On July 17, 2014, in New York Marine and General Insurance Company v. Continental Cement Company, LLC, the US Court of Appeals for the Eighth Circuit held that a choice of law question can be reviewed on appeal after denial of a summary judgment motion, even if the issue was not preserved in a Federal Rule of Civil Procedure (FRCP) 50 motion (No. 13-2313 (8th Cir. July 17, 2014)).

The case arises from a maritime insurance dispute. The defendants, Continental Cement Company, LLC and Summit Materials, LLC (Continental Cement), owned a cement barge that sank in the Mississippi River. The plaintiffs, Starr Indemnity & Liability Company and New York Marine & General Insurance Company (Starr Indemnity), insured the barge and investigated the sinking. The plaintiff insurers declined coverage for the losses and brought an action in the US District Court for the Eastern District of Missouri, seeking a declaration of their rights and obligations under Continental Cement's insurance policies. Continental Cement counterclaimed for breach of contract and vexatious refusal to pay under Missouri law.

During discovery, Starr Indemnity located a 2008 survey of the cement barge at issue that indicated the barge had not been watertight at the time Continental Cement obtained its policies. Starr Indemnity amended its complaint to assert certain affirmative defenses, including that the insurance policies were void because Continental Cement breached its duty of utmost good faith by withholding the survey from its insurance application. On a motion for partial summary judgment, Continental Cement disputed, among other things, the claim that the federal doctrine of utmost good faith is an established admiralty rule, arguing instead that Missouri law applied.

The district court denied the motion for partial summary judgment finding that the doctrine of utmost good faith is entrenched in federal law, and the case went to trial. At the close of evidence, Continental Cement moved for judgment as a matter of law under FRCP 50 based on Starr Indemnity's utmost good faith defense. Continental Cement did not, however, renew its argument made on partial summary judgment that Missouri law, rather than federal common law, governed. After the jury returned a general verdict in favor of Starr Indemnity, the district court entered a corresponding final judgment.

Continental Cement appealed arguing, among other things, that the district court erred by applying the federal doctrine of utmost good faith instead of Missouri state law. Starr Indemnity countered that Continental Cement's failure to renew its choice of law argument in its FRCP 50 motion at trial rendered this argument unavailable on appeal. In the alternative, Continental Cement argued that the district court erred by denying the motion for judgment as a matter of law.

The Eighth Circuit affirmed. The court first noted that denial of summary judgment is interlocutory in nature and generally is not appealable after trial and judgment, unless the arguments are preserved in an FRCP 50 motion at trial. The court noted, however, that there is a split among the circuit courts as to whether "purely legal" issues should be excepted from the general rule:

The Eight Circuit found that its own case law on the issue was conflicting. It also noted that an open question remained in the circuit as to whether denial of a summary judgment motion on an issue preliminary to the merits can be reviewed after trial even where no motion for judgment as a matter of law on this issue has been made. The court went on to hold that a choice of law question is:

Accordingly, the court reviewed the choice of law issue and concluded that the federal doctrine of utmost good faith is a judicially established admiralty rule that governed.

After finding that the choice of law issue could be considered on appeal, the Eight Circuit then held that Continental Cement had failed to preserve for review its substantive arguments on Starr Indemnity's utmost good faith defense. Although Continental Cement had unsuccessfully moved for judgment as a matter of law on these issues under FRCP 50(a) at the close of evidence, it failed to renew its motion postverdict under FRCP 50(b). As a result, it waived its appeal of the denial of its motion for judgment as a matter of law.

The Eighth Circuit will allow for appellate review of a choice of law question that was rejected in a summary judgment motion, even if the issue was not renewed at trial. However, the court will not hear an appeal of the denial of an FRCP 50(a) motion for judgment as a matter of law where a party does not renew the motion under FRCP 50(b) after trial.