United States Court of Appeals

For the Eighth Circuit

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No. 17-1344

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United States of America

lllllllllllllllllllllPlaintiff - Appellee

v.

Nebraska Beef, Ltd.

lllllllllllllllllllllDefendant - Appellant

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Appeal from United States District Court 

for the District of Nebraska - Omaha

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Submitted: May 15, 2018

Filed: August 27, 2018

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Before SMITH, Chief Judge, BEAM and COLLOTON, Circuit Judges.

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SMITH, Chief Judge.

Nebraska Beef, Ltd. (“Nebraska Beef”) appeals the district court’s grant of 1

summary judgment to the government in this action to enforce a settlement

agreement. We affirm.

The Honorable Joseph F. Bataillon, United States District Judge for the

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District of Nebraska.
I. Background

In 2012, the United States Office of Special Counsel for Immigration-Related

Unfair Employment Practices (OSC), a section in the Department of Justice (DOJ),

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began an investigation into Nebraska Beef, a meat-packing company. The

investigation sought to determine whether the company discriminated against

immigrant workers in violation of 8 U.S.C. § 1324b. Specifically, the OSC alleged

that Nebraska Beef unlawfully required work-authorized immigrants to provide

certain documents not required of non-immigrants. See 8 U.S.C. § 1324b(a)(6). 

In 2015, rather than proceed into litigation, the government and Nebraska Beef

entered into a settlement agreement. The agreement required Nebraska Beef to pay

a $200,000 civil penalty and to provide back pay to those who were not hired as a

result of the practice or whose hiring was delayed by it. Nebraska Beef also agreed

not to engage in any such practicesin the future. The third and fourth opening recitals

of the agreement set forth the parties’ positions on liability:

WHEREAS, the Office of SpecialCounsel concluded based upon

its investigation that there is reasonable cause to believe that

Respondent used documentary practices based on citizenship status in

violation of [8 U.S.C. § 1324b(a)(6)].

WHEREAS, Nebraska Beef denies that it has used any

documentary policies or practices based on citizenship status in its

employment eligibility verification process in violation of 8 U.S.C.

§ 1324b(a)(6).

Appellant’s Add. at 10.

The OSC underwent a name change, becoming the Immigration and

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Employment Rights Section, after litigation in this case began. For ease of reference,

we refer to it as the OSC in this opinion. 

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Paragraph 3(b) stated, “The Office of Special Counsel maintains its right, as

a federal agency statutorily charged with serving and educating the public regarding

the scope of its enforcement activities, to notify the public, including but not limited

to individuals [Nebraska Beef] identifies and notifies pursuant to paragraph 3, about

this Agreement.” Appellant’s Add. at 11.

Nebraska Beef signed the agreement on August 20, 2015, and the government

executed it four days later. That same day, the OSC issued a press release announcing

the agreement on the DOJ website. The webpage also linked to a copy of the

settlement agreement. The first two paragraphs of the release stated:

The Justice Department announced today that it reached a settlement

with Nebraska Beef Ltd., a meat packing company headquartered in

Omaha,Nebraska.The settlement resolves an investigation by the Office

of Special Counsel for Immigration-Related Unfair Employment

Practices(OSC) into whether the company was engaging in employment

discrimination in violation of the Immigration and Nationality Act

(lNA). In particular, OSC investigated whether the company was

requiring non-U.S. citizen employees, because oftheir citizenship status,

to present proof of their immigration status for the employment

eligibility verification process.

The department’s investigation found that the company required

non-U.S. citizens, but not similarly-situated U.S. citizens, to present

specific documentary proof of their immigration status to verify their

employment eligibility. The INA’s anti-discrimination provision

prohibits employers from making documentary demands based on

citizenship or national origin when verifying an employee’s

authorization to work.

Appellant’s Add. at 20. Three days later, Nebraska Beef’s counsel sent a letter to the

OSC accusing it of breaching the agreement. The letter stated that the DOJ lacked the

authority to make a finding that Nebraska Beef “required non-U.S. citizens . . . to

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present specific documentary proof of their immigration status” as described in the

press release. Appellant’s Add. at 22. Nebraska Beef stated that it never agreed to

such a finding and that the agreement did not provide for such a finding. Nebraska

Beef declared that, as a consequence of the government’s breach, it would not make

any of the payments required by the agreement.

After Nebraska Beef made good on that threat, the government filed this

breach-of-contract suit to compel compliance with the settlement agreement.

Nebraska Beef counterclaimed for breach of contract and sought declaratory relief.

Specifically, NebraskaBeef sought an order releasing itfromits obligations under the

agreement because the government’s statement that its “investigation found”

wrongdoing was a material breach excusing its nonperformance.

Nebraska Beef filed a motion for partial summary judgment, and the

government filed a cross-motion for summary judgment. The central question facing

the district court was whether the government’s press release stating that its

investigation found that Nebraska Beef had engaged in illegal employment practices

constituted a material breach of the agreement. The district court determined that it

did not and ruled in favor of the government.

The district court began its analysis by discussing the effect of the recitals and

concluded that “under Nebraska law, recitals are generally understood to be useful

insofar as they are able to clarify ambiguous or imprecise portions of an agreement.”

United States v. Nebraska Beef, Ltd., No. 8:15-cv-00370-JFB-TDT, 2016 WL

10636373, at *2 (D. Neb. Dec. 9, 2016) (citing Props. Inv. Grp. of Mid-Am. v.

Applied Commc’ns, Inc., 495 N.W.2d 483, 489 (Neb. 1993); McKinnon v. Baker, 370

N.W.2d 492, 494 (Neb. 1985); In re Strickland’s Estate, 149 N.W.2d 344, 351 (Neb.

1967)). It also looked to other states’ approachesto similar situations. Ultimately, the

court held that the “WHEREAS” clauses in the recitals “related to Nebraska Beef’s

denial of liability.” Id. at *3. The court concluded that the recitals “are binding

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portions of the Settlement Agreement” because they were referenced in the operative

portion of the agreement. Id.(citing McGinnis v. Vischering, L.L.C., 808 N.W.2d 756

(Iowa Ct. App. 2011) (table decision) (holding recitals become part of the binding

terms of the agreement when operative portion of agreement references term defined

in recitals); Stowers v. Cmty. Med. Ctr., Inc., 172 P.3d 1252, 1256 (Mont. 2007)

(holding that a contract’s recitals become an operative aspect of the agreement “when

they include language indicating the contract is being formed in consideration of

those recitals” (citation omitted))).

Despite holding that the recitals were a binding part of the agreement, the court

held that no breach, material or otherwise, occurred:

The Court does not believe that the language in the Settlement

Agreement varies sufficiently so as to constitute a breach as a matter of

law. The press release itself mentions the word “investigation” four

times. The press release provided a link to the Settlement Agreement,

where it stated that Nebraska Beef denied the allegations.

The United States absolutely had the right to “notify the public”

about the Settlement Agreement under Section 3(b) and that right

allowed the United Statesto informthe public. For the sake of argument,

the Court agrees that the United States used language different than the

language used in the Settlement Agreement when notifying the public.

However, the real question is whether the language used by the United

States was a material breach of the Settlement Agreement.

Id. It later noted that “[t]here is absolutely nothing in the Settlement Agreement that

limits or constrains the statements of the United States.” Id. at *4. 

Regarding materiality, the court stated that a material breach either “defeats the

essential purpose of the contract or makesit impossible for the other party to perform

under the contract.” Id. (quoting Siouxland Ethanol, LLC v. Sebade Bros., LLC, 859

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N.W.2d 586, 592 (Neb. 2015)). The court determined the purpose of the agreement

was to “resolve the dispute in a compromise that avoided litigation” and determined

that the “press release did not frustrate this purpose.” Id.

The use of the word “found” rather than the phrase “had

reasonable cause to believe” did not frustrate the agreement between the

partiesto resolve this dispute without litigation. The “essential purpose”

of the agreement, the negotiation that Nebraska Beef would pay a fine

in exchange for the United States’ not pursuing legal action against

them, remains intact.

Id. The court granted the government’s motion for summary judgment and ordered

Nebraska Beef to abide by the settlement.3

II. Discussion

“We review a grant of summary judgment de novo.” Swift & Co. v. Elias

Farms, Inc., 539 F.3d 849, 851 (8th Cir. 2008) (citation omitted). Because Nebraska

Beef has failed to identify a promise breached by the OSC, we affirm.

As an initial matter, we note that the government, citing Audio Odyssey, Ltd.

v. United States, 255 F.3d 512, 520 (8th Cir. 2001), alleges in a footnote that federal

common law applies to this case. Nebraska Beef did not address this contention.

Nonetheless, we find no error in the district court’s application of the law of

Nebraska, the forum state. 

In United States v. Bame, the government sued for unjust enrichment to recover

a mistakenly disbursed tax refund and sought the application of federal common law.

Though there was a post-judgment dispute regarding a stay of enforcement of 3

the agreement pending the disposition of Nebraska Beef’s appeal, that issue is not

before this court.

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721 F.3d 1025, 1026, 1030 n.4 (8th Cir. 2013). We determined that the application

of federal common law was appropriate “only when ‘there is a significant conflict

between some federal policy or interest and the use of state law.’” Id. at 1030 n.4

(quoting O’Melveny & Myers v. FDIC, 512 U.S. 79, 87 (1994)). We concluded that

“[f]or federal common law to apply, the government would need to identify ‘a

specific, concrete federal policy or interest that is compromised by [state] law.’” Id.

(second alteration in original) (quoting O’Melveny & Myers, 512 U.S. at 88). In

Bame, there was no compromise of federal policy or interest. We therefore applied

the substantive law of Minnesota, the forum state. The instant case similarly involves

no compromise of federal policy or interest caused by applicable Nebraska contract

law. Accordingly, we agree with the district court’s use of Nebraska law. 4

“In order to recover in an action for breach of contract, the plaintiff must plead

and prove the existence of a promise, its breach, damage, and compliance with any

conditions precedent that activate the defendant’s duty.” Henriksen v. Gleason, 643

N.W.2d 652, 658 (Neb. 2002) (citation omitted). “A breach is the nonperformance of

a duty . . . . ” Weber v. N. Loup River Pub. Power &Irrigation Dist., 854 N.W.2d 263,

271 (Neb. 2014). A breach that is material excuses the nonbreaching party of its duty

to perform its obligations under the contract. Siouxland, 859 N.W.2d at 592.

We also note that the government concedes that this “dispute centers on 4

application of well-established common law principles to the facts of the case.”

Appellee’s Br. at 10 n.5. As we see no variance between Nebraska state law and

federal common law on this issue, the result would be the same under either. See Sw.

Bell Tel. Co. v. Connect Commc’ns Corp., 225 F.3d 942, 949 (8th Cir. 2000) (Arnold,

J., dissenting) (“It might well be state law or it might be federal common law, but in

any case the principles would likely be the same, or virtually identical, because of the

general uniformity of the contract principles applied throughout the country in state

and federal courts alike.”).

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Nebraska Beef first argues that the OSC’s press release misrepresents the

agreement and the facts, and it contends that the government’s claim to have “found”

a violation exceeds the scope of an agency’s powers. It states that “having ‘found’

something occurred unequivocally suggests that it did, in fact, occur. An allegation

and a finding of fault are entirely different things. The distinction here is amplified

when news outlets in turn repeated the DOJ’s ‘finding’ of wrong doing [sic] from the

Press Release.” Appellant’s Br. at 10. In support, Nebraska Beef cites Black’s Law

Dictionary, which defines “find” as “[t]o determine a fact in dispute by verdict or

decision.” Find, Black’s Law Dictionary (10th ed. 2014). It also cites a case from the

Eastern District of Texas in which the court held it improper for an agency to

disqualify contractors fromprojects based on “administrative merits determinations”

that were essentially unadjudicated allegations of wrongdoing. Associated Builders

& Contractors of Se. Tex. v. Rung, No. 1:16-CV-4252016, 2016 WL 8188655, at *6

(E.D. Tex. Oct. 24, 2016). According to Nebraska Beef, these authorities support the

proposition that an agency may not claim to have made a finding in the absence of

either an admission by the party accused of wrongdoing or some judicial process.

NebraskaBeef also claims that the district court construed the essential purpose

of the agreement too narrowly. Though it agrees that avoiding litigation was a

motivation for settling the case, Nebraska Beef avers that it also sought to avoid any

admission of liability. In support, it cites Priem v. Shires, in which a Texas court

identified the purpose of a settlement agreement as “compromising doubtful and

disputed claims so as to avoid litigation and buy peace without admitting liability.”

697 S.W.2d 860, 864 (Tex. Ct. App. 1985).

The government responds that nothing in the settlement agreement prohibited

it from characterizing the settlement as it wished in a press release announcing the

agreement. The government is correct.The settlement agreement does not contain any

stipulated facts nor an admission by Nebraska Beef that the company violated federal

law. However, though the agreement did not explicitly authorize the OSC to state that

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its investigation found violations, the agreement also did not forbid the OSC from

doing so. We find itsomewhat troubling for the government to enter into a settlement

in which the accused party maintains its innocence yet the government nonetheless

declares it found violations of the law. But while conducting litigation and public

relations in this fashion may be suspect, it does not materially violate the settlement

agreement in a manner that would excuse Nebraska Beef’s obligations thereunder.

To find a breach, we must first find a promise. Henriksen, 643 N.W.2d at 658.

As the district court held, “There is absolutely nothing in the Settlement Agreement

that limits or constrains the statements of the United States. . . .” Nebraska Beef, Ltd.,

2016 WL 10636373, at *4. Whether the recitals should be considered binding, as the

district court concluded, need not be resolved, because nothing in the agreement

imposes a duty on either party to do or abstain from anything with regard to how they

publicly describe the enforcement action. Because the government did not fail to

fulfill any promise, Nebraska Beef’s breach-of-contract counterclaim fails and the

government’s claim for enforcement prevails.

III. Conclusion

Accordingly, the district court properly denied Nebraska Beef’s motion for

partial summary judgment and granted summary judgment in favor of the

government. We affirm. 

BEAM, Circuit Judge, dissenting.

The OSC breached its obligation–indeed, its contractual duty–to notify the

public about the Agreement itself when it announced publicly that the "department's

investigation found" that Nebraska Beef engaged in employment discrimination in

violation of the INA. Weber v. N. Loup River Pub. Power & Irrigation Dist., 854

N.W.2d 263, 270-71 (Neb. 2014) (noting that parties' obligations arise from the

contracts themselves and that a breach is the nonperformance of a duty). Given the

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recitals and contract language of this Agreement, along with the portrayal of the

Agreement by the partiesthemselvesin thislitigation, it is axiomatic that the essential

purpose of the Agreement was to avoid costly litigation and to avoid admission of

liability on the part of Nebraska Beef regarding the conclusion by the OSC that it had

"reasonable cause" to believe that Nebraska Beef violated 8 U.S.C. § 1324b(a)(6). 

The court accurately points out that the Agreement did not forbid the OSC from

stating that its investigation found violations. Ante at 8-9. However, the OSC was

under an obligation to describe the Agreement accurately, which Agreement

established only that the OSC had "reasonable cause" to believe that Nebraska Beef

engaged in practices that violated the INA and that Nebraska Beef denied the same. 

The statement by the OSC in the press release that it "found" that the company

violated the INA imparts the idea that Nebraska Beef did, indeed, do so, a far cry

from a "reasonable cause" to believe that a violation occurred. Accordingly, OSC's

public statement was a material breach of its duty under the Agreement to accurately

notify and educate the public. Siouxland Ethanol, LLC v. Sebade Bros., LLC, 859

N.W.2d 586, 592 (Neb. 2015) ("A 'material breach' is a failure to do something that

is so fundamental to a contract that the failure to perform that obligation defeats the

essential purpose of the contract or makesit impossible for the other party to perform

under the contract." (alteration and quotation omitted)). To make a "finding" means

"[t]o determine a fact in dispute by verdict or decision." Black's Law Dictionary

(10th ed. 2014). There was no such "finding" here. Accordingly, I dissent.

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