Opinion
Case No: 99-76317
August 30, 2002
OPINION AND ORDER GRANTING DEFENDANTS MOTION TO ALTER OR AMEND JUDGMENT AND GRANTING REQUEST FOR NEW TRIAL ON DAMAGES
I. BACKGROUND
This motion filed by Defendant is based in large part on the March 29, 2002 Order of this Court [Doc. # 350] that there is no cause of action in Michigan for "inducement of breach of loyalty." Hence, the jury should not have been instructed to consider damages based on the inducement claim. In so ruling, the Court did not reduce the general damages the jury may have intended to award on this ill-fated claim. Instead, the remittitur amount the Court suggested in its March 29th Order was based only on the damages the jury awarded for future lost profits; the Court also held in its March 29th Order that the future lost profits damages awarded by the jury was entirely speculative.
In its earlier Order, the Court did not address whether additional remittitur would be in order as a result of granting Defendant judgment as a matter of law on the inducement of breach of loyalty claim. Nonetheless, the Court finds that Defendant adequately preserved this issue at trial, even though it did not object to the general verdict form because Defendant repeatedly insisted both before and during trial, that there was no cause of action in Michigan for inducement of breach of loyalty.
Further, the Court finds that Defendant has adequately preserved this issue post-trial, inasmuch as in its Motion for Judgment as a Matter of Law [Doc. #335], Defendant based its argument, in large part, on the fact that no cause of action exists in Michigan for inducement of breach of loyalty.
In the motion now before the Court, Defendant contends that a new trial on damages is required, because it is impossible to ascertain how much the jury intended to award on Plaintiff's trade secret claim, and how much it awarded on the cause of action that never should have been submitted in the first place.
To correct this clear error of law and to prevent manifest injustice, the Court GRANTS this portion of the Defendant's motion. In so doing, it is not necessary to reach the second issue raised by the Defendant; namely, that the Court erred in recomputing Plaintiff's damages following the remittitur decision.
II. LEGAL STANDARD
Defendant brings this motion under FRCP 59(e), which provides:
(e) Motion to Alter or Amend Judgment. Any motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment.
The Federal Rules of Civil Procedure do not provide for a motion for reconsideration. Nagle Industries v. Ford, 175 FRD 251 (E.D. Mich. 1997), aff'd, 194 F.3d 1339 (Fed Cir 1999) (quoting Basinger v. CSX Transp, Inc, 91 F.3d 143, 1996 WL 400182, *2 (6th Cir
1996), cert den, 519 U.S. 1111 (1997)). However, "such motions, if served within 10 days of the entry of judgment, are considered motions to alter or amend judgments pursuant to Fed.R.Civ.P. 59(e)." Id.
Motions to alter or amend, brought pursuant to Fed.R.Civ.P. 59(e), "are entrusted to the Court's sound discretion." Keweenaw Bay Indian Community v. United States, 940 F. Supp. 1139, 1140 (W.D. Mich. 1996), rev'd on other grounds, 136 F.3d 469 (6th Cir 1998) (citing Huff, 675 F.2d at 122). "Rule 59(e) motions are generally granted for three reasons: (1) because of an intervening change in the controlling law; (2) because evidence not previously available has become available; or (3) necessity to correct a clear error of law or prevent manifest injustice." Id at 1141 (footnote and citation omitted).
III. ANALYSIS
Four questions were submitted to the jury. The first two questions were as follows:
1. Has Plaintiff Valassis proved by a preponderance of the evidence that Defendant Sunflower misappropriated trade secrets or knowingly participated in the misappropriation of trade secrets.
Yes ______ No _______
2. Has Plaintiff Valassis proved by a preponderance of the evidence that Defendant Sunflower improperly induced Linn Cornick to breach his duty of loyalty owed to Valassis.
Yes _______ No ________
Only if the jury answered "yes" to one or both of those questions were they to move to Question 3. They did answer "yes" to both. Question 3 was a causation instruction and, in retrospect, there may not have been a need to pose this question since the instructions on both misappropriation of trade secrets and inducement of breach of loyalty included a requirement that the jury find Plaintiff was damaged before Defendant could be held liable on each cause of action. The jury answered "yes" to this redundant Question 3:
Jury Instructions 29: Misappropriation
The Plaintiff must prove that the defendant misappropriated trade secrets. Misappropriation has four parts:
(1) The use of trade secrets of the plaintiff;
(2) Without the plaintiff's permission;
(3) To the benefit of the defendant or the benefit of others to whom the secrets were disclosed by the defendant; and
(4) In a manner that caused injury or damage to the plaintiff.
Plaintiff can recover against the defendant Sunflower for damages arising from misappropriation of its trade secrets by a third party, including Linn Cornick if it can be proven that Sunflower knowingly received the trade secrets.
3. Has Plaintiff Valassis proved by a preponderance of the evidence that it sustained any damages as a result of Sunflower's actions?
Yes ____ No____
The jury awarded damages. The Court finds, however, that it is impossible to know what the jury intended to award for each of the causes of action submitted to it. Because the Court cannot substitute its judgment for that of the jury and solve this dilemma by further remittitur, a new trial on damages is in order.
This is a diversity case, and support for the Court's conclusion is found in Hahnke v. Ball, 60 Mich. App. 114 (1975). In Hahnke, the motorcycle which was damaged in the accident at issue did not belong to the plaintiff, and there was no evidence introduced which would have led the jury to consider damages arising from loss of transportation. 60 Mich. App. at 122-123. Nonetheless, the jury was instructed that it could award four distinctly different amounts for damages: pain and suffering, medical, transportation and property damage. Id at 122. The jury returned a general verdict for $13,000 Id at 119. After trial, the plaintiff suggested that any error arising from the instructions regarding property and transportation damage could be cured by a remittitur. Id at 120. The trial court agreed, and assumed that the jury would not have awarded more than $1000 for property and transportation damages. Id. The court, therefore, denied the defendant's motion for new trial and ordered remittitur of $1,000. Id. Plaintiff agreed to this reduction of the judgment. Id. The Michigan Court of Appeals reversed, holding that the instructions were clearly incorrect and that it was improper for the trial court to "speculate" as to the amount the jury may have awarded for those items of alleged damage. Id at 123. In so holding the appellate court relied on in Joslin v. Grand Trunk W.R. Co., 35 Mich. App. 308, 312 (1971):
We are unaware of any method which would permit the trial court to determine what portion of this general verdict was based upon loss of companionship. We must hold that the trial court erred by requiring the 10% Remittitur.Id at 123.
Here, Plaintiff attempts to distinguish the holding of Hahnke by asserting that Valassis offered the same evidence for all of its claims, but that the categories of damages in Hahnke were for distinctively different types of damages. The Court finds this argument unavailing. The principle of Hahnke is that while some damages may have been properly awarded and others not, unless the court has a clear way for determining the jury's intent, the case must be sent back to the jury. In this case, there is no way to know how the jury apportioned damages between the claim legitimately before it, and the one deemed not to be a cause of action, if it apportioned at all.
This same principle was applied by the Sixth Circuit in Broan v. Associated Distributors, Inc, 923 F.2d 1232 (6th Cir 1991). In this trademark infringement case the jury was instructed that it could award damages for out of pocket expenses; direct economic loss; future net profits; and, goodwill. 923 F.2d at 1235 n. 1. The jury returned a general verdict for $523,000, which presumably included an amount for future mistaken product liability claims. Id at 1234-1235. Over the defendant's objection, the plaintiff argued that the defendant's knock-off product was of inferior quality; that it would fail in the future, causing fires; and that consumers would mistakenly believe these knock-offs to be plaintiff's product, leading to claims against plaintiff which it would have to investigate and defend. Id at 1238. Plaintiff further argued that in some instances the product would be totally destroyed, making it impossible to properly identify the product manufacturer, and plaintiff would be subject to these suits as well, some of which it might settle.Id. Plaintiff introduced evidence of only one potential product liability claim. Id. On cross appeals, the defendant contended that the trial court erred in allowing the jury to assess damages for future mistaken product liability claims. Id at 1239. Defendant maintained that Broan did not prove those damages with the requisite certainty. Id. On the other hand, the plaintiff contended that the trial court erred in not allowing it to seek damages for lost profits from lost future sales of Broan's products to the defendant. Id at 1236. The trial court reasoned that those damages would be too speculative as a matter of law given the specific facts of the case. Id at 1236-1237.
On appeal, the court held that the trial court erred in not allowing plaintiff to present evidence of lost future profits. Id at 1237. Further, the court held that the district court was correct in allowing the jury to award damages for mistaken future product liability claims.Id at 1240. Pointedly, the court stated:
Although the award of damages for mistaken product liability claims was proper, we have no way of determining how much of the jury award was for such claims and, therefore, we cannot affirm any particular award. Because we must remand for presentation of Broan's lost future profits theory the entire damages case must be retried.Id at 1240-1241.
The Court finds the principle applied in the Broan case to be controlling here. As in Broan, the jury had before it a perfectly credible claim on which it needed to assess damage. However, the Broan jury did not have before it all of the claims it needed to consider in awarding future net profits. Because the jury in Broan did not have all of the information it needed to have in considering plaintiff's lost profit, and because the general verdict did not differentiate between the various components of damages, the entire damage case had to be retried. Here, the jury had too much before it, and it is impossible to know what damages it may have attributed to the misappropriation theory, and how much to the inducement of breach of loyalty claim.
Finally, the Court finds the ruling in Hickson Corporation v. Norfolk, 260 F.3d 559 (6th Cir 2001) instructive as well. In Hickson, the court considered the appropriateness of a single damage question where alternative theories of liability based on one injury are presented to the jury, and where the possibility of duplicative and overlapping damages exists. In ordering a new trial on damages, the court held that in cases involving multiple claims, the jury should use a general verdict form accompanied by special interrogatories or a special verdict form. 260 F.3d at 568. The goal would be to "make clear to the jury that any damages awarded on a claim must be supported by evidence relating to that claim and damages for one claim may not be duplicative of damages awarded in another claim." Id. Here, as in Hickson, the questions as posed on the verdict form leave the Court unable to determine what the jury intended in its award of damages. IV. CONCLUSION
See also Embry v. Weissman, 74 Mich. App. 138, 142 (1977) (error for court to treble damage award for trespass, where general verdict did not disclose on which of the several theories advanced for liability the jury had assessed damages); Patrick v City of Detroit, 906 F.2d 1108, 1116 (6th Cir 1990) (new trial ordered where jury verdict form did not allow jury to apportion award of compensatory damages between defendants).
For the above reasons, the Court GRANTS the Defendant's motion. The Judgment After Remittitur is VACATED. A partial new trial on the issue of damages is ordered.
Mich Nonstandard Jury Instruction Sec. 22:08 (modified)
Jury Instruction No. 36 Inducement of Breach of Duty of Loyalty — Nature of Claim
It is unlawful for one party to improperly induce employees of another party to breach any duty of loyalty owed by any such person to a party. In order for Plaintiff Valassis to recover damages for Sunflower's alleged inducement of employees of Valassis to breach the duty of loyalty owed to Valassis, it must be found that Defendant Sunflower extended certain inducements to parties owing a duty of loyalty to Valassis, and that the duty of loyalty was thereby breached. Thus, Plaintiff Valassis must prove by a preponderance of the evidence the following elements:
1. the existence of a duty of loyalty owed by a person to Valassis;
2. that Defendant Sunflower offered inducement(s) to all such person in an attempt to get such person to breach the duty of loyalty owed to Valassis;
3. that at least one of the persons accepted the inducements offered by Sunflower;
4. that, in exchange for the inducement offered by Sunflower, any such person breached the duty of loyalty owed to Valassis; and
5. Plaintiff was damaged as a result of Defendant's conduct.
Your verdict will be for Plaintiff if you find Plaintiff has proved all of these elements.
Your verdict will be for the Defendant if you find that Plaintiff has failed to prove any one of these elements.