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Progressive EMU Inc. v. Nutrition & Fitness Inc.

United States District Court, N.D. Alabama, Southern Division

May 31, 2018




         The court has before it Progressive Emu's Motion to Alter, Amend or Vacate Directed Verdict and Interlocutory Orders, Renewed Motion for Judgment as a Matter of Law and/or Motion for New trial, doc. 258. This motion follows a three day jury trial during which the court granted directed verdicts in favor of Nutrition and Fitness, Inc. with regard to Pro Emu's claim for unpaid royalties related to alleged off-the-book sales and NFI's claim that it overpaid Pro Emu for certain orders of emu oil. Doc. 255 at 1-2. Pro Emu's breach of contract claim for unpaid royalties on reported sales in March and April 2012 was submitted to the jury, which found against Pro Emu. Id. at 2. Accordingly, the court entered judgment in favor of NFI on that claim. Id.

         Pro Emu now argues that it is entitled to (1) either a new trial or judgment as a matter of law with respect to its breach of contract claim for unpaid royalties from March and April 2012; and (2) a new trial on its damages claim based on off-the-book sales. These arguments are now fully briefed; docs. 258-1 and 273, and ripe for review.[1] Upon careful consideration of the record and the parties' briefs, Pro Emu's motion is due to be denied.


         A court applies “precisely the same” standard for granting a Rule 50(b) motion for judgment as a matter of law as it does for “‘granting the pre-submission motion [under 50(a)].'” McGinnis v. Am. Home Mortg. Servicing, Inc., 817 F.3d 1241, 1254 (11th Cir. 2016) (quoting Chaney v. City of Orlando, 483 F.3d 1221, 1227 (11th Cir. 2007)). Accordingly, “in ruling on a party's renewed motion under Rule 50(b) after the jury has rendered a verdict, [the] court's sole consideration of the jury verdict is to assess whether that verdict is supported by sufficient evidence.” Chaney, 483 F.3d at 1227. In other words, when “considering a Rule 50(b) motion after the jury verdict, ‘only the sufficiency of the evidence matters. The jury's findings are irrelevant.'” Cadle v. GEICO Gen. Ins. Co., 838 F.3d 1113, 1121 (11th Cir. 2016) (quoting Connelly v. Metro Atlanta Rapid Transit Auth., 764 F.3d 1358, 1363 (11th Cir. 2014)). In considering the sufficiency of the evidence, “‘the court must evaluate all the evidence, together with any logical inferences, in the light most favorable to the non-moving party.'” McGinnis, 817 F.3d at 1254 (quoting Beckwith v. City of Daytona Beach Shores, 58 F.3d 1554, 1560 (11th Cir. 1995)). The court bears in mind, however, that, “‘[i]t is the jury's task-not [the court's]-to weigh conflicting evidence and inferences, and determine the credibility of witnesses.” McGinnis, 817 F.3d at 1254 (quoting Shannon v. Bellsouth Telecomms., Inc., 292 F.3d 712, 715 (11th Cir. 2002)).

         Parties seeking relief after an unfavorable jury verdict may also request a new trial under Rule 59(a) on the grounds that “the [jury's] verdict is against the weight of the evidence, that the damages are excessive, or that, for other reasons, the trial was not fair . . . and may raise questions of law arising out of alleged substantial errors in admission or rejection of evidence or instructions to the jury.” Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940). Thus, “‘in a motion for a new trial the judge is free to weigh the evidence, '” Rabun v. Kimberly-Clark Corp., 678 F.2d 1053, 1060 (11th Cir. 1982) (quoting King v. Exxon Co., U.S.A., 618 F.2d 1111, 1115 (5th Cir. 1980)), and “may, in [her] discretion, grant [the motion] ‘if in [the judge's] opinion, the verdict is against the clear weight of the evidence . . . or will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict.'” McGinnis, 817 F.3d at 1254 (quoting Hewitt v. B.F. Goodrich Co., 732 F.2d 1554, 1556 (11th Cir. 1984)).

         Finally, the court may alter or amend a ruling under Rule 59(e) if “a party presents the court with evidence of an intervening change in controlling law, the availability of new evidence, or the need to correct clear error or manifest injustice.” Summit Med. Ctr. of Ala., Inc. v. Riley, 284 F.Supp.2d 1350, 1355 (M.D. Ala. 2003). Rule 59(e) motions, however, cannot be used “to relitigate old matters, [or to] raise argument or present evidence that could have been raised prior to the entry of judgment.” Michael Linet, Inc. v. Vill. of Wellington, 408 F.3d 757, 763 (11th Cir. 2005). Indeed, the Eleventh Circuit has said “a motion to reconsider should not be used by the parties to set forth new theories of law . . . absent some showing that” the theory was previously unavailable. Mays v. U.S. Postal Serv., 122 F.3d 43, 46 (11th Cir. 1997).

         A. Breach of Contract Claim for Unpaid Royalties

         After years of extensive litigation, including two summary judgment rulings and an appeal, the core issue remaining for trial was Pro Emu's claim that NFI breached the parties' contract by failing to pay Pro Emu royalties in March and April 2012. Doc. 258-1 at 2. NFI argued that it was excused from making royalty payments because Pro Emu had already breached the contract by failing to use its best efforts to fill NFI's March 2012 order for emu oil. Doc. 231 at 6-10. At the close of NFI's case-in-chief, Pro Emu moved for a judgment as a matter of law asserting that it lacked both the money and the inventory to supply NFI's request for oil, and that it had accordingly satisfied the contract's “best efforts” requirement. See Doc. 264 at 171-73. The court denied the motion, id. at 173, which Pro Emu now moves to renew pursuant to Rule 50(b) of the Federal Rules of Civil Procedure. In the alternative, Pro Emu asks for a new trial on this issue pursuant to Rule 59(a). Doc. 258-1 at 9, 11.

         1. Renewed Request for Judgement as a Matter of Law on the “Best Efforts” Issue

         In support of its Rule 50(b) motion, Pro Emu primarily argues that the evidence is undisputed that it lacked the emu oil in March 2012 to supply NFI's order and that, under the Eleventh Circuit's mandate, the contract expressly limited NFI's remedy to seeking replacement oil from other sources. Thus, Pro Emu argues that its actions constituted best efforts and that, in any event, NFI was not excused from making royalty payments.[2]

         The parties generally agree on what the trial evidence showed. To summarize briefly, Pro Emu introduced evidence indicating that, at the time of NFI's March 2012 order for emu oil, it lacked both the oil to fill the order and the money to purchase replacement oil from another source. Doc. 264 at 172-73. The evidence also indicated that Pro Emu did not seek to acquire oil in the spot market via credit, as it subsequently demonstrated the ability to do, did not communicate with NFI regarding the oil shortage beyond stating it was unable to fill the order at the same time it provided NFI notice that it had filed the instant lawsuit, and that it otherwise failed to assist NFI in finding a replacement source for the oil. Doc. 263 at 92-95, 97-100. In its motion, Pro Emu seeks to avoid the import of this undisputed evidence by seeking to read the “best efforts” provision out of the contract by arguing that NFI's sole remedy for Pro Emu's failure to fill an order was to purchase replacement oil in the market. However, this argument is foreclosed by a prior ruling of this court in which Judge William Acker interpreted the parties' contract to resolve this very issue explaining that “[P]ro Emu [was] . . . required to use all reasonable efforts in good faith to fulfill NFI's orders for emu oil.” Doc. 82 at 8. Accordingly, Judge Acker found that the limitation on NFI's remedies imposed by ¶ 2.2 applied only to “failures to supply emu oil after Pro Emu [had] given its best efforts.” Id. at 9.

         Under the law of the case doctrine, once “a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages [of] the same case.” Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816 (1988) (quotation omitted). Although this doctrine is “discretionary and does not limit a court's power to reconsider its own decisions . . . ‘where litigants have once battled for the court's decision, they should neither be required nor without good reason permitted, to battle for it again.'” Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992) (quoting Zdanok v. Glidden Co., 327 F.2d 944, 953 (2d Cir. 1964)). The rule serves “important goals vital to just and efficient judicial process, including the provision of an end to litigation . . . and the promotion of consistency in rulings between courts.” Klay v. All Defendants, 389 F.3d 1191, 1197 (11th Cir. 2004). Indeed, “as matters wend closer to final disposition, stability takes on increased importance.” McSurely v. McClellan, 753 F.2d 88, 96 (D.C. Cir. 1985) (quotation omitted).

         To justify revisiting this long-settled legal issue, Pro Emu must show that Judge Acker's ruling constituted clear error, [3] a showing that it has failed to make. Indeed, Pro Emu had the opportunity to challenge Judge Acker's construction of the contract on appeal, and it apparently elected not to do so.[4] Further, during the trial, one of Pro Emu's executive officers, Andrew Martin, agreed that “an accurate statement of [Pro Emu's] obligations under the contract” was the requirement that Pro Emu “use its best efforts to fulfill all orders as quickly as is reasonably possible.” Doc. 263 at 92. Accordingly, NFI's obligation to pay royalties was contingent on Pro Emu's use of its best efforts which Georgia law defines as the “use [of] reasonable diligence as well as good faith in [the] performance of the contract.” Flynn v. Gold Kist, Inc., 353 S.E.2d 537, 539 (Ga.Ct.App. 1987) (quotation omitted). NFI, as described, presented evidence showing that Pro Emu did not take any steps, beyond bare notification, to supply the requested oil in March 2012. See Doc. 263 at 92-95, 97-100. This evidence is sufficient, particularly when evaluated in favor of NFI as the non-movant, to support a jury verdict finding that Pro Emu failed to use its best efforts to supply NFI's March 2012 order for emu oil. See Cleveland v. Home Shopping Network, Inc., 369 F.3d 1189, 1192 (11th Cir. 2004) (explaining the district court should only enter judgment as a matter of law “when there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue”).

         2. Motion for a New Trial on the “Best Efforts” Issue

         Pro Emu also moves for a new trial pursuant to Rule 59(a) on this issue raising three primary contentions of error: (1) that the court improperly instructed the jury regarding the burden of proof; (2) that the court improperly prevented Pro Emu from presenting evidence that NFI did not require the oil it ordered in March 2012; and (3) that the jury's verdict was against the great weight of the evidence. The court addresses each of these contentions in turn.

         a. Whether the Jury was Properly Instructed on “Best Efforts”

         Relying on its trial objections and on Judge Acker's previous opinion interpreting the parties' contract, Pro Emu asserts that the court erroneously assigned the burden of proof by instructing the jury that “[y]ou must determine whether Pro Emu has proven, based on the preponderance of the evidence, that it used its best efforts, as defined here, to fulfill NFI's March 2012 orders.” Doc. 247 at 8.[5] Other than its bare assertion of error, however, Pro Emu has failed to provide the court with any basis in Georgia law for finding that the court's instructions were erroneous. See Doc. 258-1 at 3-4, 11. Instead, Pro Emu relies entirely on a prior ruling in this case in which Judge Acker opined that “Paragraph 2.2 [of the parties' contract], imposes a ‘best efforts' standard . . . [leaving] a wide open door for disagreement between the parties that will not end until after a prolonged jury trial in which NFI will have the burden of proving that Pro Emu did not use its best efforts.” Doc. 82 at 30-31. Of course, in that particular ruling, Judge Acker was specifically addressing the parties' “cross-motions for summary adjudication of disputed contract interpretation issues” not the parties' respective trial burdens, an issue which was not before the court at that time. Id. at 1. This renders Judge Acker's statement regarding the proper allocation of the burden of proof on the best efforts issue mere dicta because resolving the question had no effect on the court's resolution of the interpretative issues actually before it. See United States v. Eggersdorf, 126 F.3d 1318, 1322 n.4 (11th Cir. 1997) (defining dicta as portions of an opinion that are “not necessary to deciding the case then before [the court]”). And, of course, the court is “not bound by the dicta contained in [its] earlier opinions.” United States v. Birge, 830 F.3d 1229, 1233 (11th Cir. 2016).

         Moreover, a review of Georgia law belies Pro Emu's contention of error. Indeed, Georgia courts have explicitly held that “[a] plaintiff seeking to enforce an alleged contract has the burden and must show performance on [her] part; otherwise, [she] is not entitled to a verdict against the defendant.” Jones v. Brawner, 287 S.E.2d 255, 256 (Ga.Ct.App. 1981); Clark's Super Gas, Inc. v. Tri-State Sys., Inc., 200 S.E.2d 472, 473 (Ga.Ct.App. 1973) (explaining that “[t]he plaintiff[] [has] the burden of proving that [she] performed the contract according to its terms, or for some legal reason such performance on [her] part was as a matter of law excused”) (quotation omitted); Cleveland v. Schwaemmle, 101 S.E.2d 611, 613 (Ga.Ct.App. 1957) (holding “[w]here the plaintiff bases [her] right to recover upon an express contract . . . [she] cannot recover unless [she] has performed all [her] obligations under the contract”) (quotation omitted). As described above, the parties' contract required Pro Emu to use its best efforts to fill NFI's orders for emu oil. To the extent that Pro Emu seeks to recover unpaid royalties under the contract, it was required to show that it properly performed its own obligations, including its obligation to use its “best efforts, ” as the jury instructions correctly state. Doc. 247 at 8-9.

         Also, even assuming that the challenged jury instruction was erroneous, the court is not left with a “substantial and ineradicable doubt as to whether the jury was properly guided in its deliberations.” Simmons, 879 F.3d at 1162 (quotation omitted). Viewed as a whole, the instructions appropriately guided the jury to the central issue in the case-whether “Pro Emu breached the contract by failing to use its best efforts to supply emu oil to NFI as required under the contract.” Doc. 247 at 8. As the instructions explain, if “Pro Emu did not use its best efforts . . . that breach would excuse NFI of performance of its duties . . . [but] if Pro Emu did use its best efforts . . . NFI was also required to perform its obligations under the contract.” Id. at 8-9. “[T]here is no error even though an isolated clause may be inaccurate . . . or otherwise subject to criticism” so long as “the instructions, taken together, properly express the law applicable to the case.” State Farm Fire & Cas. Co. v. Silver Star Health & Rehab, 739 F.3d 579, 585 (11th Cir. 2013) (quotation omitted). When read as a whole, the instructions, along with the interrogatory, which asked only if “Pro Emu fail[ed] to use its best efforts to fulfill NFI's orders for emu oil in March 2012, ” doc. 250, provided the jury with the appropriate legal guidance as to the resolution of the best efforts issue. As such, the court cannot find, “in view of the allegations of the complaint, the evidence presented, and the arguments of counsel, ” that “the jury was misled.” Nat'l Distillers & Chem. Corp. v. Brad's Mach. Prods., Inc., 666 F.2d 492, 497 (11th Cir. 1982) (quotation omitted).

         Finally, any potential error was harmless. Both Pro Emu and NFI presented affirmative evidence in support of their respective positions. Pro Emu submitted evidence showing that it had no money to purchase oil and lacked the inventory to fill NFI's order on its own, and argued, on that basis, that it had fulfilled its best efforts obligation. Doc. 264 at 219-23. In contrast, NFI presented significant, affirmative evidence indicating that Pro Emu failed to take any steps, beyond notification, to assist NFI in filling the March 2012 order. Doc. 263 at 92-95, 97- 100. Even assuming that NFI had the burden on this issue, the evidence at trial was sufficient for the jury to find that NFI established by a preponderance of the evidence that Pro Emu did not use its best efforts to supply the March 2012 order. Therefore, any error purportedly flowing from the instructions was harmless and had no impact on Pro Emu's substantive rights. See Delta Health Grp. Inc. v. Royal Surplus Lines Ins. Co., 327 Fed.Appx. 860, 866 (11th Cir. 2009) (finding that erroneous instruction on burden of proof was harmless error based on the evidence presented at trial).

         b. Improper ...

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