Downing v. Riceland Foods, Inc.

• Citation: 810 F.3d 580
• Decision Date: 14 January 2016
• Docket Number: No. 14–3758.,14–3758.
• Parties: Don M. DOWNING; Adam J. Levitt; Wolf Haldenstein Adler Freeman & Herz, LLC on behalf of themselves and those similarly situated; Looper Reed & McGraw, P.C. on behalf of themselves and those similarly situated; Gray Ritter & Graham, PC on behalf of themselves and those similarly situated, Plaintiffs v. RICELAND FOODS, INC., Defendant. Riceland Foods, Counter Claimant–Appellant v. Don M. Downing; Adam J. Levitt, Counter Defendants–Appellees. Riceland Foods, Inc., Counter Claimant–Appellant v. Don M. Downing; Gray Ritter & Graham; Adam J. Levitt, as Co–Trustee of the Common Benefit Trust Fund; Looper Reed & McGraw, P.C. on behalf of themselves and those similarly situated; Wolf Haldenstein Adler Freeman & Herz, LLC on behalf of themselves and those similarly situated, Counter Defendants–Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

810 F.3d 580

Don M. DOWNING; Adam J. Levitt; Wolf Haldenstein Adler Freeman & Herz, LLC on behalf of themselves and those similarly situated; Looper Reed & McGraw, P.C. on behalf of themselves and those similarly situated; Gray Ritter & Graham, PC on behalf of themselves and those similarly situated, Plaintiffs

v.RICELAND FOODS, INC., Defendant.

Riceland Foods, Counter Claimant–Appellant

v.Don M. Downing; Adam J. Levitt, Counter Defendants–Appellees.

Riceland Foods, Inc., Counter Claimant–Appellant

v.Don M. Downing; Gray Ritter & Graham; Adam J. Levitt, as Co–Trustee of the Common Benefit Trust Fund; Looper Reed & McGraw, P.C. on behalf of themselves and those similarly situated; Wolf Haldenstein Adler Freeman & Herz, LLC on behalf of themselves and those similarly situated, Counter Defendants–Appellees.

No. 14–3758.

United States Court of Appeals, Eighth Circuit.

Submitted: Sept. 22, 2015.

Filed: Jan. 14, 2016.

Christopher Martin Hohn, argued, Saint Louis, MO, (John R. Musgrave, Kimberly M. Bousquet, Saint Louis, MO, Barry Deacon, Jason Mark Milne, Jonesboro, AR, on the brief), for appellant.

Bradley Wilders, argued, Patrick Joseph Stueve, Todd E. Hilton, on the brief, Kansas City, MO, for appellee.

Before LOKEN, BENTON, and SHEPHERD, Circuit Judges.

SHEPHERD, Circuit Judge.

Plaintiffs, a group of attorneys who performed work on behalf of farmers in underlying multi-district litigation regarding genetically-modified rice, brought a class action suit against Riceland Foods, Inc. ("Riceland"), requesting the district court compel Riceland to contribute a portion of its recoveries in various cases to the common benefit fund established by the district court to compensate Plaintiffs for their work. In response to Plaintiffs' unjust enrichment and quantum meruit claims, Riceland counterclaimed, asserting breach of contract and tortious interference claims. The district court¹ dismissed Riceland's counterclaims and certified the dismissal as a final judgment under Federal Rule of Civil Procedure 54(b). Riceland argues that this Court lacks jurisdiction to hear this appeal because the district court erred in certifying the dismissal as a final judgment under Rule 54(b). Riceland further contends that the district court erred in dismissing its counterclaims because a settlement agreement expressly released Riceland from Plaintiffs' claims because the claims "arise out of, accrue on account of, or grow out of" the presence of genetically-modified rice in the United States rice supply. We affirm.

I.

Beginning in 2006, hundreds of long-grain rice farmers and rice mills filed suit against Bayer CropScience ("Bayer") following an announcement by the United States Department of Agriculture ("USDA") that LLRICE, a genetically-modified rice which had not been approved for human consumption, had tainted the United States commercial long-grain rice supply. In more than two hundred LLRICE cases, Riceland was named as a defendant with Bayer. The cases were originally filed in multiple states, but were consolidated into a multi-district litigation ("MDL") case in the Eastern District of Missouri. See In Re Genetically Modified Rice Litigation, No. 4:06–MD–1811–CDP, 2010 WL 716190 (E.D.Mo. Feb. 24, 2010).

The district court appointed Plaintiffs Don Downing ("Downing") and Adam Levitt ("Levitt") as co-lead counsel for the MDL plaintiffs and created a "Plaintiffs' Executive Committee" consisting of six other attorneys. Collectively, these eight attorneys constituted the "MDL Leadership Group." The district court also ordered that a common benefit trust fund (the "fund"), with Downing and Levitt as co-trustees, be established to compensate attorneys for services performed for the benefit of all plaintiffs. The order required a portion of any recovery obtained by the plaintiff farmers in federal court to be contributed to the fund to pay fees and expenses of attorneys who performed work benefitting all of the plaintiff farmers. Contributions to the fund could also be made in related state court cases if so ordered by the state court, but the district court concluded that it lacked jurisdiction to order contributions to the fund in state court cases. We affirmed the district court's establishment of the fund as well as the district court's jurisdictional ruling regarding state cases.See In Re Genetically Modified Rice Litig., 764 F.3d 864, 873 (8th Cir.2014).

Following trial or settlement in the LLRICE cases, Bayer, the Negotiating Claimants' Counsel, and each Enrolled Claimant and Eligible Claimant entered into a Settlement Agreement.² The Settlement Agreement included a General Release of All Claims (the "Release"), in which each farmer ("Settling Claimant") and each farmer's attorney ("Settling Claimant Releasing Party") released their claims against Bayer. In the Release, Riceland was listed as an "Additional Released Party."

The Release provides, in relevant part, that the Settling Claimant and any Settling Claimant Releasing Party "hereby releases, acquits, and forever discharges" the Bayer Released Parties and Additional Released Parties, including Riceland, from:

any and all claims, demands, causes of action, liabilities, sums of money, damages (including, but not limited to, punitive damages), loss of service, expenses, compensation, costs and losses, of any type, kind, nature, description or character whatsoever, whether based on tort, contract or other theory of recovery and including claims for contribution and indemnity, whether known or unknown, suspected or unsuspected, whether liquidated or unliquidated, which the Settling Claimant Releasing Parties, or any of them, now has or which may hereafter accrue on account of or in any way growing or arising out of the presence in the United States rice supply of Bayer GM Rice Seed, against any Bayer Released Party or any Additional Released Party (collectively, the "Settling Claimant Released Claims").

The Release also contains a clause which provides:

Settling Claimant, on Settling Claimant's behalf and all other Settling Claimant Releasing Parties, covenants and agrees that except to the extent provided herein Settling Claimant will not sue or bring any action or cause of action, including, without limitation, by way of third party claim, cross-claim or counterclaim, against any Bayer Released Party and/or Additional Released Party in respect of any Settling Claimant Released Claim.

In February 2013, Plaintiffs, consisting of the fund established by the district court and law firms whose attorneys were part of the MDL Leadership Group, filed the instant class action case against Riceland asserting claims for unjust enrichment and quantum meruit individually and "on behalf of all persons and entities that provided or paid for common benefit services, materials, and/or related expense items" in the MDL. Plaintiffs alleged that Riceland refused to contribute to the common-benefit fund despite being awarded a large recovery against Bayer in state court. Riceland counterclaimed, asserting that Plaintiffs' filing of this lawsuit constitutes breach of contract and tortious interference with the Release. Riceland also raised the terms of the Release as an affirmative defense.

Plaintiffs moved to dismiss Riceland's counterclaim. Concluding that Plaintiffs' claims do not, as a matter of law, "arise" or "grow" out of the presence of Bayer's LLRICE in the United States rice supply and are therefore not subject to the Release, the district court granted Plaintiffs' motion to dismiss Riceland's counterclaim. Riceland then sued the law-firm plaintiffs and additional law firms in Arkansas state court, asserting the same legal theories and facts presented in its counterclaim. Riceland sought an expedited trial schedule in the Arkansas state case, prompting Plaintiffs to request an order from the district court certifying the dismissal of Riceland's counterclaim as a final judgment under Rule 54(b). Such an order presumably would bind Riceland in the Arkansas state court and compel dismissal of that case. Finding that Plaintiffs would suffer injustice if entry of final judgment were delayed, the district court certified the dismissal as a final judgment under Rule 54(b). Riceland appeals both the Rule 54(b) certification and the dismissal of its counterclaims.

II.

Riceland raises two arguments on appeal: (1) this Court lacks jurisdiction to hear this appeal; and (2) the district court erred in holding that Plaintiffs did not release their claims against Riceland. We address each of these arguments in turn.

A. Jurisdiction

We first address Riceland's argument that this court lacks jurisdiction because the district court abused its discretion in directing entry of final judgment pursuant to Rule 54(b). "This court independently reviews ... appellate jurisdiction." Outdoor Cent., Inc. v. GreatLodge.com, Inc., 643 F.3d 1115, 1118 (8th Cir.2011) (citing Matschiner v. Hartford Life & Acc. Ins. Co., 622 F.3d 885, 886 n. 1 (8th Cir.2010) ("We independently review whether the district court's Rule 54(b) determination that there was ‘no just reason for delay’ properly conferred appellate jurisdiction under 28 U.S.C. § 1291." (quoting Interstate Power Co. v. Kansas City Power & Light Co., 992 F.2d 804, 806–07 (8th Cir.1993) ))). In reviewing Rule 54(b) determinations, we apply an abuse of discretion standard and "largely defer [ ] to the district court's weighing of the equities, but more closely scrutinize[ ] the analysis of judicial administrative interests." Id. at 1118–19. Appellate courts leave the determination of the "appropriate time when each final decision in a multiple claims action is ready for appeal" to the "sound judicial discretion of the district court." Curtiss–Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 8, 100 S.Ct. 1460, 64 L.Ed.2d 1 (1980).

Generally, we only consider orders that dispose of all claims as final and appealable under 28 U.S.C. § 1291. Williams v. Cnty. of Dakota, Neb., 687 F.3d 1064, 1067 (...