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Gander Mountain Company v. Cabela's, Inc.: CIVIL PROCEDURE | CONTRACT - no law-of-case violation; no error finding unenforcable agreement to agree

1The 1996 transaction was actually entered into by a predecessor of Gander
Mountain, but for the sake of simplicity, we will follow the district courts model and
refer to Gander Mountain and its predecessor collectively as Gander Mountain.
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 07-2890
___________
Gander Mountain Company, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* District of Minnesota.
Cabelas, Inc., *
*
Appellant. *
___________
Submitted: May 12, 2008
Filed: August 27, 2008
___________
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 Cabelas, Inc. Gander Mountain filed suit against Cabelas
seeking a declaration that a particular provision of the agreement, the Contingent
Trademark License provision (CTL), was unenforceable. Cabelas counterclaimed,
seeking a declaration that the provision was enforceable and requesting an injunction
prohibiting Gander Mountain from using its trademarks or confusingly similar marks
2The Honorable Patrick J. Schiltz, United States District Judge for the District
of Minnesota.
3Gander Mountains complaint was dismissed in August 2005, leaving Cabelas
counterclaim as the only issue remaining in the case.
-2-
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 Mountains motion for summary judgment on the counterclaim.3 Cabelas
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 Cabelas 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 Cabelas for ,000,000. Pursuant to the
transaction, Cabelas purchased all of the assets of Gander Mountains catalog
division, and Gander Mountain agreed not to compete with Cabelas in the direct
marketing business for seven years. Cabelas also purchased a four-year license to use
Gander Mountains 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 Cabelas
in writing and Cabelas shall have the right to purchase from Gander
4The Honorable Raymond L. Erickson, United States Magistrate Judge for the
District of Minnesota.
-3-
Mountain for the sum of ,000 a perpetual, exclusive license free and
clear of all Liens to use the Trademarks in connection with [Cabelas]
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
Cabelas written notice that it intended to reenter the direct marketing business.
Cabelas tendered ,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 Cabelas
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. Cabelas 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 Cabelas during
discovery requested an explanation of the customary form and content of licenses
contemplated by the CTL provision. Cabelas 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 Mountains motion to compel further response, the magistrate judge4
concluded that Cabelas response was sufficient. Upon later review, the district court
-4-
held that the magistrate judges 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. Cabelas 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. Cabelas, Inc.,
No. 04-CV-3125, 2007 WL 2026751 (D. Minn. July 10, 2007) (order granting Gander
Mountains motion for summary judgment).
II. Discussion
Cabelas seeks a reversal of the district courts 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 Cabelas.
-5-
A. Law-of-the-Case Doctrine
We begin by addressing Cabelas argument that the district court violated the
law-of-the-case doctrine by granting Gander Mountains motion for summary
judgment without allowing Cabelas 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 (1983)).
The doctrine applies to decisions made by appellate courts and final decisions made
by district courts that have not been appealed. First Union Natl 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 courts comments during oral argument do not
constitute a final order subject to the law-of-the-case doctrine. See First Union Natl
Bank, 477 F.3d at 620 (the law-of-the-case doctrine applies only to final orders); In
-6-
re Adelphia Commcns 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 Mountains 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 (1991) (noting that a discovery ruling is clearly an interlocutory decision);
United States v. Raddatz, 447 U.S. 667, 673 (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. Natl Wildlife Fedn, 497 U.S. 871, 897 (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 litigants failure to buttress its position
because of confidence in the strength of that position is always indulged in at the
litigants own risk.).
The fact that Cabelas 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 judgment that Cabelas interpretation was correct as a matter of
law, and Cabelas was not entitled to rely upon the prior discovery rulings as a way
to ignore Gander Mountains substantive argument on the merits of the case.
B. Summary Judgment
Summary judgment is appropriate when there are no genuine issues of material
fact, and the moving party is entitled to a judgment as a matter of law. Bearden v.
Intl Paper Co., 529 F.3d 828, 831 (8th Cir. 2008) (citing Fed. R. Civ. P. 56(c)). We
review de novo the district courts grant of summary judgment, viewing the evidence
-7-
in the light most favorable to the nonmoving party. Id. at 831. In ruling on a motion
for summary judgment a court must not weigh evidence or make credibility
determinations. Kenney v. Swift Transp., Inc., 347 F.3d 1041, 1044 (8th Cir. 2003)
(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). [A] properly
supported motion for summary judgment is not defeated by self-serving affidavits.
Conolly v. Clark, 457 F.3d 872, 876 (8th Cir. 2006) (citing Davidson & Assocs. v.
Jung, 422 F.3d 630, 638 (8th Cir. 2005) for the proposition that to avoid summary
judgment, the nonmoving party must submit more than unsupported self-serving
allegations; the nonmoving party must provide sufficient probative evidence to allow
the nonmoving party to prevail).
Contract interpretation as well as the interpretation of an unambiguous contract
is a question of law. Richie Co., LLP v. Lyndon Ins. Group, Inc., 316 F.3d 758, 760
(8th Cir. 2003). In this diversity case, the parties agree that Wisconsin law applies.
Under Wisconsin law, an agreement to agree does not create a binding obligation.
Skycom Corp. v. Telstar Corp., 813 F.2d 810, 814 (7th Cir. 1987) (citing Witt v.
Realist, Inc., 118 N.W.2d 85, 93-94 (Wis. 1962)). To be enforceable a contract must
be definite and certain as to its basic terms and requirements. It must spell out the
essential commitments and the obligations of each party with reasonable certainty.
Witt, 118 N.W.2d at 93.
Cabelas argues that the district court improperly relied on Cabelas failure to
produce evidence regarding customary terms of perpetual trademark licenses generally
and ignored Cabelas expert testimony that the Highby Agreement was consistent with
the form and content contemplated by the CTL. Cabelas also asserts that, even if the
district court ignored Cabelas evidence, Gander Mountains expert testimony was that
there are many terms customary to trademark license agreements. Thus, Cabelas
argues, the issue of fact that exists and which should be resolved at trial is whether the
four-year trademark license agreement entered into in 1996 and/or the Highby
Agreement contained any of the terms that Gander Mountains expert described as
-8-
customary and whether those terms were in the form and content customary of
trademark license agreements.
For the same reasons discussed above, we conclude that the district courts
discovery rulings did not excuse Cabelas from refuting Gander Mountains argument
on the merits. Cabelas failure to produce evidence regarding the customary content
of perpetual trademark licenses generally resulted in its failure to meet its burden of
identifying a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S.
317, 324 (1986) (citing Rule 56(e) of the Federal Rules of Civil Procedure and noting
that a party opposing summary judgment must go beyond the pleadings and submit
affidavits, depositions, answers to interrogatories, or admissions on file and designate
specific facts identifying the genuine issue of material fact that should go to trial).
Cabelas experts conclusion that the Highby Agreement is in the form and content
customary to licenses of the type described in [the CTL] was not based upon an
analysis of the form and content customary to perpetual, exclusive trademark licenses
generally. Accordingly, the experts report did not constitute evidence that the CTL
stipulated sufficient material terms to form an enforceable contract, nor did it provide
a method of determining the material terms without further negotiation between the
parties.
Furthermore, although Gander Mountains expert stated that there are
provisions that are customarily included in trademark license agreements, the expert
noted that the specific terms or content of those provisions must be negotiated and that
the content of the Highby Agreement was not customary for perpetual trademark
licences. Specifically, Gander Mountains expert noted that he had never seen a
trademark license agreement in which the licensee covenants and agrees not to use
the license . . . . for any purpose except to protect against and prevent the use of the
Trademarks . . . Rather, a trademark license agreement is customarily entered into
to allow the licensee to use the trademarks, with the licensee paying royalties to the
licensor for use of the trademarks. This concept is supported by the CTL itself, which
-9-
provides Cabelas with the right to purchase . . . a perpetual, exclusive license . . . to
use the Trademarks in connection with its Direct Marketing Business. This
provision, allowing Cabelas to use the trademarks, is different from the Highby
Agreement, which would prevent Gander Mountain from using its trademarks to
compete with Cabelas in the direct marketing business. Thus, the only evidence in
the record concerning the content customary for perpetual trademark licenses
generally indicates that neither the license agreed upon in 1996 nor the Highby
Agreement was in the form and content customary for perpetual trademark licenses
generally. As a result, there is no evidence in the record regarding how the missing
terms of the license agreement would be determined without the parties being required
to conduct further negotiations.
Thus, there are no genuine issues of material fact and the district court was left
to apply Wisconsin law to the facts of this case. Cabelas does not argue that the
district courts conclusion that the text of the CTL created an agreement to agree was
an erroneous application of Wisconsin law. Rather, Cabelas rests its arguments on
factors other than the text of the CTL and contends that the district court failed to
uphold the parties intent, which was to be bound by the CTL. The parties intent in
1996 to create a trademark license agreement several years in the future upon the
happening of certain events does not overcome the fact that they did not agree to
sufficient specific terms nor on how to determine sufficient specific terms to render
the CTL an enforceable provision. See Kernz v. J.L. French Corp., 667 N.W.2d 751,
758 (Wis. Ct. App. 2003) (It must be borne in mind that the office of judicial
construction is not to make contracts or to reform them, but to determine what the
parties contracted to do; not necessarily what they intended to agree to, but what, in
a legal sense, they did agree to, as evidenced by the language they saw fit to use.
(quoting Marion v. Orsons Camera Ctrs., Inc., 138 N.W.2d 733, 736-37 (Wis.
1966))). At the very least, one of the material terms left open for negotiation by the
CTL is the amount of royalties Cabelas would pay to Gander Mountain for the use
of the trademarks.
-10-
Cabelas characterization of the CTL as a promise by Gander Mountain never
to use its own trademarks again in the direct marketing business is belied by the
CTLs failure to express such an unconditional promise by Gander Mountain. Rather,
we agree with the district courts conclusion that the text created an agreement that the
parties would negotiate a license agreement in the form and content customary to
perpetual trademark license agreements generally. The parties may have used the
1996 agreement for guidance, but had they intended that the perpetual trademark
license mirror the 1996 agreement exactly, the CTL would have stated as much. Thus,
we conclude that the district court did not err when it concluded that the parties had
entered into nothing more than an agreement to agree, one that is unenforceable under
Wisconsin law.
The judgment is affirmed.
______________________________
 

 
 
 

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