United States of America v. Steven Dornsbach; Kamida, Inc.

United States Court of Appeals
For the Eighth Circuit
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No. 23-3258
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United States of America
Plaintiff - Appellee
v.
Steven Dornsbach; Kamida, Inc.
Defendants - Appellants
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Appeal from United States District Court
for the District of Minnesota
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Submitted: March 20, 2025
Filed: June 2, 2025
[Unpublished]
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Before GRUENDER, BENTON, and SHEPHERD, Circuit Judges.
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PER CURIAM.
On March 9, 2022, a grand jury indicted Steven Dornsbach and Kamida, Inc.
for conspiring to restrain trade in violation of § 1 of the Sherman Act. See 15 U.S.C.
§ 1. The indictment alleged that the defendants knowingly entered into and engaged
in a conspiracy to suppress and eliminate competition by rigging bids for concrete

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repair and construction contracts. According to the indictment, the defendants’
conduct constituted a per se restraint on trade in violation of § 1 of the Sherman Act.
The following day, the Government issued a press release titled “Minnesota
Concrete Company and its CEO Indicted for Rigging Bids for Public Contracts.”
The press release described the nature of the charges against the defendants and the
potential penalties resulting from a violation of the Sherman Act. In addition, it
included a hyperlink to the indictment, as well as two statements from Government
officials. One statement said: “This indictment affirms the division’s commitment
to safeguarding the integrity of the government procurement process at all levels of
government.” The other stated: “For years, the defendants allegedly cheated their
own communities by conspiring to rig bids on concrete repair and construction
contracts for local governments and school districts. . . . Bid rigging is not a
victimless crime; it reduces competition and charges taxpayers the difference. This
indictment shows that the FBI and our partners are committed to investigating those
who try to cheat the system for their own gain.”
Prior to trial, the defendants filed a motion to dismiss the indictment. The
defendants argued that § 1 of the Sherman Act was unconstitutionally vague and that
application of the per se rule violated the Fifth and Sixth Amendments to the United
States Constitution. The district court1 denied the motion. Thereafter, the
defendants proposed jury instructions which omitted the per se rule. The district
court rejected those instructions and subsequently instructed the jury on the per se
rule.
After a seven-day trial, the jury found the defendants not guilty. The district
court entered judgments of acquittal on May 12, 2023, which terminated the criminal
case. Four days later, the Government added a notation to the top of its press release,
which stated: “The defendants in this case, Steven Dornsbach and Kamida Inc., were
1 The Honorable Daniel M. Traynor, United States District Judge for the
District of North Dakota, sitting as visiting judge in the District of Minnesota.

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acquitted by a jury of the charges alleged in the indictment described in the press
release below.” The Government added the same statement to the top of the
hyperlinked indictment. The Government made no other changes to the press
release, and it remains publicly available.
On July 10, 2023, the defendants filed a motion for a permanent injunction in
the terminated criminal proceeding. The defendants asserted that they continued to
suffer reputational harm from the Government’s press release because it maintained
that they were guilty of the crimes charged. Accordingly, they sought an injunction
requiring the Government to remove it. The district court concluded that it lacked
subject matter jurisdiction and denied the motion.
On appeal, the defendants contend that the district court erroneously (1)
concluded that it lacked subject matter jurisdiction over their motion for a permanent
injunction and (2) denied their motion to dismiss the indictment as well as their
proposed jury instructions. We review de novo the question of subject matter
jurisdiction. United States v. Meyer, 439 F.3d 855, 859 (8th Cir. 2006).
We first address whether the district court had subject matter jurisdiction over
the motion for a permanent injunction. The parties agree that the jurisdictional
inquiry turns on whether the district court had ancillary jurisdiction. “[T]he doctrine
of ancillary jurisdiction recognizes federal courts’ jurisdiction over some matters
(otherwise beyond their competence) that are incidental to other matters properly
before them.” United States v. Afremov, 611 F.3d 970, 975 (8th Cir. 2010) (internal
quotation marks omitted). Federal courts may exercise ancillary jurisdiction in two
situations: (1) “to permit disposition by a single court of claims that are, in varying
respects and degrees, factually interdependent” and (2) “to enable a court to function
successfully, that is, to manage its proceedings, vindicate its authority, and effectuate
its decrees.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 379-80
(1994).

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The defendants contend that the first category is met because their motion for
a permanent injunction is based on the facts underlying the criminal charges. It is
not enough, however, that “certain things are germane both to the ancillary
proceeding and to the criminal case.” Afremov, 611 F.3d at 975-76. Rather, a
defendant must offer a “plausible argument for finding that the claim raised in his
motion is factually or logically interdependent with any of the criminal charges
against” him. Id. at 976. Here, the motion for a permanent injunction invokes a
legal theory—defamation—that is distinct from the underlying criminal proceeding.
A determination as to whether the Government defamed the defendants through a
press release on its website would not affect the resolution of the criminal
proceeding, which turned on whether the defendants violated the Sherman Act. See
id. (noting that ancillary jurisdiction was not appropriate where resolution of the
ancillary action would “not affect the final judgment entered in the criminal case”);
see also Peacock v. Thomas, 516 U.S. 349, 358 (1996) (cautioning “against the
exercise of jurisdiction over proceedings . . . where the relief sought is of a different
kind or on a different principle than that of the prior decree” (internal quotation
marks and alteration omitted)). Indeed, the criminal case had already been
terminated for two months before the defendants filed their motion for a permanent
injunction. The defendants’ motion is therefore not factually interdependent with
the underlying criminal proceeding, and the first category is not met.
As to the second category, the defendants assert that removal of the press
release is necessary to vindicate the district court’s judgments of acquittal. The
defendants assert that the acquittals have been “rendered meaningless” before “the
general public” because the general public will read the press release and “condemn
Dornsbach and Kamida as guilty.” To the contrary, the press release states clearly
at the top that the defendants were acquitted. It nowhere states that the defendants
actually committed the crimes or that they were found guilty. We therefore conclude
that the district court did not err in concluding that it lacked ancillary jurisdiction.
See Meyer, 439 F.3d at 859-62 (concluding that federal courts lack ancillary
jurisdiction over motions to expunge criminal records based solely on equitable
grounds).

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We next address the defendants’ contention that the district court erred in
denying their motion to dismiss the indictment, as well as their proposed jury
instructions. It is well established that “[o]nly one injured by the judgment sought
to be reviewed can appeal.” Parr v. United States, 351 U.S. 513, 516 (1956).
Dornsbach and Kamida, Inc. were acquitted, so they are not “injured” parties that
can appeal the district court’s pretrial rulings. See id. at 517.
Accordingly, we affirm the judgment of the district court.
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