Federal Rule 50: Medium Rare Application? Unitherm Food Systems, Inc. v. Swift-eckrich, Inc - Leslie Eanes

• Citation: Vol. 58 No. 3
• Publication year: 2007

Casenote

Federal Rule 50: Medium Rare Application? Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc.

I. Introduction

The year 2006 marked a historical year for the now seventy-year-old Federal Rule of Civil Procedure 50.¹ In addition to an overhaul of the statutory language, which, absent contrary congressional action, became codified December 1, 2006, the Supreme Court issued its landmark opinion in Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc.² In what seems to be a straightforward procedural dictate from the High Court, Unitherm has actually resulted in confusion among federal circuits anxious to follow its precedent.

II. Factual Background

The crux ofthe underlying dispute in Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc.³ began as a patent infringement claim in which ConAgra, a subsidiary of Swift-Eckrich, Inc., sought to enforce its patent entitled "A Method for Browning Precooked Whole Muscle Meat Products," U.S. Patent No. 5,952,027 ("'027 patent").⁴ After issuance of the patent, ConAgra issued a warning to competitors who sold equipment and processes pertaining to the same browning process, stating that it intended to "'aggressively protect all of [its] rights under the ['027] patent.'"⁵ Although competitor Unitherm did not receive the warning, Jennie-O, another competitor using the same browning method, did receive the warning. Jennie-O had purchased its method—the same as ConAgra's—from Unitherm some years earlier, and Jennie-O began an investigation to determine its rights and responsibilities with respect to the '027 patent. Subsequently, Jennie-O determined that the '027 patent was likely invalid because Unitherm's president had invented the process described by ConAgra's patent six years before ConAgra filed the '027 patent application.⁶

After the discovery of the anticipatory browning process, Jennie-O and Unitherm jointly sued ConAgra in the Western District of Oklahoma seeking a declaratory judgment that the '027 patent was invalid.⁷ In addition, Jennie-O and Unitherm also alleged that ConAgra had violated section 2 of the Sherman Act⁸ by attempting to enforce a patent that had been obtained by defrauding the Patent and Trademark Office ("PTO").⁹

The district court held that the '027 patent was invalid based on Unitherm's prior public use and sale of the patented method. The district court also dismissed Jennie-O's antitrust claim due to a lack of standing but permitted Unitherm's Sherman Act claim to proceed.¹⁰

The case went to trial, and prior to its submission to the jury, ConAgra moved for a directed verdict under Federal Rule of Civil Procedure 50(a) based on the legal insufficiency of the evidence presented. The court denied the motion, and the jury returned a verdict for Unitherm. ConAgra did not renew its motion for judgment as a matter of law under Federal Rule 50(b), nor did it move for a new trial under Federal Rule 59.¹¹

ConAgra then appealed to the Federal Circuit, again asserting insufficiency of the evidence to sustain the antitrust jury verdict in favor of Unitherm.¹² Applying the law of the Tenth Circuit, the Federal Circuit relied on Cummings v. General Motors Corp.¹³ and reviewed the sufficiency of the evidence claim, even though ConAgra had not renewed its motion postverdict as required by Rule 50(b).¹⁴ Applying Cumm-ings, the court held that the district court's review had been proper, though the only available relief it could have awarded ConAgra was a new trial.¹⁵

In its review of the sufficiency claim, the Federal Circuit concluded that although sufficient evidence existed to sustain the jury's verdict that ConAgra's patent had been obtained through fraud on the PTO, Unitherm "had failed to present evidence sufficient to support the remaining elements of its antitrust claim."¹⁶ As a result, the court vacated the jury's judgment in favor of Unitherm and remanded for a new trial.¹⁷ On application by Unitherm, the Supreme Court granted certiorari and reversed the Federal Circuit's grant of a new trial.¹⁸

III. Legal Background

A. Statutory Background

Federal Rule of Civil Procedure 50¹⁹ was originally enacted by Congress in 1937.²⁰ The first amendments of note to the debated provisions (subdivisions (a) and (b)) occurred in 1963. Those amendments clarified that "[a] motion for judgment notwithstanding the verdict will not lie unless it was preceded by a motion for a directed verdict made at the close of all the evidence."²¹ In addition, the time limit for making the postverdict motion for judgment notwithstanding the verdict ("j.n.o.v.") was set at "10 days after the entry of judgment, rather than 10 days after the reception of the verdict," in an attempt to maintain consistency with the time limit for requesting a Rule 59(b) order for a new trial and a Rule 52(b) motion to amend findings by the court.²²

The substance of the subdivisions at issue has remained largely unaltered since that time.²³ Thus, at the time of the Unitherm trial, the Supreme Court analyzed both the amended Rule 50 provisions in tandem with several of its earlier opinions interpreting the operation of subdivisions (a) and (b) on postverdict j.n.o.v. motions.²⁴

B. Historically Significant Case Law

Promptly after its adoption, challenges to Federal Rule 50 arose in two landmark Supreme Court decisions. In the first, Cone v. West Virginia Pulp & Paper Co.,²⁵ the Supreme Court held that when the party seeking reversal of the judgment fails to move for j.n.o.v., "the appellate court [is] without power to direct the District Court to enter judgment contrary to the one it had permitted to stand."²⁶

Cone was an action for damages for trespass to real property. At the close of the evidence, the respondent moved for a directed verdict on the ground that the petitioner had failed to adduce sufficient evidence that he either owned or was in possession of the land at issue. The district court denied this motion, and the jury returned a verdict for the petitioner. The respondent then moved for a new trial on the basis of newly discovered evidence but failed to renew his preverdict motion by moving for a j.n.o.v. The district court also denied the motion requesting a new trial.²⁷

On appeal, the Court of Appeals for the Fourth Circuit held that the admission of certain evidence was prejudicial error and, without this evidence, the petitioner had insufficient evidence to submit to the jury the issues of title and possession.²⁸ Even though there had been no postverdict motion for j.n.o.v., the circuit court reversed and directed that judgment be entered for the respondent, rather than remanding the case to the district court for a new trial based on the newly discovered evidence.²⁹

The Supreme Court granted certiorari and held that the party's failure to renew a Rule 50(b) motion postverdict precluded an appellate court from directing entry of an adverse judgment.³⁰ The Court explained that Rule 50(b) allows a trial judge the opportunity to order either a new trial or a j.n.o.v. because a trial judge "can exercise this discretion with a fresh personal knowledge of the issues involved, the kind of evidence given, and the impression made by witnesses."³¹ Further, the rule allows a trial judge a "last chance to correct his own errors without delay, expense, or other hardships of an appeal."³²

That same year, the Supreme Court heard a case with a similar legal issue in a slightly different procedural posture. In Globe Liquor Co. v. San Roman,³³ a breach of warranty action in the sale of certain liquors, each party moved for a directed verdict at the close of evidence. Unlike Cone, the petitioner's motion was granted, and a verdict and judgment were returned and entered in the petitioner's favor. The respondents moved for a new trial on the ground that there were contested issues of fact that should have been submitted to the jury, but they did not move for a judgment postverdict under Rule 50(b).³⁴

The Seventh Circuit Court of Appeals set aside the judgment for the petitioner and remanded the case to the district court with instructions to enter judgment for the respondent.³⁵ Affirming Cone, the Supreme Court held that there was no pertinent procedural difference introduced by the fact that the petitioner had originally prevailed upon a directed verdict rather than a jury verdict.³⁶ Accordingly, the respondent's failure to assert a Rule 50(b) motion made the circuit court's remand and instruction improper.³⁷

Four years later, in Johnson v. New York, N.H., & H.R. Co.,³⁸ the Supreme Court further defined the requirements of moving for a j.n.o.v. pursuant to Rule 50(b), emphasizing, in part, specificity in motion drafting.³⁹ In a wrongful death suit against a New York railroad company, the defendant railroad moved to dismiss the complaint and requested a directed verdict at the close of evidence. The trial court reserved its decision on the motion and submitted the case to the jury. A verdict in favor of the petitioner was rendered and subsequently entered. Within ten days, the railroad moved to have the verdict set aside on the ground that it was excessive and contrary to both the law and the evidence. The motion was subsequently denied; in the same ruling, the court also denied the reserved preverdict motions for dismissal and a directed verdict.⁴⁰

The Second Circuit Court of Appeals reversed, holding that the motion for a directed verdict should have been granted. Both parties agreed that the reversal required the district court to enter judgment for the railroad notwithstanding the verdict, thus depriving the petitioner of a new trial. Accordingly, the court rendered judgment for the railroad even though the railroad had not made a postverdict motion requesting that relief.⁴¹

In its review of the case, the Supreme Court noted that "[a]lthough this respondent made several motions it did not as the rule requires move within ten days after verdict 'to have judgment entered in accordance with his...