# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 6- 17 35

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Acci on a Wind po wer No rth Am eri ca, LLC

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

Ci ty of W es t Br an ch , Iowa

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

__ __ __ __ __ __

App eal fro m

Uni te d S ta te s Di st ric t Co ur t

fo r th e Nor th ern Dis tri ct of I owa - Ced ar Ra pi ds

__ __ __ __ __ __

Su bm it te d: Decem

be r 15 , 20 16

Fil ed : Fe br ua ry

7, 2 01 7

__ __ __ __ __ __

Befo re KELLY and MURPHY, Ci rcu it Ju dg es , and MONTGOMERY, Dis tri ct 1

Ju dg e.

__ __ __ __ __ __

MURP HY, Circ ui t J ud ge

.

In 20 08 th e ci ty of W es t Br an ch , Iowa (W es t Br an ch or t he cit y ) en te red in to

an ag reem en t wit h Acci on a W in dp owe r Nor th Am eri ca, LLC (Acci on a), a co m pa ny

The Hon or ab le Ann D. Mon tg om ery, Uni te d S ta te s Di st ric t J ud ge for th e 1

Dis tri ct of M in ne so ta , si tt in g b y de si gn at io n.t h a t m an uf

act ur es an d in st al ls win d ge ne rat io n syste m s. Und er th e ag reem en t,

Acci on a wou ld ex pa nd it s bu si ne ss in W es t Bran ch if th e c i t y w o ul d co ns id er

reb at in g a p o rti on of Acci on a's ta xe s each y ear fo r ei gh t y ears

. W es t Bran ch pa id

reb at es fo r th ree ye a rs

, bu t th en refu se d to pa y su bs eq ue nt reb at es an d ul ti m at el y

can cel le d th e ag reem en t. Th e di st ric t co ur t co nc lu de d th at W es t Bran ch 's act io ns 2

br each ed th e co nt ract an d, aft er a be nc h tri al

, award ed Acc io na $4 94 ,92 4.2 8 in

da m ag es . W es t Br an ch ap pe al s, an d we a ffi rm

.

I.

Acci on a an d W es t Bran ch en te r e d i n t o a ta x in crem en t fin an ci ng (TIF)

de v e l o p men t ag reem en t in 20 08

. TIF ag reem en ts are au th or iz ed by Io wa la w, se e

Io wa Co de § 40 3.6

, to en co ur ag e eco no m ic de ve lo pm en t in sp eci fie d area s, se e Fu lt s

v. Ci ty of Co ral vi ll e, 66 6 N.W .2d 54 8, 55 1 n.1 (Io wa 20 03 ). The ag reem en t be twee n

W es t Bran ch an d Acci on a ob li ga te d th e ci ty to co ns id er pr ov id in g cert ai n be ne fit s to

Acci on a if it ex pa nd ed it s bu si ne ss i n Wes t Bran ch

. Mo st cru ci al ly, th e ag reem en t

ob li ga te d W es t Bran ch to co n s i d e r " reb at in g to ACCIONA, fo r a pe rio d [o f] ei gh t

y ears

, in crem en ta l pr op ert y ta xe s act ua ll y pa id wit h res pe ct to " im pr ov em en ts m ad e

by Acci on a in W es t Bran ch

. The ag reem en t m ad e cl ear th at al l reb at e pa y m en ts were

"s ub ject to an nu al ap pr op ria ti on of th e Ci ty Co un ci l." In th e ev en t th at th e ci ty fai le d

to ap pr op ria te a reb at e to Acci on a in a gi ve n y ear, th e ag reem en t sp eci fie d th at "t he

rem ai ni ng reb at e sc he du le sh al l be ex te nd ed by on e y ea r s o a s to al lo w ei gh t fu ll

y ears of r eb at es un de r th is Agre em en t."

W es t Bran ch pa id reb at es to Acci on a pu rs ua nt to th e ag reem en t in fis cal y ears

20 10

, 20 11

, an d 20 12

. In th os e y ears th e pr oc ed ur e fo r de te rm in in g whe th er a reb at e

wou ld be pa id was t he same. W e th eref or e ta ke fis cal y ear 2 01 0 a s an ex am pl e. In

The Hon or ab le Jo n S tu art Sco le s, Un it ed Sta te s M ag is tra te Ju dg e fo r th e 2

Nor th ern Dis tri ct of I owa , to who m th e cas e was refe rred for fin al di sp os it io n b y

co ns en t o f th e p art ie s p ur su an t t o 2 8 U.S.C. § 63 6( c).

-2

-Nov em

be r 20 08 th e W es t Bran ch ci ty c o u n c i l ap pr ov ed a res ol ut io n reb at in g a

po rti on of Acci on a's ta xe s fo r fis cal y ear 20 10 to th e co m p a ny. The reb at e was

in cl ud ed in th e ci ty's bu dg et whi ch was ad op te d in Mar ch 20 09

. Afte r Acci on a ti m el y

pa id it s fis cal y ear 20 10 ta xe s, th e ci ty fo rm al ly ap pr ov ed an d p a i d t he reb at e.

App ro xi m at el y

th e sa m e p ro ces s was fol lo wed in fis cal y ears 20 11 an d 2 01 2.

In Nov em be r 20 11 W es t Bran ch 's ci ty co un ci l ap pr ov ed a re sol uti on ob li ga ti ng

fo r ap pr op ria ti on a ta x reb at e to Acci on a fo r fis cal y ear 20 13

. The au th or iz ed reb at e

w a s su bs eq ue nt ly in cl ud ed in th e ci ty's bu dg et whi ch was ad op te d in Mar c h 2 0 1 2

.

Afte r Acci on a pa id it s ta xe s fo r fis cal y ear 20 13

, th e ci ty bu dg et was am en de d an d

th e reb at e to Acci on a was rem ov ed

. The ci ty fai le d to pa y a reb at e t o A c c i o n a fo r

fis cal y ear 20 14 un de r si m il ar ci rcu m st an ces

. Alt ho ug h th e 20 14 reb at e was in it ia ll y

ap pr ov ed in Nov em

be r 20 12

, an d in cl ud ed in th e ci ty's bu dg et in Mar ch 20 13

, th e ci ty

el im in at ed th e reb at e in am en di ng it s b ud ge t i n M ay 20 14

.

In ad di ti on to fai li ng to p a y Acci on a reb at es fo r fis cal y ears 20 13 an d 20 14

,

W es t Bran ch can cel le d th e ag reem en t in May 20 13 on th e gr ou nd th at Acci on a was

fai li ng to m eet it s co nt ract ua l ob li ga ti on s. Acci on a res po nd ed by fi li ng th is bre ach

of co nt ract act io n in Mar ch 20 14

, an d th e pa rti es pr oc eed ed to fil e cro ss m ot io ns fo r

su m m ary jud gm en t

. The di st ric t co ur t ru le d th at W es t Bran ch ha d br each ed it s

ag reem en t by can cel li ng wit ho ut cau se

. The co ur t al so de ci de d th at Acci on a was no t

en ti tl ed to da m ag es fo r reb at es th at co ul d be du e in fu tu re fis c a l ye a r s

, ho wev er,

be cau se th e ag reem en t on ly oblig at ed th e ci ty to co ns id er th e ap pr op ria ti on of reb at es

.

The co ur t th eref

or e gr an te d Acci on a's req ue st fo r sp eci fic pe rfo rm an ce fo r th e fu tu re

fis cal y ears

. Fi na ll y

, th e co ur t co nc lu de d th at ge nu in e is su es fo r tri al rem ai ne d on th e

qu es ti on of whe th er Acci on a was en ti tl ed to da m ag es fo r pr io r fis cal y ears in whi ch

th e ci ty ha d ob li ga te d reb at es fo r ap pr op ria ti on bu t su bs eq ue nt ly fai le d to pa y th em

.

Afte r a be nc h tri al

, th e di st ric t co ur t ru le d th at Acci on a was en ti tl ed to reco ve r

co m pe ns at or y da m ag es fo r th e ta x reb at es ob li ga te d fo r ap pr op ria ti on bu t no t pa id in

-3

-fis cal y ears 20 13 an d 20 14

. W es t Bran ch fil ed a mo t i on to am en d or co rrec t th e

jud gm en t whi ch was de ni ed

. W es t Bran ch a p pe al s, arg ui ng th at th e di st ric t co ur t

erre d in fin di ng th at Acci on a is en ti tl ed to da m ag es fo r reb at es no t pa id in fis cal y ears

20 13 an d 2 01 4.

II.

As th is ap pe al fo ll ows a be nc h tri al

, w e r e v i e w th e di st ric t co ur t's "l eg al

co nc lu si on s de no vo an d fa ct ua l fi nd in gs fo r cl ear erro r." Urb an Hot el Dev . C o. v.

Pres id en t Dev

. Gro up

, L.C., 53 5 F.3 d 87 4, 87 9 (8 th Ci r. 20 08 ). It is un co nt es te d th at

Io wa la w ap pl ie s in th is di ve rs it y cas e. See id

. at 87 7. Io wa co ur ts "g en eral ly rev ie w

th e co ns tru ct io n an d in te rp ret at io n of a co nt ract as a m at te r of la w." Hart ig Dru g Co

.

v. Hart ig

, 60 2 N.W .2d 79 4, 79 7 (Io wa 19 99 ). An ex cep ti on to th is ru le oc cu rs whe n

a lo wer co ur t's co nt r a c t "i nt erp ret at io n was pr ed ic at ed up on ex tri ns ic ev id en ce," as

th os e fi nd in gs "are bi nd in g o n a pp eal if s up po rte d b y su bs ta nt ia l ev id en ce." Id.

A.

W es t Bran ch fir st arg ue s th at th e di st ric t co ur t erre d in it s in te rp ret at io n of th e

pa rti es ' ag reem en t. Sp eci fic al ly, W es t Bran ch co nt en ds th at th e di st ric t co ur t erre d

in co nc lu di ng t h a t t h e c i ty br each ed th e ag reem en t whe n it fai le d to pa y reb at es in

fis cal y ears 20 13 an d 20 14 th at ha d b een ob li ga te d fo r ap pr op ria ti on

. W es t Bran ch

no te s th at al l reb at e pa y m en ts un de r th e ag reem en t are "s ub ject to an nu al

ap pr op ria ti on of th e Ci ty Co un ci l" an d su gg es ts th at a reb at e is no t ap pr op ria te d un ti l

th e m om en t at wh i c h i t i s p a i d

. In ot he r wor ds , West Bran ch arg ue s th at un de r th e

ag reem en t it ha d th e po wer to de ci de no t t o p a y th e reb at es ob li ga te d fo r

ap pr op ria ti on up un ti l th e m om en t th e reb at e ch eck s were se nt

. In su pp or t of it s

arg um en t W es t Bran ch po in ts to th e m ean in g of "ap pr op ria te ," wit ne ss te st im on y at

tri al

, an d an ad m is si on by Acc i on a at th e su m m ary jud gm en t st ag e. Non e of th es e

-4

-pi eces of ev id en ce si ng ly or in co m bi na ti on are su ffi ci en t to pe r s u ad e us th at W es t

Bran ch 's i nt erp ret at io n o f th e p art ie s' a gr eem en t i s co rrec t.

Und er Io wa la w, a ke y ru le of co nt ract in te rp ret at io n is th at co ur ts "g iv e effe ct

to th e la ng ua ge of th e en ti re co nt ract acco rd in g to it s co m m on ly acce p t e d an d

or di na ry m ean in g." Hart ig Dru g Co

., 60 2 N.W .2d at 79 7. A co ro ll ary of th is ru le is

th at it is "wel l-e st ab li sh ed

. . . th at an 'in te rp ret at io n whi ch gi ve s a reas on ab le

, la wfu l,

an d effe ct iv e m ean in g to al l te rm s is pr efer red to an in te rp ret at io n whi ch le av es a pa rt

un reas on ab le

, un la wfu l, or of no effe ct .'" DeJ on g v. Si ou x Ct r., Io wa, 16 8 F.3 d 11 15

,

11 20 (8 th Ci r. 19 99 ) (q uo ti ng Fas hi on Fab ric s of Io wa, In c. v. Ret ai l In v'r s Co rp

., 26 6

N.W .2d 22

, 26 (Io wa 19 7 8 )). As th e di st ric t co ur t no te d in it s th or ou gh an d well

reas on ed op in io n, th e pa rti es ' ag reem en t sp eci fie s th at W es t Br an ch m us t an nu al ly

c e rti fy "n o la te r th an Decem be r 1

. . . th e am ou nt ob li ga te d fo r ap pr op ria ti on fo r

reb at e to Acci on a." The ag reem en t fu rth er st at e s t h a t

, i n t he ev en t th e ci ty d eci de s

to ob li ga te a reb at e fo r ap pr op ria ti on

, "[t ]he reb at e sh al l be pa id to ACCIONA wit hi n

th irt y da y s of rece ip t by th e Ci ty of th e in crem en ta l ta xe s pa id ." If we were to acce pt

W es t Bran ch 's in te rp ret at io n of th e pa rti es ' agreem en t an d co nc lu de th at th e ci ty co ul d

pe rm i s s i b l y d e c li ne at an y ti m e to is su e a reb at e pa y m en t it ha d ob li ga te d fo r

ap pr op ria ti on , th is co nt ract ua l p ro vi si on wou ld be "o f no effe ct ." See DeJo ng , 16 8

F.3 d at 11 20 (q u o ti ng Fas hi on Fab ric s of Io wa, 26 6 N.W .2d at 26 ). Thi s

in te rp ret at io n o f th e p art ie s' a gr eem en t i s d is fav or ed un de r Io wa la w.

Th e b e t t er in te rp ret at io n of th e pa rti es ' ag reem en t— on e th at gi ve s fu ll effe ct

to al l of th e ag reem en t's pr ov is io ns —i s th e in te rp ret at io n ad op te d by th e di st ric t co ur t

an d a d v a n c e d by Acci on a on ap pe al

. Und er th is vi ew, if th e ci ty co un ci l el ect s to

ob li ga te a reb at e fo r ap pr op ria ti on

, no th in g in th e ag reem en t pr ev en ts th e ci ty co un ci l

fro m ch an gi ng it s m in d an d "u na pp ro pr ia ti ng " th e reb at e u p u n t i l th e m om en t

Acci on a pa y s it s ta xe s fo r a gi ve n fis cal y ear. Onc e Acci on a pa y s it s ta xe s, ho wev er,

th e co nt ract ua l pr ov is io n m an da ti ng pa y m en t of th e reb at e wit hi n th irt y da y s ba rs th e

ci ty fro m de ci di ng no t to pa y a pr ev io us ly obl ig at ed reb at e. In ot he r wor ds , a le ga l

-5

-ob li ga ti on to pa y reb at es th at h a v e b e en ob li ga te d fo r ap pr op ria ti on by th e ci ty

co un ci l an d ap pr ov ed as pa rt of th e ci ty's bu dg et ari se s un de r th e ag reem en t on ce

A c c i o n a pa y s it s ta xe s fo r a gi ve n fis cal y ear. W e co nc lu de th is is th e p r o p e r

in te rp ret at io n of th e pa rti es ' ag reem en t, an d we ag ree wit h th e di st ric t co ur t th at W es t

Bran ch bre ach ed th e ag reem en t wh en it de cl in ed to pa y reb at es it ha d o bl ig at ed for

ap pr op ria ti on in fis cal y ears 20 13 an d 20 14 aft er Acci on a ha d al read y pa id it s ta xe s

fo r th os e y ears

.

W es t Bran ch 's arg um en ts fo r reject in g th is in te rp ret at io n of th e pl ai n la ng ua ge

of th e p art ie s' a gr eem en t ar e n ot pe rs ua si ve

. Fo r ex am pl e, W es t Bran ch ci te s to th e

te st im on y of two tri al wit ne ss es

, on e of who m te st ifi ed fo r Acci on a, in su pp or t of it s

arg um en t th at th e pa rti es un de rs to od th e wor d "ap pr op ria te " in th ei r ag reem en t to be

syno nym ou s wi th "p ay " an d th at W es t Bran ch th eref or e ne ve r ap pr op ria te d re ba te s

fo r Acci on a in fis cal y ears 20 13 an d 20 14

. W hi le ex tri ns ic ev id en ce li ke th at cit ed

by West Bran ch m ay be co n s i d e r e d w he n in te rp ret in g a co nt ract , " th e wor ds of th e

ag reem en t are st il l th e m os t im po rta nt ev id en ce of th e pa rt[ ie s'] in te nt io ns at th e ti m e

th ey en te red in to th e co nt ract ." Pi ll sb ur y Co

. v. W el ls Dair y

, In c., 75 2 N.W .2d 43 0,

43 6 (Io wa 20 08 ). W e ha ve al read y co nc lu de d th at th e pl ai n la ng ua ge of th e pa rti es '

ag reem en t su pp or ts th e in te rp ret at io n ad op te d by th e di s t r i c t co ur t, no t th e

in te rp ret at io n ad vo cat ed by W es t Bran ch

. Mo reo ve r, th e di st ric t co ur t fo un d th at th e

Acci on a wit ne ss who te st ifi ed th at th e ci ty ha d no t mad e a n "ap pr op ria ti on fo r

pa y m en t" in fis cal y ears 20 13 an d 20 14 di d no t m ean th at th e reb at es ha d no t be en

ap pr op ria te d, bu t rat he r th at th e reb at es ha d no t be en pa id

. The di st r i c t co ur t's

fin di ng s reg ard in g th e m ean in g an d weig ht to be acco rd ed wit ne ss te st im on y are

fact ua l de te rm in at io ns we rev ie w fo r cl ear erro r. See Urb an Hot el Dev

., 53 5 F.3 d at

8 7 9 ; Pi ll sb ur y

, 75 2 N.W .2d at 43 6. Si nc e we se e no cl ear erro r he re, we co nc l u d e

th at th e ev id en ce at tri al do es no t req ui re ad op ti ng th e W es t Bran ch in te rp ret at io n of

th e p art ie s' a gr eem en t.

-6

-On a rel at ed m at te r, we ag ree wit h th e di st ric t co ur t th at an ad m is si on m ad e by

Acci on a at th e su m

m ary jud gm en t st ag e do e s n o t co m pe l a co nc lu si on th at th e ci ty

di d no t ap pr op ria te reb at es in fis cal y ears 20 13 an d 20 14

. It is tru e, as W es t Bran ch

po in ts ou t, th at in it s s u mm ary jud gm en t pa pe rs Acci on a av erre d th at it was

un di sp ut ed th at "[t ]he Ci ty di d no t ap pr op ria te th e $ 2 6 5,1 40 reb at e to be pa id to

Acci on a" fo r fis cal y ear 20 14

. The di st ric t co ur t no te d, ho wev er, th at Acci on a ha s

al way s arg ue d th at th e reb at e was ap pr op ria te d, jus t no t pa id

. In ot he r wor ds th e

di st ric t co ur t co nc lu de d th at Acci on a, li ke it s wit ne ss at tri al

, m ay ha ve be en

im pr eci se wit h a te rm of art bu t di d no t in te nd to ad m it th at th e reb at e was ne ve r

ap pr op ria te d. W e ag ree. W e ha ve pr ev io us ly no te d th at "[a ] jud ic ia l ad m is si on m us t

be de li be rat e, cl ear, an d un am bi gu ou s," an d we ge ne ral ly reject effo r t s t o c on ve rt

"ca rel es sl y wor de d" st ip ul at io n s in to di sp os it iv e ad m is si on s. Gran do e Co rp

. v.

Gan de r Mo un ta in Co ., 7 61 F.3 d 87 6, 88 5 (8 th Ci r. 20 14 ) (i nt ern al qu ot at io n m ark s

om it te d)

. W e ag ree wit h th e di st ric t co ur t th at Acci on a' s a d m is si on at su m m ary

jud gm en t is be st read as a po or ly wor de d effo rt to ad m it th at it is un di sp ut ed th at th e

reb at es were nev er pai d, no t an un am bi gu ou s adm is si on th at th e reb at es were ne ve r

ap pr op ria te d. West Bran ch is th eref or e n ot en ti tl ed to rel ie f on th is gro un d.

B.

W es t Bran ch al so arg ue s th at if th e di st ric t co ur t's in te rp ret at io n of th e pa rti es '

ag reem en t st an ds

, th e ag reem en t it se lf be co m es nu ll an d vo id be cau se it "p ur po rts to

co nt ract away th e ci ty's le gi sl at iv e po wer an d du ty to m ak e—a nd reco ns id er— an nu al

ap pr op ria ti on de ci si on s." The re is no qu es ti on

, ho wev er, th at th e Io wa Co de pe rm it s

m un ic ip al it ie s to en te r in to TIF ag reem en ts to st im ul at e eco no m ic de ve lo pm en t. See,

e.g

., Fu lt s, 66 6 N.W .2d at 55 2– 53 (ci ti ng Io wa Co de § 40 3)

. The r e a r e l i mi t s to

m un ic ip al it ie s' p o w e r s w i th res pe ct to su ch ag reem en ts , s uc h as th e li m it s im po se d

by th e Io wa Co ns ti tu ti on on m un ic ip al in de bt ed ne ss

. See id

. at 55 6. Mu ni ci pa li ti es

ge ne ral ly av oi d ov ers te pp in g th ei r bo un ds wit h res pe ct to TIF ag reem en ts by m ak in g

th e pa y m en t of reb at es un de r su c h a g r e e men ts su bjec t to an nu al ap pr op ria ti on

. In

-7

-ot he r wor ds

, TIF a g r e e m en ts typic al ly pr om is e on ly th at a ci ty wil l co ns id er

ap pr op ria ti ng a reb at e each y ear an d av oi d pr om is in g th at su ch a reb at e wil l act ua ll y

be pa id

. See, e.g

., id

. at 55 7. Thi s is pr eci se ly th e st ru ct ur e of th e ag reem en t be twee n

A c c i o n a a nd W es t Bran ch in th is cas e, an d it is a st ru ct ur e th at ha s ro ut in el y b e e n

ap pr ov ed by Iowa co ur ts . See i d.

W es t Bran ch n o ne th el es s arg ue s th at th e pa rti es ' ag reem en t is nu ll an d vo id

be cau se th e ag ree men t li m it s W es t Bran ch 's ab il it y to de cl in e to pa y reb at es at an y

ti m e. In ot he r wor ds

, W es t Bran ch co nt en ds th at th e fact th at th e ag reem en t req ui res

th e ci ty to pa y reb at es al read y ob li ga te d fo r ap pr op ria ti on wit hi n th irt y da y s of

Acci on a pa y in g it s t ax es am ou nt s to an im pe rm is si bl e de le ga ti on of th e ci ty's

le gi sl at iv e po wer to ap pr op ria te fu nd s. W e di sa gr ee. Fi rs t, an d as no te d ab ov e, TIF

ag reem en ts are cl earl y au th or iz ed by Io wa la w, se e Io wa Co de § 40 3.6

, whi ch

di st in gu is he s th e ag ree men t h e r e fro m th e co nt ract s in th e cas es on whi ch W es t

Bran ch rel ie s fo r it s l eg is la ti ve de le ga ti on arg um en t, s ee, e.g ., M arco Dev . Cor p. v

.

Ci ty of Ced ar Fal ls

, 47 3 N.W .2d 41

, 43 (Io wa 19 91 ) (co nc lu di ng th at a c o n t ract to

wid en a st reet was an im pe rm is si bl e de le ga ti on of a ci ty's le gi sl at iv e fu nc ti o n )

.

Seco nd

, ch ap te r 40 3.6 of th e Io wa Co de sp eci fie s th at it sh o u l d b e " li be ral ly

in te rp ret ed to ach ie v e t h e p u rp os es of th [e] ch ap te r" an d no te s th at ci ti es ha ve th e

po wer "t o m ak e an d ex ecu te co nt ract s an d ot he r in st ru m en ts ne ces sa ry or co nv en ie nt

to th e ex erci se of it s po wers un de r th [e] ch ap te r." Io wa Co de § 40 3.6 (1 ). Alt ho ug h

th e Io wa Co de m ay no t sp eci fic al ly au th or iz e ci ti es to ag ree to pa y reb at es th at ha ve

be en ob li ga te d fo r ap pr op ria ti on wit hi n a se t ti m e fram e, a reas on ab le in te rp ret at io n

o f th is pa rt of th e Io wa Co de su gg es ts th at ci ti es ha ve th e po wer to in cl ud e

co nt ract ua l pr ov is i o n s no t sp eci fic al ly au th or iz ed so lo ng as th e pr ov is io ns do no t

m ean in gf ul ly lim it th e ci ty's le gi sl at iv e p owe rs . Suc h i s t he cas e h ere.

The ti m in g pr ov is io n ch al le ng ed by W es t Bran ch i s ex tre m el y na rro w an d

es se nt ia ll y pr oc ed ur al ; a s no te d ab ov e, W es t Bran ch co ul d de ci de to un ap pr op ria te

reb at es it ha d ob li ga te d fo r ap pr op ria ti on up un ti l th e m om en t at whi ch Acci on a pa y s

-8

-it s ta xe s fo r a gi ve n y ear. Und er th es e ci rcu m st an ces

, we co nc lu de th is pr ov is io n an d

th e ag reem en t as a who le are en fo rcea bl e u nd er Io wa la w.

C.

Fi na ll y

, W es t Bran ch arg ue s th at th e d is tri ct co ur t ab us ed it s di sc ret io n by

"al lo w[in g] Acci on a to ch an ge it s da m ag es th eo ry an d cal cu la ti on on th e ev e of tri al ."

Befo re th e di st ric t co ur t, W es t Bran ch so ug h t rel ie f fro m Acci on a's al le ge dl y

im pr op er act io ns th ro ug h a m ot io n fo r sa nc ti on s th at in vo ke d Fed eral Ru le s of Ci vi l

Pro ced ur e 16 (f) an d 37 (c). Thi s m ot io n was la rg el y de ni ed by th e di st ric t co ur t. W e

rev ie w a di st ric t co ur t's de ci si on on whe th er to im po se s a n c t i on s fo r ab us e of

di sc ret io n. See Carm od y v. Kan

. Ci ty Bd

. of Po li ce Co m m 'rs

, 71 3 F.3 d 40 1, 40 4– 05

(8 th Ci r. 20 13 ) (Ru le 37 (c)) ; Nick v. Mo rg an 's Fo od s, In c., 27 0 F.3 d 59 0, 59 4– 95 (8 th

Ci r. 20 01 ) (Ru le 16 (f)). We see no ab us e o f di sc ret io n h ere.

W es t Bran ch arg ue s th at A c c i o n a w as im pr op erl y pe rm it te d to ch an ge it s

da m ag es cal cu la ti o n o n th e ev e of tri al

. Sp eci fic al ly, W es t Bran ch cl ai m s th at

Acci on a rev eal ed to o la te th at it wou ld se ek da m ag es fo r bo th fis cal y ears 20 13 an d

20 14 an d th at Acci on a "ra m pe d up th e am ou nt of ta x reb at es cl ai m ed " sh or tl y be fo re

tri al

. The di st ric t co ur t co nc lu de d th at Acci on a's ac t i o n s were es se nt ia ll y ha rm le ss

be cau se th ey res ul te d in "n o su rp ris e or pr ejud ic e to th e Ci ty." W e se e no ab us e of

di sc ret io n in th at de c i s i o n. Co nt rary to W es t Bran ch 's arg um en t, Acci on a so ug ht

co mp e ns at or y da m ag es fo r m ul ti pl e fis cal y ears fro m th e ve ry be gi nn in g of th is

la wsu it

. See, e.g

., Co m

pl

. at 3– 4 (J A00 07 –0 8) (req ue st in g co m pe ns at or y da m ag es

fo r W es t Bran ch 's br each of co nt ract ). Acci on a's pr et ria l cl ari fic a t i o n t h a t th e

co m pa ny wou ld se ek co m

pe ns at or y da mag es fo r fis cal y ears 20 13 an d 20 14 was

th eref or e en ti rel y co ns is te nt wit h th e th eo ry of da m ag es art ic ul at ed by Acci on a at th e

ou ts et of th is cas e, no t a se a c h a n g e on th e ev e of tri al

. Thi s fact di st in gu is he s th is

cas e fro m th os e on whi ch W es t Bran ch rel ie s fo r it s arg um en t th at Acci on a sh ou ld no t

ha ve be en pe rm it te d to se ek da m ag es fo r fis cal y ear 20 13

. See, e.g

., US Sal t, In c. v.

-9

-Bro ke n Arro w, In c., No. 07 -1 98 8 (RHK/ JS M), 20 08 W L 22 77 60 2, at *3 –4 (D. Mi nn

.

May 30

, 20 08 ) (d is al lo win g a pa rty to ch an ge it s th eo ry of da m ag es on th e ev e of tri al

fro m lo st pro fit s t o re li an ce, i nc id en ta l, o r co ns eq ue nt ia l d am ag es ).

Fu rth erm or e, th e d am ag es cal cu la ti on us ed by Acci on a ap pe ars to ha ve be en

ba se d on in fo rm at io n in th e pa rt i e s ' ag reem en t an d do cu m en ts or ig in al ly in W es t

Bran ch 's co nt ro l. The m an ne r in whi ch Acci on a cal cu la te d i t s d a mages sh ou ld

t h e r e f o r e no t ha ve su rp ris ed or pr ejud ic ed th e ci ty. In de ed

, it ap pe ars th e c i t y

co nc ed es th at th e da m ag es cal cu la ti on us ed by Acci on a an d th e di st ric t c o u r t i s

accu rat e, as W es t Bran ch do es no t ch al le ng e th e da m ag e cal cu la ti on s th em se lv es on

ap pe al

. Und er t he se ci rcu m st an ces

, we can no t fin d th at th e di st ric t cou rt abu se d it s

di sc ret io n by co nc lu di ng th at Acci on a's al le ge d im pr op er act io ns were ha rm le ss an d

de cl in in g t o s an ct io n t he co m pa ny.

III.

Acco rd in gl y , we affi rm

th e jud gm en t o f th e d is tri ct co ur t.

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