Appellate Case: 20-3172 Document: 010110716257 Date Filed: 07/26/2022 Page: 1
FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS July 26, 2022
Christopher M. Wolpert
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________________
KENNETH P. KELLOGG; RACHEL
KELLOGG; KELLOGG FARMS,
INC.; ROLAND B. BROMLEY;
BROMLEY RANCH, LLC; JOHN F.
HEITKAMP; DEAN HOLTORF;
GARTH KRUGER; CHARLES
BLAKE STRINGER; STRINGER
FARMS, INC.,
Plaintiffs - Appellants,
v. No. 20-3172
WATTS GUERRA LLP; DANIEL
M. HOMOLKA, P.A.; YIRA LAW
OFFICE, LTD; HOVLAND AND
RASMUS, PLLC; DEWALD
DEAVER, P.C., LLO; GIVENS
LAW, LLC; MAURO, ARCHER &
ASSOCIATES, LLC; JOHNSON
LAW GROUP; WAGNER REESE,
LLP; VANDERGINST LAW, P.C.;
PATTON HOVERSTEN & BERG,
PA; CROSS LAW FIRM, LLC;
LAW OFFICE OF MICHAEL
MILLER; PAGEL WEIKUM, PLLP;
WOJTALEWICZ LAW FIRM, LTD.;
MIKAL C. WATTS; FRANCISCO
GUERRA; LOWE EKLUND
WAKEFIELD CO., LPA; JOHN
DOES, 1-250,
Defendants - Appellees.
___________________________________________
Appellate Case: 20-3172 Document: 010110716257 Date Filed: 07/26/2022 Page: 2
Appeal from the United States District Court
for the District of Kansas
(D.C. No. 2:18-CV-02408-JWL-JPO)
___________________________________________
Douglas J. Nill, Douglas J. Nill, PLLC, Minneapolis, Minnesota, for
Plaintiffs-Appellants.
Christopher L. Goodman, Thompson, Coe, Cousins & Irons, Saint Paul,
Minnesota (John M. Degnan, Kathryn M. Short, and Adam Chandler, Taft
Stettinius & Hollister, LLP, Minneapolis, Minnesota; Arthur G. Boylan and
Philip J. Kaplan, Anthony Ostlund Baer & Louwagie P.A., Minneapolis,
Minnesota; and William L. Davidson and Joao C.J.G. de Medeiros, Lind
Jensen Sullivan & Peterson PA, Minneapolis, Minnesota, with him on the
briefs), for Defendants-Appellees.
______________________________________________
Before HARTZ, BACHARACH, and ROSSMAN, Circuit Judges.
_____________________________________________
BACHARACH, Circuit Judge.
_____________________________________________
This appeal stems from mass litigation between thousands of corn
producers and an agricultural company (Syngenta). The litigation took two
tracks. On one track, corn producers filed individual suits against
Syngenta. On the second track, other corn producers sued through class
actions. 1
The appellants are some of the corn producers who took the first
track, filing individual actions. (We call these corn producers the “Kellogg
farmers.”) The Kellogg farmers alleged that their former attorneys had
failed to disclose the benefits of participating as class members, resulting
1
The court certified eight statewide classes and one national class.
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in excessive legal fees and exclusion from class proceedings. These
allegations led the Kellogg farmers to sue the attorneys who had provided
representation or otherwise assisted in these cases. The suit against the
attorneys included claims of common-law fraud, violation of the Racketeer
Influenced and Corrupt Practices Act (RICO) and Minnesota’s consumer-
protection statutes, and breach of fiduciary duty.
While this suit was pending in district court, Syngenta settled the
class actions and thousands of individual suits, including those brought by
the Kellogg farmers. The settlement led to the creation of two pools of
payment by Syngenta: one pool for a newly created class consisting of all
claimants, the other pool for those claimants’ attorneys. For this
settlement, the district court allowed the Kellogg farmers to participate in
the new class and to recover on an equal basis with all other claimants.
The settlement eliminated any economic injury to the Kellogg
farmers, so the district court dismissed the RICO and common-law fraud
claims. The court also dismissed the Kellogg farmers’ other claims,
reasoning that
the Kellogg farmers had failed to allege a public benefit from
the claims under Minnesota’s consumer-protection laws,
the Kellogg farmers’ disobedience of court orders merited
dismissal of the claim for breach of fiduciary duty, and
seven other law firms, which had provided assistance, could not
have breached a fiduciary duty because they had no attorney-client agreements with the Kellogg farmers.
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The court not only dismissed these claims but also assessed monetary
sanctions against the Kellogg farmers. We uphold these rulings.
Background
I. The Kellogg farmers sue Syngenta and then sue their former
attorneys.
Like most of the other corn producers, the Kellogg farmers sued
Syngenta for genetically modifying corn-seed products and commingling
these products in the U.S. corn supply. The Kellogg farmers had intended
to export much of that corn to China, but the Chinese government refused
to import genetically modified corn. That refusal sparked tumbling corn
prices and financial disaster for thousands of corn producers like the
Kellogg farmers. Corn producers reacted by filing thousands of suits
against Syngenta, and the Judicial Panel on Multi-District Litigation
transferred the suits to the District of Kansas for pretrial proceedings.
As the suits progressed, the Kellogg farmers began to reconsider the
benefits of suing individually rather than participating in the class actions.
As the Kellogg farmers reconsidered their litigation strategy, they
suspected their former attorneys of inflating the legal fees by touting
individual actions and concealing the benefits of class litigation. So the
Kellogg farmers retained new counsel and sued in Minnesota federal
district court, asserting claims against their former attorneys and seven
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other law firms that had provided legal assistance. That suit was then
transferred to the District of Kansas as part of the multi-district litigation.
II. The Syngenta litigation settles, creating separate pools to
compensate the corn producers and their former attorneys.
After the Kellogg farmers sued their former attorneys, the district
court approved a global settlement of the cases involving Syngenta’s
genetically modified corn. The Kellogg farmers acknowledge that the
settlement allowed them to participate equally as members of a newly
created class consisting of all settling claimants. Corn producers in this
class split a settlement pool of roughly $1 billion that Syngenta had paid.
The district court also created a separate pool of about $500 million
for all of the claimants’ attorneys. Given the availability of this pool, the
court prohibited enforcement of any contingency-fee agreements.
Analysis of the Claims Against the Kellogg Farmers’
Former Attorneys
Most of the appellate issues involve the Kellogg farmers’ claims
against their former attorneys. These issues fall into two categories:
1. Arguments that the district judge should have refrained from
ruling on certain issues
2. Arguments that the district judge erred in the rulings that he
did make
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I. The district judge didn’t err in ruling on particular issues.
The Kellogg farmers argue that the district judge erred by deciding
particular issues rather than leaving them for another court or judge.
According to the Kellogg farmers, the district judge
should not have ruled on the merits because the case had been
improperly transferred to the District of Kansas,
should have recused, and
lost jurisdiction after the Kellogg farmers had appealed the
denial of their motion to recuse.
We reject these arguments.
A. We lack jurisdiction to review the Multi-District Litigation
Panel’s transfer of the case to the District of Kansas.
In the Panel’s proceedings, the Kellogg farmers moved to vacate the
transfer to the District of Kansas. The Panel denied the motion and a later
request to reconsider this ruling. The Kellogg farmers ask us to
direct the Multi-District Litigation Panel to retransfer the case
to the District of Minnesota and
vacate all orders in the District of Kansas.
We lack jurisdiction to consider these requests. 2
2
In their opening brief, the Kellogg farmers devote only one sentence
to this argument:
To comply with the § 1407(a) mandate and [the Kellogg
farmers’] due process rights to proceed with their federal and
Minnesota claims before an impartial judge to protect and
preserve their property interest in the Syngenta [multi-district
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Federal law expressly prohibits appellate review of the Panel’s denial
of a motion to transfer the case to the originating court. See 28 U.S.C.
§ 1407(e) (“No proceedings for review of any order of the panel may be
permitted except by extraordinary writ . . . .”). Given the statutory
prohibition of appellate review, transfer decisions are reviewable only
through an extraordinary writ. Id.; see In re Morg. Elec. Registration Sys.,
Inc.,
754 F.3d 772, 780 (9th Cir. 2014) (concluding that “[m]andamus is
the exclusive mechanism for reviewing [the Multi-District Litigation
Panel’s] orders” and dismissing an appeal for lack of jurisdiction because
the appellants had not sought mandamus); In re Wilson,
451 F.3d 161, 168
(3d Cir. 2006) (“Mandamus is the sole means though which petitioners can
seek review of the [Multi-District Litigation Panel’s] order.”); Grispino v.
New England Mut. Life Ins. Co.,
358 F.3d 16, 19 n.3 (1st Cir. 2004) (“The
language of
28 U.S.C. § 1407(e) only permits the courts of appeals for the
litigation] common fund, [the Kellogg farmers] respectfully
request that the Court vacate all orders and decisions in the
Kellogg lawsuit in the District of Kansas under § 2106 and the
Court’s inherent supervisory authority, and direct the [Multi-District Litigation] Panel under §§ 1407 and 2106 and in the
interests of justice to return Kellogg to the District of Minnesota.
Appellants’ Opening Br. at 27. For the sake of argument, we assume that
this sentence adequately develops an argument that the Panel should not
have transferred this case as part of the multi-district litigation. Cf.
Thompson R2-J Sch. Dist. v. Luke P. ex rel. Jeff P., 540 F.3d 1143, 1148
n.3 (10th Cir. 2008) (stating that an argument was waived when it
consisted of a single sentence in an appeal brief).
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transferee court to review the [Multi-District Litigation Panel’s] transfer
decision via the issuance of an extraordinary writ . . . .”); see also In re
Volkswagen of Am., Inc., 545 F.3d 304, 309 (5th Cir. 2008) (“There can be
no doubt therefore that mandamus is an appropriate means of testing a
district court’s § 1404(a) ruling.”). Indeed, the Kellogg farmers themselves
argued in district court: “In
28 U.S.C. § 1407(e), Congress stated that the
only process for ‘review’ of transfer orders is via ‘extraordinary writ’
under
28 U.S.C. § 1651 ‘in the court of appeals having jurisdiction over
the transferee district.’” Class Pls.’ Omnibus Surreply to Mots. to Dismiss
at 14, No. 18-cv-2408-JWL-JPO (D. Kan. Mar. 6, 2019) (emphasis in
original). We have previously denied the Kellogg farmers’ requests for a
writ, and we lack jurisdiction to review the transfer through this appeal. 3
The Kellogg farmers argue that the Supreme Court has allowed
appellate review of a Panel order, citing Lexecon Inc. v. Milberg Weiss
Bershad Hynes & Lerach, 523 U.S. 26 (1998). We disagree with this
interpretation of Lexecon.
Lexecon did not involve a challenge to the Panel’s transfer of a case.
There the Panel had transferred a case for pretrial proceedings. Id. at 31–
32. After these proceedings ended, the transferee court refused to return
3
The Kellogg farmers asked us three times for a writ. When we
declined for the third time, the Kellogg farmers asked the Supreme Court
for a writ. The Supreme Court also declined to issue a writ.
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the case to the initial court, conducted the trial, and entered judgment for
the defendants. Id. at 32. The plaintiff appealed, challenging the transferee
court’s refusal to remand the case to the initial court for trial.
Id. The
Supreme Court concluded that the transferee court had to remand the case
to the initial court before the case could go to trial.
Id. at 40–42.
Lexecon addressed a federal district court’s refusal to remand a case
after the pretrial proceedings had ended. There the problem arose because
the transferee court had conducted a trial. Our case instead addresses the
validity of the Panel’s transfer order for pretrial proceedings—an issue that
didn’t arise in Lexecon. Given these differences, Lexecon does not apply
and federal law prohibits jurisdiction to consider
the Panel’s refusal to return the case to the District of
Minnesota and
the Kellogg farmers’ request to vacate all of the District of
Kansas’s orders.
B. The district judge acted within his discretion in denying the
Kellogg farmers’ motion to recuse.
The Kellogg farmers also argue that the district judge should have
recused. This argument stems from suspicion that the district judge met
privately with the former attorneys to discuss exclusion of the Kellogg
farmers from any proposed class. This suspicion led the Kellogg farmers to
request recusal, and the district judge declined this request. We conclude
that the district judge did not abuse his discretion in declining to recuse.
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1. The abuse-of-discretion standard applies to the district
judge’s decision not to recuse.
In considering whether a district judge erred in declining to recuse,
we ordinarily apply the abuse-of-discretion standard. Maez v. Mountain
States Tel. & Tel., Inc., 54 F.3d 1488, 1508 (10th Cir. 1995). But the
Kellogg farmers urge de novo review, invoking exceptions when
the district judge “does not acknowledge the factual evidence”
supporting disqualification or
the claimant alleges a denial of due process.
Appellants’ Opening Br. at 26. In urging these grounds for de novo review,
the Kellogg farmers have misinterpreted our case law.
For the first exception, the Kellogg farmers rely on Sac & Fox Nation
of Oklahoma v. Cuomo, 193 F.3d 1162 (10th Cir. 1999). But they err in
applying the exception recognized in Sac & Fox Nation. There we
conducted de novo review because the district judge had failed to create a
record on the decision not to recuse.
Id. at 1168.
That exception lacks any bearing here because the district judge
explained his refusal to recuse. In this explanation, the district judge
cited caselaw stating that recusal isn’t necessary when a judge
acquires knowledge from a related proceeding and
observed that a party’s disagreement with rulings doesn’t show
bias.
Mem. & Order at 12, No. 18-cv-2408-JWL-JPO (D. Kan. Dec. 18, 2019)
(citing United States v. Page, 828 F.2d 1476, 1481 (10th Cir. 1987)). The
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judge added that he had not met privately with anyone to discuss exclusion
of the Kellogg farmers. Mem. Op. & Order at 10, No. 18-cv-2408-JWL-
JPO, No. 14-MD-2591-JWL (D. Kan. Apr. 3, 2020). The Kellogg farmers
disagree with this explanation, but disagreement alone doesn’t trigger the
exception: The trigger is the absence of an explanation.
For the second exception, the Kellogg farmers rely on Williams v.
Pennsylvania, 579 U.S. 1 (2016). But there the Supreme Court didn’t
discuss the standard of review for the denial of a motion to recuse. In the
cited discussion, the Court addressed only whether a refusal to recuse
could prevent consideration of harmlessness.
Id. at 14. Our issue involves
the standard of review, not harmlessness in the event of an error. 4
Because neither exception governs, we apply the abuse-of-discretion
standard. See p. 10, above.
2. The district judge had discretion to deny the motion for
recusal.
The Kellogg farmers challenge their automatic exclusion from the
class actions, arguing that the district judge
breached a fiduciary duty to them and
needed to recuse as a result of that breach.
We reject this challenge.
4
The former attorneys argue that a failure to recuse would have
constituted harmless error. But we need not address this argument because
the district court did not err. See pp. 12–16, below.
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According to the Kellogg farmers, they lost the ability to participate
in the class actions because the district judge breached a fiduciary duty to
protect potential class members. It was the district judge, the Kellogg
farmers say, who agreed to their automatic exclusion from the proposed
classes.
Though the Kellogg farmers fault the district judge, he didn’t breach
a fiduciary duty; he simply allowed automatic exclusion based on the
parties’ agreement in the class action proceedings. In those proceedings,
attorneys for some of the corn producers submitted a joint prosecution
agreement. This agreement stated that the proposed class would exclude
the Kellogg farmers and certain other corn producers. Am. and Restated
Joint Prosecution Agreement at 16, In re Syngenta AG MIR 162 Corn
Litig., No. 14-MD-2591-JWL (D. Kan. July 26, 2016).
At a hearing, the district judge stated that he had reviewed the joint
prosecution agreement but did not need to approve it:
It’s a private agreement among private parties . . . .
But I’m not going to approve it and I’m not going to disclose it.
I’ve read it. I’m not troubled by it, but I’m not approving it.
Tr. of Hr’g on Sealed Mot. by Pls. for Approval of Joint Prosecution
Agreements at 30, In re Syngenta AG MIR 162 Corn Litig., No. 14-MD-
2591-JWL (D. Kan. Apr. 27, 2015).
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Based on the joint prosecution agreement, attorneys for the corn
producers sought certification of classes that excluded the Kellogg farmers
and the other corn producers identified in the joint prosecution agreement.
Sealed Mem. in Support of Producer Pls.’ Mot. to Certify Class, In re
Syngenta AG MIR 162 Corn Litig., No. 14-MD-2591-JWL (D. Kan. June
17, 2016). After conducting a hearing and considering objections, the
district judge found that the exclusions would not create a conflict of
interest or deny due process. Mem. Op. & Order at 29–30, In re Syngenta
AG MIR 162 Corn Litig., No. 14-MD-2591-JWL (D. Kan. Sept. 26, 2016).
Based on these findings, the judge certified classes that excluded the
Kellogg farmers and the other corn producers specified in the joint
prosecution agreement. Id. at 30.
The Kellogg farmers argue that the district judge should have recused
because he had “played a critical role” in the decisions to “[allow] the
automatic opt-outs of Farmers from the Syngenta MDL proceedings
intended by [the Kellogg farmers’ former attorneys] to exploit [the Kellogg
farmers].” Appellants’ Opening Br. at 47. This argument erroneously
assumes that the district judge would need to recuse based on his earlier
decision to allow automatic exclusion from the class action.
This assumption is wrong, for “judges need not ordinarily recuse
after ruling on similar issues in other cases involving the same parties.”
Zen Magnets, LLC v. Consumer Prod. Safety Comm’n, 968 F.3d 1156, 1168
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(10th Cir. 2020). To the contrary, “opinions formed by the judge on the
basis of facts introduced or events occurring in the course of the current
proceedings, or of prior proceedings, do not constitute the basis for a bias
or partiality motion unless they display a deep-seated favoritism or
antagonism that would make fair judgment impossible.” Liteky v. United
States, 510 U.S. 540, 555 (1994); see also Frey v. EPA,
751 F.3d 461, 472
(7th Cir. 2014) (“[I]nformation a judge has gleaned from prior judicial
proceedings is not considered extrajudicial and simply does not require
recusal.”). The Kellogg farmers haven’t pointed to “deep-seated favoritism
or antagonism” arising from the district judge’s certification of classes
excluding the corn producers identified in the joint prosecution agreement.
To show partiality, the Kellogg farmers point to a declaration by an
expert witness, who urged recusal for three reasons:
1. The district judge might have breached a fiduciary duty by
allowing the automatic exclusion without considering the
Kellogg farmers’ best interests.
2. The former attorneys might have lied to the district judge about
the effect of the automatic exclusion.
3. The district judge might have engaged in ex parte
communications with class counsel or the Kellogg farmers’
former attorneys.
In the expert witness’s view, these possibilities required the district judge
to testify why he had allowed the automatic exclusion. But the expert
witness’s speculation does not require the district judge to testify.
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We can see for ourselves why the district judge allowed the
automatic exclusion. The proceedings in the class actions included
extensive discussion of the joint prosecution agreement, the scope of the
classes to be certified, and the issues bearing on exclusion of the Kellogg
farmers from these classes. See Tr. of Hr’g on Sealed Mot. by Pls. for
Approval of Joint Prosecution Agreements at 28–30, In re Syngenta AG
MIR 162 Corn Litig., No. 14-MD-2591-JWL (D. Kan. Apr. 27, 2015) (the
district judge’s statements that he had reviewed the joint prosecution
agreement containing provisions for exclusion from the classes); Sealed
Phipps/Clark Pls.’ Mem. in Opp’n to Producer Pls.’ Mot. for Class
Certification, at 18–21, 25–28, In re Syngenta AG MIR 162 Corn Litig.,
No. 14-MD-2591-JWL (D. Kan. July 26, 2016) (attorneys for one group of
corn producers arguing that the joint prosecution agreement had created
conflicting interests among the corn producers). Because the record shows
what the district judge considered and why he ruled as he did, there’s no
need for the judge to testify about his reasoning. 5 See Mem. Op. & Order at
5
The Kellogg farmers contend that opting out is an individual
decision, which their attorneys weren’t authorized to make. Some courts
have held that class counsel can’t decide whether to allow automatic opt-outs. See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1024 (9th Cir. 1998)
(“The right to participate, or to opt-out, is an individual one and should not
be made by the representative or the class counsel.”), overr’d on other
grounds, Castillo v. Bank of Am., NA,
980 F.3d 723, 729 (9th Cir. 2020);
Sharp Farms v. Speaks,
917 F.3d 276, 299 (4th Cir. 2019) (“[A]llowing
representatives to opt out a group of class members would deprive those
members of their due-process right to make that choice for themselves
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29–30, In re Syngenta AG MIR 162 Corn Litig., No. 14-MD-2591-JWL (D.
Kan. Sept. 26, 2016) (the district judge’s rejection of the challenge to the
automatic exclusion of producers designated in the joint prosecution
agreement).
Nor is testimony needed based on the expert witness’s suspicion of
ex parte communications. In considering the expert witness’s suspicion, we
apply “a presumption of honesty and integrity in those serving as
adjudicators.” Withrow v. Larkin, 421 U.S. 35, 47 (1975). So “[m]ere
speculation that an ex parte contact has occurred or that a judge was
affected by it . . . does not warrant relief or further investigation.”
Kaufman v. Am. Family Mut. Ins. Co.,
601 F.3d 1088, 1095 (10th Cir.
2010).
The district judge says that he didn’t engage in any ex parte
conversations, and the Kellogg farmers present no reason to question the
district judge’s word. See Livsey v. Salt Lake Cnty., 275 F.3d 952, 957
(10th Cir. 2001) (noting that we usually “[t]ak[e] the district court at its
word”). The district judge thus did not abuse his discretion by declining to
recuse.
. . . .”). Here class counsel didn’t unilaterally decide on the exclusions; the
Kellogg farmers’ own attorneys consented. The Kellogg farmers present no
reason for a judge to question the attorneys’ authority to consent to their
clients’ exclusion from a proposed class.
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C. The district court had jurisdiction to proceed while the
interlocutory appeal was pending.
Before filing this appeal, the Kellogg farmers had sought
interlocutory review of the district judge’s refusal to recuse. The Kellogg
farmers contend that the district court lost jurisdiction during that appeal.
This contention leads the Kellogg farmers to seek vacatur of thirteen
orders:
1. the district judge’s acceleration of briefing deadlines for a
request to schedule a planning conference, Order, No. 18-cv-
02408-JWL-JPO (D. Kan. Jan. 21, 2020)
2. the magistrate judge’s order for supplemental briefing on the
district court’s jurisdiction to proceed during the pendency of a
petition for rehearing, Order, No. 18-cv-02408-JWL-JPO (D.
Kan. Jan. 30, 2020)
3. the district judge’s statement that he would later decide
whether to suspend a briefing schedule, Order, No. 18-cv-
02408-JWL-JPO (D. Kan. Jan. 30, 2020)
4. the magistrate judge’s requirement for the Kellogg farmers to
participate in a scheduling conference, Order, No. 18-cv-
02408-JWL-JPO (D. Kan. Feb. 4, 2020)
5. the district judge’s denial of a motion to suspend a briefing
schedule, Order, No. 18-cv-02408-JWL-JPO (D. Kan. Feb. 4,
2020)
6. the magistrate judge’s order to expedite briefing on a motion
for sanctions, Order, No. 18-cv-02408-JWL-JPO (D. Kan. Feb.
12, 2020)
7. the magistrate judge’s cancellation of a scheduling conference,
Order, No. 18-cv-02408-JWL-JPO (D. Kan. Feb. 18, 2020)
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8. the magistrate judge’s grant of leave to answer the amended
complaint out of time, Order, No. 18-cv-02408-JWL-JPO (D.
Kan. Feb. 19, 2020)
9. the magistrate judge’s denial of leave to file a surreply on a
motion for sanctions, Order, No. 18-cv-02408-JWL-JPO (D.
Kan. Feb. 24, 2020)
10. the magistrate judge’s assessment of monetary sanctions and
resetting of deadlines, Order, No. 18-cv-02408-JWL-JPO (D.
Kan. Mar. 3, 2020)
11. the district judge’s denial of the Kellogg farmers’ motion to
vacate orders, recuse, and stay the proceedings, Mem. & Order,
No. 18-cv-02408-JWL-JPO (D. Kan. Apr. 15, 2020)
12. the district judge’s assessment of monetary sanctions for filing
vexatious motions, Mem. Op. & Order, No. 18-cv-02408-JWL-JPO (D. Kan. Apr. 27, 2020)
13. the district judge’s assessment of monetary sanctions for
failing to attend a planning conference, Order, No. 18-cv-
02408-JWL-JPO (D. Kan. Apr. 28, 2020)
We decline to vacate these orders, concluding that the district court did not
lose jurisdiction when the Kellogg farmers appealed the denial of their
motion to recuse.
Some orders are appealable before the issuance of a final judgment.
See, e.g., Mitchell v. Forsyth, 472 U.S. 511, 530 (1985) (stating that
denials of qualified immunity are immediately appealable). When a matter
is appealable, the district court loses jurisdiction absent a certification of
frivolousness. Stewart v. Donges,
915 F.2d 572, 577–78 (10th Cir. 1990).
But a party can’t strip the district court of jurisdiction by prematurely
appealing. See Howard v. Mail-Well Envelope Co.,
150 F.3d 1227, 1229
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(10th Cir. 1998) (“[N]o transfer [of jurisdiction to the appellate court]
occurs if the appeal is taken from a non-appealable order.”).
We’ve disallowed immediate appeals from the denial of a motion to
recuse or disqualify a judge. Lopez v. Behles (In re Am. Ready Mix, Inc.),
14 F.3d 1497, 1499 (10th Cir. 1994). Given the unavailability of an
immediate appeal, we dismissed two of the Kellogg farmers’ previous
appeals. Order at 2, In re Syngenta AG MIR 162 Corn Litig. (Kellogg
Group), No. 19-3066 (10th Cir. Dec. 31, 2019) (dismissing the Kellogg
farmers’ appeal of the district court’s denial of a recusal motion based on
the failure to “establish[] that the district court’s decisions [were] final or
immediately appealable”); Order at 2, In re Syngenta AG MIR 162 Corn
Litig. (Kellogg Group II), No. 20-3006 (10th Cir. May 12, 2020) (“[T]his
court’s case law is clear that ‘[a]n order denying a motion to recuse or
disqualify a judge is interlocutory, not final, and is not immediately
appealable.’” (second alteration in original) (quoting In re Am. Ready Mix,
Inc.,
14 F.3d 1497, 1499 (10th Cir. 1994))).
Though disgruntled litigants can’t appeal the denial of a motion for
recusal, they can seek mandamus. Nichols v. Alley, 71 F.3d 347, 350 (10th
Cir. 1995). And the Kellogg farmers did seek mandamus. See Order, In re
Kenneth P. Kellogg, et al., Nos. 20-3051, 20-3070 & 20-3084 (10th Cir.
June 1, 2020) (denying the Kellogg farmers’ petition for a writ of
mandamus). But the filing of a mandamus petition didn’t divest the district
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court of jurisdiction. See Nascimento v. Dummer, 508 F.3d 905, 910 (9th
Cir. 2007) (“[P]etitions for extraordinary writs do not destroy the district
court’s jurisdiction in the underlying case.”); Clark v. Taylor,
627 F.2d
284, 288 (D.C. Cir. 1980) (“[T]he trial court had not lost its jurisdiction
because the appellate court was entertaining an application for writ of
mandamus.”).
The Kellogg farmers cite Arthur Andersen & Co. v. Finesilver, 546
F.2d 338 (10th Cir. 1976), for the proposition that once the appeal was
filed, the Tenth Circuit obtained jurisdiction. But in Arthur Andersen, we
pointed out that a district court can proceed when the appeal involved a
non-appealable order.
Id. at 340–41. So under Arthur Andersen, the district
court did not err by proceeding.
The Kellogg farmers also assert that by proceeding with the case, the
district court committed a due process violation under Stewart v. Donges,
915 F.2d 572 (10th Cir. 1990). But Stewart addressed only the loss of
jurisdiction when a party appeals an order deciding qualified immunity,
which is immediately appealable, not when a party appeals a non-
appealable order like the denial of a request for recusal. See
id. at 573. So
Stewart does not apply, and the district court did not violate due process
by proceeding with the case. 6
6
In a letter submitted under Fed. R. App. P. 28(j), the Kellogg farmers
state that the district court’s order was immediately appealable as a denial
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II. The Kellogg farmers’ substantive challenges are either moot or
invalid.
The Kellogg farmers also challenge the rulings that the district court
did make.
A. The RICO and common-law fraud claims are moot.
The district court dismissed the claims under RICO and common-law
fraud, reasoning that the Kellogg farmers had not suffered an injury-in-
fact. The Kellogg farmers disagree with the dismissals, relying on their
contingency-fee agreements and inability to participate in any of the class
actions.
Under the mootness doctrine, an actual controversy must exist
throughout the case. An actual controversy requires
an injury-in-fact,
“a sufficient causal connection between the injury and the
conduct complained of,” and
a “likelihood that the injury will be redressed by a favorable
decision.”
Brown v. Buhman, 822 F.3d 1151, 1164 (10th Cir. 2016) (internal
quotation marks omitted). The kind of injury-in-fact required for an actual
of an injunction. But this was the first time that the Kellogg farmers
suggested that the district court’s refusal to recuse would have constituted
a denial of an injunction, and we don’t consider new arguments raised in a
28(j) letter. See Niemi v. Lasshofer,
728 F.3d 1252, 1262 (10th Cir. 2013).
Even if we were to consider the new argument, the Kellogg farmers haven’t
explained or supported their characterization of the ruling as a denial of an
injunction.
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controversy depends on the elements of the claim. See Transunion LLC v.
Ramirez, 141 S. Ct. 2190, 2204 (2021).
“If an intervening circumstance deprives the plaintiff of a personal
stake in the outcome of the lawsuit, at any point during litigation, the
action can no longer proceed and must be dismissed as moot.” Campbell-
Ewald Co. v. Gomez, 136 S. Ct. 663, 669 (2016) (internal quotation marks
omitted). Intervening circumstances arose here, implicating the
requirements of a claim involving RICO and common-law fraud.
These claims required the Kellogg farmers to prove an economic
injury. See Tal v Hogan, 453 F.3d 1244, 1253 (10th Cir. 2006) (stating that
a RICO action requires proof of an injury to business or property); Hoyt
Props. Inc., v. Prod. Res. Group, L.L.C.,
736 N.W.2d 313, 318 (Minn.
2007) (stating that a common-law fraud claim requires proof of pecuniary
damage). But the Kellogg farmers’ alleged economic injury vanished when
the district court
prohibited the Kellogg farmers’ former attorneys from
enforcing the contingency-fee agreements and
allowed the Kellogg farmers to participate in the class
settlement on an equal basis with all other corn producers.
With the disappearance of an economic injury, the RICO and common-law
fraud claims became moot.
Despite the disappearance of an economic injury, the Kellogg farmers
contend that the district court
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considered the wrong time-period,
disregarded the fees that their former attorneys had collected
based on the contingency-fee agreements,
failed to consider the case against their attorneys as a separate
lawsuit, and
ignored statutes that establish standing.
We conduct de novo review and reject these arguments. See Niemi v.
Lasshofer, 770 F.3d 1331, 1344 (10th Cir. 2014) (de novo review).
1. The district court properly considered events after the suit
had been filed.
The Kellogg farmers view an injury-in-fact as something that we
consider only when the suit begins. And when the Kellogg farmers sued,
they allegedly had an economic injury from their obligations under the
contingency-fee agreements. But a case or controversy must remain
throughout the litigation. See Phelps v. Hamilton, 122 F.3d 1309, 1315
(10th Cir. 1997) (“[A] plaintiff must maintain standing at all times
throughout the litigation for a court to retain jurisdiction.” (quoting
Powder River Basin Res. Council v. Babbitt,
54 F.3d 1477, 1485 (10th Cir.
1995))).
The case or controversy on the RICO and common-law fraud claims
ended when the Kellogg farmers settled with Syngenta. So the district
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court did not err by considering the settlement even though it took place
after the Kellogg farmers had sued their former attorneys.
2. The attorney fees from the settlement do not constitute an
injury-in-fact for the claims under RICO and for common-law fraud.
The Kellogg farmers urge an ongoing injury because their former
attorneys ultimately profited from their contingency-fee agreements. But
the former attorneys profited from the attorney-client relationships, not the
contingency-fee agreements. Those relationships allowed the attorneys to
recover settlement fees from Syngenta; but those fees came at the expense
of Syngenta, not the Kellogg farmers, because the settlement had created
two pools. In one pool, the district court had awarded roughly $1 billion to
the Kellogg farmers and thousands of other corn producers. The court had
also created a separate pool, containing roughly $500 million, to
compensate the attorneys. See p. 5, above.
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The tradeoff was that the attorneys couldn’t collect anything outside their
awards from the second pool. Mem. Op. & Order at 21–22, No. 14-MD-
2591-JWL (D. Kan. Dec. 31, 2018) (MDL Dkt. No. 3882); In re Syngenta
AG MIR 162 Corn Litig., 357 F. Supp. 3d 1094, 1115 (D. Kan. 2018). 7
The attorneys could seek payment from the second pool based on the
amount of their clients’ losses. So the Kellogg farmers’ former attorneys
7
In the amended complaint, the Kellogg farmers asked the court to cap
their former attorneys’ contingency fees “at zero” to equalize the
assessment of attorney fees and expenses. Am. Class Action Compl. for
Declaratory and Injunctive Relief and Damages at 10, ¶ 20, No. 18-cv-
02408-JWL-JPO (D. Kan. Nov. 13, 2018). The district court effectively
granted this cap by prohibiting attorneys from collecting anything under
their contingency-fee agreements.
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used those losses when calculating the payouts from the second pool. But
that pool was divided only between attorneys; the attorneys’ payouts from
the second pool couldn’t affect the amount paid to the Kellogg farmers or
any other corn producers. So the payouts could not cause an economic
injury to the Kellogg farmers on their claims involving common-law fraud
or RICO. 8
The Kellogg farmers argue that the entire settlement (including the
pool of funds allotted to the attorneys) belonged to the class members. But
the Kellogg farmers waived this argument by
failing to sufficiently brief it and
presenting it too late.
The Kellogg farmers waived this appellate argument by failing to
develop a reason to disturb approval of the settlement, which had created
the separate pools for corn producers and attorneys. The Kellogg farmers’
opening brief states only that their “share of the Syngenta [multi-district
litigation] common fund is [their] property.” Appellants’ Opening Br. at 38
(emphasis omitted). This one-sentence contention doesn’t adequately
present an argument that the $500 million attorney-fee pool belonged to
the corn producers. See Thompson R2-J Sch. Dist. v. Luke P. ex rel. Jeff P.,
8
The Kellogg farmers appear to recognize that their common-law
fraud and RICO claims wouldn’t affect their own recovery under the
settlement, as they argue that “[i]t is the process that matters, not the
outcome.” Appellants’ Opening Br. at 44.
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540 F.3d 1143, 1148 n.3 (10th Cir. 2008) (stating that an argument is
waived when it consists of a single sentence in an appeal brief).
Even if the Kellogg farmers had developed an argument to upend the
settlement, this argument would have come too late. The Kellogg farmers
didn’t appeal the order approving the global settlement. See Hawkins v.
Evans, 64 F.3d 543, 546 n.2 (10th Cir. 1995) (rejecting an attempt to
collaterally attack an order in a previous case that had not been appealed).
Nor did they raise the argument in district court when responding to their
former attorneys’ motion to dismiss.
The Kellogg farmers instead raised this argument for the first time
when seeking vacatur of the district court’s judgment. But a motion to
vacate the judgment doesn’t allow parties to present new arguments that
could have been raised earlier. See Lebahn v. Owens, 813 F.3d 1300, 1306
(10th Cir. 2016) (“[A] Rule 60(b) motion is not an appropriate vehicle to
advance new arguments or supporting facts that were available but not
raised at the time of the original argument.” (citing Cashner v. Freedom
Stores, Inc.,
98 F.3d 572, 577 (10th Cir. 1996))). The district court thus
acted properly by declining to consider the Kellogg farmers’ new argument
involving the class members’ ownership of the settlement funds.
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3. The Kellogg farmers didn’t show an injury-in-fact from the
existence of a separate suit involving property interests.
The Kellogg farmers also point to the Multi-District Litigation
Panel’s distinction between the Kellogg farmers’ suit against their former
attorneys and the suits against Syngenta. According to the Kellogg farmers,
the Panel’s distinction served as recognition of an injury-in-fact.
We disagree. The Panel was just saying that the dispute between the
Kellogg farmers and their former attorneys would need to be resolved
through separate litigation rather than an objection to the global
settlement. The Panel didn’t comment on the existence of an injury-in-fact.
The Kellogg farmers also characterize their claims as “choses in
action,” triggering property interests under the Fifth Amendment.
Regardless of this characterization, however, the Kellogg farmers lost a
stake in the outcome when the district court nullified the contingency-fee
agreements and allowed equal participation in the settlement.
4. Federal statutes did not create an injury-in-fact.
The Kellogg farmers also argue that RICO and the declaratory-
judgment statute confer standing. It’s true that “Congress may create a
statutory right or entitlement the alleged deprivation of which can confer
standing to sue even where the plaintiff would have suffered no judicially
cognizable injury in the absence of statute.” Warth v. Seldin, 422 U.S. 490,
514 (1975). But Congress’s authority to create an entitlement doesn’t
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scuttle the need for an injury-in-fact. See TransUnion v. Ramirez, 141 S.
Ct. 2190, 2200 (2021).
The two federal statutes being invoked (RICO and the declaratory-
judgment statute) don’t automatically confer an injury-in-fact. RICO
expressly requires an injury to “business or property.” 18 U.S.C.
§ 1964(c); see Tal v. Hogan,
453 F.3d 1244, 1254 (10th Cir. 2006). And
the declaratory-judgment statute requires the claimant to separately show
an injury-in-fact. See
28 U.S.C. § 2201(a) (stating that a court can issue a
declaratory judgment “[i]n a case of actual controversy”); Cardinal Chem.
Co. v. Morton Int’l, Inc.,
508 U.S. 83, 95 (1993) (“[A] party seeking a
declaratory judgment has the burden of establishing the existence of an
actual case or controversy.” (citation omitted)).
Despite the lack of statutory support for an ongoing case or
controversy, the Kellogg farmers argue that the district court disregarded
the separation of powers by dismissing the claims under RICO and the
Declaratory Judgment Act. This argument is waived and invalid. It’s
waived because the Kellogg farmers didn’t present this argument in district
court or ask us to apply the plain-error standard. See United States v.
Leffler, 942 F.3d 1192, 1197 (10th Cir. 2019). And the argument is invalid
because statutory claims—like other claims—can become moot. See, e.g.,
Powder River Basin Res. Council v. Babbitt,
54 F.3d 1477, 1480, 1484–85
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(10th Cir. 1995) (concluding that claims brought under the Declaratory
Judgment Act and another federal statute had become moot).
…
We thus conclude that the district court properly dismissed the
claims involving common-law fraud and RICO. These claims became moot
because the Kellogg farmers had no economic injury.
B. The district court acted within its discretion by sanctioning
the Kellogg farmers through dismissal of their claim for
breach of fiduciary duty.
The district court also sanctioned the Kellogg farmers by dismissing
their claim involving breach of fiduciary duty, and the Kellogg farmers
challenge that dismissal. We conclude that jurisdiction existed and the
district court did not abuse its discretion.
1. Jurisdiction existed in district court despite the absence of
an economic injury.
We again must address jurisdiction, considering whether the Kellogg
farmers alleged an injury-in-fact. Though the Kellogg farmers suffered no
economic injury, none was required for a claim involving breach of a
fiduciary duty. See Perl v. St. Paul Fire & Marine Ins. Co., 345 N.W.2d
209, 212 (Minn. 1984) (“[Minnesota] law treats a client’s right to an
attorney’s loyalty as a kind of ‘absolute’ right in the sense that if the
attorney breaches his or her fiduciary duty to the client, the client is
deemed injured even if no actual loss results.”); see also Rice v. Perl, 320
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N.W.2d 407, 411 (Minn. 1982) (allowing a client to recover the
compensation paid to an attorney who breached a duty of loyalty).
Because economic injury wasn’t required, a legally protected interest
existed based on Minnesota’s recognition of a right to an attorney’s
loyalty. See St. Paul Fire & Marine Ins. Co., 345 N.W. 2d at 212
(concluding that clients have a right to an attorney’s loyalty under
Minnesota law). The alleged invasion of that interest constituted an injury-
in-fact. See In re Facebook, Inc., Internet Tracking Litig.,
956 F.3d 599,
600–01 (9th Cir. 2020) (concluding that the availability of a disgorgement
action under state law would establish a legally protected interest that
suffices for Article III standing).
Given the allegation of an injury-in-fact, we consider the former
attorneys’ other jurisdictional challenges. The former attorneys argue that
recovery couldn’t benefit the Kellogg farmers because forfeiture of the
attorney fees would result only in the distribution of additional fees to
other attorneys rather than to other producers. We disagree. The district
court explained that even though it “may have necessarily found that
attorneys for farmers in the underlying litigation deserved fees (for work
benefitting the settlement class),” “the [c]ourt did not find . . . that
attorneys [had] never breached any duty of loyalty while representing
farmers throughout the entire course of the underlying litigation.” Mem. &
Order at 14, No. 18-cv-2408-JWL-JPO D. Kan. Dec. 18, 2019). So breach
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of a duty of loyalty could trigger an award to the Kellogg farmers. See Perl
v. St. Paul Fire & Marine Ins. Co., 345 N.W.2d 209, 212 (Minn. 1984).
2. The district court didn’t abuse its discretion in sanctioning
the Kellogg farmers by dismissing the claim for breach of
fiduciary duty.
The court sanctioned the Kellogg farmers by dismissing their claim
for breach of fiduciary duty, reasoning that the Kellogg farmers and their
new counsel had “repeatedly, obstinately refused to accept the Court’s
rulings or to comply with its orders, even after warnings that continued
noncompliance could result in dismissal.” Mem. Op. & Order at 1, No. 18-
cv-02408-JWL-JPO (D. Kan. July 28, 2020).
The Kellogg farmers challenge the dismissal, and we review
the dismissal for an abuse of discretion and
the underlying factual findings for clear error.
See Ehrenhaus v. Reynolds, 965 F.2d 916, 920 (10th Cir. 1992) (abuse-of-
discretion standard); Olcott v. Dela. Flood Co.,
76 F.3d 1538, 1551 (10th
Cir. 1996) (clear-error standard).
The Kellogg farmers previously filed two premature appeals. After
we dismissed the first one, the district court tried to move the case along.
The court started by ordering a discovery planning conference.
The Kellogg farmers’ new attorney refused to participate, stating that
the district court lacked jurisdiction. The Kellogg farmers then filed a
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second notice of appeal and applied for a writ of mandamus, again
challenging the district court’s refusal to recuse.
The magistrate judge set a date for the planning conference, but the
Kellogg farmers’ new attorney failed to attend and again moved for recusal
and vacatur of every ruling made during the pendency of the prior appeal.
When the new attorney failed to appear at the discovery planning
conference, the former attorneys moved for sanctions, including dismissal.
The magistrate judge declined to recommend dismissal, but ordered the
Kellogg farmers to pay the fees and expenses incurred by the former
attorneys to attend the earlier discovery planning conference.
The magistrate judge scheduled a second discovery planning
conference, warning the Kellogg farmers’ new attorney that failure to
attend or participate would result in a recommendation of dismissal. The
new attorney attended the second conference by telephone. But he refused
to budge, announcing that he would not participate in discovery or pretrial
preparation until our court decided the new appeal and request for
mandamus.
The Kellogg farmers also filed a second motion for recusal without
addressing the district court’s reasons for denying the first motion. The
district court required the Kellogg farmers to pay the attorney fees and
expenses that the former attorneys had spent to respond to the second
recusal motion. The Kellogg farmers failed to pay these sanctions.
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Given the Kellogg farmers’ disregard of these orders, the former
attorneys obtained sanctions consisting of dismissal with prejudice on the
sole remaining claim (breach of fiduciary duty). In imposing this sanction,
the court considered five pertinent factors: “(1) the degree of actual
prejudice to the other party; (2) the amount of interference with the
judicial process; (3) the litigant’s culpability; (4) whether the court warned
the [offending] party in advance that dismissal would be a likely sanction
for noncompliance; and (5) the efficacy of lesser sanctions.” Mem. Op. &
Order at 8, No. 18-cv-02408-JWL-JPO (D. Kan. July 28, 2020) (quoting
Ecclesiastes 9:10-11-12, Inc. v. LMC Holding Co., 497 F.3d 1135, 1140–41
(10th Cir. 2007)). In the district court’s view, each factor supported
dismissal.
In responding to the district court’s assessment, the Kellogg farmers
contend that the district judge had a conflict of interest and lacked
jurisdiction to proceed during the pendency of the appeal. We’ve elsewhere
rejected these contentions. See pp. 10–20, above.
The Kellogg farmers also argue that
the failure to pay the monetary sanctions could have been
addressed by other means, like the posting of a bond or
execution of the judgment, and
bad faith is necessary for a dismissal with prejudice.
We reject both arguments.
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The district court could have enforced the monetary sanctions
through a bond or execution of a judgment. But the court reasonably
viewed lesser sanctions as futile given the Kellogg farmers’ refusal to pay
the monetary sanctions. So the court did not abuse its discretion in
dismissing the claim with prejudice.
The Kellogg farmers also argue that dismissal is appropriate only
when a party acts in bad faith. We disagree.
Although dismissal is a harsh sanction, it may be appropriate in cases
of “willfulness, bad faith, or some fault.” Chavez v. City of Albuquerque,
402 F.3d 1039, 1044 (10th Cir. 2005) (emphasis added) (cleaned up); see
also Archibeque v. Atchison, Topeka & Santa Fe Ry. Co.,
70 F.3d 1172,
1174 (10th Cir. 1995) (“[D]ue process requires that the discovery violation
be predicated upon willfulness, bad faith, or some fault of [the] petitioner
rather than inability to comply.” (cleaned up)). So the district court can
impose dismissal when a defendant willfully disobeys orders. See Willner
v. Univ. of Kan.,
848 F.2d 1023, 1030 (10th Cir. 1988).
The magistrate judge found that the Kellogg farmers had “willfully
refus[ed] to participate in the litigation before th[e] court.” Order at 8, No.
18-cv-02408-JWL-JPO (D. Kan. Mar. 3, 2020). The district judge upheld
this ruling. Mem. & Order at 2–3, No. 18-cv-02408-JWL-JPO (D. Kan.
Apr. 15, 2020). The magistrate judge and the district judge had discretion
to find willful disregard of their orders. See Ehrenhaus v. Reynolds, 965
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F.2d 916, 921 (10th Cir. 1992). We review their factual findings for clear
error, see
id., and see none here.
The Kellogg farmers insist that bad faith is required for dismissal,
relying on Societe Internationale pour Participations Industrielles et
Commerciales, S.A. v. Rogers, 357 U.S. 197 (1958). We disagree. In
Societe Internationale, the Supreme Court invalidated a dismissal because
compliance with the underlying order might have violated Swiss law.
Id. at
204, 208–12.
No similar impediment prevented the Kellogg farmers from
complying with the district court’s order. And in Societe Internationale,
the Supreme Court reiterated that noncompliance with a court order could
justify dismissal when there is “willfulness, bad faith, or . . . fault” on the
petitioner’s part. Id. at 212 (emphasis added).
The district court reasonably based the sanction of dismissal on
prejudice to the former attorneys, interference with the judicial process,
culpability, warnings to the Kellogg farmers, and ineffectiveness of lesser
sanctions. In applying these considerations, the court acted within its
discretion.
C. The district court did not err in dismissing the Minnesota
statutory claims based on the failure to allege a public
benefit.
The district court also dismissed claims under three Minnesota
statutes:
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1. Minnesota Consumer Fraud Act, Minn. Stat. § 325F.69, subd. 1
2. Minnesota False Statement in Advertising Act, Minn. Stat.
§ 325F.67
3. Minnesota Uniform Deceptive Trade Practices Act, Minn. Stat.
§§ 325D.43–48
The Kellogg farmers challenge these dismissals, and we reject the
challenges.
1. The district court had jurisdiction over these claims.
The threshold issue involves jurisdiction, which requires an injury-
in-fact. See Part II(B)(1), above.
An injury-in-fact requires
“an invasion of a legally protected interest” and
a harm that is “concrete and particularized” and “actual or
imminent . . . .”
Spokeo, Inc. v. Robins, 578 U.S. 330, 339 (2016) (quoting Lujan v. Defs. of
Wildlife,
504 U.S. 555, 560 (1992)).
The Kellogg farmers adequately alleged an injury-in-fact. The
attorneys’ alleged conduct included deceptive statements that deprived the
Kellogg farmers of an opportunity to make informed decisions about the
Syngenta litigation. See Appellants’ App’x vol. II, at 153–59. Based on
these allegations, the Kellogg farmers have adequately alleged the invasion
of a legally protected interest because Minnesota law recognizes a
protected interest in the loyalty of one’s attorneys. See Perl v. St. Paul
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Fire & Marine Ins. Co., 345 N.W.2d 209, 212 (Minn. 1984) (allowing a
client to recover the compensation paid to an attorney who breached a duty
of loyalty); see also State v. Minn. v. Sch. of Bus., Inc.,
935 N.W. 2d 124,
138–39 (Minn. 2019) (allowing recovery for equitable restitution to divest
a wrongdoer of improper profits). The Kellogg farmers’ interest is legally
protected even if they can’t recover under the Minnesota statutes. See Duke
Power v. Carolina Envtl. Study Grp.,
438 U.S. 59, 78–79 (1978); see also
WildEarth Guardians v. United States Bureau of Land Management,
870
F.3d 1222, 1232 (10th Cir. 2017) (“Our own precedents indicate that the
legal theory and the standing injury need not be linked as long as [the
injury-in-fact is likely to be redressed by a favorable decision].”).
Given the allegations of statutory violations involving disloyalty, the
Kellogg farmers have adequately alleged a legally protected interest and a
harm that is “concrete and particularized” and “actual and imminent.”
Spokeo, Inc. v. Robins, 578 U.S. 330, 339 (2016) (quoting Lujan v. Defs. of
Wildlife,
504 U.S. 555, 560 (1992)). So we have jurisdiction over the
statutory claims.
2. The Kellogg farmers fail to adequately develop an appellate
argument on public benefit.
Given jurisdiction, we consider the Kellogg farmers’ challenge to the
dismissals. The Kellogg farmers had brought these claims under
Minnesota’s private-attorney-general statute, Minn. Stat. § 8.31 subd. 3a.
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Under this statute, a private right-of-action exists only if successful
prosecution of the claim would benefit the public. Ly v. Nystrom, 615
N.W.2d 302, 314 (Minn. 2000).
Recovery might benefit the public when a merchant broadcasts a
fraudulent advertisement and makes “numerous sales and information
presentations” to the public. Collins v. Minn. Sch. of Bus., 655 N.W.2d
320, 330 (Minn. 2003). In contrast, recovery doesn’t benefit the public
when the claimant is defrauded in a “single one-on-one transaction.”
Nystrom,
615 N.W.2d at 314.
In the amended complaint, the Kellogg farmers allege that
their former attorneys chose a harmful litigation strategy in
order to maximize their own attorney fees and
recovery from the former attorneys would benefit the 60,000
farmers and consumers in Minnesota who rely on an honest,
ethical market for legal services.
The district court considered these allegations and concluded that they
hadn’t created a public benefit. Mem. & Order at 6–9, No. 18-cv-2408-
JWL-JPO (D. Kan. Aug. 13, 2019), adhered to in part on reconsideration,
Mem. & Order at 9–11, No. 18-cv-2408-JWL-JPO (D. Kan. Dec. 18, 2019).
For this conclusion, the court reasoned that
the Kellogg farmers had mainly sought forfeiture of attorney
fees to compensate for past wrongs rather than to stop ongoing
misconduct,
the pursuit of class-wide claims hadn’t necessarily provided a
public benefit, and
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the alleged misrepresentations had targeted a specific group
within a specific industry.
Id.
The Kellogg farmers sought reconsideration, arguing that for a public
benefit, “the Minnesota Supreme Court only requires a determination of
whether Defendants are engaged in misrepresentations to the public
through advertisement.” Class Pls.’ Mem. in Support of Mots. to (1)
Correct a Clerical Error in the August 13, 2019 Mem. and Order, (2)
Vacate the Substantive Rulings, (3) Certify a Question to the Minnesota
Supreme Court, and (4) Vacate All Orders at 14–15, No. 18-cv-02408-
JWL-JPO (D. Kan. Sept. 10, 2019). The district court rejected this
argument, reasoning that the Kellogg farmers hadn’t alleged a
misrepresentation to the public at large. Mem. & Order at 10–11, No. 18-
cv-2408-JWL-JPO (D. Kan. Dec. 18, 2019).
In their opening appeal brief, the Kellogg farmers present an
argument consisting of only a single sentence, asserting that the district
court “disregard[ed] binding Minnesota Supreme Court precedent that the
only requirement for application of the Minnesota business and consumer
protection claims is a determination of whether the [attorneys] engaged in
misrepresentations to the ‘public at large’ through advertisements, etc.”
Appellants’ Opening Br. at 41 (emphasis in original) (quoting Collins, 655
N.W.2d 320). Nowhere do the Kellogg farmers address the district court’s
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reasoning, which treated the alleged misrepresentations as made to a
specific group rather than the public at large. By failing to develop an
argument that the district court erred, the Kellogg farmers waived a
challenge to dismissal of the statutory claims. See Murrell v. Shalala, 43
F.3d 1388, 1389 n.2 (10th Cir. 1994) (“[P]erfunctory [allegations of error]
fail to frame and develop an issue sufficient to invoke appellate review.”).
Given this waiver, we affirm the dismissal of the three statutory claims. 9
9
The district court noted that one of the statutes (the Minnesota
Uniform Deceptive Trade Practices Act) contains its own provision for a
private right-of-action. So the requirement of a public benefit might not
apply to that claim. Nevertheless, the Kellogg farmers relied only on the
private-attorney-general statute to bring their claims under the Minnesota
Uniform Deceptive Trade Practices Act. So the district court concluded
that
“the claim as pleaded [wa]s subject to dismissal,”
even if the Kellogg farmers had asserted a claim through the
Minnesota Uniform Deceptive Trade Practices Act rather than
the private-attorney-general statute, the claim would have been
futile because the Act provides only injunctive relief, and
the Kellogg farmers had not alleged ongoing deception of other
consumers.
Mem. & Order at 6–10, No. 18-cv-2408-JWL-JPO (D. Kan. Aug. 13, 2019),
adhered to in part on recons., Mem. & Order at 9–11, No. 18-cv-2408-
JWL-JPO (D. Kan. Dec. 18, 2019). The Kellogg farmers have not
challenged the district court’s reasoning on the alleged violation of the
Minnesota Uniform Deceptive Trade Practices Act. The failure to present a
separate challenge constitutes a waiver. See Navajo Nation v. San Juan
Cnty., 929 F.3d 1270, 1281 (10th Cir. 2019) (finding a waiver when an
appellant failed to explain how the district court’s reasoning was wrong).
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D. The district court did not abuse its discretion in assessing
monetary sanctions against the Kellogg farmers.
The Kellogg farmers also challenge monetary sanctions imposed by
the magistrate judge and the district judge.
The magistrate judge assessed sanctions against the Kellogg farmers
for failing to obey a scheduling order and permit discovery. 10 The district
judge assessed sanctions under 28 U.S.C. § 1927 for unreasonably and
vexatiously multiplying the proceedings. Mem. & Order at 5–6, No. 18-cv-
02408-JWL-JPO (D. Kan. Apr. 15, 2020). The § 1927 sanctions were based
on costs that the former attorneys had incurred in responding to the
Kellogg farmers’ motion to vacate and recuse. We review these sanctions
for an abuse of discretion. See Farmer v. Banco Popular of N. Am.,
791
F.3d 1246, 1256 (10th Cir. 2015).
In challenging the monetary sanctions, the Kellogg farmers argue
that they had legitimate grounds to object to the district court proceedings
and to refuse to participate until we decided their interlocutory appeal. The
district court had the discretion to regard these objections as illegitimate.
If the Kellogg farmers had questioned the validity of the district
court’s order for a discovery conference, “they could have sought
reconsideration or a writ; but they could not violate the order.” Auto-
10
The Kellogg farmers objected to the magistrate judge’s monetary
sanctions, but the district judge overruled the objections. Mem. Op. &
Order, No. 18-cv-02408-JWL-JPO (D. Kan. Apr. 3, 2020).
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Owners Ins. Co. v. Summit Park Townhome Ass’n, 886 F.3d 863, 867 (10th
Cir. 2018); see also Maness v. Meyers,
419 U.S. 449, 458–59 (1975)
(stating that a party must comply with an order (in the absence of a stay)
even when the party questions the validity of an order). And the Kellogg
farmers lacked a reasonable basis to question the validity of the district
court’s initiation of discovery because we’d already dismissed a virtually
identical appeal as premature. Order at 2, In re Syngenta AG MIR 162 Corn
Litigation (Kellogg Group), No. 19-3066 (10th Cir. Dec. 31, 2019); see
also Lopez v. Behles (In re Am. Ready Mix, Inc.),
14 F.3d 1497, 1499 (10th
Cir. 1994) (stating that orders denying recusal are not immediately
appealable). 11
We’ve held that jurisdiction continues in district court when a party
prematurely appeals. See Howard v. Mail-Well Envelope Co., 150 F.3d
1227, 1229 (10th Cir. 1998) (stating that a non-appealable order does not
transfer jurisdiction from the district court to the appellate court). The
Kellogg farmers’ new attorney flouted these holdings and obstructed the
proceedings by refusing to comply with the district court’s orders.
11
The Kellogg farmers assert that the district court imposed the
sanctions as “an adversarial response . . . to [their] efforts to disqualify the
district court through the interlocutory appeal and mandamus petition[].”
Appellants’ Opening Br. at 55. For this assertion, the Kellogg farmers
provide no support.
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That attorney did attend the second planning conference and
announce his position. But he still refused to proceed with a discovery
plan, which stymied the district court’s ability to advance the case. See
Dietz v. Bouldin, 579 U.S. 40, 41 (2016) (noting a district court’s “inherent
power to . . . manage its docket and courtroom with a view toward the
efficient and expedient resolution of cases”). The magistrate judge and the
district judge thus had a reasonable basis to find obstructive conduct. 12
The Kellogg farmers also argue that sanctions may be imposed only
after the case had ended. For this argument, the Kellogg farmers rely on
Steinert v. Winn Group, Inc., 440 F.3d 1214 (10th Cir. 2006). But Steinert
holds only that § 1927 sanctions may be imposed after final judgment. Id.
at 1223. The case does not prevent sanctions while the case is proceeding,
and the district court acted properly in imposing sanctions before entering
the final judgment.
We thus conclude that the district court did not abuse its discretion
in imposing monetary sanctions.
12
The Kellogg farmers say that they couldn’t “be charged with a failure
to prosecute” during their interlocutory appeal and application for
mandamus relief. Appellants’ Reply Br. at 5. But the district court didn’t
suggest a failure to prosecute the action; the court instead imposed
sanctions based on a failure to comply with orders.
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Analysis of the Claims Against the Seven Other Law Firms
The Kellogg farmers sued not only their own former attorneys but
also seven law firms that had assisted. 13 For the dismissal of these claims,
we engage in de novo review, using the standard that applied in district
court. BV Jordanelle, LLC v. Old Republic Nat’l Title Ins. Co., 830 F.3d
1195, 1200 (10th Cir. 2016). In district court, the applicable standard was
the one governing motions to dismiss under Fed. R. Civ. P. 12(b)(6):
whether the amended complaint contained factual allegations creating a
reasonable inference of liability. See Ashcroft v. Iqbal,
556 U.S. 662, 663
(2009); BV Jordanelle, 830 F.3d at 1200–01.
The Kellogg farmers argue that they could bring claims against the
seven law firms because they had been listed in the contingency-fee
agreements. 14 For this argument, the Kellogg farmers invoke
Minnesota Rule of Professional Conduct 1.5(e), which requires
attorneys to accept joint responsibility under fee-sharing
agreements, and
the opinion of an expert witness, who concluded that all of the
attorneys listed on the contingency-fee contracts had violated
their fiduciary obligations to the Kellogg farmers.
13
The seven other law firms are Hovland and Rasmus, PLLC; Dewald
Deaver, P.C., LLO; Patton Hoverson & Berg, P.A.; Wojtalewisz Law Firm,
Ltd.; Johnson Law Group; VanDerGinst Law, P.C.; and Wagner Reese,
LLP.
14
The Kellogg farmers also argue that they could bring these claims in
a representative capacity. But the district court did not dismiss these
claims based on an inability to sue in a representative capacity.
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We reject this argument. The district court granted judgment on the
pleadings to the seven law firms after terminating all but the Minnesota
claim for breach of fiduciary duty. Under Minnesota law, however, an
attorney bears no fiduciary duty to a non-client. See McIntosh Cnty. Bank
v. Dorsey & Whitney, LLP, 745 N.W.2d 538, 545 (Minn. 2008). And the
Kellogg farmers were not clients of these seven law firms. So these law
firms had owed no fiduciary duty to the Kellogg farmers, and the district
court properly granted judgment on the pleadings to the seven law firms.
The Kellogg Farmers’ Additional Motions
The Kellogg farmers have filed a motion entitled “Motion for
Judicial Notice or, in the Alternative to Supplement the Record on
Appeal.” They have also filed a second motion for judicial notice of other
documents.
These motions concern the fee awards received by the former
attorneys as part of the global settlement in the suits against Syngenta. The
Kellogg farmers ask us to (1) take judicial notice of demands that the
former attorneys deposit the attorney fees into an escrow account until this
case is resolved or (2) supplement the record with these demands. The
Kellogg farmers also seek vacatur of the district court’s rulings and return
of the case to the District of Minnesota. These motions lack merit.
Even though the Kellogg farmers demand an escrow account for the
collection of forfeited attorney fees, this demand does not affect our
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analysis of mootness, recusal, public benefit, or sanctions. So our analysis
moots the demand for an escrow account.
Our analysis also moots the Kellogg farmers’ repetition of their
arguments for vacatur and transfer of the case to the District of Minnesota.
We’ve elsewhere rejected these arguments. See pp. 6–9, 17–20, above.
We thus deny the Kellogg farmers’ motions .
Conclusion
We lack appellate jurisdiction to review the Multi-District Litigation
Panel’s transfer of the case to the District of Kansas and reject the Kellogg
farmers’ procedural challenges involving recusal and jurisdiction in
district court. And we affirm
the dismissal of the claims involving common-law fraud and
RICO based on mootness,
the sanctions requiring monetary payment and dismissing the
claim for breach of fiduciary duty,
the dismissal of the claims under Minnesota’s private-attorney
general statute, and
the award of judgment on the pleadings to the seven law firms
lacking contractual ties to the Kellogg farmers.
Finally, we deny the Kellogg farmers’ motion for judicial notice or
supplementation of the record.
47
