3M Innovative Properties, Co.v.Barton Nelson, Inc.

United States District Court, D. MinnesotaMar 22, 2005
Civil File No. 02-3591 (PAM/RLE) (D. Minn. Mar. 22, 2005)

Civil File No. 02-3591 (PAM/RLE).

March 22, 2005


MEMORANDUM AND ORDER


PAUL MAGNUSON, Senior District Judge

This matter is before the Court on Plaintiffs' Motion for Judgment as a Matter of Law or alternatively, for a New Trial. For the reasons that follow, the Motion is denied.

BACKGROUND

This case involves Defendant Barton Nelson, Inc.'s ("Barton Nelson") infringement of a patent owned by Plaintiffs 3M Innovative Properties, Co. and 3M Company ("3M"). Since the beginning of the litigation, Barton Nelson asserted that it was not liable for infringement because the parties were contractually bound by a Covenant Not to Sue ("Covenant"). After extensive dispositive motion practice, the issue for trial was narrowed to whether Barton Nelson's products fell within the scope of the Covenant. This issue was tried to a jury in January and February 2005. The jury found that the Covenant protected Barton Nelson from liability, and awarded Barton Nelson $980,000 in damages for 3M's breach of the Covenant.

3M now brings this Motion for Judgment as a Matter of Law, arguing that 3M did not breach the Covenant, and that attorneys' fees are not a proper measure of damages for breach of the Covenant. Specifically, 3M maintains that the evidence is insufficient to support the verdict and that Barton Nelson is not entitled to attorneys' fees as a matter of law. Alternatively, 3M contends that it is entitled to a new trial because Barton Nelson "poisoned the well" by presenting improper arguments to the jury throughout trial. Barton Nelson contends that substantial evidence supports the jury's verdict, that it is entitled to attorneys' fees as a measure of damages, and that 3M has failed to show prejudice to justify a new trial.

DISCUSSION

A. Standard of Review

Rule 50 provides that judgment as a matter of law is proper when a party fails to establish a "legally sufficient evidentiary basis for a reasonable jury to find for that party." Fed.R.Civ.P. 50(a). The Court must afford substantial deference to the jury's verdict, and judgment as a matter of law is not appropriate unless "all the evidence points one way and is susceptible of no reasonable inferences sustaining the position of the non-moving party." Moran v. Clarke, 296 F.3d 638, 643 (8th Cir. 2002) (quotations and citations omitted). The Court must not re-weigh the evidence or make independent credibility determinations, but must draw all factual inferences in favor of the non-moving party. Garcia v. City of Trenton, 348 F.3d 726, 727 (8th Cir. 2003).

The Court may grant a new trial if a "miscarriage of justice" has occurred because of an unsupported verdict, an excessive damage award, or significant legal errors at trial. Gray v. Bicknell, 86 F.3d 1472, 1480 (8th Cir. 1996); Hannah v. Haskins, 612 F.2d 373, 376 (8th Cir. 1980) (new trial is appropriate if "prejudicial error has been committed in the trial of the action").

B. Substantial Evidence

3M asserts that the evidence presented at trial fails to prove that the parties intended the Covenant to apply to anything but paper notes or that the adhesive was applied in the form of small spaced dots or islands. Barton Nelson disagrees and contends that the evidence is sufficient to support the jury's verdict. 3M's argument on this point clearly demonstrates the dispute of fact that remained for trial, and its disagreement with the jury's findings does not justify overturning the jury's verdict. Having reviewed the evidence and presided over the trial, the Court finds that the jury's verdict was reasonable, especially in light of the conflicting and very persuasive evidence presented by both parties.

C. Attorneys' Fees

3M contends that Barton Nelson is not entitled to recover attorneys' fees as a measure of damages for 3M's breach of the Covenant. 3M first asserts that the "American rule" precludes an award of attorneys' fees. The American rule prevents the prevailing party from recovering attorneys' fees unless a statute or the contract itself provides for such recovery. See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247 (1975); Johnson v. U.S. Dep't of Hous. Urban Dev., 939 F.2d 586, 591 (8th Cir. 1991). As this Court has already stated, the American rule is not implicated in this case because the basis for recovery is not because Barton Nelson is the prevailing party. Rather, Barton Nelson seeks recovery of the actual damages it incurred as the natural consequence of 3M's breach of the Covenant. The Court has ruled on this issue and will not revisit it again. 3M's Motion on this point is denied.

3M also contends that Barton Nelson is not entitled to attorneys' fees and costs because the Covenant does not expressly provide for such remedy and there is no evidence indicating that the parties contemplated such a remedy at the time they entered into the Covenant. However, this is the very issue that was presented to the jury, and although 3M disagrees with the jury's findings, the Court finds that the evidence is sufficient to support the jury's finding that Barton Nelson could recover attorneys' fees as damages for 3M's breach of the Covenant.

Finally, 3M contends that the evidence submitted by Barton Nelson lacked sufficient foundation. Barton Nelson presented a summary of Barton Nelson's attorneys' fees and expenses, rather than itemized invoices, and laid proper foundation for the admission of this evidence. Federal Rule of Evidence 1006 permits summary evidence to be used by a party, so long as the underlying evidence is made available to the other party. Barton Nelson represents that it made the un-redacted itemized invoices available to 3M on January 30, 2005. 3M disputes that these invoices were made available, and instead submits that these invoices were not made available until the first day of trial, January 31, 2005. According to 3M, it could not sufficiently examine Barton Nelson's witnesses on the issue of damages. 3M submitted a standing objection at trial to the use of this evidence.

Again, as the Court noted at trial, this issue should have been raised by the parties prior to trial, so that such evidence could have been reviewed in camera or with the assistance of the Magistrate Judge. Although the Court notes that Barton Nelson could have disclosed the un-redacted itemized invoices earlier, the Court nonetheless finds that the invoices were available to 3M throughout the pendency of trial. Furthermore, 3M had received periodic summaries of these expenses from Barton Nelson, and could have requested the supporting itemized invoices at an earlier time. Thus, the Court finds that the evidence was sufficient to support the jury's conclusion.

D. New Trial

3M contends that it is entitled to a new trial because Barton Nelson "poisoned the well" by presenting improper arguments on the scope of the covenant and improper evidence of Barton Nelson's attorneys' fees. In particular, 3M contends that Barton Nelson improperly referenced a prior order during summation. The Court sustained 3M's objection, and immediately gave the jury a curative instruction that was accepted by both parties. Furthermore, even assuming that Barton Nelson's counsel's summation remarks rose to the level of impropriety, the remarks did not cause a "miscarriage of justice" sufficient to warrant a new trial. Finally, the remaining arguments presented by 3M on this point simply restate its previous arguments. Thus, the Court is not persuaded that a new trial is warranted.

CONCLUSION

3M has failed to establish that it is entitled to judgment as a matter of law under Federal Rule Civil Procedure 50. Similarly, 3M has failed to establish that any miscarriage of justice occurred during trial. Accordingly, IT IS HEREBY ORDERED that Plaintiffs' Motion for Judgment as a Matter of Law, or alternatively, For a New Trial (Clerk Doc. No. 264) is DENIED.