Wells Fargo Bank, N.A. v. WMR E-Pin, LLC

1993). containing correspondence “That

threatening in outra- language phrased

geous correspon- not make the terms does threatening.”

dence less Id. The fac- in this lacks some of the

tual basis case Watts,

mitigating present circumstances light of the record as whole and review,

our we limited standard con-

clude that there was no obvious error. judgment of court is the district

affirmed. BANK, N.A., Appellee,

WELLS FARGO e-PIN, LLC; e-Banc, LLC;

WMR

Synoran, Inc., Appellant.

No. 09-3800. Appeals,

United States Court of

Eighth Circuit. April

Submitted: Sept.

Filed:

Rehearing and En Banc Rehearing

Denied Nov. 2011.* * Loken, Judge Bye partici- grant and Benton petition did not rehearing en pate in the consideration or decision of this banc. Judge Murphy, Melloy Shepherd matter. Columbus, LeVere, OH, ap-

T. Earl pellant. Candee, Thomson, Tyler T. D.

Richard MN, Wisnia, N. Howard San Minneapolis, CA, O’Brien, Washington, Diego, Kevin M. Rankin, Dallas, TX, DC, W. Barton appellee. MURPHY, WOLLMAN,

Before GRUENDER, Judges. Circuit WOLLMAN, Judge. Circuit (Synoran)1 and WMR e- Synoran, LLC (e-Pin) appeal from district Pin LLC of an arbitration confirmation court’s2 Ericksen, e-Banc, Honorable Joan N. United 2. The Synoran, LLC is successor to sake, Judge of Minne- District for the District clarity’s we will States For refer LLC. sota, adopting report and recommenda- Synoran formerly e-Banc as entity that was Noel, L. Unit- of the Honorable Franklin opinion. tion throughout this $1,865 provided award of million favor of Wells dispute must be re- N.A., prevailed Fargo, through solved particular arbitration. Of claims for of contract and for breach mis- appeal provisions relevance to this appropriation Appellants trade secrets. relate to the scope pro- the arbitration ju- maintain that the district court lacked ceeding and the forms of relief available to award, risdiction to confirm the erred in parties: award, confirming the and abused its dis- (i) all Disputes Arbitrators shall resolve denying cretion their motion to amend with accordance the substantive law injunction or permanent terminate a is- of the state in which the arbitration is part sued as We affirm. award. (ii) held, may any remedy grant or relief a court of the which the I. held grant arbitration is could or order In Fargo Wells entered into a scope with the here of and ancillary such relationship Syno- appellant business with necessary relief as is to make effective parties ran. The outlined the terms of the award; (iii) any pow- and shall have the relationship in a Licensing Software recovery er to award of all costs and (SLA), Agreement agreement an umbrella fees, impose to sanctions and to take by to subsequent agree- be fleshed out such other actions as deem neces- parties. ments between the Under the sary judge to the extent a pursu- could SLA, Synoran provide consulting ant to the Federal Rules of Civil Proce- products services and software to Wells dure, applicable or other law. Fargo that management related its [ ] customer accounts. ... Any award arbitration under this Sec- In Fargo Wells sought additional tion shall be to monetary limited dam- consulting Synoran services from related ages injunction and shall development of include no Digital Informa- (DIXE Software). Exchange tion software party direction other than the adopted The DIXE Software a “distribut- direction to pay monetary amount. ed approach network” Fargo Wells ¶ ¶7, J.A. Ex. 000029at proprietary. Fargo deemed Sy- Wells and After e-Pin Fargo and Wells executed (DIXE noran agreement entered a second PLA, assigned e-Pin patent certain Consulting Agreement), under which Wells DataTreasury interests Corporation Fargo reserved proper- certain intellectual (DTC). DTC sued Wells Fargo patent for ty rights associated with the DIXE Soft- infringement. Fargo Wells invoked the ware and acknowledged that certain other dispute procedures resolution and initiated property intellectual rights associated arbitration proceedings against e-Pin and approach “central switch” belonged to DTC. DTC contended that it was not sub- appellant e-Pin. ject to arbitration and was ultimately dis- Wells and e-Pin executed Synoran missed. intervened together and (PLA) a Patent License Agreement with e-Pin asserted against counterclaims through which Fargo acquired a li- Fargo arising rights from their un- cense to products use certain patented der the SLA. e-Pin that relate to cheek clearing and In July check three-member arbitra settlement The PLA in- services. (the Panel) corporated dispute panel tion reference the reso- convened and heard procedures SLA, lution from the days of testimony. findings twelve In its Magistrate ed Judge States for the District of Minnesota. law, the Panel States Patent and Trademark the United and conclusions

of facts Appellants argued Office. that the infor- counterclaims, appellants’ dismissed longer constituted a trade secret mation no claims in favor Wells found injunction against its use or and that misappropria breach of SLA should be lifted. The district disclosure secrets, DIXE software trade tion of the motion, appeal court denied that and this WMR e- “Synoran ordered followed. $1,265,000.00 attorneys’ pay LLC” Bank ask that we vacate the dis- Appellants $600,000.00in The Panel costs.3 fees and court’s trict confirmation of award enjoined appellants permanently also subject-matter jurisdiction. In the lack of using disclosing the DIXE soft from or alternative, ask that they we reverse trade secrets. ware award, confirmation of the arbitration va- petitioned In Wells October finding is the “inven- cate that Wells arbitration court to confirm the district secrets, tor” of DIXE software trade Award). (the ruling that Before award attorneys’ the award of fees and vacate argument the district court heard petition, e-Pin, against permanent and lift the costs parties regarding jurisdiction, its from the injunction against them. ob-

ultimately concluding, over appellants’ II. subject- of jection, prerequisites satisfied. jurisdiction Appellants had been contend that the district matter subject jurisdiction to court lacked matter a to va- filed cross-motion appellants The confirm the Award. review de novo We Award, modify arguing that the cate or subject jurisdiction. questions of matter authority its when it Panel had exceeded Sac & Fox Tribe v. Bureau Indian 1) in violation of granted injunctive relief (8th Cir.2006). F.3d Affairs, 439 835 2) procedures, governing arbitration jurisdiction subject exists Federal matter 3) fees, attorneys’ and concluded awarded if exceeds controversy the amount Fargo was the “inventor that Wells $75,000 and the suit is between citizens DIXE software trade se- owner” 1332(a)(1). different states. 28 U.S.C. crets. in con- parties agree The that the amount satisfied, mo- appellants’ troversy district court denied but element has been parties. they whether are diverse modify granted dispute or Wells tion to vacate a confirm. It entered Fargo’s motion to is citizen of Appellant Synoran a $1,685,000 appel- judgment against states, including Ap California. several permanently enjoined them from lants and pellants Fargo maintain that is Wells disclosing making or use of the otherwise California, principal place citizen of Appellants DIXE trade secrets. software business, Dakota, and of South where asking the judgment, to alter the moved They argue that main office is located. injunc- permanent court to lift the district holding district court erred ground Fargo that Wells bank, tion on is deemed Fargo, as national only the DIXE software trade se- its main public made a citizen state in which 4 is office located. patent application when it filed crets Fargo es- Appellants claim that Wells original WMR e-Pin order misidentified 3. The denying topped that it is a citizen from Panel later amended as "WMR e-Bank.” The in Mount because the district court mistake, California we this the award to correct 08-6298, N.A., Bank, No. CV v. throughout the award refer the amended (C.D.Cal.2008) found 2008 WL 5046286 opinion. this remainder of remanded the case it was and therefore it. had removed court after Wells 706 555, 565-66, “corporate are enti U.S. 9

National banks 83 S.Ct. L.Ed.2d any State, (1963). by chartered not but ties Congress eliminated Currency Comptroller of the of the U.S. question” jurisdiction “federal for any law Schmidt, Treasury.” Bank v. Wachovia involving suit national bank and created 303, 306, S.Ct. diversity jurisdiction under the same ru (2006). L.Ed.2d 797 The relevant statuto governing bric as state banks. See ry language citizenship na defining Funds, Morgan Excelsior Inc. JP diversity tional banks for purposes appears Chase, N.A., F.Supp.2d. n. paragraph the second of 18 U.S.C. (S.D.N.Y.2006). A subsequent amendment “All 1348: associations provided national banks shall shall, purposes for the of all other actions “be deemed citizens the States in which them, against be deemed citizens of located,” they respectively (quoting are id. respectively the States 3, 1887, Act of March 24 Stat. At located.” issue is whether a national 554-55). Congress retained phrasing bank is princi “located” the state of its without alteration in the Judicial Code of business, place of pal if its main in office is 1911, which formerly “combined two dis a different state. provisions crete on proceedings involving by begin noting every We that court to banks,” Wachovia, national 546 U.S. at § consider the of meaning pur 1348 for 311, 941, 126 S.Ct. and retained the same poses jurisdiction of recognized has phrasing once more when it amended the term ambiguous. “located” is See Wa § in 1348 1948. Bank, 318, 126 chovia 546 U.S. S.Ct. 941 predecessors § These of 1348 demon- (“To summarize, ‘located,’ appear as its Congress’s put strated intent “to national in ances the reveal ... laws is a banks on the word; footing same as the banks of chameleon meaning depends they in the state where purpose the context and were located for all which it is used.”). Consequently, purposes jurisdiction the of we examine the statutory history States,” and case law in order to of courts the United Leather meaning construe the of term “located” Cooper, Nat’l Bank v. 120 Manufacturers’ §in 778, 780, 7 U.S. S.Ct. 30 L.Ed. 816 (1887), and to “limit of the access national Congress first authorized national banks to, suability in, their the federal at which they time could “sue and courts to the same extent to non- which be sued in the federal district and circuit national banks so were limited.” Wacho- solely courts because were national via, (altera- banks, 546 U.S. 126 S.Ct. 941 regard without to diversity, amount omitted) (quoting tions controversy or the Mercantile Nat. existence of a federal Dallas, question 565-66, in the usual Bank at sense.” 371 U.S. at 83 Mercantile 520). Nat. Bank at v. Langdeau, Dallas 371 S.Ct. circumstance, ton, 1447(d) (7th Cir.1999); a In such 28 U.S.C. 708 Win- appellate any remanding bars review Co., of order ters v. Diamond Shamrock Chem. 149 a case to the state court from which it was (5th Cir.1998); F.3d 395 Alliance End Remembered, Things removed. See Inc. v. Pet Repression City Chicago, v. F.2d of rarca, 127-28, 116 S.Ct. (7th Cir.1987). Therefore, appel- we find (1995). According 133 L.Ed.2d 461 to case argument estoppel unpersua- lants’ collateral circuits, non-appealable law from other re give preclusive sive and decline to effect to preclusive mand order lacks effect and is to findings district court from Califor- See, adjudged be e.g., on its own merits. nia in an unrelated matter. Ill., Washing-

Health Cost Controls Inc. v. of a statute implications that the jurisdictional pari- Thus, principle later by implications stat- statutory evolving altered ty from emerged omitted). Id. Horton (quotation ute.” banks. The governing framework proposition likewise endorsed prin- question is whether vexing more jurisdictional parity concept Congress traditional intact after remained ciple animate our under- 1332(c)(1) which altered should continue § adopted corpora- standing 1348: “Because section banks and of state jurisdiction modifying or any “a citi- tions, language was not have corporation such that a does understanding been rejecting interpretive has State zen where it has court incorporated predecessors, of the State came with its this (emphasis place incorporate business.” to retain and presume should added). ju- backdrop existing interpretive [of at 431. parity].” 387 F.3d risdictional making their case

Appellants, both South that Firstar Bank a citizen of rejoins California, rely on Firstar concluding Dakota and Horton overreached (7th Faul, Bank, N.A. 253 F.3d 982 policy preference jurisdictional parity One, NA., Cir.2001) v. Bank and Horton statutory of clear survived in absence (5th Cir.2004). Bank Firstar F.3d 426 preference. It embodying that language must be and Horton concluded that implic- that these cases were also contends in order to interpreted light itly question Supreme into called jurisdictional parity. of Bank, principle honor the Court’s decision in Wachovia which (“Con- Bank, F.3d at 988 See Firstar 253 a of national bank is not citizen held a against an U.S.C. 1348 gress passed 28 office, it a every in which has branch state background which assumed interpretive “a in which its but is citizen of the State were have the same that national banks office, as forth in its articles of main set as state banks to the federal courts access 306, association, 546 at is located.” U.S. Horton, 387 F.3d corporations.”); and Although Supreme S.Ct. 941. 126 (‘We light in section 1348 construe 435 whether a national Court did not consider jurisdictional intent to maintain Congress’s a of the state of bank is also citizen on national banks the one parity between business, it did observe: principal place of corporations and hand and state banks complete parity with state To achieve other.”) neither statute refers to Yet state-incorporated enti- and other banks parity, and jurisdictional or to the other ties, banking association a national language giving effect to contains neither a citizen of have to be deemed concept. of its main office and the both the State principal of business. place inter- of its entailed some State approach That this Horton, 26; 431, and n. F.3d 387 pretive was not lost on Seventh strain A., Bank, N. Firstar 253 F.3d at 993- Bank: “Inter- Firstar deciding in Circuit that a Congress prescribed has § current ver- 994. preting 28 U.S.C. deemed to be a corporation in “shall be promulgated of which was sion 1332(e)(1), by which has been citizen of State § enacted referencing 28 U.S.C. incorporated of the State where it might strike some years later ten place of business.” 28 principal n. has its at 993 incongruous.” as added). 1332(c)(1) (emphasis § Nonetheless, classic U.S.C. it reasoned that “the for national provision many counterpart en- judicial reconciling laws task of associations, 1348, however, § time, them to ‘make getting acted over “principal place refer to of busi- combination, necessarily does not assumes sense’ 708 Co.,

ness”; simply such v. Am. & Corp. deems associations Tel. Tel. 512 U.S. of the States in which “citizens 129 S.Ct. L.Ed.2d 182 The absence of a respectively (1994); States, located.” Perrin v. United “principal reference in place business” 37, 42-45, S.Ct. L.Ed.2d § practical signifi- be of scant (1979)). for, case, every cance in almost as this 1948, when Congress last amended one, the location of national bank’s § yet it had principal- not created main of its place office and of place-of-business citizenship. At coincide. business time the term referred “located” Bank, U.S. at 317 n.

Wachovia national bank had its S.Ct. office, designated by main its articles Because main is in Fargo’s office Moreover, Congress association. when state other that of its principal place than principal-place-of-business introduced citi- business, we must consider the outlier zenship for corporations state banks and scenario identified in footnote nine Wa- 1332(c)(1), §in it made no reference Funds, chovia Bank. In Inc. Excelsior jurisdictional parity, nor national banks Chase, N.A., Morgan JP district court § 1348. And nothing 1348 indi- fairest reading asserted “the of foot- incorporate by cates that it would refer- note nine is Supreme that the Court ex- any subsequent change ence in the stat- pressed skepticism over whether term governing jurisdiction utes over state ‘located’ 1348 included corporations. circum- These business,’ ‘principal place bank’s in view strongly suggest that, stances with the of the absence such term in the statute.” passage 1332(c)(1), Congress recon- Id. gone at 317. The has Seventh Circuit figured jurisdictional landscape further, reading reject Wachovia Bank to corporations, state banks and state but proposition embraced in its Firstar left that of national banks undisturbed. Bank decision that a prin- national bank’s The alternative proposition cipal place of is an independent business —that Congress intended to meaning alter the of basis for In citizenship. Eng’g, Hicklin § retroactively Bartell, (7th passed when it Cir.2006), L.C. v. 439 F.3d 346 1332(c)(1) § jurisdictional so it retain concluded that “Wachovia Bank held parity that not statutory national banks are of derived from the only citizens the —is states in which statutory interpretation, their main offices locat- text or of canons ed[.]” Id. at 348. jurisdictional but parity assumes anis principle immutable af long endures Firstar Bank and Horton modeled ter the statutes from which it arose have citizenship the of national banks after that all been amended and to it references have corporations strength the anof as statutory been history excised. But the sumption that Congress intended to suggests opposite, the as the district change the meaning of the former statute Funds, court’s observations in Excelsior when it enacted the latter order to Inc. make clear: perpetuate jurisdictional parity. findWe Congress If juris- intended achieve support little assumption. for that We are parity dictional between national and of the view that “[t]he most relevant time state banks for all period times and for a determining statutory term’s place thus to include meaning the time when busi- the statute was Funds, Inc., enacted.” Excelsior ness as a location for national bank F.Supp.2d (citing at 319 MCI Telecomms. it citizenship when became basis for banks or bank, have state for either state individual Congress could for a state statutory the lan- for that citizens. provided Indeed, of 1348’sstat- several guage. Funds, Inc., 470 F.Supp.2d. Excelsior express contained utory predecessors omitted). Had (statutory citations 319-20 an have supported that would language jurisdictional Congress wished to retain reference incorporating by for argument have parity unequivocally could citizenship changes subsequent not, It consequently so. did and done See, citizens. banks or individual state concept longer applies. no Whether (providing July Act of e.g., policy question to be is a for ought revived involving na- for suits jurisdiction not federal will Congress, courts. We banking associations “shall tional jurisdictional concept into import not than, as, juris- not other same that was unknown at the time of its not against banks suits diction that, Accordingly, pur- we adoption. hold any law of the United under organized §to a national bank is a citi- suant (“the States....”); Act of March only of in which its main zen the state courts shall not circuit and district office is located. than such as jurisdiction other interpretation po- individual This accords have in cases between State”); Au- Act of Comptrol- of the same citizens sition taken Office (same). However, such all gust during Currency argument oral ler Bank,5 the con- expressly invoked language During exchange an Wachovia removed in well parity was cept Ginsburg and Justice between OCC version of the statute before current government’s argument, the outset 3, 1911. Act of March was enacted. See expressly disavowed that a na- the OCC fact, expressly language place bank’s principle tional of business between parity established an basis citizen- provided independent banks was removed ship: changed to language when the was Thank Mr. you, MR. SRINIVASAN: parity na- jurisdictional between create Justice, itmay please Chief “individual citizens.” tional banks and Court: change 1887. This Act March purposes determining For its State the con- argument undermines 1348, a na- citizenship under 28 U.S.C. jurisdictional underlying cept parity in banking tional association is located to concept designed § 1348 is a broad is in its main office the State which changes the citizen- statutory trace to found, may in every not State term through the ship of state banks a branch office or other form maintain Rather, suggests that the “located.” presence. physical parity underly- jurisdictional concept What about its JUSTICE GINSBURG: limited, on more based ing the statute is if it’s differ- place of business principal citi- understanding of then-existing from its main office? single ent zenship, which would been (Oct. 2002). previously Whatever occasioned OCC e-Pin that the had Fargo claim that Wells is a citizen both prohibition express refer us to the outlined South Dakota and California and conclude dispute procedures in the resolution that that err in the district court did not deter- govern “Any were to the arbitration: mining subject-matter jurisdic- that it had award arbitration under this Section tion over this action. monetary damages shall be limited to 2000-2009/2005/2005_04_l recording transcript 186/argument. 6. Both the audio the http://www.oyez.org/cases/ are available at: “Appro- briefing panel to final entitled injunction or direction include no shall Remedies,” they asked the Panel pay priate the to to other than direction party ¶ “[djeclare misappropriated Ex. 000029 9. had monetary J.A. Wells amount.” enjoin Panel ignored that the ... confidential trade secrets and Appellants contend in- using express prohibition from such confidential infor- the contract’s junctive secrets[.]” relief. mation and trade J.A. Ex. second, during closing argu- 000384. And that, be court concluded The district ment, appellants counsel one of the in that an appellants argued cause think “we the evidence is clear stated: against junction should be issued proven Fargo] that we’ve that [Wells took arbitration, the during the course of litany just gave on the that I this based the they right challenge the to waived preference and that be our you, injunctive relief in the grant contained enjoin you they you find that did and It on precept “[i]f Award. relied the using them from the software as it’s de- and without reservation party willingly proposed fined our order.” J.A. 000425. to an to submitted arbitra allows issue Having the requested that Panel enter in- the then tion, cannot await outcome and he behalf, junctive appellants relief on their lacked au argue later that the arbitrator complain cannot the Panel when decides the matter.” Minne thority to decide injunctive against instead to enter relief Paul Union v. Nw. apolis-St. Mailers them. Inc., (8th Publ’ns, 502, 509 Cir. 2004) Slaney Int’l Amateur (quoting contend that even if Appellants (7th Fed’n, Cir. F.3d Athletic affirmatively request injunctive did 2001)). relief, precluded the Panel was nonetheless 43(a) it Rule granting from under of the deny that their references

Appellants 43(a) provides AAA Rules. Rule injunctive constitute a concession relief remedy may grant any arbitrator or remedy “[t]he and con- that it was an available just relief that the arbitrator deems affirmatively it they that even if did tend equitable scope and within the injunctive relief, lacked request the Panel parties----” the agreement Appellants authority grant govern- under contend that this rule the Panel bars from ing Rules of the American Commercial (AAARules). awarding prohibited agree- relief Arbitration Association ment, requested by if such relief is even review the confirms that Our record position ignores But parties. their on appellants were notice that Wells Minneapolis-St. Paul lesson Mailers injunctive seeking relief and Fargo was Union, F.3d at which teaches that it as they sought pre- well. may scope arbitrator expand submitted in hearing brief Wells parties based on the issues the review April enjoin Panel to asked the arguments they submit or the advance in alleged appellants continuing from proceedings. unpersuasive findWe trade of DIXE software misappropriation argument Minneapolis-St. appellants’ object chal- Appellants did not secrets. and like cases Paul Mailers Union lenge authority the Panel’s this time. they did not inapposite because involve enough alone not have been This parties specifically that the form relief injunctive re- prohibition abrogate in their prohibited agreement. agreement, parties’ appel- lief in the but appellants requested injunctive re- We conclude that affirmatively lants right the contrac- lief two in the waived their to enforce separate on instances later First, proscription injunctive by in relief proceedings. a section of their tual challenge Fargo’s request which out failing appellants posi- Wells the staked their they for such it them- tion that requesting rightful relief owners and Accordingly, court DIXE aspects selves. the district did inventors of software appellants determining not err in had and asked the Panel to acknowledge them challenge right Fargo waived the Panel’s as such. to a points their Wells number briefing injunctive examples appellants’ award of relief. final invented, in which it claimed to have creat- Challenge B. Misappro- the Panel’s ed, developed technology or and corre- priation Determination sponding patents Fargo before Wells sub- sequently it. stole reasons, reject we ap For similar pellants’ contention that the Panel exceed Moreover, above, as set forth a sec- authority determining ed its “the inven tion briefing “Appro- of the final entitled torship patent applications.” of pending Remedies,” priate appellants asked that driving One of the main issues the arbitra the Panel find in enjoin their favor and tion was each side’s assertion Fargo Wells from further misappropria- misappropriated other had trade secrets and, alternative, tion in the invited the relating DIXE technology. Given “[djecline jurisdic- Panel to to exercise its posture, parties clearly this both contem tion to a determination render as to the plated that the Panel consider ownership of the property intellectual inventorship rightful ownership of as question.” Thus, Ex. long J.A. so pects technology. of that The Panel ulti question ownership and inventor- mately concluded ship open, appellants was left actively is the inventor and owner sway tried to the Panel their favor.

of all the DIXE Trade Secrets which Though they suggested that the Panel DIXE Trade Secrets out are set within might jurisdiction, they also decline did not (1) Digital documents entitled: In- contend that it should do so other than Exchange formation “DIXE” Business prudential reasons and treated this as a Review, Technology Architecture and secondary option. 2.0, August Version dated 2003 and Appellants question counter that the (2) System Architecture, The DIXE patent “inventorship” pending applica- Draft, Version Working dated Oc- 2.0— tions is exclusively reserved to the United tober Fargo Evidentiary (USP- States Patent and Trademark Office Hearing Exhibits WF DIXE-35 and WF TO) under federal law. 35 U.S.C. DIXE-118, respectively, all of which § Accordingly, appellants argue, misappropriated were from Wells even if parties agreed to arbitrate by Synoran, Inc. and e-Pin WMR LLC. inventorship, issue of the Panel lacked ¶ 7(a). reviewing J.A. 000054 After power Moreover, to resolve it. appel- record, we are satisfied that the Panel did lants maintain the Panel’s decision authority not exceed in resolving conflicts with the conclusions the USP-

issue of misappropriation in this fashion. subsequent TO a proceed- interference Appellants claim that never agreed ing in November 2008 which the USP- to submit inventorship. the issue of rejected patent But TO application from replete the record Fargo.7 Appellants is instances in Wells assert that the proceeding 7. An applicants interference "an adminis- more claim same invention. proceeding trative in the proceeding U.S. Patent and Such a when occurs the same (1) appli- Trademark Office to determine which pending appli- invention is claimed in two cations, (2) cant patent application is entitled to the when pending two or in one PLA, SLA, not the party to the but effectively invalidate conclusions USPTO’s Fargo provides dispute is the that PLA that finding Panel’s Wells the the DIXE software arising and owner” the of it “be agreement “inventor out resolved secrets at issue. pro- trade the resolution dispute accordance with Ex. specified [SLA].” in the J.A. cedures too much appellants find read We turn, procedures, Those endow owner” in phrase “inventor and into authority award the Panel with the to ¶ 7(a) specific ignore of the Award judge “to extent a costs and fees the same dispute misappropria- over context to could the Federal Rules pursuant re- charged Panel was that the tion Procedure, applicable or other law.” Civil that appel- Panel concluded solving. The ¶ however, that Appellants argue, Id. trade secrets misappropriated lants technology attorneys’ to claimed award of grounded a the Panel related At developed. SLA, bot- have invented of the provision fees on a different tom, dispute ¶ with the Panel’s appellants’ attorneys’ 12(k), fees to be which allows conclusion, of the Pan- the extent not with prevailing party. to the That awarded Throughout proceed- authority. el’s by provision incorporated is not reference urged the Panel exer- appellants ings, not applied in the PLA and should thus to declare that authority that same cise e-Pin, a against party which was not technology invented the they owned and Therefore, according to appel- SLA. dispute. lants, authority Panel exceeded its against accorded to the Far- assessing Mindful of the deference fees e-Pin Wells decision, Group, arbitrators’s on the of the go’s “prevailing favor basis Crawford Inc., not we will second party” provision. determination that re the Panel’s guess Fargo parties responds Wells misap as to solving competing claims gov- agreed that arbitration would be necessary to made it consider propriation Rules, provision by erned the AAA DIXE developed the soft invented or who provides that award expressly “the by assumed as much Appellants ware. arbitrator(s) an ... include treating question who invented or de attorneys’ parties if all fees award linchpin of the software as a veloped the requested such an award or is author- wrongfully mis party over which dispute agree- ized law or their arbitration we conclude Accordingly, it. appropriated 43(d)(ii). AAA Rule ment.” err court did not when district par- if provision, that under this submits Award on the to vacate the declined Rules ties the AAA Commercial bound the scope the Panel grounds that exceeded fees, attorneys’ request then the arbitra- mandate. of its arbitral they appear empow- tors before whom such fees. ered to award Attorneys’ Challenge to Award of C.

Fees affidavits support, As cites e-Pin, from as well an affidavit counsel dis

Appellants contend owner, from that were submitted its sole confirming the award court trict erred it announced the Panel before e-Pin, attorneys’ against arguing fees that at- requested The affidavits Award. to hold e-Pin liable that there was no basis to appellants. fees be awarded torneys’ that e-Pin is a They point them. out 1999). (7th pending tionary, 818-19 ed. year patent within issued filing date.” Black’s Law Dic- application's Fargo request Appellants Wells had made a seek part similar relief from the before the Panel announced decision. enjoins permanently Award that them parties requested” “all an Accordingly, own, “claiming from as their asserting any attorneys’ award of fees and thus the Pan- in, ownership disclosing any interest part el to was authorized consider those re- of, any or DIXE using way the Trade 43(d)(ii) quests. provides Because Rule Bank, Secrets Fargo of Wells N.A.” J.A. attorneys’ basis for the award of fees ¶ 7(b). Appellants contend that the e-Pin, against we conclude that the district trade to which paragraph secrets this re- in confirming court did not err it. fei-s the public entered domain in January 2006 as a result of patent application IV. Thus, according Wells filed. ap- to above, As recounted after the dis pellants, permanent injunction bars Award, trict court appel confirmed the using them from or disclosing information lants amend moved terminate or already that is public By domain. permanent injunction pursuant to Rules it, upholding they claim, the district court 59(e) 60(b)(5) of the Federal Rules of contravened Minnesota State Secrets 59(e) Civil permits Procedure. Rule a mo Act, which reads: tion to judgment alter or amend a no later Actual misappropriation or threatened than days after it has been entered. may enjoined. Upon be application to Such motions “serve the limited function of court, injunction an shall be termi- correcting manifest errors law or fact or nated when the trade secret has ceased present newly discovered evidence.” exist, injunction may but the be con- Dist., Lowry Chapel v. Watson Sch. tinued for an peri- additional reasonable (8th Cir.2008). 60(b)(5) F.3d Rule od of time in order to eliminate commer- allows judgment for relief from a final cial advantage that otherwise would be grounds judgment that “the has been derived from the misappropriation. satisfied, discharged; released or it According Minn.Stat. 325C.02. to appel- based on judgment an earlier that has lants, because the DIXE Software entered vacated; been or applying reversed or public via Fargo’s domain patent prospectively equitable[.]” is no longer 60(b)(5). application, it ceased to exist as a Fed.R.Civ.P. trade secret district court abused its The district court indicated that it discretion in refusing to terminate the in- did not law, discern error fact or junction. nor had the appellants presented evidence Appellants right locate their to seek of changed circumstances that rendered 60(b)(5) Rule relief in 9 U.S.C. which the confirmation of the inequitable award provides a judgment confirming an unjust. or manifestly Consequently, it de arbitration award “shall have the same nied the motion to or terminate amend the effect, as, force and all respects, and be permanent injunction. D. Ct. Order of subject the provisions to all of law relating 27, 2009, Oct. at 2. Appellants contend the to, action; judgment an and it district court abused its in deny discretion enforced as if had been rendered in ing an post-trial this motion. action in the court in it is contends that the entered.” appellants’ motion does Sterling Heights, not AIG Baker satisfy prerequisites LLC v. relief un 59(3) Inc., 60(b)(5), Multi-Cinema, der either Rule American Rule (11th Cir.2009) reflected in the district findings (concluding court’s denying their motion. a judgment confirming an arbitration MURPHY, dissenting. Judge, Circuit or worse treated no better is “to be award and there- any judgment” other civil than majority’s I from answer to dissent the relief). 60(b) Ap- to Rule subject is fore question by Supreme left the open the perma- the enforcing claim pellants Schmidt, Bank v. 546 Court in Wachovia equitable” injunction longer “is no nent 303, 9, 941, n. 126 S.Ct. 163 U.S. 317 60(b)(5). the chronolo- Rule as But under (2006). footnote The Court’s L.Ed.2d clear, the extent makes to they recite gy divergent interpreta- itself to two lends the relevant Fargo brought that Wells in the case importance tions of decisive pub- into the trade secrets DIXE software suggest I respectfully before this court. filing patent applica- for a by lic domain majority has followed the less the 2006, tion, more than January it did so in on the supportable one. Based record the Award was years and a half before two area, this developed the law in I con- well issued. plaintiff clude that is not di- Synoran they since are verse to defendant injunction, an “whether Because of the same both citizens state. While impeach subject is not to wrong, or right main office is in Fargo’s located the conditions application in its to ment Dakota, place of busi- South States making,” existed at its United being in There no ness is California. thus 119, Co., 106, U.S. 52 S.Ct. & v. Swift case, diversity jurisdiction in this basis for (1932), 460, appellants must 76 L.Ed. 999 of district court should judgment that shift identify changed circumstances and the for lack be vacated case dismissed in favor under equitable balance their jurisdiction. matter subject 60(b)(5). They failed to do so. have Rule Rather, appear to invoke the appellants I. the Panel’s to the merits of rule attack conclusion, is not that conclusion because starting point analysis for is 28 The in changes longer equitable” light “no provides § 1348 which in relevant U.S.C. This underlying or facts. miscon the law “All national associations part: 60(b)(5)relief. the function of strues shall, purposes of all other actions them, rule relief if it is The fact that the allows by against or be deemed citizens judgment longer equitable” they “no are respectively the States which not our prospective application to of the case before located.” The focus It an does not appeal. substitute for of the word “locat- meaning court is on the that have diversity jurisdiction. of issues relitigation allow purposes ed” for Instead judgment. resolved roots statutes been 1348 traces its to Section change conditions it refers to some which created enacted 1882 and 1887 ineq- jurisdictional parity that makes continued enforcement state and na- between 290, July 12,1882, uitable. Act ch. tional banks. (the jurisdiction § 22 Stat. Wright Arthur R. Mil- Alan & Charles as, and “shall the same national banks ler, Practice Procedure Federal than, jurisdiction for suits not other 1995). (2d conclude § ed. We against organized banks not under or court not abuse its the district did States”); Act of law the United see denying motion termi- discretion 4, 24 March ch. Stat. injunction. permanent nate amend (national banks shall be “deemed 554-55 V. they the States which citizens of located”). respectively is affirmed. judgment language Supreme and codification Though explained Court time, changed slightly these statutes over again Act, years five later that the 1882 consistently Supreme Court has inter- limit, predecessor “sought preted to have national placed them banks with exceptions, the access footing “on the banks of the same to, suability in, and their the federal state where were located for all the courts to the extent to non- same jurisdiction purposes of courts of national are so banks limited.” Mercan the United States.” Leather Nat’l Mfrs.’ 555, Langdeau, tile Nat’l Bank v. 371 U.S. 778, Cooper, 780, Bank v. 7 S.Ct. 565, 520, (1963) 83 9 523 S.Ct. L.Ed.2d 777, (1887); L.Ed. 816 30 see Continental added). (emphasis years And fifteen after 119, Buford, Nat’l Bank v. U.S. 191 123- 1332(c)(1), § passage en of our banc 24, 54, (1903); 24 48 L.Ed. 119 S.Ct. Petri judicial court on the prior focused four Bank, 644, v. 142 Commercial Nat’l U.S. had recognized decisions which the con 650-51, 325, (1892) 12 S.Ct. 1144 35 L.Ed. gressional policy favoring jurisdictional (“no why reason” national banks “should parity for state and national banks. See not resort federal tribunals other Co., Burns v. Am. Nat’l Bank & Trust 479 corporations individual citizens (8th (en Cir.1973) banc). F.2d 27-30 might”). Supreme Neither the Court nor our court judicial The first interpretation of the suggested any way in that the 1958 enact word “located” in predecessor statutes 1332(c)(1) § ment of 28 U.S.C. § by 1348was done Ninth Circuit in changed longstanding and unanimous Surety American Company Bank of interpretations §of predeces 1348 its (9th California, 133 F.2d 162 Cir. jurisdictional sors requiring parity be 1943). Reasoning that the citizenship of a tween national and state banks. corporation was “fixed its business,” place of the court held that na leading appellate The two decisions ad tional banks were only citizens of the dressing the exact issue us—wheth before principal places their “states er national banks are citizens of the state Thus, business were maintained.” Id. at in which principal place their of business (1) § the time 1348 was enacted 1948: Bank, are located—are Firstar N.A. v. only Supreme Court decisions inter Faul, (7th Cir.2001), 253 F.3d 985-94 preting predecessor statutes had ruled One, N.A., and Horton v. Bank that a national bank’s location should (5th Cir.2004), denied, 429-36 cert. 546 on a comparable considered basis with U.S. 126 S.Ct. 163 L.Ed.2d (2) state and corporations, (2006). 1127 Both circuit courts decided only circuit court explained decision had yes was thorough that a answer after banking national association was analyses,8 located in the principal place state of its and both decisions were refer business. positively enced Wachovia. See 546 Thus, U.S. at 317 n. 126 S.Ct. 941. provision defining

The current the citi- 2004 three circuits had that a concluded zenship corporations, 28 U.S.C. national 1332(c)(1), banking association is a citizen of was enacted Al- the state of though principal place that statute did not reference the business. banking Horton, provision 436; Firstar, association in See F.3d at 387 253 436; Firstar, 8. Both decisions also held that national banks 253 F.3d at 994. also Wa- organi- were citizens of the state “listed in its chovia, 546 atU.S. 126 S.Ct. 941. Horton, zation certificate.” See 387 F.3d at Co., whether a national bank is 994; greed 133 F.2d at about Am. Sur. F.3d principal place citizen of the state of its took Judge John Koeltl a new business. Wachovia, Supreme reaf- Court Funds, approach to the issue Excelsior reasoning in and Hor- Firstar firmed Bank, N.A., 470 Morgan Inc. v. Chase JP deciding that nation- in the ton course (S.D.N.Y.2006). F.Supp.2d Relying citizen not a association is al heavily Congress the fact that did not maintains branch every state in which at the time it enact amend office, it is least a citizen but that 1332(c)(1), he that national office, ed concluded main as set forth “in which its association, not of the state of their is located.” banks are citizens in its articles of 303, 307, S.Ct. subse principal place U.S. business. Some (2006). Specifically, L.Ed.2d 797 quent court decisions followed district jurisdic- principle employed Court thinking, majority his as has the line of very principle which the parity, tional the Bank, Fargo Tse Compare here. v. Wells applies” “no and majority longer concludes N.A., TEH, C 10-4441 2011 WL No. support.” The for which it finds “little (N.D.Cal. 19, 2011), 175520, *2 at Jan. “in to the explained comparison Court Bank, N.A., DeLeon v. Wells 729 and other access afforded state banks 1119, (N.D.Cal.2010), F.Supp.2d 1123-24 entities,” national state-incorporated Mortgage Corp., with Stewart Wachovia a federal forum would be banks’ access to MMM, 11-06108 2011 No. CV WL if “drastically a national bank reduced” (C.D.Cal. 2, 2011), Aug. *2-6 at every of state where deemed a citizen were Bank, NA, v. Wells Goodman it maintained a branch. Id. 11-2685-JFW, No. CV 2011 WL 941; id. at see also S.Ct. S.Ct. (C.D.Cal. 2011). at *2 June in Wachovia the significantly, Most II. decide, to, but did not the Court alluded majori- I with the respectfully disagree In now before our court. precise issue to be ty’s framing of issue whether the Court “to footnote wrote principle jurisdictional parity of “remained parity with state banks complete achieve 1332(c)(1) § adoption intact” after the of entities,” state-incorporated and other I the issue is more submit association “would have properly viewed be whether Wachovia a citizen of both the State of to be deemed undermines longstanding and unani- principal main and the State of its office holding nation- precedent mous circuit business,” of and it Firstar and place cited principal al of their banks are citizens favorably. n. 9. ac- Horton Id. at 317 It view, my § In Wachovia knowledged places not refer to a of business. does business,” “principal place continuing of unlike construed in favor of bank’s should be 1332(c)(1), speculated but “ab- preexisting light to read place of a ref- ‘principal sence business’ na- policy jurisdictional parity between practical §in be of scant erence hand state tional one case, for, every significance almost corporations on the other. Ac- banks and one, of a national bank’s this the location I would that national banks cordingly, hold place of its main office and princi- their are citizens of state where Id. coincide.” business place is located addition pal of business main to the in which their office state Subsequently a number of district courts us and disa- located. question have faced the before Supreme actual- In view of the Wachovia Court Court’s reliance on the jurisdictional

ly applied principle jurisdictional principle parity to decide Wachovia, to reverse a circuit decision footnote 9 parity fairly court is most read to that, complied suggest that had not The Fourth in the with it. rare case where a place Circuit’s conclusion that national banks bank’s main office and principal states, every were citizens state in business are different nation- maintained a branch erroneous al bank would be office was “located” in To both. because, “in af- comparison to the access reach that conclusion would “com- achieve plete parity,” principle Supreme forded banks and other state-incor- that the entities,” porated national bank access to a Court linked to predeces- 1348 and its forum “drastically explain federal would be re- sors. That would cita- Court’s Wachovia, empha- duced.” 126 tions to Firstar and Horton and its 941; corporations see S.Ct. also id. at 126 S.Ct. 941 sis that citizens their contrast, (“By incorporation deci- state of Appeals’ Court of “and” state of severely principal place sion in instant case constricts their (emphasis of business Wachovia, diversity jurisdic- national banks’ access in original). 317 n. U.S. at compared tion as available access 126 S.Ct. 941. corporations generally.”). majority If the majority significant also overlooks jurisdic-

were correct that principle portion the exchange individual between parity tional in abrogated 1348 was with the attorney Justices and representing the 1332(c)(1) passage in the Comptroller of during the Currency Supreme Court would not have relied on arguments in argued Wachovia. Counsel principle that to decide Wachovia. that a national banking is not a association each citizen of state in which it has a Court suggested

The footnote 9 branch, position subsequently taken jurisdictional parity Wachovia that re In the Court. the course of his comments a salient principle. mains That is the clos he also remarked that a bank national est it has come to deciding the issue now not a citizen of the state of principal its us. before The Court that noted 710; place of op. business. See complete parity “achieve WL at *20-21. Several Justices entities,” state-incorporated and other appeared skeptical of reading jurisdic- national bank “would have to be deemed a tional statutes to limit a bank to national citizen both the State its main office being a of only citizen one state. Counsel and the State principal place vigorous faced questioning from members business.” Id. at 317 n. 126 S.Ct. 941 of the position Court that and twice added). (emphasis just Having relied on its position “open admitted was not that principle it, to decide the case before and shut”: appeared the Court hint that order to JUSTICE “complete your achieve STEVENS: Is it view parity,” a bank national that a national par- be a bank two would citizen of have princi the state of its just allel locations or pal place of one? business. two And the circuit cases it cited favorably, Firstar9 Hor MR. SRINIVASAN: IN-it have a could ton, reached conclusion. main office that’s different from what majority suggests Eng’g, Although that Hicklin Firstar. it contains dicta referenc- Bartell, (7th Wachovia, Flaum, L.C. v. F.3d ing Judge Cir. the author of 2006) Firstar, may have panel overruled Hicklin surely Firstar. was on the and would thing; such does no contrary does not even mention holding. addressed place of principal of its and the State principal to be would construe one Wachovia, at 317 n. the test under business.” of business place 1332(c)[.] under 126 S.Ct. corporations applies consistent with what position is also

This that it view is Our SRINIVASAN: MR. only widely available writ- to be the appear simply of a State a citizen wouldn’t be Comptroller positions taken ten has its fact by virtue us, Currency on the issue now before Now, there. place of business principal Comptroller the Cur- see Office not an though, it’s say, I would (Oct. Interp. Ltr. No. rency, because the Court and shut case open 2002), Comptroller’s amicus as well as the the issue raised specifically a case that 2003 WL brief Horton. See 1332(c) ... also construe ... could accessible on That brief remains at *3-14. to national associa- applying today. government’s website tions[.] www.occ.gov/topics/laws-regulations/ And if we did—if SCALIA: JUSTICE litigation/leg-proc-other-horton-vs-bank- 1332(c) there way, interpret we did 2011) (last Aug. at 14 accessed one.pdf, any favoritism wouldn’t be (“Thus, a national diversity purposes banks. a ‘citizen’ of the be deemed bank should It right. That’s SRINIVASAN: MR. place of business state of its entirely eliminate favoritism. (if different), specified the state association.”). articles of bank’s you But did GINSBURG: JUSTICE that the ma- respectfully suggest I also 1332(c) nation- apply does not say prec- circuit overlooked relevant jority has location. only It’s one al bank. Bums, court re- the en banc edent. our ThaW-that’s Mr. SRINIVASAN: embodying the history § as counted 1348’s charac- view, I’m—I wouldn’t again, but jurisdictional parity. See principle of open an and shut an—as terize 1973, Bums was decided F.2d at 28-29. case[.] 1332(c)(1), §of the 1958 enactment after 3358081,at *29-32. 2005 WL it and in- majority does not cite but the Scalia and Justice Justice Roberts Chief jurisdictional parity stead concludes a limiting concerned appeared both Congress did applies” because longer “no citizenship to its main of- national bank’s concept in 1958. to “retain” not choose in a “fa- national banks put would fice is inconsistent That conclusion 3358081, at *8- position. 2005 WL vored” history of 1348. Bums’s recitation logic questioned Justice Stevens 30. 1948, the § 1348 was enacted When bank allow a national a rule that would expressly have con court to only appellate office in a small choose its main to had held the issue now before us sidered majority a it does from where removed is “lo association that a at *24-26. And See id. its business. of, in, a citizen and therefore cated” Bank even conceded counsel Wachovia principal place business. state of in- “to interpreted 1348 could Co., Congress F.2d at 162. Am. Sur. Id. at of business.” principal place clude princi intended that to have presumed is concurred Significantly, all Justices *8. Bragdon carry to 1348. See ple to over acknowledgment 9’s footnote 645, 118 Abbott, S.Ct. v. national bank- “complete parity” achieve Pons, (1998); v. Lorillard L.Ed.2d 540 deemed have to be association “would ing 580-81, 98 S.Ct. office 434 U.S. of its main of both the State a citizen (1978), cited; L.Ed.2d and cases Firs KAPLAN; Elliot Jeanne

tar, majority 253 F.3d at con 988. Kaplan, Appellants, period time cludes the “most relevant statutory determining term’s mean ing the time when the statute was enact CLINIC; Mayo Foundation; MAYO Op. ed.” at 708. Yet it does not cite Mayo Foundation for Medical Edu- Surety implies American and even Research; Mayo cation and Roch- principal place citizenship “was business ester, Inc.; Mayo Rochester, Clinic unknown adoption.” at the Op. time of its Inc.; Burgart; Lawrence J. David Na- inaccurate, simply This is 709. since Appellees. gorney, principal place citizenship of business was 09-2493, Nos. 10-2290. law, a creature of the common and had States Court of Appeals, United applied Surety been in American Eighth Circuit. predecessor § 1348’s statute. Submitted: March 2011. Congress No doubt have also could Sept. Filed: 2011. §made 1348 clearer in 1958when enact- Rehearing and Rehearing En Banc 1332(c)(1), §ed but it have need not done Denied Oct. given preexisting undei-standing so the statute and predecessors

placed national and state on equal

jurisdictional footing. Congress Had in- abrogate principle juris-

tended parity

dictional it would have been “noteworthy departure” from established

jurisdictional principles, likely and it “more not [

than plainly ] stated such if that

intent” preferred been its out- Co., Am.

come. Sur.

III. I

Since conclude that Wells is a both of

citizen South Dakota and of Cali-

fornia, business, place of I hold that it Synoran are nondi- parties.

verse The case should therefore subject

be dismissed for lack of matter

jurisdiction. notes bank, OCC, corpora change like a that a national of heart at the we credit asserted tion, herein, susceptible citizenship in two states quoted is to argument, at statement oral principal on where its main office and based and defensi- finding it both recent more more interpretation located in an of business are light statutory history and text of in of the ble Comptrol letter from 2002. Office Currency, Interp. at 6 Ltr. No. ler of III. The— MR. SRINIVASAN: Principal place Appellants JUSTICE GINSBURG: contend that district denying in to court erred their motion business. award; modify vacate or the arbitration MR. don’t SRINIVASAN: We—we authority the panel grant lacked think that a national association injunctive relief and determine inventor- princi- of a in is citizen State which ship subject of technology pending pat- found, pal of business is insofar as place applications; ent and that the district in might different from State affirming court erred the award of at- which its main office is located. e-Pin, torneys’ against appellant LLC. fees So the main JUSTICE GINSBURG: On appeal from a district court's' order it, office is like 1332 before the '58 modifying, vacating or confirming, an ai’bi- amendment. award, findings tration we review of fact right, MR. Jus- SRINIVASAN: That’s questions for clear error and of law de Ginsburg, in part, tice and that’s be- Group, Holekamp, novo. Inc. v. Crawford chronology. cause of historical (8th Cir.2008). “The word located first and was used district court affords the arbitrator’s deci- the current version of section was extraordinary an sions level deference years enacted which was 10 long and confirms so as the arbitrator concept principal place before the arguably construing even applying any jurisdictional business salience. acting scope contract and within his — n That Congress was first time that (internal authority.” Id. quotation marks Congress this was 1958—that enacted omitted). An arbitral award be vacat- a specific provision dealing corpo- only grounds ed enumerated in the citizenship, rate time that’s first (FAA). (citing Federal Arbitration Act Id. concept that we see the Assoc., Mattel, Inc., Hall Street LLC v. place having of business relevance in the 576, 583, S.Ct. jurisdictional context. (2008)). L.Ed.2d 254 18:22, Bank, at Arg. Oral Wachovia Challenge A. of Injunctive to the Grant U.S. 126 S.Ct. 941.6 The coun- OCC’s Relief that it is “an open sel conceded not shut case” and that “one could reach 7(b) Award, In paragraph princi- conclusion 1332’s reference to appellants Panel ordered that be “per place of pal apply business should also to manently enjoined ... restrained from Yet, banks.” Id. 29:06. for the asserting ownership in ... or interest above, forth reasons set we conclude that using any way the DIXE Trade Se attenuated, for doing the basis so is crets.” claim Appellants the Panel Accordingly, reject appellants’ best. we authority doing exceeded its so and

Case Details

Case Name: Wells Fargo Bank, N.A. v. WMR E-Pin, LLC

Court Name: Court of Appeals for the Eighth Circuit

Date Published: Sep 2, 2011

Citation: 653 F.3d 702

Docket Number: 09-3800

Court Abbreviation: 8th Cir.