1 The Honorable John R. Tunheim, United St ates District Judge for the District of Minnesota. 

## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 05-3434

___________ Slidell, Inc., *
* Appellant, * * Appeal from the United States v. * District Court for the * District of Minnesota. Millennium Inorganic Chemicals, Inc., *
* Appellee. *

___________ Submitted: April 19, 2006 Filed: August 23, 2006

___________ Before WOLLMAN, HANSEN, and BENTON, Circuit Judges.

___________ WOLLMAN, Circuit Judge. Slidell, Inc. (Slidell) appeals from th e judgment entered by the district court 1 on the jury verdict in its breach of contract claim against Millennium Inorganic Chemicals, Inc. (Millennium). Additionally, Slidell appeals from the district court’s denial of its motion for judgment as a matter of law and for new trial and for an order to determine liability for wrongful injunction. We affirm.2 Including the price for change orders thatare not in dispute, the total contract price for all seven machines and some additional equipment was about $11.2 million.
-2- I.

Slidell manufactures automated packaging equipment used in the titanium dioxide industry. Millennium, which produ ces titanium dioxide, decided to purchase from Slidell seven fully automated packaging machines to be installed in its facilities in Ohio, England, and France. After m onths of negotiation, Slidell and Millennium entered into a contract providing that Slidell would manufacture the seven machines for a total contract price of $10,350,465, 2which included up to a twelve percent discount that Millennium would receive only if the fundamental aspects of all seven machines were identical. The contract further provided that:

Waivers shall not be binding unless se t forth in writing and signed by the party allowing the waiver. No waiv er of a breach of any provision of this Contract shall constitute a wa iver of any other breach of the provision or any breach of any other provisions of this Contract.
Appellant’s App. at 371. Additionally, the contract provided that any changes to the final scope of the project were to be madein accordance with a written order to Slidell and agreed to by the parties. The contract did not set a delivery date for the equipment but instead required Millennium to make milestone progress payments to Slidell throughout the course of performance. Tes timony at trial indicated that the parties understood that the seven machines would becompleted within approximately sixteen months. Additionally, the contract required that Slidell submit biweekly status reports and updated Gantt schedules to Millennium. Th e contract specified that the agreement should be interpreted in accordance with Minnesota law.

In October 2000, friction developed between Slide ll and Millennium over the equipment’s computerized supervisory sy stem. Millennium decided to upgrade the-3- supervisory system specified in the c ontract and executed two change order development requests that authorized Slidell to start designing the system. In March 2001, Slidell informedMillennium that completing the supervisory system to Millennium’s new specifications would add another $1.6 million to the contract price. Millennium was dissatisfied with this pri ce and requested that Slidell remove the supervisory system from the scope of its work.

In May 2001, Millennium confirmed th at it was removing the supervisory system from the scope of the contract with Slidell. There is evidence that around May 11, sensitive information regarding Slidell’ s design of the machines was provided to the RoviSys Company (RoviSys) without S lidell’s consent. Throughout the rest of May, Millennium had meetings with Rovi Sys regarding its manufacture of the new supervisory system. Testimony at trial indi cated that Slidell was never informed of these meetings. Around this same period of time, Slidell met with Millennium to discuss the removal of the supervisory system from their contract.

On June 21, 2001, Millennium asked Slid ell for permission to share Slidell’s technical information with RoviSys for the purpose of providing RoviSys with background information on the packaging machines so that it could design the new supervisory system. Slidell replied that this would require a separate nondisclosure agreement with RoviSys. Slidell prepar ed the agreement, RoviSys signed it, and Millennium sent it to Slidell for its si gnature. Without so informing Millennium, Slidell did not sign the agreement. M illennium then shared Slidell’s design documents with RoviSys.

In August 2001, Slidell prepared ChangeOrder No. 5, which, in accordance with Millennium’s request, removed the supervisory system from the scope of Slidell’s work without any change in the contract price. Slidell sent the change order to Millennium for its signature, representi ng to Millennium that it would sign Change Order No. 5 once Millennium signed it. Notw ithstanding this representation, Slidell-4- never signed the order, nor did it inform Millennium that it had not done so. There is evidence that in August and Septembe r of 2001, Slidell threatened to sue Millennium if it failed to perfo rm on the contract or failed to accept a change order to remove the 12 percent discount.

On January 17, 2002, Slidell sued Millennium for breach of contract, promissory estoppel, quantum meruit, equ itable estoppel, and violations of the Minnesota Uniform Trade Secrets Ac t, M.S.A. §§ 325C.01-.08. Millennium counterclaimed for breach of contract, specific performance, replevin, unjust enrichment, an equitable lien, and a constructive trust. At the time Slidell commenced this action, Millennium had paid Slidell $8.82 million in progress payments under the contract. This was $500,000 more than th e amount to which Slidell was entitled under the milestone progress payment schedule set forth in the c ontract. Slidell’s damages expert testified that at the time Slide ll stopped work on the machines, Slidell had realized a net profit on the job of nearly $1.5 million. Millennium’s damages expert determined this net profit to be about $4.6 million.

In February 2002, Slidell informed M illennium that it intended to disassemble the partially completed machines and sell and return the parts and components for value. On March 7, 2002, Millennium move d for a preliminary injunction prohibiting Slidell from selling, returning, or transfe rring any of the equipment or components to third persons for value pending the outcome of the trial on the merits. The district court granted the motion, entered the inj unction, and required Millennium to post a $2 million injunction bond to pay any costs or damages incurred by Slidell in the event that it was found that Slide ll had been wrongfully enjoined.

In October and November of 2003, Slidell and Millennium filed cross-motions for summary judgment. On June 28, 2004, the district court granted Slidell’s motion to dismiss Millennium’s equitable claims fo r a constructive trust, an equitable lien, and unjust enrichment. The district court also granted Millennium’s motion to dismiss-5- Slidell’s claim for equitable estoppel but denied summary judgment as to all remaining claims.

On October 4, 2004, both parties file d their own statements of the case. Millennium’s statement related that Slid ell’s work under the contract proceeded slowly and that there were disputes about wire colors for the machines. Among other things, Millennium also asserted that Slid ell was deficient in providing the appropriate level of management for the project. Slidell’s statement focused on Millennium’s alleged misappropriation of trade secrets, breach of contract, quantum meruit, and promissory estoppel regarding long-term European field support.

Prior to trial, both parties submitted pr oposed jury instructions. Slidell’s proposed instruction on waiver stated that to establish waiver, “Millennium must prove the heightened standard that (a) S lidell’s actions were so clear and unequivocal that no other reasonable explanation of the conduct is possible, and (b) Millennium must relied [sic] upon the conduct to its detrim ent.” Appellant’s A pp. at 287. It also required the jury to find that Slidell inte ntionally relinquished the contract provision providing that all waivers be in writing be fore it could find waiver. Finally, the proposed instruction stated that if Slidell had clearly communicated to Millennium that it reserved its rights under the contract , it did not waive these rights. Slidell’s proposed instruction on equitable estoppel provided that the jury must find that Slidell’s representations must be enforcedto avoid injustice before it could find equitable estoppel and that the jury coul d not find equitable estoppel if Millennium had engaged “in any misleadi ng tactics, concealments, misrepresentations and/or defaults that exacerbated the situation.” Appellant’s App. at 288. Slidell’s proposed instruction on prior breach provided that if the jury found “that Slidell’s decision to stop performance of the contract and in itiate this lawsuit occurred before Millennium’s breach, then Mille nnium’s breach is excused.” Appellant’s App. at 287.-6- The trial occupied some twenty-three days during January and February 2005. Both Millennium and Slidell offered testim ony relating the events that had occurred between the parties and testimony that th e project had been delayed for numerous reasons. Millennium also offered testim ony that Slidell’s initial project manager lacked experience and that she had failed to provide the biweekly status reports and updated Gantt schedules to Millennium as re quired by the contract. At the close of the evidence, Slidell moved for judgm ent as a matter of law on Millennium’s remaining equitable claims for specific performance and replevin, as well as its affirmative defense of equitable est oppel. Millennium responded by voluntarily dismissing its specific performance and replev in claims. The district court denied Slidell’s motion to dismiss Millennium’s e quitable estoppel defense and submitted the remaining claims to the jury.

At the charge conference, Slidell reiterate d its view that to find a waiver of a specific contract provision, a jury must fi rst find a separate waiver of the provision that requires all waivers to be in writing. It also argued that an implied waiver requires a heightened standard of proof. Fu rther, Slidell contended that if Millennium breached, Slidell had the right to proceedin a commercially reasonable manner and that if it continued performing under a rese rvation of rights, its performance could not have constituted a waiver. Finally, Slidell argued that if an equitable estoppel instruction were given to the jury, the court should include an instruction on the unclean hands doctrine as a defense to equitable estoppel.

In its Instruction 13, the district court instructed the jury that:

First, Millennium allege s that Slidell waived Millennium’s breach. In order for Slidell to have waived Millennium’s breach, you must find that Slidell knew of its legal rights, in tended to relinquish its rights, and unequivocally did so. If you find that Millennium breached particular provisions of the contract, in some way, but that Slidell knew of Millennium’s breach and continued to exercise its rights under the-7- contract and continued to de mand performance after Millennium’s breach, then Millennium’s breach may be excused. Any waiver by Slidell is limited to the speci fic breach that was waived. Second, Millennium argues that Slidell committed a material breach of the contract prior to Millennium’s material breach. If you find that Slidell materially breached the cont[r]act before Millennium materially breached the contract, th en Millennium’s breach is excused. A breach is material if it defeats one of the primary purposes of the contract. Third, Millennium alleges the defe nse of “equitable estoppel.” To establish equitable estoppel, Millennium must show that: 1) Slidell misrepresented a mate rial fact or was silent when it had a duty to speak; 2) Slidell knew or should ha ve known the representation was false; 3) Slidell intended Millennium to act on the representation; 4) Millennium lacked knowledge of the true facts; and 5) Millennium reasonably relie d upon the misrepresentation to breach the cont[r]act.
Appellant’s App. at 308-09.

The jury returned a verdict on February 24, 2005, finding that Millennium had breached the contract; that Millennium’s breachwas legally justifie d; that Slidell had breached the contract; that Slidell’s breach wa s not legally justified; that Slidell was liable to Millennium for damages of $4,822,850.64; that Slidell’s confidential information was not a trade secret; that Slidell proved each element of promissory estoppel regarding European field support services; and that Millennium was liable to Slidell for damages of $650,000.

On March 14, 2005, the district court dissolved the preliminary injunction against Slidell. On April 14, 2005, Slid ell moved to determin e Millennium’s liability for the wrongful issuance of the injunction. The district court denied the motion and dismissed Millennium’s injunction bond.-8- II.

We generally review for abuse of discretion the district court’s jury instructions. Eden Elec., Ltd. v. Amana Co. , 370 F.3d 824, 827 (8th Cir. 2004). We afford the district court broad discretion in choosing the form and language of the instructions, and our review is limited to a determinati on of whether the instructions, taken as a whole and viewed in the light of the evid ence and applicable law, fairly and accurately submitted the issues to the jury. Id. ; United Fire & Cas. Co. v. Historic Pres. Trust , 265 F.3d 722, 727 (8th Cir. 2001); Wheeling Pittsburgh Steel Corp. v. Beelman River Terminals, Inc. , 254 F.3d 706, 711 (8th Cir. 2001). We will reverse a jury verdict only if the erroneous instruction affected a party’s substantial rights, and thus a new trial is necessary only when the errors misl ed the jury or had a probable effect on the jury’s verdict. Goss Int’l Corp. v. Ma n Roland Druckmaschinen Aktiengesellschaft , 434 F.3d 1081, 1093 (8th Cir. 2006).

We review the jury instructions fo r plain error, however, if the party challenging them has failed to preserve the issue for review by failing to state distinctly the matter objected to and the grounds for the objection on the record. See Fed. R. Civ. P. 51; D upre v. Fru-Con Eng’g Inc. , 112 F.3d 329, 333 (8th Cir. 1997). Our review under this standard is narrow and is confined to the exceptional case in which error has “seriously affected the fairness, integrity, or public reputation of the judicial proceedings.” Genthe v. Lincoln , 383 F.3d 713, 718 (8th Cir. 2004) (citations omitted); see also Niemiec v. Union Pac. R.R. Co. , 449 F.3d 854, 858 (8th Cir. 2006) (stating that plain error review is stringently limited, especially in the civil context). We will reverse “only if the error prejudi ces the substantial rights of a party and would result in a miscarriage of ju stice if left uncorrected.” Genthe , 383 F.3d at 718 (citations omitted).-9- A.

Slidell first argues that the district court’s jury instruction on waiver was deficient in numerous respects and that we should thus grant it a new trial. We disagree.

1.

Slidell argues that the district court erred in failing to instruct the jury that the contract’s written waiver requirement must have been waived before the jury could find that Slidell waived any specific contract provision by any means other than in writing. Minnesota courts have held thatdespite a contract’s requirement that a waiver be in writing, certain provisions of th e contract may be waiv ed even if they are not in writing. See Pollard v. Southdale Garden s of Edina Condo. Ass’n, Inc. , 698 N.W.2d 449, 453 (Minn. Ct. App. 2005); Lars on v. Hill’s Heating & Refrigeration of Bemidji, Inc. , 400 N.W.2d 777, 781 (Minn. Ct. App. 1987). Further, Minnesota courts have never stated that the require ment of a written waiver requires a waiver separate from any waiver of the specific contract provision. Indeed, they have indicated that the waiver of the requirementthat a waiver be in writing may result in an effective waiver of the specific c ontract provision and vice versa. SeeCitizens Nat’l Bank of Madelia v. Mankato Implement, Inc. , 441 N.W.2d 483, 483-87 (Minn. 1989); Albany Roller Mills, Inc. v. N. United Feeds & Seeds, Inc. , 397 N.W.2d 430, 432-33 (Minn. Ct. App. 1986) (stating that“the requirement of a writing may be waived and result in an effec tive oral modification”). An example of this can be seen in Citizens National Bank of Made lia v. Mankato Implement, Inc. See 441 N.W.2d at 483-87. There, a debtor granted a bank a security interest in his farm equipment under an agreement that provided that the de btor would not sell or otherwise dispose of this collateral without prior written consent of the bank. Id. at 484. Thereafter, the debtor traded some of his old farm e quipment for newer farm equipment. Id. Although the bank did not give the debtor wr itten consent to trade the equipment, the-10- debtor discussed each trade-in with the bank’s president before it was made and the bank president orally approved and encouraged the trades. Id. The Minnesota Supreme Court held that the facts that proved that the bank gave consent to the transactions also proved that the bank waiv ed its right to requi re written approval of the transactions. Id. at 487. Slidell has cited no pe rsuasive Minnesota law to the contrary, and thus it has failed to demons trate that the district court abused its discretion in failing to instruct the jury thattwo separate waivers were required to find a waiver of Millennium’s alleged breach.

2.

Slidell also argues that the jury instru ction erroneously indicated that the jury could find a waiver by Slide ll based solely on Slidell’ s continued performance under the contract. We disagree.

Under this argument, Slidell first conte nds that the district court should have included language that an implied waiver is a narrow defense requiring that “[t]he conduct must be so consistent with and indicative of an intention to relinquish the particular right and so clear and unequivo cal that no other reasonable explanation of the conduct is possible.” Appellant’s Br . at 36 (quoting Medicare Glaser Corp. v. Guardian Photo, Inc. , 936 F.2d 1016, 1021 (8th Cir. 1991) (applying Missouri law)) (alterations and internal quotations omitted) . Under Minnesota la w, a waiver is “an intentional relinquishment of a known right, and it must clearly be made to appear from the facts disclosed.” C itizens Nat’l Bank of Madelia , 441 N.W.2d at 487 (internal quotations omitted); see also Niazi v. St. Paul Mercury Ins. Co. , 121 N.W.2d 349, 354 n.5 (Minn. 1963) (“Waiver is the voluntary relinquishment of a known right.”). Slidell fails to c ite any Minnesota law supporting the heightened standard for waiver that it suggests. The instruc tion clearly required the jury to find an unequivocal relinquishment of Slidell’s know n rights to find waiver. The balance of the instruction does not vitiate this require ment because the instruction, taken as a-11- whole, fairly and adequately submitted the issue to the jury. Given the district court’s broad discretion in choosing the language of the instructions, we conclude that the district court did not abuse that discretion in failing to instruct the jury on the heightened standard requested by Slidell.

Slidell next contends th at a course-of-conduct waiv er requires detrimental reliance, which the instruction failed to re flect. In support of its argument, Slidell cites Hedged Investment Partners, L.P. v. Norwest Bank Minnesota, N.A. , in which the Minnesota Court of Appeals stated th at a “course-of-conduct waiver is based on the theory of estoppel and requires de trimental reliance.” 578 N.W.2d 765, 771-72 (Minn. Ct. App. 1998). We must be careful not confuse waiver and estoppel, however, because they are entir ely different. Clark v. Dye , 197 N.W. 209, 212 (Minn. 1924). The Minnesota Supreme Court has rep eatedly stated that the definition of waiver is the intentional relinquishment of a known right, and it has made no mention of any element of detrimen tal reliance. See, e.g. , Illinois Farmers Ins. Co. v. Glass Serv. Co. , 683 N.W.2d 792, 798 (Minn. 2004); Seavey v. Erickson , 69 N.W.2d 889, 895 (Minn. 1955). In Clark v. Dye , the Minnesota Supreme Court indicated that there are two types of waivers—one resulting fro m the intentional relinquishment of a known right and the other resulting from an estoppel enforcing that right. See 197 N.W. at 212. Indeed, post-Hedged Investment Partners cases have not required a finding of detrimental relian ce for waivers. See, e.g. , Pollard , 698 N.W.2d at 453-54. Thus, while a waiver based on estoppel may require detrimental reliance, not every form of implied waiver requires such reliance. Accordingly, the jury instructions were not erroneous in this respect.

Slidell also contends that the jury shoul d have been instructed that Slidell did not waive its claim for breach of contractif it continued performance on the contract but proceeded in a commercially reasonable manner in accordance with Minnesota Statute Annotated §§ 336.2-703 and 704 or reserved its right to sue. Minnesota Statute Annotated § 336.1-308 provides that a party can reserve its rights under a-12- contract if it does so explicitly. Because we agree with the district court that “there is insufficient evidence to support a finding th at Slidell ‘explicitly’ reserved its rights despite continuing to perform under the c ontract,” D. Ct. Memorandum Opinion and Order of July 26, 2005, at 11, we conclude that the district court did not abuse its discretion in failing to include within the instruction Slidell’s suggested language on reservation of rights.

Additionally, Slidell failed to provide a proposed instruction on the issue of proceeding in a commercially reasonable manner after a breach. Accordingly, we review for plain error. SeeMelford Olsen Honey, Inc. v. Adee , 452 F.3d 956, 966 (8th Cir. 2006) (holding that claimed error in district court’s decision to not include an instruction on anticipatory repudiation was waived because appellant failed to request a jury instruction on the issue). We conclude that even if the district court erred in omitting such an instruction, no miscarriage of justice resulted.

3.

Next, Slidell argues that the district court erred in failing to instruct the jury that Slidell’s claim for a breach of the implied covenant of good faith and fair dealing and its claim that Millennium anticipatorily repudi ated the contract could not be waived. Because Slidell failed to propose a jury instruc tion to this effect, we review for plain

error.

Slidell has failed to cite any Minnesota law that supports its argument that a party cannot waive a breach of good faith and fair dealing. The law that it does cite instead stands for the proposition that a party that acts in bad faith cannot raise equitable remedies. It does not, however , support Slidell's argument that a party cannot waive a breach of good faith and fair dealing. Without deciding whether a party can waive the implied c ovenant of good faith and fair dealing, we conclude that the district court did not plainly err in failing to include any such instruction.-13- In support of its argument that a party cannot waive its claim for anticipatory repudiation, Slidell cites Minnesota Statute Annotat ed § 336.2-610 and National Liberty Corp. v. Wal-Mart Stores, Inc. , 120 F.3d 913, 916 (8th Cir. 1997) (applying Missouri law). These authorities do not support Slidell’s argum ent, and we have found no Minnesota authority that does support it. See Space Ctr., Inc. v. 451 Corp. , 298 N.W.2d 443, 451 (Minn. 1980) (noting that a party may have waived its claim for anticipatory breach). Accordingly, we concl ude that the district court did not plainly err in failing to include Slide ll’s now-contended for instruction.

4.

Finally, Slidell argues that no evidence s upports the jury’s finding that Slidell waived Millennium’s breach. We construethis argument as one based on Federal Rule of Civil Procedure 59. Under this rule, the district court’s denial of a new trial is virtually unassailable, and we will reverse only when ther e is an absolute absence of evidence to support the jury’s ve rdict. Pulla v. Amoco Oil Co. , 72 F.3d 648, 656- 57 (8th Cir. 1995). Our review of the reco rd satisfies us that there was sufficient evidence that Slidell knew of its rights and voluntarily relinquished them. There was testimony indicating that Slidell was aware of Millenium’s actions that allegedly constituted a breach, that Slidell continue d to manufacture the equipment, and that Millennium continued to makemilestone progress payment, which Slidell continued to accept. Accordingly, Slidell’s argument fails.

B.

Next, Slidell argues that Millennium’s equitable estoppel defense should not have been submitted to the jury because it constitutes a question of law, that the instruction misstated the law, and that no evidence supported a finding of estoppel. We disagree. First, equitable estoppel depe nds on the facts of a case and is ordinarily a fact question for the jury to decide. N. Petrochemical Co. v. United States Fire Ins.-14- Co. , 277 N.W.2d 408, 410 (Minn. 1979). Second, Slidell failed to preserve for review its arguments that the court’s instruction misstated the law. Slidell did not propose an instruction stating that Millennium’s equ itable estoppel offense was limited to the specific breach to which Slide ll’s misrepresentations or omissions related, nor did it raise the objection that the instruction lacked the element of unconscionability. Accordingly, we review for plain error, and we conclude that neither of these omissions would result in a miscarriage of justice if left uncorrected. Finally, we conclude that Slidell’s argument that th ere was no evidence to support a finding of estoppel is without merit. The record c ontains evidence that Slidell represented to Millennium that it had signed Ch ange Order No. 5, that S lidell intentionally failed to sign the order, that Slidell failed to inform Millennium that it had not signed the order, that Slidell intended Millennium to act on the misrepresentation or omission, that Millennium was unaware that Slidell had not signed the order, and that Millennium relied to its detriment on Slidell’s misrepre sentation or omission when it assigned the manufacture of the supervisory system to RoviSys.

C.

Slidell next argues that the district court’s instruction that either party’s breach of contract could be excused by the other party’s prior breachimproperly permitted Millennium to assert a new prior breach theory during its closing argument. Because Slidell failed to object to the instruction, we again review for plain error. The district court’s instruction, viewed in the light of the evidence and applicable law, fairly and accurately submitted the issue to the jury. Further, although it is true that surprise resulting from a major variance in the th eory of a defense may be a ground for granting a new trial, see Sanford v. Crittenden Mem’l Hosp. , 141 F.3d 882, 886 (8th Cir. 1998), no such surprise occurred here . Millennium placed Slidell on notice that it would assert a prior breach defense whenit referred to Slid ell’s poor management of the contract in its statement of the case and when it deposed and examined witnesses on the issues of Slidell’s failu res in updating schedules and making regular-15- reports to Millennium as the contract require d. In any event, any error that may have occurred did not amount to a substantial prejudice to Slidell’s rights and will not amount to a miscarriage of ju stice if left uncorrected.

D.

Slidell also argues that the district court erred in failing to instruct the jury that if it found that Millennium had acted ine quitably, Millennium would be barred from relying on its equitable defens es of waiver, estoppel, and prior breach. While it is true that the unclean hands doctrine bars a party that acted inequitably from obtaining equitable relief, Heidbreder v. Carton , 645 N.W.2d 355, 371 (Minn. 2002), such inequitable conduct must bear some relati on to the merits of the case. Prow v. Medtronic, Inc. , 770 F.2d 117, 121-22 (8th Cir. 1985) (applying Minnesota law).

Slidell points out that the jury found that Millennium acted unconscionably when it concluded that Slidell had prove d each element of promissory estoppel regarding European field support servi ces. This finding of unconscionability, however, was unrelated to Millennium's asse rtion of equitable estoppel, which was directed at Slidell's clai m that Millennium had breached the contract by deleting the supervisory system from the scope of Slid ell's work and by transferring Slidell's technical drawings and data to RoviSys without Slidell's consent. That the court's instruction on estoppel was not so limited di d not constitute an abuse of discretion because, taken as a whole, the estoppel instruction fairly and accurately submitted the issue to the jury.

Slidell also argues that Millennium wa s guilty of unclean hands for numerous other reasons. We conclude, however, that the district court did not abuse its discretion in determining that there was not “such strong evidence of oppressive or deceptive conduct here that it’s required that this be pointed out.” Tr. at 3987.-16- Slidell failed to preserve for review its argument that an instruction regarding Millennium's unclean hands should have b een included with respect to Millennium's defenses of waiver and prior breach. We c onclude that the distri ct court's refusal to include the instruction would not amount to a miscarriage of justice if left uncorrected.

III.

Finally, Slidell argues that the districtcourt wrongfully enjoined it from selling and returning the parts and components of th e partially completed machines for value because each of Millennium’s equitable clai ms was dismissed. Because this is a question of law, we review de novo whether Slidell was wrongfully enjoined. See Nintendo of Am., Inc. v. Lewis Galoob Toys, Inc. , 16 F.3d 1032, 1036 (9th Cir. 1994) (“We review de novo a district court’s deci sion to execute [an injunction] bond.”); cf. Bowman v. White , 444 F.3d 967, 974 (8th Cir. 2006) (“ We review de novo the district court’s conclusions of law.”).

Federal Rule of Civil Procedure 65(c) pr ovides that a party that has incurred or suffered costs and damages because it wa s wrongfully enjoined may recover on an injunction bond. We have not previously had the opportunity to define the term “wrongfully enjoined,” but both the Second and Ninth Circuits have determined that a party has been wrongfully enjoined if it is ultimately found that the enjoined party had at all times the right to do what it wa s enjoined from doing. Nintendo of Am., Inc. , 16 F.3d at 1036 (wrongfully enjoined if the party “had the right all along to do what it was enjoined from doing”); see also Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 910 F.2d 1049, 1054 (2d Cir. 1990) (wrongfully enjoined “if it is ultimately found that the enjoined party had at all times the right to do the enjoined act”).

Slidell contends that because Millenni um’s claims for equitable relief were dismissed before the case was submitted to the jury, Millennium failed to establish-17- that it was entitled to equitable relief, and thus Slidell was wrongfully enjoined. While the failure to carry the burden of proof on a permanent injunction may show that a preliminary injunction should not have been issued, this failure is only conclusive if there is an absence of a decision on the merits of the case. See Middlewest Motor Freight Bureau v. United States , 433 F.2d 212, 243 (8th Cir. 1970). If a party prevails on the merits of the case, a preliminary injunction issued on its behalf could not have been wrongful unless the basis for arguing that the preliminary injunction was wrongfully issued is independent of the claim on the merits. See Grupo Mexicano de Desarrollo, S .A. v. Alliance Bond Fund, Inc. , 527 U.S. 308, 313- 18 (1999). This is not one of those rare cases, because Slidell’s basis for arguing that the preliminary injunction was wrongfully issu ed is the claim that it retained the right to sell and return the parts and components for value, a right th at was dependent on the merits of the case. Millennium argued th at if Slidell did nothave the legal right to stop work on the machines, it did not have the legal right to dismantle the machines and sell and return the part s and components for value. This wrongful conduct on Slidell’s part is the only reason that Slide ll, absent the preliminary injunction, would have had the opportunity to sell and return the parts and components of the unfinished machines. The district court did not e rr in granting the preliminary injunction to prevent Slidell from doing this.

Conclusion

The judgment is affirmed.

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