8th U.S. Circuit Court of Appeals Digest: Jan. 17.

Byline: Minnesota Lawyer

CIVIL OPINIONS

Administrative

ERISA; 'Cross-Plan Offsetting'

Where out-of-network medical providers, who brought class-action cases litigating under ERISA for their patients against a health-insurance plan administrator, argued that the relevant plan documents did not authorize the administrator to engage in cross-plan offsetting, a doctor was authorized to bring the action as a representative of his patients, and the grant of partial summary judgment to the plaintiffs on the issue of liability is affirmed because nothing in the plan documents authorized the practice, and the practice conflicts with ERISA requirements, so the administrator's interpretation of the plan was not reasonable. Judgment is affirmed.

17-1744 Peterson v. UnitedHealth Group, Inc., appealed from the District of Minnesota, Grasz, J.

Bankruptcy

Relief from Stay; Foreclosure Sale; Jurisdiction

Where a debtor challenged an order granting relief from the automatic stay, the debtor did not obtain a stay pending appeal and the underlying property was sold to a bank at a foreclosure sale, so no effective relief can be provided and the appeal must be dismissed. Appeal is dismissed.

18-6022 Marshall v. Deutsche Bank Nat'l Trust Co., appealed from U.S. Bankruptcy Court, Saladino, J.)

Banks and Banking

Fraud Scheme; Sufficiency of Evidence; Bank Defendant

Where a receiver charged with recovering assets for victims of a Ponzi scheme sued a bank, which provided services to the scammers' entities, arguing that the bank aided and abetted the scheme, the District Court correctly found that there was insufficient evidence to reasonably infer that the bank knew about or substantially aided the tortuous conduct.

Dissenting opinion by Kelly, J.; "To be sure, each individual piece of evidence described above, standing alone, may not be sufficient to indicate Sarles knew of every detail of the Ponzi scheme and its full extent. But the case before us is for aiding and abetting the specific torts of breach of fiduciary duty, conversion, false representation and fraud. Associated Bank, in fact, concedes that these specific torts were 'committed by the operators of a Ponzi scheme who stole investors' money from 2006 until 2009.' When viewed as a whole, seeReeves,530 U.S. at 151, the evidence could lead a reasonable jury to conclude that Sarles knew that the principals' conduct constituted each of the alleged torts. A jury could conclude that Sarles knew of the principals' breach of fiduciary duty because, among other things, he helped Cook withdraw hundreds of thousands of dollars of investor funds for use inconsistent with the funds' intended purpose and helped the principals implement an illegal scheme designed to mask a $13 million shortfall of investor funds.

"In sum, I believe the Receiver has presented sufficient evidence to defeat summary judgment. Accordingly, I respectfully dissent."

Judgment is affirmed.

17-1250 Zayed v. Associated Bank, appealed from the District of Minnesota, Grasz, J.

Civil Practice

Attorneys' Fees; Reduction; Contract Case

Where a defendant in a contract dispute argued that breaches by the plaintiff precluded recovery under Iowa law, the plaintiff's breaches were found to be not material by the jury, and the defendant also failed to show that the District Court erred by failing to give additional jury instructions as requested, and the judgment is affirmed because the award of attorneys' fees was supported by the parties' agreement, and the court did not abuse its discretion by reducing the fees. Judgment is affirmed.

17-1451 Ryan Data Exchange v. Graco, Inc.,appealed from the Southern District of Iowa, Beam, J.

Civil Practice

Class Action, Indigent Defendants, Sovereign Immunity

Where plaintiffs brought a class action against the state and governor of Missouri and officials of the state's public-defender system arguing that the state was failing to meet its obligations to provide indigent criminal defendants with meaningful representation, the state did not waive sovereign immunity by removing the action from state to federal court, and the judgment is reversed and remanded because sovereign immunity precluded an action against the state for cases involving equitable relief, and exceptions to the doctrine for consent and proprietary function did not apply, and the District Court...