Hot issues from Minnesota and 8th Circuit

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This past year, and the year ahead, place a spotlight on the state of Minnesota and 8th Circuit for their key roles in reshaping of the federal judiciary, and on legal issues garnering national attention. This includes the impact of Sen. Al Franken’s resignation and the unprecedented judicial turnover on the 8th Circuit; two Minnesota cases that have made their way from the 8th Circuit to the United States Supreme Court; and important data breach cases before the 8th Circuit.

Federal court composition

The election of President Donald Trump, coupled with a Republican-controlled Senate, ushered in an unprecedented number of federal judicial appointments. In addition to Justice Neil Gorsuch’s appointment to the Supreme Court, the twelve circuit court nominees confirmed by the Senate since Trump’s inauguration, marked the highest number of circuit court appointments in the first year of any presidency since the circuit courts were created in 1891. (Chuck Grassley and Mitch McConnell, A Historic Year for the Federal Judiciary, National Review, Jan. 6, 2018.)

The 8th Circuit felt these effects first-hand. Not only is Justice Gorsuch now the justice assigned to the 8th Circuit, (This was made effective June 27, 2017. See here) but Judge Lavenski R. Smith was elevated to Chief Judge following Judge William Riley’s retirement. Additionally, two new judges were appointed to the 8th Circuit in the past four months (Judge Ralph R. Erickson of Fargo, North Dakota in October 2017 and Judge L. Steven Grasz from Omaha, Nebraska in January 2018); and a third nomination—that of Justice David Stras—is pending in the Senate. (8th Circuit, Active and Senior Judges, available here; Stephen Montemayor, Stras clears Senate committee vote on federal appeals court nomination, Star Tribune (Jan.18, 2018), available here) This amount of turnover is unprecedented—by comparison, the last judges appointed to the 8th Circuit were Judge Jane Kelly in 2013 and Judge Bobby E. Shepherd in 2006. (See Active and Senior Judges, supra n.3.)

The two senators from Minnesota had a featured role in this regard, with both Sen. Amy Klobuchar and Sen. Al Franken serving on the Senate Judiciary Committee. Of the two, Franken grabbed the spotlight. The New York Times, for example, highlighted that during Gorsuch’s confirmation hearings, Franken “was perhaps the most aggressive questioner so far.” (Matt Flegenheimer et al., Seven Highlights From the Gorsuch Confirmation Hearings, New York Times (Mar. 21, 2017), available here)

And it was Franken who refused to return his “blue slip” for Stras, which is traditionally required from both home-state senators before confirmation proceedings take place—a tradition bucked by Republicans who proceeded with Stras’ nomination. (Jessica Scheider, Democrats object to Grassley’s move on judicial nominee blue slips, CNN (Nov. 29, 2017), available here)

That spotlight on Minnesota has faded with Franken’s resignation. His replacement, Sen. Tina Smith, is not serving on the Judiciary Committee., (Dave Orrick, Sen. Tina Smith gets her wish: She’s appointed to the Agriculture Committee, Pioneer Press) and Sen. Amy Klobuchar, by contrast, joined Republicans in a 13-8 Judiciary Committee vote in Stras’s favor. (Montemayor, supra n.3.)

U.S. Supreme Court cases

Of the approximately 70 cases the United States Supreme Court will be hearing in its current term — running from October 2017 to June 2018 — two arise from Minnesota on appeal from the 8th Circuit. While one is the quintessential kind of constitutional case one expects before the Supreme Court, the other reflects that not all of the cases the Supreme Court hears are of sweeping scope on high profile issues.

The first, Minnesota Voters Alliance v. Mansky, No. 16-1435, poses the question of whether Minnesota Statute Section 211B.11, which broadly bans all political apparel at the polling place, is facially overbroad under the First Amendment. (U.S. Supreme Court, No. 16-1435, available here).

The case arose when Minnesota election officials circulated an Election Day Policy that included Tea Party slogans among those prohibited under the statute, with individuals then claiming this chilled their speech. (Minnesota Voters Alliance v. Mansky, No. 15-1682, Slip Op. at 3 (8th Cir. Feb. 28, 2017), available here)

The 8th Circuit rejected the challenge, and the Petition highlighted “deep tension” on the issue between the 8th, 5th, and D.C. Circuits on the one hand, and the 4th and 7th Circuits on the other. (Petition for a Writ of Certiorari, available here)

The second case, Sveen v. Melin, No. 16-1432, poses a more esoteric question: Does the application of a revocation-upon-divorce statute to a contract signed before the statute’s enactment violate the Contracts Clause? The 8th Circuit held that doing so was unconstitutional, in a case where the ex-wife and primary beneficiary of her ex-husband’s life insurance policy challenged the revocation-upon-divorce statute’s retroactive application to revoke her beneficiary designation after her ex-husband’s death. (Melin v. Sveen, No. 16-1172 ((8th Cir. Apr. 3, 2017)), available here)

In the petition to the Supreme Court, the issue was framed as being of broader importance, naming 28 states as enacting similar statutes, and contending that the 8th Circuit’s decision conflicts with the 10th Circuit and two state supreme courts. (Petition for a Writ of Certiorari at i, 9, available here)

Data breach issues before 8th Circuit

The 8th Circuit has also found itself on the front lines of other important legal issues. Data breach litigation is a prime example. Two Minnesota-headquartered businesses—Target and SuperValu—were recently hit with data breaches, and the litigation that ensued was before the 8th Circuit.

Target’s case serves as an important reminder to counsel and courts alike that class action settlements can’t be rubber-stamped, but require the District Court’s “rigorous analysis.” Last year, the 8th Circuit remanded the class settlement order to the District Court “because the district court failed to articulate its analysis of the numerous disputed issues of law and fact regarding the propriety of class certification.”( In re Target Corp. Customer Data Sec. Breach Litig., 847 F.3d 608, 615 (8th Cir. Feb. 1, 2017).

The case is currently pending again before the 8th Circuit following a new order from the District Court and further briefing by the parties.

SuperValu’s data breach case resulted in the 8th Circuit weighing in on important standing issues. Weighing in following the Supreme Court’s recent class action standing decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the 8th Circuit held that the class action allegations that SuperValu’s data breach created the risk of identity theft in the future, was insufficient to create standing. Instead, the 8th Circuit only permitted the suit to proceed as to one plaintiff who pled that he had already suffered a fraudulent charge.(In re SuperValu, Inc., Customer Sec. Data Breach Litig., 870 F.3d 763 (8th Cir. Aug. 20, 2017)).

The 8th Circuit, on the other hand, did find standing to exist in another data breach case against Scottrade, although the claims were still dismissed on the merits. There, the 8th Circuit explained that when part of the parties’ bargain was for protection of the customer’s personal information, when there is a data breach, there is actual injury for the diminished value of that bargain. (Kuhns v. Scottrade, Inc., 868 F.3d 711 (8th Cir. Aug. 21, 2017)).

As data breach litigation increases, the 8th Circuit has shown its willingness to jump into the fray and scrutinize closely plaintiffs’ initial efforts to bring suit, and the parties’ efforts to settle the action.

Timothy J. Droske is Of Counsel and Appellate Practice Group Co-Chair, Dorsey & Whitney, LLP. Vanessa J. Szalapski is an associate attorney, Health Litigation Group, Dorsey & Whitney, LLP.