Court Opinion

ID: 3030877
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:45:02.128654+00
Date Added: 2024-06-11T11:48:08.979683
License: Public Domain

United States Court of Appeals
                         FOR THE EIGHTH CIRCUIT
      ___________

      No. 02-3043
      ___________

Fox Sports Net North, LLC,              *
a Delaware limited liability company,   *
                                        *
                   Appellant,           *
                                        *
      v.                                *
                                        *
Minnesota Twins Partnership, a          *
Minnesota general partnership; Kevin    *
Cattoor, its Chief Operating Officer,   *
                                        *
                   Appellees.           *
                                            Appeals from the United States
                                            District Court for the
                                            District of Minnesota.
      ___________

      No. 02-3098
      ___________

Fox Sports Net North, LLC,              *
a Delaware limited liability company,   *
                                        *
                   Appellee,            *
                                        *
      v.                                *
                                        *
Minnesota Twins Partnership, a          *
Minnesota general partnership; Kevin    *
Cattoor, its Chief Operating Officer,   *
                                        *
                   Appellants,          *
                                    ___________

                              Submitted: December 9, 2002

                                   Filed: February 10, 2003
                                    ___________

Before WOLLMAN, HEANEY, and MELLOY, Circuit Judges.
                         ___________

HEANEY, Circuit Judge.

       In this diversity case, Fox Sports Net North, LLC (“Fox”) brought suit against
Minnesota Twins Partnership (“the Twins”) and Kevin Cattoor, the Twins’s chief
operating officer. Fox’s claims against the Twins alleged breach of contract,1 breach
of duty of good faith and fair dealing, misappropriation of trade secrets, and tortious
interference with contract. Fox sued Cattoor individually for misappropriation of
trade secrets, breach of common law and fiduciary duties, tortious interference with
contract, and tortious interference with business relations. The Twins and Cattoor
counterclaimed, alleging business defamation, defamation, unfair competition, and
tortious interference with prospective business relations. The district court2 granted
summary judgment on all claims. Both parties appeal, and we affirm.

                                 BACKGROUND

      This case centers around telecast rights for sporting events. In January of 1998,
the Twins and Midwest Sports Channel (“MSC”) entered into a Telecast Agreement

      1
       Fox simultaneously sought a declaratory judgment that the same contract was
valid and enforceable.
      2
      The Honorable David S. Doty, United States District Court for the District of
Minnesota.

                                         -2-
granting MSC the right to televise a number of Minnesota Twins baseball games on
its network. At that time, Kevin Cattoor was general manager and vice-president of
MSC.

       Under the Telecast Agreement, MSC obtained the right to televise Twins
games from 1998 through the 2001 season. The agreement also contained an option
clause, by which MSC could extend the contract for two additional seasons if, by the
end of the 2001 season, the Twins were able to “secure an acceptable stadium
solution, excluding a new stadium.” (Appellant’s Confidential App. at 277.)3 Thus,
if there were an acceptable stadium solution before the end of their 2001 season,
MSC could televise Twins games for the 2002 and 2003 seasons.

        The Telecast Agreement also contained a clause that entitled the Twins to
yearly bonus payments if certain conditions were met. The bonus would be triggered
if, “[d]uring the Term of this Agreement . . . the Twins secure an acceptable stadium
solution or new stadium solution which secures the Twins in the Metro Area for the
remaining Term of this Agreement, including the Option Years.” (Id. at 278.) If the
Twins met these conditions, the bonus payments would be due for every season
“following the acceptable solution.” (Id.)

       In 1998, the Twins entered into a lease agreement with the Metropolitan Sports
Facilities Commission that obligated the Twins to continue playing home games at
the Hubert H. Humphrey Metrodome (“Metrodome”) in Minneapolis, Minnesota
through the 2000 season. The lease agreement contained three separate, one-year
option clauses, which the Twins could exercise to use the Metrodome for the 2001,
2002, and 2003 seasons. After effectuating the lease agreement, the Twins notified

      3
       Although we cite certain appendices as “confidential,” this is simply a
reference to the volume title as designated by the parties and is not intended to confer
any protected status on the documents contained therein.

                                          -3-
MSC that it had an acceptable stadium solution because, including the lease option
years, the Twins had the ability to stay in the Twin Cities metro area through the 2003
season. Accordingly, the Twins argued that it had met the conditions that entitled the
Twins to bonus payments. MSC disagreed, reasoning that the lease did not secure the
Twins in the metro area through the 2003 season because the lease options for years
2001, 2002, and 2003 were not yet exercised. No litigation arose as a result of this
dispute, and it remained unresolved.

       In March of 2000, Kevin Cattoor left MSC to work for a different company, but
by fall of 2000, Cattoor had joined the Twins as chief operating officer. As part of
his job, he was responsible for exploring the viability of Victory Sports, a regional
sports network wholly owned by the Twins’s parent corporation. Cattoor began to
investigate the possibility of having Victory Sports televise games of the Twins, the
Minnesota Timberwolves, the Milwaukee Bucks, and the Minnesota Gophers, all of
which had telecast agreements with MSC.

       On September 27, 2000, the Twins exercised its option to play home games in
the Metrodome for the 2001 season. In February of 2001, Fox bought MSC. Shortly
after Fox took over MSC’s operations, it sent the Twins a letter asserting its belief
that there was an acceptable stadium solution, and informing the Twins that Fox
would exercise its right to broadcast games for the 2002 and 2003 seasons. Fox
maintained, however, that the Twins had not secured an acceptable stadium solution
sufficient to qualify the Twins for bonus payments under the contract. The Twins
disputed Fox’s interpretation of the Telecast Agreement. Fox responded by filing suit
against the Twins and Cattoor on May 30, 2001.

       In October of 2001, the Twins exercised their 2002 option to play home games
in the Metrodome. Because the contract dispute in this suit was not finally resolved
by the time the 2002 baseball season began, the Twins agreed to have Fox carry its
games for that season in accordance with the Telecast Agreement.

                                         -4-
       On May 8, 2002, the district court granted summary judgment in favor of Fox
on the contract claim, finding that as a result of the Twins’s Metrodome lease
agreement with its unexercised option years, the Twins had secured an acceptable
stadium solution sufficient to trigger Fox’s right to televise the Twins’s 2002 and
2003 games. Nonetheless, the court held that because the Twins were not, at the time
of the order, committed to staying in the Twin Cities metro area through the 2003
season, the Twins were not entitled to bonus payments.

      On June 6, 2002, the Twins exercised their option to play home games at the
Metrodome for the 2003 season. The Twins argued to the district court that they had
now satisfied all conditions that would entitle it to bonus payments, as they had
secured an acceptable stadium solution through the term of the Telecast Agreement,
including the option years. The district court agreed, and ordered Fox to pay the
Twins bonus payments for the 2001, 2002, and 2003 seasons. By separate order, the
court denied relief on all parties’ tort claims. This appeal followed.

                                   DISCUSSION

       Summary judgment is appropriate where no genuine issue of material fact
exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The district court’s
interpretation of a contract’s terms and effect are reviewed de novo, John Morrell &
Co. v. Local Union 304A, 913 F.2d 544 (8th Cir. 1990), as is the district court’s grant
of summary judgment for tort claims, Insty*Bit, Inc. v. Poly-Tech Indus., 95 F.3d 663
(8th Cir. 1996). In this diversity matter, Minnesota law guides our analysis of the
substantive claims.

                                         -5-
I.    THE CONTRACT ISSUES

      Although the parties have alleged myriad tort claims against one another, the
interpretation of the Telecast Agreement is the principal issue of contention. The
construction and effect given to a contract are questions of law to be determined by
the court. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979). “A
contract is to be interpreted to give effect to the mutual intention of the parties at the
time of contracting, and in so doing the language used governs if it is clear and does
not involve an absurdity.” Carl Bolander & Sons, Inc. v. United Stockyards Corp.,
215 N.W.2d 473, 476 (Minn. 1976) (citation omitted). “In interpreting a contract, the
language is to be given its plain and ordinary meaning.” Brookfield Trade Ctr., Inc.
v. County of Ramsey, 584 N.W.2d 390, 394 (Minn. 1998).

       Where terms in a contract are ambiguous and their meaning depends upon
extrinsic evidence, interpretation of the contract should be left for the finder of fact.
Turner, 276 N.W.2d at 66. A word or phrase in a contract is ambiguous if it is subject
to more than one reasonable interpretation. Blattner v. Forster, 322 N.W.2d 319, 321
(Minn. 1982). The district court found that the Telecast Agreement is clear and
unambiguous. We agree. The question remains, however, what effect the Twins’s
lease at the Metrodome had on Fox’s right to broadcast games in the 2002 and 2003
baseball seasons and on the Twins’s right to receive bonus payments.

       The Telecast Agreement provides Fox with the option to televise Twins games
during the 2002 and 2003 seasons if the Twins “secure an acceptable stadium
solution, excluding a new stadium, during the Term of this Agreement.” (Appellant’s
Confidential App. at 277.) The contract defines “Term” to mean the four baseball
seasons “commencing on January 1, 1998 and ending with the completion of the 2001
season.” (Id.) Fox therefore had an option to extend the term of the Telecast
Agreement only if an acceptable stadium solution, other than a new stadium, existed
by the end of the 2001 baseball season.

                                           -6-
       The Twins’s lease at the Metrodome granted the Twins an option to continue
leasing the space for the 2001, 2002, and 2003 seasons, respectively. Notably, the
Twins were under no obligation to exercise any of these options and were free to
leave the Metrodome after the 2000 season. Nonetheless, toward the end of the 2000
season, the Twins exercised their 2001 lease option. The district court correctly held
that the act of leasing the Metrodome for the 2001 season could only be interpreted
as an indication from the Twins that staying at the Metrodome was an acceptable
stadium solution, triggering Fox’s option right to televise Twins games for the 2002
and 2003 seasons.

       The Telecast Agreement granted the Twins bonus payments of twenty-five
percent of the annual license fees if “the Twins secure[d] an acceptable stadium
solution or new stadium solution which secures the Twins in the Metro Area for the
remaining Term of this Agreement, including the Option Years.” (Appellant’s
Confidential App. at 278.) The bonus payment is due each year following the
acceptable stadium solution.

      Fox asks us to hold that the Twins are not entitled to bonus payments because
they have not met the terms of this contract clause. In other words, Fox suggests that
the Twins secured an acceptable stadium solution sufficient to entitle it to televise
Twins games in the 2002 and 2003 seasons, but that no acceptable stadium solution
existed that would have triggered the Twins’s right to bonus payments. We decline
Fox’s invitation to define “acceptable stadium solution” differently for different
sections of the contract. Rather, we adhere to the principle that “[t]erms in a contract
should be read together and harmonized where possible.” Burgi v. Eckes, 354
N.W.2d 514, 518 (Minn. Ct. App. 1984). Just as the Metrodome lease was an
acceptable stadium solution for the purpose of triggering Fox’s option rights, it was

                                          -7-
an acceptable stadium solution for the purpose of entitling the Twins to bonus
payments.4

       The lease agreement was originally extended by the Twins to secure the Twins
at the Metrodome for the 2001 season on September 27, 2000. As discussed above,
the lease of the Metrodome constituted an acceptable stadium solution, qualifying the
Twins for bonus payments if, as the contract required, the solution “secure[d] the
Twins in the Metro Area for the remaining Term of this Agreement, including the
Option Years.” (Appellant’s Confidential App. at 278.) On June 6, 2002, the Twins
extended their lease through the 2003 season, satisfying the condition that the team
stay throughout the term of the Telecast Agreement. Thus, we agree with the district
court that, pursuant to the contract, the Twins are entitled to bonus payments for each
season following the acceptable stadium solution – in this case, the 2001, 2002, and
2003 seasons.

II.   THE TORT CLAIMS

      Fox supplemented its complaint by alleging a number of tort claims against
both Cattoor and the Twins. The Twins and Cattoor responded by filing tort
counterclaims against Fox. The district court granted defense motions for summary
judgment on all claims.

      4
        We also note that in its complaint, Fox agreed that if it televised the 2002 and
2003 Twins games, it would “be obligated to pay the Twins the delineated percentage
increase in annual license fees as set forth in the Telecast Agreement.” (Appellant’s
Non-Confidential App. at 86.) Fox’s admission in its pleadings casts its contrary
argument to this court in an unpersuasive light. Cf. Missouri Housing Dev. Comm’n
v. Brice, 919 F.2d 1306, 1314 (8th Cir. 1990) (“[A]dmissions in the pleadings . . . are
in the nature of judicial admissions binding upon the parties, unless withdrawn or
amended.” (quoting Scott v. Comm’r, 117 F.2d 36, 40 (8th Cir. 1941))).

                                          -8-
A.    Fox’s Tort Claims5

       Fox sued the Twins and Cattoor for misappropriation of trade secrets. The
Minnesota Uniform Trade Secrets Act prohibits the improper acquisition, use, or
disclosure of trade secrets. See Minn. Stat. §§ 325C.01-08. A “trade secret” is
defined as information that “derives independent economic value . . . from not being
generally known to, and not be readily ascertainable by proper means by, other
persons who can obtain economic value from its disclosure or use.” § 325C.01, Subd.
5(i). In order for the information to be protected, the owner must take reasonable
efforts to maintain its secrecy. § 325C.01, Subd. 5(ii). In a suit for misappropriation
of trade secrets, the plaintiff must specify what information it seeks to protect.
Electro-Craft Corp. v. Controlled Motion, Inc., 332 N.W.2d 890, 898 (Minn. 1983).

       Fox cannot meet its burden of establishing that Cattoor or the Twins were privy
to any of its confidential information. Fox argues that Cattoor had access to trade
secrets by his knowledge of its financial information and business contacts. We
disagree. First, we note that Cattoor was general manager at MSC, but had left by the
time MSC was purchased by Fox. Therefore, any information Cattoor may have had
related only to MSC. Fox concedes that it entered into other telecast agreements after
Cattoor left, rendering Cattoor’s knowledge of its financial information outdated. As
the district court observed, obsolete information cannot form the basis for a trade
secret claim because the information has no economic value. Further, Cattoor’s
knowledge of industry contact people does not rise to the level of a trade secret
because this type of unprotected information is readily ascertainable within a trade.
As for Cattoor’s knowledge of various telecast agreements he had gleaned while at
MSC, these documents are not protected because Fox’s predecessor, MSC, did not

      5
       Fox’s brief is devoid of any challenge to the district court’s adverse grant of
summary judgment on its claims that the Twins breached a duty of good faith and fair
dealing and that the Twins and Cattoor tortiously interfered with its prospective
business relations. Thus, we decline to address these issues on appeal.

                                         -9-
mark them as confidential between the parties. See Electro-Craft, 332 N.W.2d at 903
(holding no trade secret protection where none of company’s relevant documents
marked as confidential).

      Even if Cattoor did know of trade secrets, the record contains no evidence that
he used the information for the Twins’s benefit. Fox speculates that it is inevitable
that Cattoor will, at some future point, use confidential information for the Twins’s
benefit. Fox presents no evidence to support this assertion. The district court
correctly granted summary judgment on Fox’s trade secrets claims.

       Fox also sued Cattoor individually for breach of his common law and fiduciary
duties, alleging that Cattoor has misused or will misuse confidential information that
he gathered during his employment at MSC. This claim is essentially a restatement
of Fox’s trade secrets claim. Again, Fox has failed to specify what information
Cattoor was privy to, what steps it took to keep that information confidential, and
how Cattoor misused the information. For the same reasons Fox’s trade secrets
claims fail, this claim fails as well.

       Fox further alleges tortious interference with contract. To prove tortious
interference, the plaintiff must show that a contract existed between the plaintiff and
a third party, and that the defendant knowingly procured the third party to breach the
contract without justification. Kjesbo v. Ricks, 517 N.W.2d 585, 588 (Minn. 1994).
The plaintiff must also show that damage resulted from the defendant’s conduct. Id.

      Fox claims that the defendants wrongfully contacted other sports teams that
were under contract with Fox. While Cattoor did approach a number of teams about
the possibility of joining Victory Sports, none of the teams changed networks – all
remained with Fox. In fact, some teams have since signed new contracts to stay with
Fox for an extended period of time. Fox has not adequately explained how it was
damaged by Cattoor’s conduct, particularly where no team left the network. Because

                                         -10-
Fox has failed to establish the essential elements of its tortious interference with
contract claim, we agree that the district court properly granted summary judgment
in favor of the defendants.

B.    Defendant Counterclaims

       The Twins and Cattoor sued Fox for business defamation and defamation,
respectively, based on a press release Fox issued announcing the commencement of
this lawsuit. A plaintiff is entitled to relief for defamation where it is established that
the defendant published a false statement about the plaintiff that harmed the
plaintiff’s reputation. Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 255
(Minn. 1980). “However, statements about matters of public concern that are not
capable of being proven true or false and statements that reasonably cannot be
interpreted as stating facts are protected from defamation actions by the First
Amendment.” McGrath v. TCF Bank Sav., FSB, 502 N.W.2d 801, 808 (Minn. Ct.
App. 1993). Thus, in analyzing a defamation claim, the court must consider the
context within which the statement was made. Hunt v. Univ. of Minnesota, 465
N.W.2d 88, 94 (Minn. Ct. App. 1991).

        Our independent review of the press release at issue leads us to the conclusion
that it is not actionable. First, nothing in the document is actually false; the press
release contains imprecise language that, at most, casts the Twins and Cattoor in a
negative light. See McGrath, 502 N.W.2d at 808 (holding negative, imprecise terms
will not give rise to defamation claim). The Twins argue that the press release
insinuates that the Twins are seeking to leave Minnesota. A close reading of the
press release makes clear, however, that Fox was merely speculating that leaving
Minnesota may be an alternative that the Twins were considering, based on the
Twins’s claim that no acceptable stadium solution existed. See Hunter v. Hartman,
545 N.W.2d 699, 707 (Minn. Ct. App. 1996) (holding no cause of action for
defamation where defendant “advocates one of several feasible interpretations of

                                           -11-
some event”). Moreover, the context of the document – a press release from Fox
announcing that it is suing the Twins and Cattoor – makes clear that the purpose of
the writing is for Fox to state its case to the public. Id. at 706 (“The context of a
remark, if one that would lead even the most careless listener to perceive the remark
as exaggerated or imaginative commentary, may make an otherwise defamatory
statement protected hyperbole.”) Thus, although some of the language contained in
the press release is inflammatory, it is not defamatory.

        Lastly, the Twins brought related claims for unfair competition and tortious
interference with prospective business relations.6 The Twins point to evidence that
Fox tried to persuade its cable operators and sports teams, particularly the
Timberwolves and the University of Minnesota, to continue their relationships with
Fox rather than work with Victory Sports. The Twins’s best evidence to support this
contention is a letter sent from Fox to Rob Moor, president of the Timberwolves. In
the letter, Fox stated that it is in litigation with the Twins regarding telecast contracts,
and cautioned the Timberwolves about entering into contract discussions with the
Twins that would violate Fox’s contract rights. Fox further stated that it would
protect its contract rights with the Timberwolves, alluding to litigation.

      Liability for unfair competition claims only attaches where the actor’s conduct
is improper. R.A., Inc. v. Anheuser-Busch, Inc., 556 N.W.2d 567, 571 (Minn. Ct.
App. 1996). There is “no liability for interference on [the] part of one who merely
gives truthful information to the other.” Glass Serv. Co., Inc. v. State Farm Mut.
Auto. Ins., 530 N.W.2d 867, 871 (Minn. Ct. App. 1995) (citing Restatement (Second)
of Torts, § 772 cmt. b (1979)).

       6
        Minnesota recognizes tortious interference with prospective business relations
as a sub-class of unfair competition tort claims. See United Wild Rice, Inc. v. Nelson,
313 N.W.2d 628, 632 (Minn. 1982).

                                           -12-
      The letter from Fox to the Timberwolves contained truthful information, as the
Timberwolves were currently under contract with Fox, and Fox held a right of first
negotiation after the contract expired. As such, nothing was improper about Fox
contacting the Timberwolves to assert Fox’s contract rights. Because the remaining
evidence of unfair competition is too speculative to be actionable, the district court’s
grant of summary judgment on this claim was proper.

                                   CONCLUSION

      As a result of extending its lease at the Metrodome, the Twins triggered Fox’s
option right to televise Twins games for the 2002 and 2003 seasons under the
Telecast Agreement. Moreover, having satisfied the conditions of the contract, the
Twins are entitled to bonus payments under the Telecast Agreement for years 2001,
2002, and 2003. We affirm the district court’s interpretation of the Telecast
Agreement.

      No genuine issue of material fact exists on the parties’ tort claims, and, finding
the law to favor the defendants on each claim, we agree that the district court
correctly granted defense motions for summary judgment on each claim.

       Having taken the matter under advisement, we hereby deny the motion to seal
briefs and appendices, and our temporary order requiring the clerk of courts to hold
the briefs and appendices under seal is withdrawn.

      A true copy.

             Attest:

                CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                         -13-