                     United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 08-1747
                                   ___________

Semi-Materials Co., Ltd.,             *
                                      *
         Plaintiff - Appellee,        * Appeal from the United States
                                      * District Court for the Eastern
   v.                                 * District of Missouri.
                                      *
MEMC Electronic Materials, Inc.;      * [UNPUBLISHED]
MEMC Pasadena, Inc.,                  *
                                      *
         Defendant - Appellant.       *
                                 ___________

                             Submitted: June 9, 2009
                                Filed: July 10, 2009
                                 ___________

Before BYE, BEAM, and SHEPHERD, Circuit Judges.
                           ___________

PER CURIAM.

       MEMC Electronic Materials, Inc., and MEMC Pasadena, Inc. (collectively
MEMC), appeal the district court’s order finding it entered into a binding settlement
agreement with Semi-Materials Co., Ltd., and ordering specific performance of the
settlement terms. We remand.

      MEMC manufactures polysilicon, and Semi-Materials manufactures
semiconductors using a process requiring polysilicon. Beginning June 2005, MEMC
and Semi-Materials entered into a series of contracts covering the sale of polysilicon
by MEMC to Semi-Materials. In September 2006, Semi-Materials sued MEMC
alleging it breached the contracts. On November 9, 2007, the parties attended a
mediation in hopes of settling the dispute. No settlement was reached but the parties
continued to negotiate.

       At the unsuccessful mediation, a handwritten “term sheet” was compiled
delineating the salient terms to be covered by any settlement. On November 20, 2007,
using the handwritten term sheet as a guideline, counsel for MEMC sent an email to
Semi-Materials’s attorney, which included a Proposed Settlement Term Sheet. The
email contained an explanation of several of the proposed terms and concluded by
stating:

      Much like Semi-Materials, MEMC does not want this to drag out. The
      parties either need to agree now on these settlement terms, or not agree,
      and proceed with the lawsuit. As a result, I have been instructed to
      advise Semi-Materials that this settlement offer is MEMC’s last offer,
      and that the offer will remain open until 5:00 p.m. on Friday, November
      23, 2007. While I will not be in the office on Thursday or Friday, I will
      have my Blackberry, and we can indicate assent to the Term Sheet via e-
      mail as needed. Obviously, thereafter we would need to commence
      drafting the actual Settlement Agreement (said differently, we are not
      expecting to have the Settlement Agreement drafted and signed by
      November 23; just agreement on this Term Sheet). Obviously, any
      Settlement Agreement would need to include broad releases, including
      releases broad enough to capture not only the disputes raised by the
      allegations in the Amended Complaint, but other matters Semi-Materials
      has raised regarding relationships between Semi-Materials and MEMC
      and SMC Shanghai and MEMC.

      Counsel for Semi-Materials responded to MEMC’s final offer on November 22,
2007, stating: “Semi-Materials hereby accepts MEMC’s settlement offer.”

       Over the next month, the parties exchanged several drafts of a proposed
settlement agreement but no final draft was agreed upon or executed. On December
26 and 27, Semi-Materials wired pre-payments to MEMC for a December 31, 2007,

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shipment, as required by MEMC’s settlement offer. On December 26, MEMC
advised Semi-Materials it could not provide the shipment. On December 28, Semi-
Materials advised MEMC it considered the November 20 final settlement offer
binding upon Semi-Materials’s unconditioned acceptance, and MEMC’s failure to
ship was a breach of the settlement agreement. Thereafter, Semi-Materials moved the
district court for an order enforcing the settlement and for specific performance.

       The district court held MEMC’s final settlement offer contained in the
November 20 email and attachment constituted a binding offer of settlement. The
court further concluded a binding settlement agreement had been created by Semi-
Materials’s unconditional acceptance of the offer. The court rejected MEMC’s
characterization of the final offer as conditioned upon the execution of the final
Settlement Agreement and the various releases. Additionally, the district court
ordered specific performance. On appeal, MEMC argues the district court erred
because 1) the parties’ communications made clear any settlement was conditioned
upon the execution of a written final Settlement Agreement and the necessary releases,
2) the Proposed Settlement Term Sheet could not reasonably be understood by Semi-
Materials as a binding offer or agreement, and 3) the parties’ conduct demonstrated
the Proposed Settlement Term Sheet was not intended by either as a binding offer or
agreement.

       Subsequent to the district court judgment granting specific performance, market
conditions drastically changed. Polysilicon or suitable substitutes became more
plentiful and the price of the product dramatically spiraled downward. As a result, a
few days prior to oral argument Semi-Materials moved this court for an order vacating
the district court’s order or, alternatively, an order affirming the district court but
remanding for consideration of Semi-Materials’s motion to rescind the settlement
agreement. Conversely, MEMC asks the court to reverse the district court’s decision
on the merits or, alternatively, to grant the motion to vacate with the added caveat that
it may recover its costs incurred on appeal.

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       Simply stated, both parties now contend, for different reasons, that the specific
performance remedy, the action of the district court that provides this court with
appellate jurisdiction, is neither equitable nor desirable. Because of this underlying
change in circumstances, the parties request that we return this contract dispute to the
district court in its pre-settlement status. The parties differ, however, with respect to
whether MEMC should be allowed to recover its appellate costs.

       After reviewing the record and the parties’ briefs and arguments, we find this
to be a just result and grant Semi-Materials’s motion to vacate. This returns the
dispute to the district court for further consideration of the claims and defenses of the
parties. The additional matter of MEMC’s costs on appeal is likewise placed within
the sound discretion of the trial court. See Fed. R. App. P. 39(e). We also remind
MEMC that it must file a bill of costs with the clerk of this court within fourteen days
of the entry of judgment if it wishes to preserve its right to recover any appellate costs.
See Fed. R. App. P. 39(d)(1); 8th Cir. R. 39A(b).

      Accordingly, we remand this matter to the district court for further proceedings
consistent with this opinion.
                        ______________________________




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