Opinion
ORDER DENYING DEFENDANTS' MOTION FOR JUDGMENT AS A MATTER OF LAW AND GRANTING IN PART DEFENDANTS' MOTION FOR A NEW TRIAL.
CLAUDIA WILKEN, District Judge.
Defendants Dr. Michael McGovern, Charles Riddle, and Dr. Paul Thompson (individual Defendants) move for judgment as a matter of law or, in the alternative, for a new trial. Plaintiffs the Veal Connection Corporation and Simon Samson oppose the motion. The matter was heard on July 25, 2003. Having considered all of the papers filed by the parties and oral argument on the motion, the Court DENIES the individual Defendants' motion for judgment as a matter of law. However, the Court GRANTS the individual Defendants' motion for a new trial as to damages.
BACKGROUND
Plaintiff Simon Samson is the owner of Plaintiff the Veal Connection Corporation, dba Velasam (Velasam). Plaintiffs operate a meat-processing plant. Velasam is subject to inspection by the Food Safety and Inspection Service (FSIS), an agency of the United States Department of Agriculture (USDA). Without inspections, Velasam cannot legally process meat. See 21 U.S.C. § 610. Plaintiffs filed suit against various USDA employees, alleging that the federal officials retaliated against them for complaining to various government officials about the FSIS's actions by inter alia issuing unfounded process deficiency reports (PDRs) and withholding inspection.
Plaintiffs also sued the United States of America pursuant to the Federal Tort Claims Act. That claim was tried to the Court and is not addressed in this Order.
The matter was tried by a jury in March, 2003. The jury found that Defendant McGovern retaliated against Plaintiffs by delaying the reinstatement of inspection services at Velasam in October, 1995; that Defendant Riddle retaliated against Plaintiffs by causing the issuance of unfounded PDRs in January, 1996; and that Defendant Thompson retaliated against Plaintiffs by continuing a suspension of inspection from January, 1996 until April, 1996. Further, the jury found that these Defendants conspired to violate Plaintiffs' constitutional rights. The jury found that Plaintiff Simon Samson did not suffer emotional distress as a result of the individual Defendants' actions. However, the jury found that Plaintiff Velasam suffered economic damages as a result of the individual Defendants' actions and awarded Velasam $1,175,000 in damages. The individual Defendants then filed this motion for judgment as a matter of law or, in the alternative, for a new trial.
LEGAL STANDARD
I. Motion for Judgment as a Matter of Law
A motion for judgment as a matter of law after the verdict renews the moving party's prior Rule 50(a) motion for directed verdict at the close of all the evidence. Fed.R.Civ.P. 50(b); Farley Transp. Co. v. Santa Fe Trail Transp. Co. , 786 F.2d 1342, 1345-47 (9th Cir. 1986). The post-trial motion may be raised only as to the same claims and upon the same grounds as the prior motion. Murphy v. City of Long Beach , 914 F.2d 183, 186 (9th Cir. 1990); Collins v. City of San Diego , 841 F.2d 337, 342 (9th Cir. 1988).
Judgment as a matter of law after the verdict may be granted only when the evidence and its inferences, construed in the light most favorable to the non-moving party, permits only one reasonable conclusion as to the verdict. Thus, the burden the moving party must carry is a weighty one. Where there is sufficient conflicting evidence, or if reasonable minds could differ over the verdict, judgment as a matter of law after the verdict is improper. See, e.g., Kern v. Levolor Lorentzen, Inc. , 899 F.2d 772, 775 (9th Cir. 1990); Air-Sea Forwarders, Inc. v. Air Asia Co. , 880 F.2d 176, 181 (9th Cir. 1989); Peterson v. Kennedy , 771 F.2d 1244, 1252 (9th Cir. 1985); L.A. Mem'l Coliseum Comm'n v. NFL , 726 F.2d 1381, 1387 (9th Cir. 1984).
II. Motion for a New Trial
A new trial may be granted if the verdict is not supported by the evidence. There is no easily articulated formula for passing on such motions. Probably the best that can be said is that the Court should grant the motion "[i]f, having given full respect to the jury's findings, the judge on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Landes Constr. Co., Inc. v. Royal Bank of Canada , 833 F.2d 1365, 1371-72 (9th Cir. 1987) (quoting 11 Wright & Miller, Fed. Prac. & Proc. § 2806, at 48-49). The Ninth Circuit has found that the existence of substantial evidence does not prevent the court from granting a new trial if the verdict is against the clear weight of the evidence. Landes , 833 F.2d at 1371. "The judge can weigh the evidence and assess the credibility of witnesses, and need not view the evidence from the perspective most favorable to the prevailing party." Id . Therefore, the standard for evaluating the sufficiency of the evidence is less stringent than that governing a Rule 50(b) motion for judgment after the verdict.
DISCUSSION
I. Individual Defendants Are Not Entitled To Qualified Immunity
The individual Defendants argue that they are entitled to qualified immunity because, as they frame the issue, "a reasonable FSIS official would [not] know that taking enforcement action against Velasam, when there was clear evidence that Velasam had violated the Federal Meat Inspection Act and/or regulations promulgated thereunder, would result in a violation of Plaintiffs' constitutional rights." However, simply reciting the way in which the individual Defendants frame this issue reveals the flaw in their argument. The issue is not whether a reasonable FSIS would know that taking otherwise legitimate enforcement actions against Velasam would violate Plaintiffs' constitutional rights, but whether a reasonable FSIS would know that taking otherwise legitimate enforcement actions in order to retaliate against Plaintiffs for exercising their free speech rights would violate Plaintiffs' constitutional rights. The Ninth Circuit has clearly held, several years before the actions at issue here, that taking otherwise legitimate enforcement actions with the intent to retaliate for the exercise of First Amendment rights is unconstitutional. In Soranno's Gasco Inc. v. Morgan , 874 F.2d 1310 (9th Cir. 1989), the defendants argued that their suspension of plaintiffs' bulk use permits could not be unconstitutional because the applicable statute authorized such a suspension under the circumstances at issue. The Ninth Circuit rejected the defendants' argument, stating that the defendants were required to "show, by a preponderance of the evidence, that they would have reached the same decision in the absence of the protected conduct. The defendants here have merely established that they could have suspended the permits. This court has clearly stated that this is insufficient." Id. at 1315 (emphasis in original). Similarly here, the individual Defendants are not entitled to qualified immunity simply by demonstrating that they could have taken the disputed regulatory actions, because regulatory actions that would otherwise be legitimate are unconstitutional if undertaken for an improper purpose. Therefore, the Court rejects the individual Defendants' contention that they are entitled to judgment as a matter of law on the basis of qualified immunity.
II. Sufficient Evidence Supports the Jury's Finding of a Conspiracy
The individual Defendants argue that there was insufficient evidence to enable a reasonable jury to find that they conspired to violate Plaintiffs' constitutional rights. The individual Defendants concede that they participated in conversations and meetings during which Velasam was discussed, as they must given the evidentiary record. However, they claim that such conversations and meetings in and of themselves are not indicative of a conspiracy to retaliate, because such conversations and meetings were necessary to enable them to address legitimate regulatory concerns. However, Plaintiffs did not rely simply on evidence of conversations and meetings. The evidence suggests that the individual Defendants were aware of and concerned about Plaintiffs' complaints and the vulnerability of their actions to challenge. Further, the testimony that Plaintiffs introduced suggests that a theme of the individual Defendants' conversations and meetings was "working together" and sending a "consistent message." Plaintiffs also introduced Plaintiff Simon Samson's testimony that McGovern threatened him with retaliation if he escalated his complaints and Bruce Hageman's testimony that John Cameron stated that Velasam would soon be shut down permanently. A permissible inference that may be drawn from this testimony is that the individual Defendants' purpose was unlawful. Taken together, this evidence is sufficient to support the jury's finding that the individual Defendants conspired among themselves and with other FSIS officials to retaliate against Plaintiffs.
Contrary to the individual Defendants' claim, the jury was not required to find that each participant in the conspiracy knew the exact details of each retaliatory action. Therefore, it is irrelevant that Plaintiffs have not introduced evidence showing that all the individual Defendants agreed to take each specific retaliatory act taken by one of them. It is only necessary for Plaintiffs to have introduced evidence showing that the individual Defendants acted pursuant to a common plan to retaliate against Plaintiffs, which the jury found they did.
III. The Court Properly Admitted the Testimony of Luverne Gast
The individual Defendants argue that the Court erred in admitting the expert testimony of Luverne Gast because, according to the individual Defendants, Gast's testimony was not "based upon sufficient facts or data" and/or was not "the product of reliable principles and methods" as required by Rule 702 of the Federal Rules of Evidence. See United States v. Finley , 301 F.3d 1000, 1007 (9th Cir. 2002) (noting that Federal Rule of Evidence 702 allows the admission of expert opinion testimony if "(1) the subject matter at issue [is] beyond the common knowledge of the average layman; (2) the witness [has] sufficient expertise; and (3) the state of the pertinent art or scientific knowledge permits the assertion of a reasonable opinion"). More specifically, the individual Defendants complain that Gast's testimony that the periods of withholding and suspension of inspection at Velasam were unusually long was not sufficiently supported because the factual record that he relied upon was limited to the experiences of meat processing facilities located in the State of California.
As an initial matter, the Court notes that the individual Defendants' objection to Gast's testimony on the basis that Gast's dataset was too limited is improper, because the individual Defendants never previously objected to Gast's testimony on this basis. However, even if the Court were to consider this objection, the limitations of Gast's data set do not render his conclusions inadmissible. Gast reasonably attempted to determine whether the length of time during which inspection was withheld from or suspended at Velasam was unusually long by comparing that length of time with data provided to him by Defendants on the withholding or suspension of inspection at other establishments. Based on this comparison, Gast concluded that it was. If the individual Defendants believed that the consideration of a larger data set would have led a different conclusion, they were free to introduce such evidence, and, in fact, they did introduce evidence of one other instance in which inspection was withheld for a prolonged period of time. Thus, the weakness that the individual Defendants identify in Gast's testimony is one properly addressed through cross examination and the introduction of additional evidence, not through the exclusion of his testimony. See Daubert v. Merrell Dow Pharm., Inc. , 509 U.S. 579, 596 (1993) ("Vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.").
IV. Sufficient Evidence Supports the Jury's Finding that Defendant McGovern Delayed Reinstating Inspection in Retaliation for Plaintiffs' Complaints
The individual Defendants argue that there was insufficient evidence to support the jury's finding that Defendant McGovern retaliated against Plaintiffs by withholding inspection in October, 1995 for longer than warranted by Plaintiffs' violation of the applicable USDA rules. The individual Defendants reach this conclusion only by ignoring the substantial evidence that supports the jury's verdict. Plaintiffs introduced testimony that, shortly before Defendant McGovern refused to reinstate inspection for a significant period of time in October, 1995, he threatened Plaintiff Simon Samson with retaliation if Samson escalated his complaints. Plaintiffs also introduced the testimony of their expert witness that his review of other incidents indicated that inspection was withheld from Velasam for an unusually long time. This testimony was supported by the testimony of Defendant McGovern himself, who indicated that he could remember only one other instance in which inspection was withheld for a similarly lengthy period of time. Finally, Plaintiffs introduced evidence from which the jury could infer that Defendant McGovern made it unnecessarily difficult for plaintiffs to comply with the necessary requirements for reinstating inspections at Velasam. The foregoing is sufficient evidence to support the jury's finding that Defendant McGovern retaliated against Plaintiffs by delaying the reinstatement of inspection services in October, 1995.
V. Sufficient Evidence Supports the Jury's Finding that Defendant Riddle Instructed Rora Field to Issue PDRs to Velasam in Retaliation for Plaintiffs' Complaints
The individual Defendants argue that there was insufficient evidence to support the jury's finding that Defendant Riddle retaliated against Plaintiffs by instructing Rora Field to issue PDRs to Velasam during the January, 1996 product recall. Once again, the individual Defendants ignore the substantial evidence in the record that supports the jury's finding. Plaintiffs introduced evidence that Defendant Riddle had been informed of their complaints by Defendant Thompson. Plaintiffs also introduced evidence that, even before the recall began, Defendant Riddle instructed Rora Field to issue a PDR to Velasam for receiving unwholesome or unidentified product. Furthermore, at trial, none of the USDA employees were able satisfactorily to explain how Plaintiffs could conduct a recall without receiving unwholesome or unidentified product, and Plaintiffs introduced testimony that no one explained this to them at the time of the recall. Finally, Defendant Riddle himself later recognized that there were problems with this PDR and sought to rescind it. Based on this evidence, the jury could reasonably have concluded that Defendant Riddle decided to punish Plaintiffs for their complaints by issuing an unfounded PDR.
VI. Sufficient Evidence Supports the Jury's Finding that Defendant Thompson Caused Inspection to be Withheld in Retaliation for Plaintiffs' Complaints
The individual Defendants argue that there was insufficient evidence to support the jury's finding that Defendant Thompson retaliated against Plaintiffs by delaying the reinstatement of inspection services during the spring, 1996 closure of Velasam. The individual Defendants contend that the undisputed evidence shows that the decision regarding when inspection services would be reinstated was made by USDA officials in Washington, D.C., not by Defendant Thompson, and so Defendant Thompson could not have delayed the reinstatement of inspection services in retaliation for Plaintiffs' complaints.
However, Plaintiffs introduced evidence that when Defendant Thompson made the decision to withhold inspection, he sent Plaintiff Samson a letter outlining steps that Samson could take to get inspection reinstated, namely "(1) satisfactorily justify the incident; (2) outline effective steps to prevent a recurrence; or (3) provide acceptable assurance that there will not be any recurrence." Samson responded with a five page letter in which he explained that his investigation determined that Velasam employees had not harassed or intimated or interfered with FSIS employees and offered his assurance that such actions were not tolerated by Velasam. However, rather than accepting Samson's response, which could have been found to satisfy both the first and third alternatives outlined in Defendant Thompson's letter, Defendant Thompson instead sent Samson's response to USDA officials in Washington, D.C. with a fax cover page stating that Defendant Thompson "would like all of us to be in agreement on a response to this." Based on this evidence, the jury could reasonably have inferred that it was Defendant Thompson who chose to escalate this incident by referring it to officials in Washington, D.C., rather than resolving it locally, in order to retaliate against Plaintiffs by delaying the reinstatement of inspection.
Further, Plaintiffs introduced evidence that Defendant Thompson played a role in deciding when inspection could be reinstated. More specifically, Plaintiffs introduced a letter from a USDA official to Defendant Thompson explicitly stating that the "Velasam enforcement procedure and written company policy concerning prohibitions must be approved by you, " and Defendant Thompson testified that he engaged in negotiations with Plaintiffs' attorneys regarding the content of such a policy.
Finally, Plaintiffs introduced the testimony of their expert witness that inspection had been withheld for an unusually long time.
Taken together, this evidence is sufficient to enable the jury to conclude that Defendant Thompson delayed the reinstatement of inspection services in order to retaliate against Plaintiffs.
VII. The Individual Defendants are Entitled to a New Trial on Damages Because Plaintiffs Failed to Introduce Sufficient Evidence of Causation
The individual Defendants argue that Plaintiffs failed to introduce sufficient evidence of causation of damages. Specifically, the individual Defendants claim that the evidence introduced by Plaintiffs was insufficient to allow the jury to disaggregate the negative effects on Velasam's business of lawful regulatory activity from the effects of actions that the jury found to be the result of illegal retaliation. The individual Defendants are correct. Plaintiffs were required to introduce sufficient evidence to allow the jury to award damages only for the injury caused by the individual Defendants' unlawful acts. City of Vernon v. S. Cal. Edison Co. , 955 F.2d 1361, 1372 (9th Cir. 1992); see also MCI Communications Corp. v. Am. Tel. & Tel. Co. , 708 F.2d 1081, 1162 (7th Cir. 1983) ("When a plaintiff improperly attributes all losses to a defendant's illegal acts, despite the presence of significant other factors, the evidence does not permit a jury to make a reasonable and principled estimate of the amount of damage."). Plaintiffs did not do so. Plaintiffs' damages expert, Dr. Barry Ben-Zion, testified to the decline of Velasam's business during 1995 and 1996, but was unable to attribute the cause of that decline to the individual Defendants' unlawful retaliation. Plaintiff Simon Samson and two other witnesses testified that after the 1996 closure of Velasam, Velasam had approximately a quarter of the customers that it had had previously. However, none of this testimony clarified whether the number of customers after that closure was being compared to the number of customers prior to that closure or the number of customers at some earlier date prior to the legitimate regulatory actions taken against Velasam. Therefore, the evidence offered by Plaintiffs was insufficient to allow the jury to make a proper award of damages. The Court grants the individual Defendants' motion for a new trial as to damages, unless Plaintiffs agree to a remittitur to a nominal damage award of one dollar. Rinehart v. Wedge , 943 F.2d 1158, 1161 (9th Cir. 1991).
In their opposition, Plaintiffs assert that they are not required to prove what damages were caused by which unlawful act. While true, this principle is not helpful to Plaintiffs. Plaintiffs did not simply fail to attribute their damages to particular wrongful acts taken by the individual Defendants; they failed to demonstrate that their damages were caused by the individual Defendants' wrongful acts as opposed to legitimate regulatory actions taking place during the same time frame.
CONCLUSION
For the foregoing reasons, the Court DENIES the individual Defendants' motion for a judgment as a matter of law. However, the Court GRANTS the individual Defendants' motion for a new trial, limited solely to the issue of damages, unless the Plaintiffs accept a remittitur to $1 in nominal damages. A further case management conference shall be held on February 27, 2004 at 1:30 p.m. to discuss future proceedings.
IT IS SO ORDERED.