Unitherm Food Systems v. Swift Eckrich (04-597)
Appealed from: Court of Appeals for the Federal Circuit
Oral argument: November 2, 2005
Rule 50(a) of the Federal Rules of Civil Procedure empowers a judge to determine an issue himself, rather than submitting it to the jury, when the evidence is insufficient for a reasonable jury to conclude to the contrary. When the judge's determination of the particular issue makes it impossible for the losing party to prevail in its overall claim or defense, the judge will enter a "judgment as a matter of law" against the party. Because such a judgment deprives the losing party of its constitutional right to a jury trial, the rules governing the exercise of Rule 50(a) power are very important. This case addresses a significant question about these rules: may a court of appeal review the sufficiency of evidence presented at trial, when a party loses a pre-verdict motion for judgment as a matter of law under Rule 50(a), but then fails to renew the motion under Rule 50(b) after the jury has reached a verdict? The Supreme Court's resolution will greatly impact the speed and quality of review of trial court decisions by courts of appeal, as well as the power these courts possess to overturn improper verdicts.
Whether, and to what extent, a court of appeals may review the sufficiency of evidence supporting a civil verdict where the party requesting review made a motion for judgment as a matter of law under Rule 50(a) of the Federal Rules of Civil Procedure before submitting the case to the jury, but neither renewed that motion under Rule 50(b) after the jury's verdict nor moved for a new trial under Rule 59?
May a court of appeal review the sufficiency of evidence presented at trial, when a party loses a pre-verdict motion for judgment as a matter of law under Rule 50(a), but then fails to renew the motion under Rule 50(b) after the jury has reached a verdict?
Unitherm Food Systems ("Unitherm"), a manufacturer and supplier of food processing machinery, sued Swift-Eckrich, doing business as ConAgra Refrigerated Foods ("ConAgra"), for defrauding the Patent Office, misrepresenting itself to Unitherm, improperly interfering with Unitherm's prospective business relations, and monopolistic practices in violation of federal and state antitrust laws. Brief for Petitioner at 2.
Sine the early 1990s, Unitherm had sold a system for browning precooked turkey breasts involving special ovens and unique processing procedures. See Brief for Petitioner at 2. In September of 1999, ConAgra patented an allegedly identical process after Prem Singh, a ConAgra employee, viewed demonstrations of the Unitherm process. See id. at 2-3. Singh allegedly misrepresented himself as an interested buyer of Unitherm ovens in order to observe the browning process. Id. at 3. After obtaining a patent, ConAgra threatened to sue manufacturers of ovens that might be used to implement its browning process, as well as several turkey breast vendors that had either purchased or expressed an interest in Unitherm's similar browning method. See id. at 3.
Following the conclusion of Unitherm's case, ConAgra made an oral motion for judgment as a matter of law ("JMOL") under Rule 50(a) with respect to "all of the counts." See Brief for Respondent at 9. In the five or so minutes afforded by the court to elaborate on its motion, ConAgra argued that the evidence was insufficient for a reasonable jury to find it had defrauded Unitherm or improperly interfered with Unitherm's prospective business relations. See id. at 9. ConAgra made no mention of the antitrust claim or any of its legal elements, including antitrust injury, intent to monopolize, or a dangerous probability of success of monopolization. See id. at 4-5.
At the conclusion of all the evidence and prior to the judge's submission of the issues to the jury, ConAgra renewed-and was denied-its oral motion for JMOL "for each of the three causes of action that the plaintiffs have brought." See id. at 9. The jury ultimately found in favor of Unitherm on its antitrust, patent invalidation and improper interference in prospective business relations claims, and against Unitherm on its fraudulent representation claim. Id. at 5. Following the verdict, ConAgra did not renew its motion for JMOL under Rule 50(b). Id.On appeal, however, the United States Court of Appeals for the Federal Circuit remanded the antitrust claim for a new trial, finding the evidence was insufficient to prove the legal elements for antitrust liability. See Brief for Petitioner at 6. The court stressed that Rules 50 and 59 permitted it to grant a retrial but barred its entering judgment in favor of ConAgra. See Brief for Respondent at 13-14. The Supreme Court granted certiorari to determine whether the Federal Circuit was entitled to review the sufficiency of the evidence presented by Unitherm at trial, when ConAgra failed to renew its oral motion for JMOL following the verdict. See Brief for Petitioner at i.
A victory for Unitherm would have potentially profound benefits to the judicial system. At its most basic level, a victory would require a party to make a post-verdict motion for JMOL before a court of appeal could review the sufficiency of the evidence presented at trial. Thus, it provides notice to the winning party of the specific issues likely to be raised on appeal, enabling that party to anticipate and begin briefing issues for appellate review. See Brief for Petitioner at 22-23. "[T]he post-verdict motion thus functions as a timely notice to benefit the appellate process, because briefing and argument are more likely to be informed and informative when the issue has already been joined in post-verdict argument." Id. at 23. Conversely, if a court of appeal could evaluate the sufficiency of the evidence offered on any claim, including those for which no post-verdict JMOL was made, both parties would be forced to brief every issue, a costly and wasteful exercise for courts and parties alike. See id. at 23-24. Indeed, in the instant case Unitherm was required to "address the sufficiency of the evidence of nearly every element of every claim." Id. 24.
Further, a post-verdict JMOL motion provides an opportunity for both parties to brief the trial judge on all salient facts and arguments, which should improve the accuracy and quality of JMOL determinations. See id. at 23-24. As Unitherm emphasizes, "Unlike verbal motions made during the heat of trial, a written motion made post-verdict serves the forces of contemplation and careful review." Id. at 12.
More specifically, requiring a post-verdict JMOL motion provides a trial judge, who has directly observed witnesses and their demeanor and has complete, first-hand knowledge of the trial, to determine whether sufficient evidence existed to sustain the verdict. See id. at 20-22. Moreover, a trial judge's ruling on a post-verdict motion may contain an extensive discussion of the relevant facts, the judge's evaluation of those facts in light of all of the events at trial, and the basis for his ultimate decision. See id. at 20-21. A trial court "has the same opportunity that jurors have for seeing the witnesses [and] for noting all those matters in a trial not capable of record." Id. at 21. Empowering a court of appeal to evaluate the sufficiency of the evidence without the benefit of the trial judge's views, therefore, only increases the risk of error. See id. at 21-22. Indeed, a court of appeal which possesses only a cold record cannot exercise the judgment that a trial judge, who "saw and heard the witnesses and has the feel of the case which no appellate printed transcript[,] can impart." Id. at 14.
A trial judge's analysis of a post-verdict motion for JMOL, which elaborates his reasons for denying the motion, also obviates the need for a court of appeal to comb the record for contrary evidence. See id. at 20-21. With federal courts experiencing an "ever-increasing caseload," such efficiency improvements are imperative. Id. at 25.
Requiring a party to make a post-verdict motion for JMOL also avoids a costly and wasteful retrial. See id. at 19, 22. Under current law, a court of appeal that concludes the evidence is insufficient to support the verdict may grant a retrial but may not enter judgment against a party. See Brief for Respondent at 13-14. A post-verdict motion for JMOL, however, enables the trial judge either to order a retrial or enter judgment for the moving party. See Fed. R. Civ. P. 50, 59; Brief for Respondent at 13-14. By avoiding a new trial, the latter option conserves scarce judicial resources and saves litigants additional expense.
Authorizing a court of appeal to review the sufficiency of the evidence without a post-verdict motion for JMOL may also endanger fundamental constitutional principles. Brief for Petitioner at 19. Removing this precondition will invariably result in more frequent appellate review of jury verdicts, jeopardizing "the exclusive power of juries to weigh evidence and determine contested issues of fact-a jury being the constitutional tribunal provided for trying facts in courts of law." Id. Indeed, the risk of unconstitutional intrusion into jury's fact-finding role accounts for the general reluctance to grant JMOL, which should be used "cautiously and sparingly." Id.
On the other hand, a victory for Unitherm might have negative ramifications. A procedural misstep by the losing party, i.e. failing to renew a motion for JMOL, would preclude a court of appeal from examining evidence that may be patently inadequate. By frustrating the main purpose of Rule 50-exclusion of a verdict lacking firm evidentiary support-this interpretation seems to elevate form above the substantive purpose of the rule. See Brief for Respondent at 16. Indeed, it would amount to "judicial creation of a formalistic procedural trap." Id.
Although a post-verdict motion for JMOL does provide notice to the winning party of potential issues on appeal, the petitioner's appellate brief, which is submitted to the court and winning party, amply serves this function. Furthermore, pre-verdict motions for JMOL adequately apprise the winning party of likely issues for appeal. See id. 14. Concern that removing the renewal requirement would enable a court of appeal to evaluate every claim-as well as every element of every claim-may be overstated. See id.Indeed, the federal circuit could only review claims addressed by pre-verdict motions for JMOL. See id. 14. ?In any event, requiring a post-verdict motion for JMOL is not an effective mechanism to narrow the scope of appellate review, since a party may make a post-verdict motion for JMOL on every claim or defense raised by the opposing party.
True, a post-verdict motion for JMOL provides the trial judge an opportunity to contemplate carefully and describe in detail the key evidence on both sides, and elaborate on the basis of his determination. However, Rules 50 and 59 neither require the parties to prepare detailed briefs nor the judge to issue a reasoned opinion for denying JMOL. See Fed. R. Civ. P. 50, 59,; Brief for Respondent at 15. Because Rule 50(b) "would not require the parties to file briefs or the district court to prepare findings, conclusions, or an opinion," the expectation of a detailed, articulate opinion from the trial judge is "wishful thinking." Id.15. Moreover, the judge may have elaborated upon the reasons for denying a pre-verdict JMOL, obviating the need to repeat the analysis following post-verdict JMOL. Finally, a post-trial motion for JMOL appears superfluous when a party has moved for JMOL after a presentation of all the evidence. Indeed, no new evidence is introduced between the conclusion of both parties' cases and the rendering of a verdict by the jury.
The rule that an appellate court does not give consideration to issues not raised below "is not a mere technical formality and is essential to the orderly administration of civil justice." Brief for the United States as Amicus Curiae Supporting Petitioner at 8 (quoting Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure? 2472, at 94 (2d ed. 1995)) ["Brief of United States"].
As a general rule, an issue can only be preserved on appeal when a timely objection or request for judicial action is raised below. See id. at 8, 10; Brief for Respondent at 14. If, as in this case, sufficiency of the evidence is the issue in question, then a further requirement of a post-verdict Rule 50(b) motion may be required. See Brief of United States at 8. The circuit courts are currently split on the issue: the Federal Circuit, in ruling on this issue, used the law of the Tenth Circuit, since their choice of law rule dictates that they use the law of the regional circuit in antitrust issues not specific to patent law. See Brief for Respondent at 10-11; Brief of United States at 5, 6. Under established Tenth Circuit precedent, the issue of sufficiency of the evidence is preserved where an appropriate motion has been made after the close of the evidence, even when a post-verdict Rule 50(b) motion is not filed. See Cummings v. General Motors Corp., 365 F.3d 944, 950-951 (10th Cir. 2004). Eight out of ten circuits with cases on point have held that a post-verdict Rule 50(b) motion is required, and the Tenth Circuit panel in Cummings expressed a willingness to conform its rule to that of other circuits if so directed by an appropriate authority. See Brief for Respondent at 11.
Petitioner Unitherm's Argument
Unitherm first contends that Supreme Court precedents were not followed by the decision below. See Brief for Petitioner at 13. By extending the policies relied upon in similar cases previously decided by the Court, Unitherm hopes to show that the rule of the Tenth Circuit is contrary to the Court's mandatory authority. For instance, the Court has repeatedly held that the courts of appeal lack authority to enter a verdict contrary to the verdict of a jury if a Rule 50(b) motion is not filed. Brief of United States at 20. In Cone v. West Virginia Pulp & PaperCo., the respondent made a Rule 59 post-verdict motion for a new trial but nota Rule 50(b) motion for judgment as a matter of law. See 330 U.S. 212 (1947); Brief for Petitioner at 13-14. When the court of appeals directed judgment for the respondent on insufficiency of the evidence, the Supreme Court overturned that decision and held that the court of appeals could not direct judgment for the respondent when a Rule 50(b) motion was not filed. See Brief for Petitioner at 13-14. Where a Rule 50(b) motion had been made, moreover, the Court held that it was within the power of the court of appeals to direct judgment for the respondent, reinforcing the concept that a Rule 50(b) motion is necessary to consider the issue of sufficiency of the evidence. See Brief for Petitioner at 16; Neely v. Martin K. Eby Constr. Co., 386 U.S. 317 (1967).
In both of the aforementioned cases, the Supreme Court clearly established accuracy as one of a few key policies which required a Rule 50(b) motion be made before a court of appeals could direct judgment for a losing party. In Cone, the Court cites the trial judge's "feel of the case" and his ability to see and hear the witnesses firsthand, an experience which "no appellate printed transcript [could] impart." Brief for Petitioner at13-14. A trial judge in this position thus gains "a last chance to correct his own errors without delay, expense, or other hardships of an appeal." Id. at 14. A post-verdict Rule 50(b) motion also increases the accuracy of appellate judgments by providing a fuller record for the appellate court. Id. at16. Because the issue in the instant case is the sufficiency of the evidence, these considerations are doubly important-the actual trial proceedings are highly relevant to the issue to be preserved.?
Unitherm also cites precedent within the Federal Circuit as identifying efficiency as a key policy concern. See id. at 20. In Biodex v. Loredan Biomedical, Inc.,the Federal Circuit, in examining the issue in question, determined that "the efficient resolution of controversies at a time of increased filings and overburdened dockets is" served by a requirement that parties declare the specific defects in the sufficiency of the evidence, such as through a Rule 50(b) motion. See id. at 20 (quoting Biodex v. Loredan Biomedical, Inc.,946 F.2d 850, 861 (Fed. Cir. 1991)). In the instant case, the policy of efficiency was definitely not served, as Unitherm was required to "address the sufficiency of evidence of nearly every element of every claim." Id. at24.
A Rule 50(b) motion further serves efficiency by providing notice to the winning party of the specific issues likely to be raised on appeal. While ConAgra did file a Rule 50(a) motion regarding the antitrust aspect of the case, it did not reach the issue of sufficiency of the evidence, as is indicated by the trial court's denial which stated that the "[Respondent's] argument [was] limited to the alleged inconsistency of the verdict. Defendant does not assert the $6 million award was not supported by the evidence." Id. at 5. Thus ConAgra's Rule 59 motion also did not contain any sufficiency of evidence arguments. See id. at6. As such, Unitherm was confronted with sufficiency of the evidence arguments for the first time on appeal.
Finally, Unitherm contends that the purpose of Rule 50(b) supports a hard requirement of a Rule 50(b) motion before appellate review of sufficiency of the evidence. See id. at 19. In Montgomery Ward & Co. v. Duncan, the Court explained that Rule 50(b) "was adopted for the purpose of speeding litigation and preventing unnecessary re-trials." 311 U.S. 243, 250 (1940). Beyond this efficiency purpose, Unitherm also argues that the Rule 50(b) contains a constitutionally mandated respect for the role of the jury in fact-finding within Rule 50(b). See Brief for Petitioner at 19. Appellate review of sufficiency of the evidence is clearly an intrusion on the fact-finding role of the jury, as it purports to review facts already "found" by the jury, so such review must be cautiously applied.
Respondent ConAgra's Argument
ConAgra contends that the requirement of a Rule 50(b) motion to preserve sufficiency of the evidence is superfluous and purely formalistic, and that the application of the general rule of preservation is sufficient to preserve this issue. See Brief for Respondent at 18-19. ConAgra contends that the issue was preserved on appeal because it raised the issues both in the course of argument and through its two pre-verdict Rule 50(a) motions. See id. So, although ConAgra's Rule 50(a) and Rule 59 motions did not explicitly raise sufficiency of evidence arguments, ConAgra's arguments during the trial could be read as sufficiency of evidence arguments which preserved the issue on appeal. See id. at 39. ConAgra further disagrees with the trial court's characterization of its Rule 50(a) motions as completely lacking sufficiency of the evidence arguments, since its motions were expressly stated to be on "the same grounds previously argued," including its sufficiency of evidence arguments. Id.
While ConAgra acknowledges that the Court's prior holdings on related issues in Cone and other cases point to a required Rule 50(b) motion, it dismisses the holdings by arguing that because these holdings were not incorporated into Rule 50 when "it was completely rewritten and adopted by this Court in 1963," the holdings are no longer valid. See id. at 33-34. (The Solicitor General, in an amicus brief supporting Petitioner, contests this interpretation of the current Rule 50, noting that the "minor, technical alterations" to Rule 50(b) in 1963 and the new, unrelated subsections 50(c) and 50(d), give the Court no reason to believe that the amendments supersede the Court's prior holdings on the issue. See Brief of United States at 26.) Furthermore, ConAgra advances two policy arguments of its own: it claims that allowing a review of the sufficiency of the evidence in the absence of a Rule 50(b) motion serves the policies of fairness and efficiency. See Brief for Respondent at 46.
ConAgra contends that its failure to file an optional Rule 50(b) motion did not conflict with fairness as it did not reflect a conscious effort to conceal potential issues for appeal and did not create procedural disadvantages for Unitherm. See Brief for Respondent at 11. Furthermore, ConAgra contends, disallowing review of sufficiency of the evidence would actually be unfair to ConAgra. See id. Since under established Tenth Circuit law, pre-trial Rule 50(a) motions do not need to be renewed under Rule 50(b) to preserve sufficiency of the evidence on appeal, and since the trial judge had made it clear that she understood ConAgra's positions on the issues and did not wish to hear them reargued, ConAgra had no reason to believe that it needed to file a post-verdict Rule 50(b) motion.See id. at 11. Moreover, if ConAgra's report of the attitude of the trial judge is accurate, then the policy of efficiency is also served by ConAgra's decision not to file a Rule 50(b) motion, as such a motion would have been futile. See id.
Finally, ConAgra contends that even if the Court decides that a Rule 50(b) motion is mandatory for reconsideration of sufficiency of the evidence on appeal, then such a rule would be new to the Federal Circuit and should not be retroactively applied. See id. at 11. Citing Harper v. Virginia Dept. of Taxation, ConAgra argues that the Court recognizes that new rules should not be retroactively applied in order "'to avoid injustice or hardship to civil litigants who have justifiably relied on prior law.' " See id.at 36 (quoting 509 U.S. 86, 97 (1993)).
If Unitherm's extension of the Supreme Court's precedential policy objectives to the current issue is successful, then it is likely that the Tenth Circuit's rule will be changed and Unitherm will prevail. As the Tenth Circuit has itself expressed a willingness to conform its rule to that of other circuits for policy reasons, and given that the overwhelming majority of courts are already in agreement with Unitherm, a victory for Unitherm appears likely.
The specific circumstances of this case, however, suggest that victory is not assured; while the general rule may come down on the side of Petitioner, the fact that ConAgra's case reasonably relies on established Tenth Circuit precedent may preclude retroactive application of a new general rule in cases applying the law of that circuit.
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