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Failure to Renew Post-Trial Motion Bars Appeal

04-0597
January 23, 2006

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Last Month at the Federal Circuit - February 2006

Judges: [Justice Thomas delivered the opinion of the Court, in which Chief Justice Roberts and Justices O’Connor, Scalia, Souter, Ginsburg, and Breyer joined. Justice Stevens filed a dissenting opinion, in which Justice Kennedy joined.]

In Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc., No. 04-597 (U.S. Jan. 23, 2006), the Supreme Court reversed the Federal Circuit’s decision to vacate an $18 million jury award and remand for a new trial. The Court held that the Federal Circuit had no basis on which to review the appellant’s challenge to the sufficiency of the evidence with regard to a patent fraud antitrust claim because the appellant failed to renew its preverdict motion pursuant to Rule 50(b).

Unitherm Food Systems, Inc. (“Unitherm”) sued Swift-Eckrich, Inc. (doing business as “ConAgra”), alleging that ConAgra violated § 2 of the Sherman Act by attempting to enforce a patent that ConAgra had obtained by fraud. Unitherm’s antitrust claim proceeded to trial in the United States District Court for the Western District of Oklahoma. Prior to the district court’s submission of the case to the jury, ConAgra moved for a directed verdict pursuant to Rule 50(a) based on the legal insufficiency of the evidence. The district court denied the motion, and the jury returned an $18 million verdict in favor of Unitherm. ConAgra neither renewed its motion for JMOL pursuant to Rule 50(b) nor moved for a new trial pursuant to Rule 59.

On appeal, ConAgra argued that there was insufficient evidence to sustain the jury’s verdict on the antitrust claim. The Federal Circuit applied Tenth Circuit law, which allowed a party that had failed to file a postverdict motion challenging thesufficiency of the evidence to raise such a claim on appeal as long as the party had filed a Rule 50(a) motion prior to submission of the case to the jury. The Federal Circuit concluded that Unitherm failed to present evidence sufficient to support all elements of its antitrust claim. Accordingly, the Federal Circuit vacated the jury’s judgment in favor of Unitherm and remanded the case for a new trial.

The Supreme Court reversed, noting that Fed. R. Civ. P. 50 establishes two stages for challenging the sufficiency of the evidence in a civil jury trial. Rule 50(a) allows a party to challenge the sufficiency of the evidence prior to submission of the case to the jury. Rule 50(b) sets forth the procedural requirement for renewing a sufficiency of the evidence challenge after the jury verdict and entry of judgment, and allows the district court to choose between ordering a new trial or entering judgment. Three Supreme Court cases decided soon after World War II establish that the absence of a Rule 50(b) motion divests an appellate court of power to review the sufficiency of the evidence.

Following the holdings in those cases, the Court concluded that the Federal Circuit lacked power to enter judgment for ConAgra in these circumstances. Further, the Court concluded that the Federal Circuit lacked power to grant a new trial because ConAgra never sought a new trial before the district court and ConAgra’s unsuccessful Rule 50(a) motion did not present the district court with the option of ordering one. Accordingly, the Court held that a party is not entitled to pursue a new trial on appeal unless that party makes an appropriate postverdict motion in the district court.

In dissent, Justice Stevens concluded that, while there may be reasons for an appellate court to decline to direct a verdict in favor of the party that lost below if that party failed to make a timely Rule 50(b) motion, the appellate court does not lack power to direct such a verdict or order appropriate relief to prevent manifest injustice.