubs Greater 907 F.T.C., 921, (6th Cir.1968); F.2d 925 Feil 392 472, (Tex.1995) (“Generally, 479-80 F.T.C., 879, 1960); (9th Cir. v. 285 F.2d 896 false, misleading, deceptive if it an act is or Johnson, v. 541 F.2d see also United States capacity 'ignorant, has the to deceive an unth- 710, (8th Cir.1976) ("[LJiability civil 712 ”) (citation person.' inking, omit- or credulous penalties arises without a ted). [under FTCA] But see ex rel. Nixon v. Telco Missouri showing practices Pub., 596, any that the were need for Directory & 863 S.W.2d 601-602 n. malicious.”); (Mo.1993) Benrus Watch Co. (listing twenty-one intentional 2 cases from F.T.C., 313, (8th Cir.1965) F.2d 318 adopting "capacity v. 352 to deceive” stan- states that, act, (“Whether deceptive practice holding ... a trade dard but under Missouri's fraud). deception species depends impression ... which such a is a 780 (2) by

Finally, interpretation ing promise, promisor our of the ADT of a intent (3) fact that by upon, PA is influenced relied reli- promise that the be ADTPA that the preamble provides to the upon promise promisee, ance protect “to the inter statute was enacted injustice resulting from refusal public of both the consumer and the ests Hilyard In re promise.” enforce the community.” Mosby business legitimate (8th Co., 596, Drilling Cir. Co., 5:07CV00314-WRW, Paper Int’l No. Ark, 1988); Props. K.C. see also N.W. (E.D.Ark. July at *2 2008 WL Partners, LLC, Inc. v. Inv. Lowell 2008) ADTPA (unpublished) (quoting the (2008) (“[T]he 1, 14 Ark. 280 S.W.3d Furthermore, the Arkansas preamble). party estoppel must asserting prove Supreme recognized legis has “the Court strictly, certainty every there must be purpose” enacting lature’s remedial intent, constituting the facts it must not be ADTPA and also that a “liberal construc inference, by argument taken and noth- appropriate.” tion of the Ar [A]DTPA intendment.”). can ing supplied Co., Bryant ex rel. v. R A Inv. kansas & alleges promised Curtis Lumber (1999). Ark. if qualifi- rebates customers met the Liberal construction in this context means documents, cations on the rebate LP in- that the ADTPA protect should consumers tended retailers like Curtis Lumber and practices beyond from trade common law rely promise, end-user customers to on the fraud. detrimentally Curtis Lumber relied on considerations, light of these we con- promise, inju- and Curtis Lumber’s summary judgment inap- clude injustice. Notably, ries constitute an other propriate as to Curtis Lumber’s claims courts plaintiff have held is not 4-88-107(a)(l) 4-88-108(2). §§ under required to show that a defendant har- A reasonable fact-finder could conclude bored a fraudulent intent in order to re- that LP omitted material term from the cover under promissory the doctrine of rebate documents with the intent that re- estoppel. Chicago See Harris v. Hous. rely tailers and customers on the rebate Auth., No. 97 C at WL documents—and likewise that LP’s rebate (N.D.Ill. 2, 1998) July (unpublished) *3 n. deceptive documents constituted a trade (“Defendant’s contention that in- fraud or practice. But unlike the fraud and con- tent a required to deceive is element of a claims, structive fraud the ADTPA claims promissory estoppel flatly claim is incor- are despite viable the lack of evidence rect.”). regarding knowledge LP’s aof false or LP contends that Curtis Lumber cannot deceptive practice specific or it’s intent to prove promissory the elements of estoppel deceive. First, for two LP argues reasons. that it Promissory Estoppel16 promises fulfilled the it regarding made law, However, promis program. Under Arkansas the rebate we believe sory estoppel requires plaintiff the disagree. reasonable fact-finder could “(1) clearly show four elements: the mak- LP promised pay rebates to customers alleged originally 16. Curtis Lumber a claim when the court later found that LP included a equitable estoppel. When district "use” term in the rebate documents. The partially granted summary judgment, court it parties argue appeal promissory whether a granted also Curtis Lumber leave to amend estoppel summary judg- claim should survive complaint promissory to state a claim for ment, accordingly. and we evaluate the claim estoppel. That leave to amend became moot (1951), and, Country and Corner 240 S.W.2d products SmartSide purchased who Reiss, App. 22 Ark. Drug, Food & Inc. v. condition to failed to state a importantly, (1987), position for the use the that the customers payment estop proof promissory or submit that the remedies under a certain date by products limited, pp. appo 772-73. are but neither case is supra pel their use to LP. of Therefore, that Arkan such, argument first fails. we conclude LP’s site. As Lumber to recover permits sas law Curtis is that re argument LP’s second on LP’s damages it incurred reliance limited to estoppel is promissory lief under promissory of promise under doctrine between promise” “enforcement estoppel. customers, and therefore Curtis for the costs cannot recover Lumber Damages D. The promise. in reliance on LP’s incurred LP, requiring remedy, according to

sole damages Lumber seeks for lost How to the customers. LP to rebates profits products, on the sales of SmartSide ever, contrary to Section argument carrying with increased costs associated (Second) of Con the Restatement 90 of inventory, the value of rebates that extra which, Arkansas, tracts, is the “black- customers, paid to its estoppel.” K.C. promissory law on letter it was unable to collect due value sales at 14. Comment d Props., 280 S.W.3d acts, injuries goodwill, to LP’s attor- variety of contemplates a expressly § 90 fees, LP ar- neys’ punitive damages. available remedies: damages that several of the claims gues binding under this section is promise

A law, by appear but it does not are barred contract, by full-scale enforcement challenge damages sought for inven- appropriate. remedies is often normal costs, attorneys’ tory goodwill, or fees. which bear on But the same factors granted any

whether relief should (1) Lost Profits character and extent of also bear on the particular, may relief remedy. Arkansas has not decided whether or to be limited to restitution sometimes promis under profits lost are recoverable by specific measured damages or Beverage Co. sory estoppel. See S. Beach relief reliance promisee’s the extent Brands, Inc., 355 Ark. v. Harris promise. the terms rather than (2003) (reserving this recoverable, (Second) profits § are question). Lost of Contracts Restatement added). however, Ark. the ADTPA. See More under (emphasis d cmt. 4-88-113(f) (“Any person § who suf over, contemplates Code the Restatement also injury as a result of damage fers actual parties third who detri brought claims in this as defined an offense or violation rely promise. on a See id. mentally 90(1) (“A of action to recover promisor has cause [Act] which the promise § appropriate, if and reason damages, action actual reasonably expect to induce should fees.”); attorney’s Smith v. Walt able part promisee on the or forbearance cf. 591, Ford, Inc., 314 Ark. Bennett does induce a third and which person (1993) (“[L]ost ....”) are profits (empha or forbearance such action (reli under the Odometer § [Federal c. recoverable added); id. 90 cmt. see also sis damages’ provided ‘actual Act as Fraud] LP cites two Ar parties). third ance requisite to levels cases, they proved are Bank v. Peoples National kansas causation.”). Co., 11, certainty and 219 Ark. Linebarger Construction Instead, initially The district court held that Cur- its customers. it argues that the presented enough tis Lumber has evidence exceptions fraud and duress to the volun- damages profits. to recover for lost In its therefore, tary payment apply, rule granting order LP’s motion for reconsider- payment of the voluntary. rebates was not ation, however, the court determined exception fraud apply The does not be- voluntary payment precludes rule Cur- cause, as we stated previously, Curtis recovering profits. tis Lumber from lost Lumber has not shown a viable fraud Although This result is incorrect. Moreover, claim. if even Curtis Lumber payments arguably Lumber’s to customers requisite could establish the state of mind “voluntary,” alleged were Curtis Lumber’s fraud, for paid it has not shown that it profits argue lost were not. LP does not to rebates customers in reliance on LP’s contrary. Accordingly, to the we hold that allegedly fraudulent statement. Stated may pursue damages Curtis Lumber differently, alleged fraud did not in- profits lost on the sales. cancelled pay duce Curtis Lumber to At rebates. Rebates Paid Curtis Lumber most, Curtis Lumber has shown causa- i.e., that LP’s statements caused a

This section concerns the re tion — situation in which it compelled pay felt to paid, bates that Curtis Lumber either in rebates to the customers. That is differ- the form of a cash refund or account ent, however, from the situation a credit, where to seventeen of its customers after payor is fraudulently induced to make a pay to argues refused the rebates. LP payment, in which case the law treats the that Curtis Lumber “any cannot recover payment involuntary. as See 70 payments or account C.J.S. gave credits to its Payment § customers,” because Curtis Lumber volun tarily gave payments those and credits.17

Under Arkansas’s well-established volun argu Curtis Lumber’s duress rule, tary payment person cannot recov ment is more compelling. The record money er voluntarily he or she has shows that Curtis Lumber marketed LP’s Gillett, paid. See Boswell v. 226 Ark. products promotion rebate to cus (1956); see also TB representing tomers seventy-five percent Blytheville, Sign Inc. v. Little Rock & of its business. After LP’s June 2007 Emblem, Inc., 328 Ark. 946 S.W.2d letter applicants, the rebate (1997). A payment owner, is deemed Lumber’s who relatively new recoverable, voluntary, and business, thus not “when to the stated that he was com a person fraud, without mistake of fact pelled pay customers the rebates “[o]ut duress, coercion, pays money or extortion of concern for losing their other business on a demand which is not enforceable having presented as result of against him.” City Indeed, Ritchie v. Lum- program to them.” two of Curtis Bluff Co., ber 86 Ark. 110 S.W. 592 Lumber’s they customers stated that (1908). Curtis Lumber admits that it had would have withdrawing considered their no obligation pay enforceable rebates to business from Curtis Lumber if the re- interpret argument 17. We ap- pursue do not LP's legal failed to action to collect the ply to the fourteen orders that Curtis Lumber amounts owed. Even if we consider Curtis allegedly was unable to collect due “payment," to LP’s Lumber’s inaction to be a we acts. Curtis Lumber did not those cus- question would find that there exists factual tomers either in the involuntary form of cash refund or as to whether it was the under most, an account exception. credit. At Curtis Lumber pp. duress 783-86. infra

783 pres latter has no other means of immediate paid.18 not The coercive bates were by making payment. Lumber are further evi relief than the on sures through it sent to LP by the email denced Shinn, 70, Vick v. 49 Ark. 4 S.W. 61 demanding the re July 2007 counsel (1887) added; (emphasis quo- removed and Drawing all reasonable paid.19 be bates omitted). tations and internal citations Lumber, in favor of Curtis inferences However, emphasized language the from dispute a factual as to at minimum there is was dicta because the issue on appeal Vick pay to Lumber’s decision whether Curtis sufficiency in that was the case of evidence compelled by a threat of los rebates was to show duress. The court found that the question, business. The ing substantial payment voluntary, was and it did not then, type pressure this is whether decide whether can duress be asserted involuntary un enough payment to render against a person payee different from the der the doctrine of duress. exerting pressure. Id. pressure that the from argues LP first Bishop In Ark. Bishop, App. 98 customers is irrelevant because Curtis (2007), 250 570 modern Arkansas only excep- can assert the duress bypassed a opportunity court clear to em against party pres- the who exerted tion rigid proposes. brace the rule that LP now words, In Lum- sure over it. other Bishop, plaintiff sought reimburse pressure from complain ber cannot about ment from his for payments ex-wife allege against a the customers and duress he made to a car dealership on his ex- LP). Admittedly, party (e.g., third car, wife’s and the ex-wife claimed the in a support 113-year rule finds some old payments voluntary. were Id. at 572-73. Arkansas case: plaintiff alleged The duress because he payments protect The doctrine established the authori- made his credit rat payment ing i.e., pressure ties is that a is not to be re- that he was under from — garded compulsory, third-party Bishop as unless made to creditors. Id. at 573. person property ultimately from emancipate plaintiffs pay or held existing imposed prior seeking legal an actual and duress ments made relief upon party money voluntary, payments to whom the were but made after involuntary It is sufficient ... when were paid.... they ward because were protest. some actual or threatened under Although there is exer- made Id. possessed, power quoted cise of or believed to court Vick’s limited formulation of duress, possessed, by party exacting adopt it did not the rule that du receiving payment person only against per over the ress can be asserted property exerting pressure. of another from which the son Id. argues non-hearsay 18. LP that we should not consider when used to show listener’s du- summary-judgment ress). these statements at the stage they hearsay. because are inadmissable However, 56(e)(1). See Fed.R.Civ.P. the cus Floorcovering, 19. See Inc. v. Wermers Santan are tomers' statements offered show Corp., Ill.App.3d na Natural Gas 342 276 effect of the out-of-court statements Ill.Dec. 794 N.E.2d 1014 thus, (Curtis Lumber) they listener are ("Protest may evidence also serve as of com Cline, hearsay. See United States v. 570 ....”); pulsion unwillingness and an (8th Cir.1978) (statements F.2d are (same); Payment § see also C.J.S. non-hearsay when used to show the listener's Lord, Richard A. Williston on Contracts mind); Herrera, state of United States v. (4th ed.) (same). § 71:18 (5th Cir.1979) (statements F.2d are Furthermore, any are not takes into consideration exigencies we aware victim.”). in a case which court has held that duress alleged the situation of the Cur- against non-payee. cannot be asserted presented promotion tis Lumber to its against payees, Duress is often asserted customers, and the customers who ordered that necessarily but it does not follow du products represented SmartSide a sub- ress is limited to that scenario. The du portion stantial of Curtis overall Lumber’s essence, that exception, recognizes ress put coloquially, business. To it it would payments compulsion made under are not penny have been pound wise but foolish voluntary. little dif We believe makes for Lumber to payment demand pressure ference who exerts and who re pay from the customers and to refuse to payment, long ceives the so as the duress is, That rebates. Curtis Lumber would causally tied to defendant and the well in fared the short-term with the reasonably pressure is sufficient to deem a promotion SmartSide but suffered severe involuntary.20 payment Any limitation on repercussions in its overall revenue. As identity this doctrine based on the of the such, a reasonable fact-finder could find party exerting pressure would be artificial. that Curtis Lumber had no other means of sum, exception we believe duress immediate relief. Mktg. flexible. See BMG Direct Inc. v. Peake, (Tex.2005) Finally, LP contends that Curtis Lum (“[T]he voluntary-payment equi- rule is an actually alleging ber is “business duress” may (also table one and require balancing com- referred to as “economic duress” or peting depending upon interests par- compulsion”), “business which Arkansas circumstances.”). ties’ recognized. courts have not Lum responds ber that the modern trend Next, argues the evidence is variety jurisdictions wide is to relax the insufficient to show duress because Curtis voluntary payment to recognize rule right” deny “had the absolute duress can exist from pressures business requests payment. customers’ just as much as of physical threats harm. Surely, duress is limited to situations in See, e.g., Machinery Hauling, Inc. v. Steel payor which the had “no other means of Va., W. 181 W.Va. by than S.E.2d making pay- immediate relief Vick, (collecting authorities and sum ment.” 4 S.W. at 61. problem The marizing: years, argument, “Through with LP’s there has though, is that Curtis steady been a options, expansion princi Lumber’s alternative of duress reality, ple such that longer would not have afforded relief. direct dire harm is no See 25 essential, Am.Jur.2d Duress & the focus instead being Undue Influence (“[T]he § adequacy remedy is to whether the threat overbears the exercise will.”). standard, practical tested which of free reasoning wrongful 20. We stress that oppressive our does not obvi conduct and not necessities.”). ate the basic element of causation —Curtis plaintiff's But LP is not an prove Lumber must still that LP' acts caused party.” Viewing "unrelated third the record pay it to rebates to seventeen customers. We must, we as LP created a situation in which it agree party” with LP that an "unrelated third likely that customers would demand sat- should be held liable for the acts of a isfaction from Curtis Lumber. In these cir- payee pressure payor. who exerts on a cumstances, jury a reasonable could find LP's Co., W.R. Grimshaw Co. Nevil C. Withrow acts caused Curtis Lumber's dilemma and (8th Cir.1957) ("The asser thereby caused Curtis Lumber to the re- proven by tion of duress must be evidence bates. resulted duress from defendant’s persuasive and the of party cites Cox circumstances Neither case, Ark. 867 S.W.2d 460 McLaughlin, Supreme we believe the Arkansas (1993), we find informative as to how which may Court would hold duress have apply would Supreme the Arkansas Court Thus, in summary judg- existed this case. in the context of the exception the duress inappropriate ment was to the extent it case, In that a voluntary payment rule. damages voluntary limited based on the a cargo transportation arranged broker for payment rule. company shipment to deliver a of

trucking factory in Nebraska to a pet food from a (3) Damages Punitive warehouse in Texas. Id. at 461. The company leased a truck and trucking Arkansas, By in punitive statute ship a to haul the agreed pay to driver damages are restricted to situations shipment was en ment. Id. While where: route, however, company told trucking (1) ought The defendant knew or pay the driver that it could not for the known, light surrounding delivery. Id. The driver refused to contin circumstances, that his or her conduct broker, Id. The trip paid. ue on the unless naturally probably would result its valuable bro

who did not want lose injury or damage and that he or she pet company, with the food kerage account continued the conduct with malice or in roughly agreed pay the driver disregard reckless of consequences, by trucking company. amount owed inferred; may from which malice later refused to Id. at 462. The broker intentionally pursued The defendant amount, the full and the driver sued purpose course of conduct for the breach of contract. Id. The broker for causing injury or damage. sought agreement to void the with the though driver on the basis of duress —even Moreover, § plain- Ark.Code 16-55-206. express pet there was no threat from the required satisfy tiffs are the above stan- company, physi food let alone a threat of convincing dard clear and evidence. Id. Supreme cal harm. The Arkansas Court § 16-55-207. expressly recognized duress “[e]conomic argues Curtis Lumber that punitive ... voiding as a valid excuse for a con damages particularly are appropriate Ultimately, tract.” Id. at 463. the court true, involving That cases fraud. see questions held that fact precluded sum Moore, Ray Dodge, Inc. v. Ark. issue, mary judgment e.g., on the duress (1972), but Curtis whether the broker would have suffered Lumber’s claims based on intentional de hardship,” “serious financial whether the fail ception Upon as matter of law. act,” victim a wrongful broker was “the record, careful review of the we believe no and whether “other remedies would be jury reasonable could find that LP acted inadequate.” Although Id. at 464. Cox with malice or an intent to harm Curtis party seeking to void a con dealt with such, tract, analysis is instructive Lumber. As Curtis Lumber is not we believe its general.21 light punitive damages. for duress in In entitled to pursue Cox trial, persuasive authority against remanding By Cox also trucker. case argument only that duress exists where Supreme implicitly the Arkansas Court held Cox, pressure payee. is exerted party where a third that duress can exist pressure originated from the third- economic pressure. exerts party pet company, payee food but the 17(a) Advisory ing III. Conclusion Fed.R.Civ.P. Commit Note). tee reasons, foregoing we affirm the For the judgment regard with to

district court’s Here, governs “pos- Arkansas law who fraud, Lumber’s claims for con- Curtis rights sesses the to be enforced.” Consul fraud, knowing/intentional structive and Gen., 330 F.3d at 1045. Curtis Lumber practices. trade reverse the deceptive We brought has claims under Arkansas law for regard with to the claims under judgment ADTPA, negligent misrep- violation of the 4-88-107(a)(10) §§ and 4- Arkansas Code fraud, equitable resentation/constructive 88-108(2) promissory estoppel. and As to estoppel, misrepresenta- and intentional affirm lim- damages, we the district court’s Therefore, we must look to tion/fraud. punitive damages itation on but reverse Arkansas’s “substantive law” to determine voluntary pay- the limitation based on the proper par- whether Curtis Lumber is the ment rule. pro- We remand further ty bring these claims.

ceedings opinion. consistent with this ADTPA, regard With to the Arkansas provides “[a]ny person law who suf- SMITH, Judge, in concurring Circuit damage injury fers actual as a result of dissenting in part part. and an offense or violation as defined in this respectfully I dissent because I conclude has a cause chapter action to recover that, applying Arkansas substantive law damages, appropriate, actual if and rea- respect with to all of Lumber’s Curtis attorney’s sonable fees.” Ann. Ark.Code claims, party Curtis is not the real 4-88-113(f) added). § (emphasis Similar- prosecute in interest to present action. ly, law provides Arkansas that in order for fraud, plaintiff to recover for “a plaintiff Rule of Rule [Federal Procedure] Civil 17(a) show,” among things, must other provides: “[e]very “damage action shall be prosecuted [upon in as a result of the reliance party the name of the real suffered 17(a). representation in the false of material interest.” Fed.R.Civ.P. The fact].” who, v. party Ellington, real McAdams 333 Ark. 970 party interest added). law, governing (emphasis under 205 pos- substantive fraud, The rights sesses the same is true for constructive See enforced. Knight Day, see Iowa Public Serv. v. v. 343 Ark. Co. Medicine Bow (8th Co., (2001), promissory 302 estoppel, Coal Cir. 1977). Smith, 87-393, see v. No. Shaw CA 4, 1988) at *2 (Ark.Ct.App. May WL action, diversity “In a state law deter (unpublished). party mines the issue of who is a real Burkhart, interest.” Jaramillo notes, majority As the Curtis Lumber (8th Cir.1993). 1241, 1246 F.2d alleges that it has sustained actual dam- Republic Consul Gen. ages profits Indonesia v. for lost it rebates Rentals, Inc., Bill’s paid F.3d to its customers. supra Part (8th Cir.2003) added). (emphasis “Such a II.D.1-2. question The of whether Curtis requirement in place protect ‘to damages Lumber has sustained actual un- against and, turn, defendant a subsequent action der law Arkansas substantive actually recover, party entitled to proper party bring is the in interest to generally suit, judgment present insure that the will turns on whether Arkansas’s ” proper judicata.’ have its voluntary payment effect as res rule applies to its Healthcare, (quot damages. United 88 F.3d at 569 claims for court found that Originally, the district Curtis Lumber also confirmed for the district court that it had initially charged Lumber could not recover the re- accounts of customers who paid bates or refunds that to its custom- had not account; payment made a “volun- their when payments ers because those were the customers then informed Lum- tary,” no and Curtis Lumber was under they ber that product, did not want the obligation payments. make legal those Curtis Lumber then “wrote off the account The court also found “economic or credited the account for the amount exception voluntary pay- duress” to the that originally had been billed under apply ment rule did not because that rule invoice.” Curtis Lumber did not consider only apply would if had exerted eco- “voluntary this to be a payment” because nomic duress over Lumber to Curtis force it had paid the customers anything; Lumber to LP- Curtis rebates to furthermore, the customers did not receive not the customers. But the court found product, they nor paid had ever Curtis provided enough that Curtis Lumber had Lumber. profits evidence of lost and increased costs summary judgment

to withstand LP’s mo- But the district court found that damages. tion on the issue of actual a difference,” “distinction without a explaining: Thereafter, LP filed a motion for recon- If they paid you money you refund sideration, any arguing that Curtis Lum- money debt, them they to erase a then if damage “separate ber must be and inde- charged have been you forgive and then pendent applicant, from claim of rebate account, that charge by writing off the $2,400 only which would if they be the ever the bottom line is the All same. of the LP.” LP that sued asserted money has been refunded to the custom- profit they the lost that [Curtis Lumber] er they either the form of if cash only would seek this case could be a advanced cash or if they just credit $2,400 claim, part of a rebate because charged been on an account. It seems money that is the amount of that Mr. to me that ... under these circum- built price into his sales when he stances, undisputed if it’s that all of the And, products. sold the SmartSide customers were either refunded cash for thus, if he were to sue us for a lost they what given were advanced or credit profit already he’s told us —and account, they to cancel their that all fall average profit per the lost customer who voluntary payments under this rule and $2,400 bought of material was If $600. damages. would not be included as he sues us that and the Court lets granting its order LP’s motion for re- him do that and then customer later consideration, the district court that found $2,400, sues LP for its of rebate we voluntary payment “the precludes rule $3,000 ultimately pay a amount on a recovering Plaintiff from lost profits based $2,400rebate. upon the facts of this case.” position profit So is that the lost [L.P.’s] appeal, argues On Curtis Lumber only could be a part of the rebate claim holding the district court erred in that the right of the claimant and he has no to voluntary payment rule barred its recov- that, separate recover because it’s not ery because its “cancelation of orders [sic] and distinct. payment of refunds and rebates to its LP then exception ‘voluntary’ asserted no to the customers were not in either voluntary payment applied. legal meaning rule or common-sense account of a damages crediting “actions and ucts or back the

word” because its ordered, yet ... customer who had but not L[.]P[.]’s were the result fraud (Em- for, placed on Curtis Lumber.” paid products. Although duress SmartSide added.) phasis may have been a reasonable business deci- sion, produce Lumber has failed to money long “It has been settled that any legal it was under a evidence unjust voluntarily paid in satisfaction of an obligation to make this refund or credit to demand, knowledge with full illegal TB Blytheville, its customers. See fraud, duress, facts, and without Furthermore, at both the extortion, cannot afterwards be recovered refunding crediting of customers and the payor.” Murphy, Larrimer v. of customers’ accounts constitute back (1904).22 “In Ark. 82 S.W. law, “payments” under Arkansas as the voluntary-payment order for the rule to correctly court concluded. district apply, payor] must not have had [the [a Ritchie, result, at 592. As a S.W. legal] duty pay].” Blytheville, TB [to un- voluntary payment applicable at rule is S.W.2d 933. less Curtis Lumber can show that an ex- law, making “the Under Arkansas the Larrimer, ception applies. to the rule See the the cred- placing advancements and at 82 S.W. 169. “payment.” its to account” is a Rit- [an] chie, 110 S.W. at 592. As to the rebates that Curtis Lumber open Where there is an account between customers, majority paid to some of its the parties, agree- two in the of an absence notes Curtis Lumber’s concession that “it contrary, ment to the all items of the had no obligation pay enforceable re- account become parts constituent there- Instead, it argues bates to its customers. of, applied payment and are in that the exceptions fraud and duress the oldest item in the account on the other voluntary payment apply, rule and there- side; only and he is entitled to recover fore, payment of the rebates was not vol- upon in whose favor the final balance the untary.” supra See Part II.D.2. is, whole account is The found. rule majority’s I concur in the conclusion accounts, where there are mutual exception apply, the fraud does not applied, credits on one side are to the but I extend its conclusion to both Curtis other, extinguishment of debits as prof- Lumber’s claims for rebates and lost payments intentionally made thereon. supra respectfully its. See Part II.D.2. I Id. majority’s dissent from the conclusion As to Curtis Lumber’s claim for lost Supreme “the Arkansas would hold Court profits, majority concludes that “[al- may that duress -have existed this case.” though payments Lumber’s Curtis to cus- Instead, Id. I conclude that the duress arguably ‘voluntary,’ tomers were Curtis exception apply does to either not alleged profits Lumber’s lost were not.” profits. Lumber’s claim for rebates or lost supra Part But Lum- II.D.l. First, disagree majority’s claim I with the dis- profits ber’s for lost stems from it refunding Supreme either total a customer missal of the Arkansas Court’s already paid prod- who for the SmartSide statement Vick matter, applicable 22. As an initial Curtis Lumber’s asser- because fraud and duress are two paid tion that it its customers because of voluntary payment exceptions to the rule. See implicit L.P.’s “fraud and is Larrimer, duress” con- 82 S.W. at 169. voluntary payment that the cession rule is ” Vick, regarded not to be as ment.’ at payment (quoting that a 61). emancipate discussed, compulsory, previously unless made S.W. at As from an actual person property presented Curtis Lumber has no evidence existing imposed upon any legal obligation duress that it was under money to whom the is LP or to its customers to party the refunds Thus, ... It is sufficient when there and rebates. paid.... Curtis Lumber was actual or threatened exercise of “best able paying” is some to avoid the loss pos- to be power possessed, or believed the customers. See id. sessed, by party exacting or receiv- Finally, majority the Cox case that the ing payment person over the found “informative as to how Arkansas of another from which the lat- property Supreme Court would apply the duress ter has no other means of immediate exception in voluntary the context of the by making payment. relief than rule,” payment H.D.2., supra see Part Vick, (emphasis at 61 removed and S.W. Cox, distinguishable. In the broker—-the added; quotations and internal citations payor- -sought to directly recover from the — omitted). can, course, per- “Dicta payee driver —not from a par- third —the City suasive value.” Pretka v. Kolter Pla ty trucking company. 867 S.W.2d at —the (11th II, Inc., za Cir. contrast, Curtis Lumber —the 2010). Furthermore, the absence of a “[i]n payor seeking to recover from a third —is court, ruling by highest definitive state party payees- from the cus- —LP—not —the may court consider ... dicta ... federal tomers. highest to show how the court the state ” Accordingly, apply would

would decide the issue at hand.... Arkansas (Canada) voluntary payment rule and find that Michelin Tires Ltd. v. First Cur- (1st Bank, tis Lumber has not sustained actual dam- Nat’l Cir. 1981); ages under Arkansas Corp. see also Kirk v. Hanes N. substantive law. (6th Carolina, Cir.1994) Consequently, I would hold that Curtis F.3d (“But, Lumber is may proper party not the in interest because even dicta be of some bring present suit. ascertaining value in the relevant state basis.”). law, we consider it on that Therefore, I affirm judgment would ruling by In the of a absence definitive of the district court. Supreme the Arkansas regarding Court can against whether duress be asserted

non-payee, language Vick should be guide highest

our as to court in how present

the state would resolve the issue. im- explicitly

Vick states that the duress upon “by

posed plaintiff must be

party money paid.” to whom the 4 S.W. Here, paid

at 61. the mon-

ey to L.P. its customers —not to

Second, although majority relies on Bishop, Bishop, the Arkansas MUMID; Muse; Court Ibrahim Fah Fadumo Appeals party asserting stated that Ahmed; Safiya Mohamad; mo Iftu “ must Jibril; Maymuna Osman; duress ‘no other means of Muktar by making pay- immediate than Ibrahim; Mohamed; Misbah Amal relief

Case Details

Case Name: Curtis Lumber Co., Inc. v. Louisiana Pacific Corp.

Court Name: Court of Appeals for the Eighth Circuit

Date Published: Aug 24, 2010

Citation: 618 F.3d 762

Docket Number: 09-2602, 09-2692

Court Abbreviation: 8th Cir.