Opposition Brief — Olander v. State Farm Mutual Automobile Insurance

a res

re a

No. 02-1852

IN THE

Supreme Court of the United States

BRIAN OLANDER,

Petitioner,

v.

STATE FARM MUTUALAUTOMOBILE

INSURANCE COMPANY; et al.,

Respondents.

On PETITION FOR A WRIT OF CERTIORARI TO THE

~ UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF IN OPPOSITION

RosBert J. UDLAND DALE L. BECKERMAN

VoGEL Law FirM Counsel of Record

218 NP Avenue Deacy & Deacy, LLP

P.O. Box 1389 920 Main Street

Fargo, ND 58107-1389 Suite 1900

(701) 237-6983 Kansas City, MO 64105

(816) 421-4000

Attorneys for Respondents

182617 ce

COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

1

- CORPORATE DISCLOSURE STATEMENT

Respondent State Farm Mutual Automobile Insurance

Company is a mutual insurance corporation which is owned

by its policyholders and has no publicly traded stock.

Respondents State Farm Fire and Casualty Company, State

Farm Life Insurance Company and State Farm General

Insurance Company are wholly-owned by Respondent State

Farm Mutual Automobile Insurance Company.

-

TABLE OF CONTENTS

Corporate Disclosure Statement ................

Table of Comtemts .....cs ss s55005 5 eee

Table of Cited Authorities .......:+ss0s5eeee tees

Reasons for Denying the Petition ...............

x The Case Does Not Meet This Court’s

Standards For Certiorari. ................

A.

Authority of the Courts of Appeal to

Order Rehearings En Banc. ..........

The Eighth Circuit’s Grant of Rehearing.

There is No Conflict Between Circuits

on An Important Issue. .............

1. Petitioner Points to No Conflicting

Case from Any Circuit. .........

2. Petitioner’s Reliance on the Local

Rules of Other Courts of Appeal Is

Misplaced. .... 0s s.ss0 cau

There Was No Irregularity in the

Proceedings. ....«seusse05 eee

Page

‘ ili

Contents

Page

II. Conclusion: The Writ Should Be Denied. ... 10

Appendix — Rule Involved ................... la

lv

TABLE OF CITED AUTHORITIES

CASES

Appling v. State Farm Mutual Automobile Insurance

Co., _ F.3d __, 2003 WL 21920905 (9th Cir.)

Seeseoeneesveeseoseeseeoueeeaseeseesvesa eesesveeseseoeeseensdes 8 8

Brown yv. Stites Concrete, Inc., 994 F.2d 553

Pr SD bs ee nneokc ene bese aenseetees

Crowell v. Campbell Soup Co., 264 F.3d 756

PR ED da ncinvexcnan berber entanpes

HM Holdings, Inc. v. Rankin, 72 F.3d 562

Cy Ge SE eC ennSekeeed bicernc seen

Khanh Phuong Nguyen v. U.S., __ U.S. __, 123 S.

Ct. 2130, 156 L. Ed. 2d 64 (U.S. 2003) ........

Layne & Bowler Corp. v. Western Well Works, Inc.,

261 U.S. 387, 43 S. Ct. 422 (U.S.1923) .......

Martin v. Equitable Life Assurance Society, 553 F.2d

AVR Ge ee TOFD creecinescces niacwetoees

Melnick v. State Farm Mutual Automobile Insurance

Co., 749 P.2d 1105 (N.M.), cert. denied, 499 U.S.

822, 109 S. Ct. 67, 102 L. Ed. 2d 44 (1988) ....

Mooney v. State Farm Insurance Companies, 344 F.

Page

—

Vv

Cited Authorities

Page

Olander v. State Farm Mutual Automobile Insurance

Co., 278 F.3d 794 (8" Cir. 2002), vacated, 317

F.36 GGr Gl" Ga: SOE + x05 0we ee sacet ieee 1,5

Olander v. State Farm Mutual Automobile Insurance

Co., 317 F.3d 807 (8* Cir. 2003) ..... 0.05008. 4, 5-6

Shenker v. Baltimore & Ohio R.R. Co., 374 U.S. 1,

83 S. Ct. 1667, 10 L. Ed. 2d 709 (1963) ....... 3-4

U.S. v. American-Foreign S.S. Co, 363 U.S. 685,

80 S. Ct. 1336, 4 L. Ed. 2d 1491 (1960) ....... “4

Vitkauskas v. State Farm Mutual Automobile

Insurance Company, 157 Ill. App.3d 317, 509

N.E.2d 1385 (fll. App. 1987) .............6.- 1

Wadeson v. American Family Mutual Ins. Co.,

SES NW .AG S67 GD. TBO onc candiavnewe’s 5

Western Pacific Railway Corp. v. Western Pacific

Railway Co., 345 U.S. 247, 73 S. Ct. 656,97 L.

RS | ear Mae CMa 3, 4, 6, 8

STATUTE

MULL (MO... ee 3,8

vi

Cited Authorities

Page

RULES

United States Supreme Court Rule 10 .......... passim

United States Supreme Court Rule 13 ........... l

Rule 35 Fed. R. AMD. Fs cc cvereesavenvutesees passim

Rule 35A of the United States Court of Appeals for

the Binhth CHOU ow. cen ccdsvccusedsaceners 8

Rule 35.0 of the United States Court of Appeals for

the Thiel CONGUE oc cvnveckeduinueeseesceu 8

Rule 40(c) of the United States Court of Appeals for

the Soventh COOW a oc ccccstadevsessiucess 7

OTHER AUTHORITIES

Internal Operating Procedure 9.3.3 of the United

States Court of Appeals for the Third Circuit

spo aeeedssuveus che eeuweeee Onin eee 8

Internal Operating Procedure, Rule 35 of the United

States Court of Appeals for the Fifth Circuit

l

REASONS FOR DENYING THE PETITION

I. THE CASE DOES NOT MEET THIS COURT’S

STANDARDS FOR CERTIORARI.

Petitioner complains of the grant of rehearing by the

United States Court of Appeals for the Eighth Circuit.

Pursuant to its grant of rehearing, the Eighth Circuit has

already proceeded to rehear the case, reverse the panel

opinion and affirm the District Court’s grant of summary

judgment. See Pet. App. B, p. 2a. Only after the rehearing

produced an adverse result did Petitioner elect to complain

of the decision to grant the rehearing.’

1. The decisive substantive issue in the case is whether the Agent’s

Agreement between Petitioner and Respondents is terminable at will.

The Agreement, which is of indefinite duration, provides, “You or State

Farm have the right to terminate this Agreement by written notice

delivered to the other or mailed to the other’s last known address. . . .”

See Pet. App. B, p. 3a. The reported decisions on the issue from other

jurisdictions had held that the Agreement is terminable at will. Mooney

v. State Farm Insurance Companies, 344 F. Supp. 697 (D.N.H. 1972);

Melnick v. State Farm Mutual Automobile Insurance Co., 749 P.2d 1105

(N.M.), cert. denied, 499 U.S. 822, 109 S. Ct. 67, 102 L. Ed. 2d 44

(1988); Vitkauskas v. State Farm Mutual Automobile Insurance

Company, 157 Ill. App. 3d 317, 509 N.E.2d 1385 (Ill. App. 1987). The

panel opinion here held to the contrary. Olander v. State Farm Mutual

Automobile Insurance Co., 278 F.3d 794 (8th Cir. 2002), vacated, 317

F.3d 807 (8th Cir. 2003). On August 13, 2003, a panel of the Ninth

Circuit also held that the Agreement is terminable at will in Appling v.

State Farm Mutual Automobile Insurance Co., __ F.3d __, 2003 WL

21920905 (9th Cir.).

2. Thus, Respondents note that there is a question of this Court’s

jurisdiction under Rule 13. The Petition seeks review of the March 26,

2002 decision to grant the rehearing, Pet. App. A, p. 1a. Although the

rehearing was granted in March 2002, the Petition was not filed until ~

June 2003.

2

This Court grants review on a writ of certiorari sparingly

and only for “compelling reasons”. Rule 10. “A petition for

writ of certiorari is rarely granted when the asserted error

consists of erroneous factual findings or the misapplication

of a properly stated rule of law.” Jd. As the Court stated in

dismissing as improvidently granted the writ in Layne &

Bowler Corp. v. Western Well Works, Inc., 261 U.S. 387,

392-93, 43 S. Ct. 422, 423 (U.S. 1923):

If it be suggested that as much effort and time as

we have given to the consideration of the alleged

conflict would have enabled us to dispose of the

case before us on the merits, the answer is that it

is very important that we be consistent in not

granting the writ of certiorari except in cases

involving principles the settlement of which is of

importance to the public, as distinguished from

that of the parties, and in cases where there is a

real and embarrassing conflict of opinion and

authority between the Circuit Courts of Appeals.

That remains the Court’s approach today. Rule 10(a)

articulates three standards which “indicate the character of

the reasons the Court considers”. Those are:

(a) a United States court of appeals has entered a

decision in conflict with the decision of another

United States court of appeals on the same

important matter; has decided an important federal

question in a way that conflicts with a decision

by a state court of last resort; or has so far departed

from the accepted and usual course of judicial

proceedings, or sanctioned such a departure by a

2

Y

lower court, as to call for an exercise of this

Court’s supervisory power; i

Petitioner makes arguments under the first and third. The

case satisfies neither.

A. Authority of the Courts of Appeal to Order

Rehearings En Banc.

Section § 46(c) of Title 28 of the United States Code

(Pet. App. C, p. 25a) empowers the courts of appeal to grant

rehearings en banc. The statute is silent as to the

circumstances in which the courts of appeal can, or should,

exercise the power to rehear cases en banc. Congress could

have articulated a standard but did not do so, thus leaving

the way open for the Judicial Branch to craft rules for the

exercise of the power.

Shortly after adoption of 28 U.S.C. § 46(c), this Court

recognized in Western Pacific Railway Corp. v. Western

Pacific Railway Co., 345 U.S. 247, 73 S. Ct. 656, 97 L. Ed.

986 (1953) that 28 U.S.C. § 46(c) is a broad grant of both

power and discretion to rehear cases:

The statute deals not with rights but with powers.

The manner in which that power is to be

administered is left to the court itself. . . . Because

§ 46(c) is a grant of power, and nothing more,

each Court of Appeals is vested with a wide

latitude of discretion to decide for itself just how

that power shall be exercised.

345 U.S. at 259 (emphasis added). The Court reiterated the

breadth of that discretion in Shenker v. Baltimore & Ohio

le

4

R.R. Co., 374 U.S. 1, 4, 83 S. Ct. 1667, 10 L. Ed. 2d 709 (1963)

and United States v. American-Foreign S.S. Co, 363 U.S. 685,

80 S. Ct. 1336, 1339, 363 U.S. 685, 688, 4 L. Ed. 2d 1491

(1960) (citing Western Railway, supra).

In 1967, this Court adopted Rule 35, Fed. R. App. P.

(Pet. App. D, p. 26a) That Rule establishes two broad criteria

for the grant of a rehearing en banc: (1) maintenance of

uniformity of the decisions of the circuit, and (2) questions of

“exceptional importance”. Rule 35(a)(1), (2), Fed. R. App. P.

Although the Rule codified bases for the grant of rehearing,

nothing in the text of the Rule or the accompanying Comments

suggested that it was intended to limit the broad discretion

granted by Congress and previously recognized by this Court E

in Western Pacific and Shenker. H

B. The Eighth Circuit’s Grant of Rehearing.

In their Petition for Rehearing (Pet. App. K, pp. 39a-40a,

50a-51a), Respondents made significant arguments on both

grounds for rehearing under Rule 35(a). Concerning uniformity,

a number of prior decisions of the Circuit, applying similar or

identical rules of contract construction, had held that agreements

with similar language were terminable at will. Defendants cited

Crowell v. Campbell Soup Co., 264 F.3d 756, 761 (8th Cir. 2001)

(termination at will of contract for agricultural services), and

Martin v. Equitable Life Assurance Society, 553 F.2d 573

(8th Cir. 1977) (finding of ambiguity in termination language

reversed; contract held terminable at will)’. The panel opinion

was in conflict with those.

3. The en banc Court identified a number of other decisions of

the Eighth Circuit which had recognized that agreements of indefinite

duration could be terminated at will. Olander v. State Farm Mutual

Automobile Insurance Co., 317 F.3d 807, 810 n.2. (8th Cir. 2003).

5

Petitioner’s argument (Pet. at 5) to the contrary about

those cases is taken directly from his opposition to

Respondents’ Petition for Rehearing (see Pet. App. L, p. 60a).

The Eighth Circuit’s en banc opinion (Pet. App. B, p. 5a)

obviously disagreed with Petitioner’s reading of those cases

as a matter of law. Review of such a disagreement is not

within Rule 10 of this Court.

Concerning the “exceptional importance” criterion of

Rule 35(a)(2), Fed. R. App. P., Respondents noted (Pet. App.

K, pp. 39a, 50a-5 1a) that there are several hundred State Farm

agents in the Circuit whose contract relations may be affected

by the opinion of the panel’.

In its decision, the en banc Court succinctly stated its

rationale for rehearing the case en banc. In full° that is as

follows:

Because this decision may affect countless State

Farm agency relationships in the Eighth Circuit

and nationwide and conflicts with a number of

decisions by other courts construing the standard

form State Farm agency contract, we granted State

4. The panel opinion relied (278 F.3d at 797) on contract

language anticipating a beneficial relationship as creating ambiguity.

Respondents pointed out in their Petition for Rehearing (Pet. App.

K, p. 44a) that that was directly contrary to North Dakota precedent

in Wadeson v. American Family Mutual Ins. Co., 343 N.W.2d 367,

371 (N.D. 1984) where the North Dakota Supreme Court held that

similar assurances of a long career did not render termination at will

language ambiguous.

5. In his quotation of the rationale (Pet. at 6), Petitioner omits

critical language.

6

Farm’s petition for rehearing en banc and now

affirm.°

317 F.3d at 809. That language indicates that the Court found

that the issue satisfied the exceptional importance standard.’

Petitioner suggests that the case did not meei the

exceptional importance standard because it involves North

Dakota law. The Eighth Circuit obviously viewed the case

as one of broader significance, as indicated by its language

quoted immediately above*®. That was a discretionary

determination under Western Railway, supra. That does not

qualify for review under Rule 10 of this Court.

6. Respondents asserted additional bases for finding exceptional

importance under Rule 35(a)(2), Fed. R. Civ. P. which the en banc

Court did not incorporate into its opinion. See Pet. App. K, pp. 39a-

40a, 50a-Sla.

7. As mentioned in note 3 above, the en banc Court also

identified at 317 F.3d at 810 n.2 a number of prior decisions of the

Circuit, involving various types of contracts, with which the panel

opinion was in conflict, thus furnishing a second basis for en banc

review under Rule 35, Fed. R. App. P.

8. Because the case, which was originally filed by Petitioner in

United States District Court, reached a United States Court of

Appeals, any decision is destined to be cited repeatedly in contract

termination cases throughout the country.

wee Re Nr re mr

:

7

C. There is No Conflict Between Circuits on An

Important Issue.

1. Petitioner Points to No Conflicting Case from

Any Circuit.

Petitioner fails to point to conflicting cases from other

circuits. Brown v. Stites Concrete, Inc., 994 F.2d 553 (8th

Cir. 1993) does not aid his argument. That case was also

decided by the Eighth Circuit and therefore does not qualify

as the decision of another court of appeals.

Also, the holding of Brown does not aia Petitioner.

The Eighth Circuit held only that, where a suggestion of

rehearing en banc is granted, the court of appeals reviews

only the issues set out in the Suggestion as meriting rehearing;

the court does not review the entire case. Nothing in Brown

conflicts in any way with the decision to rehear Petitioner’s

case.

Nor is Petitioner’s other cited case on the issue,

HM Holdings, Inc. v. Rankin, 72 F.3d 562 (7th Cir. 1995), in

conflict with the decision of the Eighth Circuit to rehear this

case. In HM Holdings, the Seventh Circuit held that the

petitioner for rehearing had failed even to attempt to conform

to the requirements of that Court’s Rule 40(c) for such

petitions.* The HM Holdings decision was addressed to the

unique circumstances of that petition and is no authority

regarding the Eighth Circuit’s disposition of Respondents’

petition in this case.

9. The same cannot be said of Respondents’ petition here.

See Pet. App. K, pp. 38a-40a and 49a-5la where Respondents

specifically articulated bases under Rule 35, Fed. R. Civ. P. for

rehearing en banc. -

8

2. Petitioner’s Reliance on the Local Rules of

Other Courts of Appeal Is Misplaced.

The local rules of other circuits are not decisions of those

circuits.'° By the language of Rule 10 of this Court, which

focuses on decisions, differences among rules of the circuits

do not constitute conflicts warranting grant of the writ of

certiorari.

Moreover, some of the rules on which Petitioner relies

are not inconsistent with the Eighth Circuit’s grant of

rehearing. For example, nothing in Third Circuit Rule 35.0

prohibits rehearing en banc of a state law issue. Third Circuit

Internal Operating Procedure (“IOP”’) 9.3.3. (Pet. App. 28a)

does permit, albeit with caution, rehearing en banc on issues

of state law (“Rehearing en banc is ordinarily not granted

when the only issue is one of state law”). The Fifth Circuit

IOP directed to rehearings en banc (Pet. App. F, p. 29a)

expressly recognizes conflict between an opinion and “state

law precedent” as a basis for rehearing en banc'’.

Finally, there is no requirement of uniformity among the

circuits in this area. Taken together, 28 U.S.C. § 46(c), Rule

35 Fed. R. App. P., and this Court’s decision in Western

Railway give the individual courts of appeal broad discretion

in the decision to grant or deny en banc hearings.

There is no conflict with other Circuits and certiorari is

not warranted on that basis.

10. Eighth Circuit Rule 35A (App. A hereto) addresses only

procedures on such petitions and sanctions.

11. Petitioner omits this standard in his discussion of the IOP

in the Petition. Pet. at 6.

;

:

u

9

D. There Was No Irregularity in the Proceedings.

Petitioner also asserts that the Court of Appeals somehow

departed from the usual and accepted course of proceedings.

That argument has no merit.

This Court has granted the writ on that basis only in the

most extreme cases. For example, in Khanh Phuong Nguyen

v. United States, _U.S.__, 123 S. Ct. 2130, 156 L. Ed. 2d

64 (U.S. 2003), review was granted where petitioner’s

conviction was reviewed by a court which included an Article

IV judge.

This is not such a case. The Eighth Circuit proceeded in

an orderly fashion to address Respondents’ timely Petition

for Rehearing. Shortly after Respondents filed their petition

for rehearing, and in accordance with Rule 35, Fed. R. App.

P., the Court of Appeals requested a response from Petitioner.

Petitioner filed his response on February 20, 2002 — well

before the Court entered its order granting rehearing en banc

on March 26, 2002. Pet. App. L, p. 53a. The en banc decision

states bases for the rehearing under both standards of Rule

35, Fed. R. App. P.

The proceedings were orderly and in accordance with

the Federal Rules of Appellate Procedure and the Rules of

the United States Court of Appeals for the Eighth Circuit.

There was no departure from the accepted and usual course

of judicial proceedings. Nothing in the proceedings warrants

this Court’s intervention by way of a writ on the basis of

irregularity.

10

II. CONCLUSION: THE WRIT SHOULD BE DENIED.

Respondents respectfully urge that the Petition for Writ

of Certiorari be denied or dismissed for lack of jurisdiction.

Respectfully submitted,

RosBert J. UDLAND DALE L. BECKERMAN

VoGEL Law FirM Counsel of Record

218 NP Avenue Deacy & Deacy, LLP

P.O. Box 1389 920 Main Street

Fargo, ND 58107-1389 Suite 1900

(701) 237-6983 Kansas City, MO 64105

(816) 421-4000

Attorneys for Respondents