Sports Unlimited Inc. v. Lankford Enterprises Inc., No. 00-3160

• Citation: 275 F.3d 996
• Decision Date: 03 January 2002
• Docket Number: No. 00-3160
• Parties: (10th Cir. 2002) SPORTS UNLIMITED, INC., Plaintiff - Appellant, v. LANKFORD ENTERPRISES, INC., Defendant - Appellee
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 996

275 F.3d 996 (10th Cir. 2002)

SPORTS UNLIMITED, INC., Plaintiff - Appellant, v. LANKFORD ENTERPRISES, INC., Defendant - Appellee.

No. 00-3160

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

January 3, 2002

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS (D.C. No. 98-2201-GTV)

[Copyrighted Material Omitted]

Submitted on the briefs:^*

Bryan W. Smith and Todd D. Powell of Fisher, Cavanaugh, Smith & Lemon, P.A., Topeka, Kansas, for Plaintiff - Appellant.

Steven R. Fabert of Fisher, Patterson, Sayler & Smith, L.L.P., Topeka, Kansas, for Defendant - Appellee.

Before BRORBY, HOLLOWAY and JONES,^** Senior Circuit Judges.

HOLLOWAY, Senior Circuit Judge.

Plaintiff-Appellant Sports Unlimited, Inc. brought suit against Defendant-Appellee Lankford Enterprises, Inc., presenting several theories for relief, all based on allegations that Defendant had caused Plaintiff to lose business and had injured its business reputation.¹ Jurisdiction in the district court was claimed under both 28 U.S.C. 1331 & 1332; Plaintiff also invoked the court's supplemental jurisdiction under 28 U.S.C. 1367 (which appears to have been important because the First Amended Complaint revealed on its face that Plaintiff and one of the defendants, who was later dismissed, see n.1, were both corporations deemed to be citizens of Oklahoma).

The district court granted summary judgment for Defendant and issued a Memorandum and Order, published at 93 F.Supp.2d 1164, explaining its analysis. The district judge held that Plaintiff's two claims based on Kansas law tortious interference with contract and tortious interference with prospective business advantage were barred by the applicable Kansas statute of limitations. The district judge also granted summary judgment against Plaintiff on its claim based on section 43(a) of the Lanham Act, 15 U.S.C. 1125(a), concluding that Plaintiff had not proven sufficient dissemination of the allegedly misleading information to constitute commercial "advertising or promotion" within the meaning of the Lanham Act.

This court has jurisdiction under 28 U.S.C. 1291. We find no error in the analysis of the district court and affirm.

I

Although each party submitted voluminous materials in support of its position on Defendant's motion for summary judgment, the district judge very succinctly summarized the truly salient facts, 93 F.Supp.2d at 1166-67, and on appeal Plaintiff devotes only two paragraphs of its brief to providing the factual context for its arguments. Consequently, we too may be quite brief in setting out the essential background. We pause to note that, as the district judge was considering Defendant's motion for summary judgment, he credited Plaintiff's allegations in some crucial respects, which will be mentioned as appropriate.

Both Plaintiff and Defendant are in the business of supplying and installing gymnasium floors. In February 1996, Defendant came into possession of a "reference list" containing allegedly false and defamatory information about Plaintiff. The reference list consists of a list of some of Plaintiff's customers, followed in some cases by what appears to be a description of the customers' unfavorable comments about Plaintiff's work. Plaintiff contends that Defendant "would be the most probable source for some of the information." Although Defendant admitted distributing the reference list only to two persons, the architect and the general contractor on the Larned project mentioned below, Plaintiff alleged that Defendant distributed the list to all seven known recipients.

Plaintiff installed a floor in a gymnasium at a middle school in Larned, Kansas in early 1996. In the summer of that year, several problems with the floor developed. The architect, a Mr. Karst, telephoned Ms. Marie Franklin, president of Defendant, for advice on the floor problems. Ms. Franklin advised, both by telephone and by letter, that adjusting the humidity in the gymnasium might remedy the problem, but she said that the "fastest and surest" solution would be removal and replacement of the floor. She also sent a copy of the reference list to Mr. Karst and to Coonrod & Associates, the general contractor on the project. Later, Coonrod terminated Plaintiff's contract and hired Defendant to remove and replace the floor.

II

A

We review a district court's grant of a motion for summary judgment de novo, applying the same standard as the district court. See Trujillo v. University of Colo. Health Sciences Ctr., 157 F.3d 1211, 1213 (10th Cir. 1998). Summary judgment is appropriate only if the admissible evidence shows "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). A fact is "material" if, under the governing law, it could have an effect on the outcome of the lawsuit. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute over a material fact is "genuine" if a rational jury could find in favor of the nonmoving party on the evidence presented. Id. The burden of showing that no genuine issue of material fact exists is borne by the moving party. See Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). When, as in this case, the moving party does not bear the ultimate burden of persuasion at trial, it may satisfy its burden by pointing to "a lack of evidence for the nonmovant on an essential element of the nonmovant's claim." Id. at 671.

Both the district court and the court of appeals will draw all reasonable inferences in favor of the nonmoving party. See Curtis v. Oklahoma City Public Sch. Bd. of Ed., 147 F.3d 1200, 1214 (10th Cir. 1998). If no genuine issue of material fact is in dispute, this court then determines whether the substantive law was correctly applied by the district court. See Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir. 1996).

B

The district court granted Defendant's motion for summary judgment and explained its reasoning in a thorough opinion reported at 93 F. Supp.2d 1164. The judge held that Plaintiff's state law claims for tortious interference with contract and tortious interference with prospective business advantage were barred by limitations. The judge observed that ordinarily the two year statute of limitations of Kan. Stat. Ann. 60-513(a)(4) would apply to these torts.² In the circumstances of this case, however, the judge held that the claims should be treated as defamation claims, which are expressly subject to a one year period of limitations under Kan. Stat. Ann. 60-514(a).

In deciding to apply the one year statute of limitations, the district judge relied on Taylor v. I.U.E., 968 P.2d 685 (Kan. Ct. App. 1998), concluding that Plaintiff Sports Unlimited's claims, like those of the plaintiff in Taylor, were "clearly and solely based" on defamatory statements; that the gravamen of the claims thus was defamation; and that litigants should not be permitted to escape the bar of limitations "'by disguising an action for defamation and calling it one for tortious interference.'" 93 F. Supp.2d at 1167 (quoting Taylor, 968 P.2d at 690).

On appeal, Plaintiff does not dispute that the action was commenced more than one year after the Defendant had committed the allegedly tortious acts. Instead Plaintiff raises a purely legal issue, arguing that the two year statute of limitations should have been applied rather than the one year statute. We conclude that the district judge was correct in his determination that the federal court should follow Taylor as an authoritative indication of Kansas law on the limitations issue.

Plaintiff argues that Taylor is "wrong and inapplicable."³ As to the first of these contentions, we are persuaded that we must regard Taylor as authoritative even though it was decided by the intermediate appellate court of Kansas, not the highest court of the state. As the Supreme Court has explained:

A state is not without law save as its highest court has declared it. There are many rules of decision commonly accepted and acted upon by the bar and inferior courts which are nevertheless laws of the state although the highest court of the state has never passed upon them. In those circumstances a federal court is not free to reject the state rule merely because it has not received the sanction of the highest state court, even though it thinks the rule is unsound in principle or that another is preferable. State law is to be applied in the federal as well as the state courts[,] and it is the duty of the former in every case to ascertain from all the available data what the state law is and apply it rather than to prescribe a different rule, however superior it may appear from the viewpoint of "general law" and however much the state rule may have departed from prior decisions of the federal courts.

Where an intermediate appellate state court rests its considered judgment upon the rule of law which it announces, that is a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise.

West v. A.T.&T., 311 U.S. 223, 236-37 (1940) (emphasis added; internal citations omitted).

Our research has not revealed a truly definitive statement from the Kansas Supreme Court on the precedential weight of opinions of the Kansas Court of Appeals. We do find, however, a very strong indication in the state's rules for its appellate courts that published opinions of the intermediate court, like Taylor, are regarded as precedential. Rule 7.04 of the applicable Kansas rules provides that decisions of the Kansas Court of Appeals are to be explained either in published, formal opinions or in unpublished "memorandum opinions." The rule, which is quoted in full in the margin, further provides that unpublished opinions "are deemed to be without value as precedent . . . ."⁴ The clear inference that we draw from...