Gander Mountain Co. v. Cabela's, Inc.

• Decision Date: 27 August 2008
• Docket Number: No. 07-2890.,07-2890.
• Citation: 540 F.3d 827
• Parties: GANDER MOUNTAIN COMPANY, Appellee, v. CABELA'S, INC., Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

540 F.3d 827

GANDER MOUNTAIN COMPANY, Appellee, v. CABELA'S, INC., Appellant.

No. 07-2890.

United States Court of Appeals, Eighth Circuit.

Submitted: May 12, 2008.

Filed: August 27, 2008.

Michael C. Cox, argued, Omaha, NE, Daniel J. Fischer, Omaha, NE, George W. Soule, Omaha, NE, George W. Soule, Minneapolis, MN, on the brief, for appellant.

Dudley W. Von Holt, argued, Ann Elizabeth Blackwell, Bruce D. Ryder, St. Louis, MO, on the brief, for appellee.

Before WOLLMAN, MURPHY, and SMITH, Circuit Judges.

WOLLMAN, Circuit Judge.

This case arose from a contract dispute involving a 1996 transaction between Gander Mountain Co.¹ and Cabela's, Inc. Gander Mountain filed suit against Cabela's seeking a declaration that a particular provision of the agreement, the Contingent Trademark License provision ("CTL"), was unenforceable. Cabela's counterclaimed, seeking a declaration that the provision was enforceable and requesting an injunction prohibiting Gander Mountain from using its trademarks or confusingly similar marks in its direct marketing business. Concluding that the provision in question was unenforceable because it was merely an agreement to agree, the district court² granted Gander Mountain's motion for summary judgment on the counterclaim.³ Cabela's appeals, arguing that the district court violated the law-of-the-case doctrine and erred in granting summary judgment in favor of Gander Mountain. We affirm.

I. Background

Both Gander Mountain and Cabela's are in the business of selling outdoor recreational, sports, and hunting equipment. Until 1996, Gander Mountain sold its products through retail stores and through direct marketing using mail-order catalogs. In 1996, experiencing financial difficulties and facing the prospect of filing for bankruptcy, Gander Mountain sold its catalog division and exclusive rights to certain Gander Mountain trademarks to Cabela's for $35,000,000. Pursuant to the transaction, Cabela's purchased all of the assets of Gander Mountain's catalog division, and Gander Mountain agreed not to compete with Cabela's in the direct marketing business for seven years. Cabela's also purchased a four-year license to use Gander Mountain's trademarks in its direct marketing business, agreeing not to actually use the trademarks but to exercise its rights under the license to prevent others from using the trademarks in direct marketing. The noncompetition agreement also contained the CTL provision, which states:

In the event Gander Mountain is engaged in active steps to reenter the Direct Marketing Business after the expiration of the seven-year noncompetition period ... then Gander Mountain shall notify Cabela's in writing and Cabela's shall have the right to purchase from Gander Mountain for the sum of $1,000 a perpetual, exclusive license free and clear of all Liens to use the Trademarks in connection with [Cabela's] Direct Marketing Business.... Such license shall be evidenced by a separate written agreement in form and content customary to licenses of the type described above....

After the seven-year noncompetition period expired, Gander Mountain gave Cabela's written notice that it intended to reenter the direct marketing business. Cabela's tendered $1,000 to Gander Mountain and presented a draft license agreement, referred to by the parties as the Highby Agreement. Gander Mountain refused to sign the Highby Agreement, contending that the CTL is unenforceable under Wisconsin law, and brought the above-described action.

The parties dispute the meaning of the language in the CTL that gives Cabela's the right to a license that is to be "evidenced by a separate written agreement in the form and content customary to licenses of the type described above." Cabela's has argued throughout the litigation that the terms of the license agreement can be determined by the license agreed to in the 1996 transaction, which it asserts is what the parties intended by "in the form and content customary to licenses of the type described above."

One of the interrogatories submitted by Gander Mountain to Cabela's during discovery requested an explanation of the "customary form and content of licenses" contemplated by the CTL provision. Cabela's response was that the license created in the 1996 transaction was the only example that was needed, pointing to the Highby Agreement that it had previously drafted and tendered to Gander Mountain. In denying Gander Mountain's motion to compel further response, the magistrate judge⁴ concluded that Cabela's response was sufficient. Upon later review, the district court held that the magistrate judge's determination was not clearly erroneous or contrary to law and affirmed the order without comment.

Thereafter, Gander Mountain filed a second motion to compel further responses to its interrogatories. Cabela's filed for protective orders, and the issue was again brought before the magistrate judge. Concluding that the issue appeared to duplicate that which was covered in its prior order, which had concluded that the issue was not within the scope of further discovery, the magistrate judge denied the motion.

Gander Mountain contends that the language in the CTL does not provide definite terms and that the 1996 transaction is not sufficient to supply the necessary terms because a single example of a nonperpetual license agreement cannot be determinative of the customary form or content of a perpetual license agreement. After hearing oral argument, the district court agreed with Gander Mountain and held that the CTL was merely an unenforceable agreement to agree because there was no evidence in the record to illustrate the "form and content customary to perpetual, exclusive trademark licenses generally." See Gander Mountain Co. v. Cabela's, Inc., No. 04-CV-3125, 2007 WL 2026751 (D.Minn. July 10, 2007) (order granting Gander Mountain's motion for summary judgment).

II. Discussion

Cabela's seeks a reversal of the district court's grant of summary judgment, a remand to the district court with directions to re-open for additional fact and expert discovery, and/or the grant of summary judgment for Cabela's.

A. Law-of-the—Case Doctrine

We begin by addressing Cabela's argument that the district court violated the law-of-the-case doctrine by granting Gander Mountain's motion for summary judgment without allowing Cabela's an opportunity to conduct discovery that it had previously declined to conduct.

The law-of-the-case doctrine has been described as a means to prevent the relitigation of a settled issue in a case. United States v. Bartsh, 69 F.3d 864, 866 (8th Cir.1995). The doctrine "requires courts to adhere to decisions made in earlier proceedings in order to ensure uniformity of decisions, protect the expectations of the parties, and promote judicial economy." Id. In other words, the doctrine "`posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.'" United States v. Carter, 490 F.3d 641, 644 (8th Cir.2007) (quoting Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983)). The doctrine applies to decisions made by appellate courts and final decisions made by district courts that have not been appealed. First Union Nat'l Bank v. Pictet Overseas Trust Corp., Ltd., 477 F.3d 616, 620 (8th Cir.2007). The doctrine does not apply to interlocutory orders. Id. ("interlocutory orders ... can always be reconsidered and modified by a district court prior to entry of a final judgment").

We conclude that the district court did not violate the law-of-the-case doctrine. Its grant of summary judgment was based upon the legal determination that the contract language, "in form and content customary to licenses of the type described above," did not refer only to the 1996 license between the parties but also to licenses "in form and content customary to perpetual, exclusive trademark licenses generally." The district court did not issue a final order on this legal determination prior to entering summary judgment. A district court's comments during oral argument do not constitute a final order subject to the law-of-the-case doctrine. See First Union Nat'l Bank, 477 F.3d at 620 (the law-of-the-case doctrine applies only to final orders); In re Adelphia Commc'ns Corp., 336 B.R. 610, 636 n. 44 (Bankr.S.D.N.Y.2006) ("Thoughts voiced by judges in oral argument do not always find their way into final decisions, often intentionally and for good reason."). Additionally, the prior discovery rulings were not decisions on the merits of Gander Mountain's argument that the "form and content customary to licenses" could not be determined solely by the 1996 agreement. See FirsTier Mortgage Co. v. Investors Mortgage Ins. Co., 498 U.S. 269, 276, 111 S.Ct. 648, 112 L.Ed.2d 743 (1991) (noting that a discovery ruling is "clearly" an interlocutory decision); United States v. Raddatz, 447 U.S. 667, 673, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980) (citing 28 U.S.C. § 636(b)(1), and noting that a magistrate judge cannot make a final and binding decision on dispositive motions); see also Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 897, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990) ("A litigant is never justified in assuming that the court has made up its mind until the court expresses itself to that effect, and a litigant's failure to buttress its position because of confidence in the strength of that position is always indulged in at the litigant's own risk.").

The fact that Cabela's was not compelled by the district court to produce certain evidence did not make the evidence inadmissible for purposes of establishing a genuine issue of material fact. At no time did the magistrate judge or the district court determine that evidence of perpetual trademark licenses generally was inadmissible. Accordingly, the discovery rulings did not require the district court to conclude on the motions for summary...