JAMES O. BROWNING, District Judge.
This case concerns a suit that Guidance, a small endodontic-equipment company, has brought against the much larger Defendants, who were both Guidance's rivals and its suppliers. More background on the lawsuit is set forth in one of the Court's earlier opinions. See Guidance Endodontics, LLC v. Dentsply Int'l, Inc., 633 F.Supp.2d 1257, 1260-67 (D.N.M.2008) (Browning, J.). The Defendants are manufacturers and suppliers of a variety of dental/endodontic products that compete with Guidance's products, including endodontic obturators, files, and ovens.
Letter from Bill Newell to Dr. Charles Goodis (dated September 25, 2008), filed February 24, 2010 (Doc. 508-2, p. 43). On the same day, Brian Addison, vice president, secretary, and general counsel of Dentsply, sent a similar letter to Goodis. That letter stated, in relevant part:
Letter from Brian Addison to Dr. Charles Goodis (dated September 25, 2008), filed February 24, 2010 (Doc. 508-2, p. 26).
In addition to ceasing to supply obturators, the Defendants refused to manufacture a new endodontic file—the V2 file— which Guidance was intending to sell. Furthermore, the Defendants allegedly waged an organized campaign to drive Guidance out of business, which included running a marketing campaign that involved falsely representing to actual and potential Guidance customers that Guidance was no longer able to supply endodontic files. Based on these three categories of conduct, Guidance filed this suit.
On November 21, 2008, Guidance filed a Verified Complaint and Demand for Jury Trial. In the Complaint, Guidance made seven claims for relief: (i) breach of contract based on the Defendants' refusal to supply obturators, see Complaint ¶¶ 158-68, at 30-31; (ii) breach of contract based on the Defendants' refusal to supply endodontic files, see Complaint ¶¶ 169-79, at 31-32; (iii) breach of the implied covenant of good faith and fair dealing, see Complaint ¶¶ 180-87, at 32-33; (iv) violation of the Delaware Deceptive Trade Practices Act, see Complaint ¶¶ 188-97, at 33-34; (v) violation of the NMUPA, see Complaint ¶¶ 198-207, at 34-35; (vi) violation of § 43(a)(1)(B) of the Lanham Act, see Complaint ¶¶ 208-16, at 35-36; and (vii) tortious interference with existing and prospective contractual relations, see Complaint ¶¶ 217-26, at 36-37. On the way to trial, the Court dismissed several of these claims.
The Court held a three-week jury trial from September 21, 2009 through October 9, 2009. See Clerk's Minutes Before the Honorable James O. Browning at 1, filed September 21, 2009 (Doc. 439). On Wednesday, October 7, 2009, the Court read the instructions to the jury. See id. at 40. Those instructions included Guidance's claims for breach of contract, breach of the implied covenant of good faith and fair dealing, violation of the NMUPA, and violation of the Lanham Act. See Court's Final Jury Instructions (Given), Instruction No. 18, at 18, filed October 8, 2009 (Doc. 430). The Court had dismissed the other claims before trial.
The jury deliberated for approximately two days. On October 9, 2009, the jury returned a verdict largely in favor of Guidance. The jury found that the Defendants breached the Supply Agreement with regard to its failure to supply obturators and its failure to produce the V2 file, and found that breach caused Guidance damages. See Verdict Form ¶¶ 2-4, at 2, filed October 9, 2009 (Doc. 441). The jury also found that the Defendants breached the implied covenant of good faith and fair dealing and violated the NMUPA, and found that both infractions caused damages to Guidance. See id. ¶¶ 5-12, at 2-3. The jury awarded Guidance $500,000.00 in compensatory damages for past harm caused by the breach of contract related to the V2, and $3,580,000.00 in future damages related to that breach. See Verdict
The jury did not, however, completely absolve Guidance of fault. It found that Guidance breached the Supply Agreement and willfully engaged in false advertising in violation of the Lanham Act, 15 U.S.C. § 1125. See Verdict Form ¶¶ 24-27, at 6-7. As a result, the jury awarded the Defendants $93,000.00 in compensatory damages. See id. ¶ 35, at 8.
On October 22, 2009, Guidance filed a motion asking the Court to enter a final judgment in conformity with the jury's verdict. See Motion for Entry of Final Judgment, filed October 22, 2009 (Doc. 450). The Court granted the motion in part, see Order, filed March 31, 2009 (Doc. 537), and entered a judgment similar to the judgment that Guidance sought, see Final Judgment, filed March 31, 2010 (Doc. 538).
As part of the Defendants' multi-faceted strategy to avoid the jury's $40,000,000.00 punitive damages verdict, the Defendants assail the validity of the verdict and judgment regarding Guidance's NMUPA claim.
Second, the Defendants insist that Guidance failed to provide it with sufficient notice of the particular theory of the NMUPA claim which Guidance planned to assert—that the Defendants failed to deliver the quality or quantity of goods contracted for—in advance of trial, and that the Court should therefore forbid Guidance from recovering under it. See Motion at 7-12. They insist that Guidance failed to present the NMUPA theory it presented to the jury in either its Complaint or in the Pretrial Order. See Motion at 7-9. They then argue that Guidance's discovery responses failed to adequately put the Defendants on notice of this theory. See id. at 9-12.
Third, the Defendants argue that the Court should change its choice-of-law findings because Guidance was barred from proving actual damages in connection with its NMUPA claim. See Motion at 12. Because New Mexico applies the doctrine of lex loci delicti commissi—the law of the place where the wrong occurred—and because any lost sales by Guidance occurred in New Mexico, the Court previously concluded that New Mexico law would apply to Guidance's NMUPA claim. See Memorandum Opinion and Order at 20-22, filed September 8, 2009 (Doc. 303). The Defendants argue that, because the Court prohibited Guidance from recovering actual damages in connection with the NMUPA claim, there is no evidence that harm occurred in New Mexico, and thus the basis for applying New Mexico law has been undermined. See Motion at 12-13. The Defendants thus conclude that, because there is no basis for allowing the claim to continue under New Mexico law, and the NMUPA does not exist under any other jurisdiction's law, the Court should set aside the verdict as to the NMUPA claim. See Motion at 13-14.
Guidance opposes all of the Defendants arguments and seeks to preserve its $40,000,000.00 verdict. Guidance first argues that the Defendants have failed to preserve their objection to the Court's submission of the NMUPA instructions and questions to the jury. See Guidance's Response to "Dentsply/TDP's Motion to Set Aside the UPA Verdict and Enter Judgment as a Matter of Law or Order New Trial" [Doc. 503] at 2, filed February 24, 2010 (Doc. 508)("Response"). It asserts that the proper procedural vehicle to seek to set aside the verdict is a motion under rule 50(b) of the Federal Rules of Civil Procedure, that a prerequisite to a rule 50(b) motion to set aside the verdict is a rule 50(a) motion for directed verdict at trial, and that the Defendants failed to make a rule 50(a) motion with sufficient specificity to preserve this issue for a rule 50(b) motion. See Response at 2.
Next, Guidance argues that the Defendants are attempting to graft onto New Mexico law a requirement that a NMUPA plaintiff must allege the subsections of § 57-12-2D on which he or she relies. See Response at 3-4. Guidance asserts that this construction of the NMUPA is erroneous because those subsections do not set forth separate claims—there is only one claim: violation of the NMUPA—but rather set forth a non-exhaustive list of conduct which might, independently, constitute a violation of the NMUPA. See id.
With respect to the Defendants' sufficiency-of-the-evidence argument, Guidance insists it had plenty of evidence. It first asserts that Guidance provided evidence that the letters in which the Defendants accused Guidance of breaching the Supply Agreement was a pretext for stopping Guidance's supply of products, and that the Defendants' true motivation was to keep Guidance from grabbing a larger share of the market by selling at reduced prices. See Response at 5-6. It points out that the NMUPA does not require that Guidance be deceived, but only that the communication be one that may or tends to deceive. See id. at 7. It argues that there was plenty of evidence of an aggressive marketing campaign, including false and misleading statements to Guidance's customers, which is sufficient to satisfy the NMUPA's requirements. See id. at 9-10.
Guidance responds to the Defendants' notice theory by arguing that the factual allegations in the Complaint and the Pretrial Order gave the Defendants adequate notice of Guidance's quality-or-quantity theory of NMUPA liability. See Response at 14-15.
Finally, in regard to the Defendants' argument that New Mexico law no longer applies because Guidance did not recover actual damages, Guidance first argues that the issue is waived because the Defendants first raised the argument in a footnote in one of their post-trial motions. See Response at 20 (citing Doc. 454, at 9 n. 7). With respect to the merits of the Defendants' contention, Guidance argues that the Court never determined that Guidance did not suffer damages, but only that Guidance had not quantified those damages and thus would not be allowed to recover them. See Response at 21. It next asserts that,
At the hearing on this motion, R. Ted Cruz, the Defendants' attorney, first argued that the sole predicates upon which Guidance's NMUPA claim is premised are the letters that Newell and Addison sent to Guidance. See Transcript of Hearing at 246:12-247:13 (taken March 23, 2010, 708 F.Supp.2d 1209) ("Tr.")(Cruz). Mr. Cruz argued that letters of this sort, and these letters in particular, could not be of the type that tends to or does deceive. See Tr. at 247:14-252:1 (Cruz). He also reminded the Court that the jury found Guidance breached the Supply Agreement and engaged in false advertising, which was the same wrong of which those letters accused Guidance. See Tr. at 248:20-250:15 (Cruz). Mr. Cruz reiterated his arguments that Guidance gave insufficient notice of its intent to proceed on this quality-or-quantity theory, see Tr. at 252:2-256:10 (Cruz),
Mr. Cruz predicted that Guidance's initial argument in response to this motion would be that the Defendants failed to properly preserve the objection for post-trial review. He thus addressed the point at which he believed the Defendants successfully preserved the objections. See Tr. at 259:8-262:22 (Cruz). He identified two points: (i) in the Defendants' October 1, 2009 motion for directed verdict; and (ii) in an October 4, 2009 letter to the Court seeking reconsideration of an oral ruling. See Tr. at 259:8-262:22 (Cruz).
The Court pressed Mr. Cruz whether a jury might reasonably conclude the Newell and Addison letters were of a type that may or tended to deceive or mislead if the jury concluded that they were a pretext for a predatory move to control the marketplace. Mr. Cruz took the position that it is irrelevant what the Defendants' subjective intent was in sending those letters; because the letters' content was true, there can be no NMUPA liability. See Tr. at 264:15-267:18 (Cruz). The Court then pressed further, asking whether, in Mr. Cruz' view, a reasonable jury could have perhaps concluded that, although the facts in the letters were true, those facts were not the motivation behind the Defendants' decision to stop supplying Guidance with obturators. Mr. Cruz responded alternatively that: (i) the letters already indicated that Dentsply's and TDP's concerns about Guidance's conduct was its competitive aspects, and thus that they had an intent to
As the Court's instructed, Donald De-Candia, Guidance's attorney, first addressed Guidance's argument that the NMUPA theory which went to the jury— the quality-or-quantity theory—was fairly in the Pretrial Order. He directed the Court to several paragraphs of Exhibit B to the Pretrial Order, which he stated sufficiently expressed the quality-or-quantity NMUPA theory. See Tr. at 272:25-274:3 (Court, DeCandia)(citing Pretrial Order Exhibit B ¶¶ 21-25, at 7, ¶¶ 37-39, at 9-10, ¶ 41, at 10, ¶¶ 50-59, at 12-13, ¶¶ 72-74, at 14-15, ¶¶ 86-90, at 16-17, ¶¶ 179-97, at 28-31, filed October 9, 2009 (Doc. 434-1)). He asserted that Guidance had several bases for imposition of punitive damages, so the quality-or-quantity NMUPA violation is not the sole punitive damages predicate. See Tr. at 274:12-24 (DeCandia). He then argued that the quality-or-quantity NMUPA theory is not a separate claim, but rather is a separate basis for finding NMUPA liability, and that the jury found that Guidance had met its burden with respect to each of the four enumerated elements of a NMUPA claim. See id. at 274:25-276:6 (DeCandia).
Mr. DeCandia then sought to debunk the Defendants' preservation arguments by showing that the portions of the transcript that the Defendants' cited do not discuss the issue that they now seek to raise by post-trial motion. See id. at 276:7-282:6 (Court, DeCandia). He then made several substantive arguments: (i) that the pretextual nature of the Newell and Addison letters tended to deceive, because they appeared to describe the reason for Dentsply's and TDP's decision to cease providing Guidance with obturators, but that reason was disingenuous; (ii) that the communications describing the purported reason Dentsply and TDP refused to produce the V2 file was also deceptive and could provide a predicate for NMUPA liability; and (iii) that the NMUPA claim was also predicated on the statements made to Guidance customers. See Tr. at 282:7-284:14 (DeCandia). Mr. DeCandia spent the remainder of argument rebutting arguments that Mr. Cruz made. See id. at 284:15-288:7 (DeCandia).
Rule 50 presents two ways a party may secure a judgment in his or her favor after a trial has begun. Rule 50(a) allows a movant to, in effect, bring a motion for summary judgment on the trial record; such motions raise a legal issue of the sufficiency of the non-moving-party's evidence as to a particular issue. Rule 50(b) allows a movant to attack the sufficiency of the evidence after the trial has ended.
Judgment as a matter of law is proper where "a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." Fed.R.Civ.P. 50(a)(1). This standard for a directed verdict mirrors the standard for summary judgment. See Anderson v. Liberty Lobby, 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Wiles v. Michelin N. Am., Inc., 173 F.3d 1297, 1303 (10th Cir.1999); Morales v. E.D. Etnyre & Co., 382 F.Supp.2d 1278, 1280-81 (D.N.M.2005) (Browning, J.)("This [rule 50(a) ] standard is identical to that the court must employ when ruling on
In determining whether to grant judgment as a matter of law, a court may not weigh the evidence or make its own credibility determination, see Shaw v. AAA Eng'g & Drafting, 213 F.3d 519, 529 (10th Cir.2000), and must draw all reasonable inferences in favor of the nonmoving party, see Thompson v. State Farm Fire & Cas. Co., 34 F.3d 932, 941 (10th Cir.1994). Such a judgment is warranted if the evidence permits only one rational conclusion. See Crumpacker v. Kan. Dep't of Human Resources, 474 F.3d 747, 751 (10th Cir. 2007). In other words, "[t]he question is not whether there is literally no evidence supporting the [nonmoving] party . . . but whether there is evidence upon which the jury could properly find [for that party]." Century 21 Real Estate Corp. v. Meraj Int'l Inv. Corp., 315 F.3d 1271, 1278 (10th Cir.2003) (some alterations in original); Morales v. E.D. Etnyre & Co., 382 F.Supp.2d at 1280-81 ("If . . . the evidence points but one way and is susceptible to no reasonable inferences that support the opposing party's position, the court should grant judgment as a matter of law.").
Moreover, rule 50(a) "expressly requires a motion for a directed verdict to `state the specific grounds therefor.'" First Sec. Bank of Beaver v. Taylor, 964 F.2d 1053, 1056 (10th Cir.1992). On the other hand, "[t]echnical precision is not necessary in stating grounds for the motion so long as the trial court is aware of the movant's position." United States v. Fenix & Scisson, Inc., 360 F.2d 260, 266 (10th Cir.1966). See First Sec. Bank of Beaver v. Taylor, 964 F.2d at 1056. "When a movant fails to state the specific grounds for its [rule 50(a)] motion, our case law requires the moving party to demonstrate the trial court was aware of the moving party's position." First Sec. Bank of Beaver v. Taylor, 964 F.2d at 1056 (holding that an objection to the sufficiency of the evidence failed to inform the trial judge of the party's objection to the uncertainty or enforceability of an oral agreement).
"Rule 50(b) . . . sets forth the procedural requirements for renewing a sufficiency of the evidence challenge after the jury verdict and entry of judgment." Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 400, 126 S.Ct. 980, 163 L.Ed.2d 974 (2006). The rule states:
Fed.R.Civ.P. 50(b). Much like a rule 50(a) motion, "[a] renewed motion for judgment as a matter of law under Rule 50(b) . . . must state the grounds on which it was made." 9B C. Wright & A. Miller, Fed. Prac. & Proc. Civ. § 2537, at 604-05 (3d ed.2008).
A prerequisite to a rule 50(b) motion, and one implicit in its nature as a renewed motion for judgment as a matter of law, is that the moving party have made a rule 50(a) motion for judgment as a matter of law during trial, and that the party raise in the rule 50(a) motion all issues it seeks to raise in the subsequent rule 50(b) motion. See M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d 753, 762 (10th Cir.2009) ("Kerr-McGee did not assert these arguments in its Rule 50(a) motion at the close of Mark's case-in-chief, and is thus precluded from relying on them as a basis for Rule 50(b) relief."); Marshall v. Columbia Lea Regional Hosp., 474 F.3d 733, 738 (10th Cir. 2007) (noting that raising a particular defense in a "pre-verdict Rule 50(a) motion. . . is a prerequisite to a post-verdict motion under Rule 50(b)."); United Int'l Holdings, Inc. v. Wharf (Holdings) Ltd., 210 F.3d 1207, 1229 (10th Cir.2000) ("[M]erely moving for directed verdict is not sufficient to preserve any and all issues that could have been, but were not raised in the directed verdict motion."); First Sec. Bank of Beaver v. Taylor, 964 F.2d at 1057 ("[A] party is precluded from relying upon grounds in a [rule 50(b) ] motion for judgment notwithstanding the verdict that were not previously raised in support of the [rule 50(a) ] motion for a directed verdict.")(citing Karns v. Emerson Elec. Co., 817 F.2d 1452, 1455 n. 2 (10th Cir.1987)); 9B C. Wright & A. Miller, Fed. Prac. & Proc. Civ. § 2537, at 603-04 (3d ed.2008)("[T]he district court only can grant the Rule 50(b) motion on the grounds advanced in the preverdict motion, because the former is conceived of as only a renewal of the latter."); id. ("[T]he case law makes it quite clear that the movant cannot assert a ground that was not included in the earlier motion."). The advisory committee notes to the 1991 amendment state that "[a] post-trial motion for judgment can be granted only on grounds advanced in the pre-verdict motion." Fed.R.Civ.P. 50 advisory committee's
Finally, "Rule 50(b) allows a motion for a new trial under Rule 59 to be joined in the alternative with a renewed motion for judgment as a matter of law; subdivisions (c) and (d) make elaborate provision for when the two motions are made in the alternative." 9B C. Wright & A. Miller, Fed. Prac. & Proc. Civ. § 2521, at 222 (3d ed.2008). The rule states: "[T]he movant may file a renewed motion for judgment as a matter of law and may include an alternative or joint request for a new trial under Rule 59." Fed.R.Civ.P. 50(b). Even if no rule 50(a) motion was made and therefore the court cannot grant a rule 50(b) motion for judgment as a matter of law, the court is still permitted to entertain a rule 59 motion for new trial on the basis that the verdict was based on a quantum of evidence that is insufficient as a matter of law. See Fed.R.Civ.P. 59. As Professors Charles Wright and Arthur Miller state:
9B C. Wright & A. Miller, Fed. Prac. & Proc. Civ. § 2537, at 604 (3d ed.2008).
Rule 59 governs motions for new trial. That rule states that, after a jury trial, "[t]he court may, on motion, grant a new trial on all or some of the issues—and to any party—. . . for any reason for which a new trial has heretofore been granted in an action at law in federal court." Fed. R.Civ.P. 59(a). Case law has fleshed out the rule. Seventy years ago, the Supreme Court of the United States determined that
Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251, 61 S.Ct. 189, 85 L.Ed. 147 (1940). Such a motion can be granted based on any error so long as "the district court concludes the `claimed error substantially and adversely' affected the party's rights." Henning v. Union Pacif. R. Co., 530 F.3d 1206, 1217 (10th Cir.2008) (quoting Sanjuan v. IBP, Inc., 160 F.3d 1291, 1297 (10th Cir.1998)).
Although motions for a new trial are generally committed to a Court's discretion, they are disfavored and should be granted with caution. See Richins v.
Where a plaintiff invokes a federal district court's diversity jurisdiction, the district court looks to the forum state's choice-of-law rules to determine which state's substantive law to apply. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Pepsi-Cola Bottling Co. v. PepsiCo, Inc., 431 F.3d 1241, 1255 (10th Cir.2005). The first step in a New Mexico choice-of-law analysis is to characterize the claim by "area of substantive law—e. g., torts, contracts, domestic relations-to which the law of the forum assigns a particular claim or issue." Terrazas v. Garland & Loman, Inc., 140 N.M. 293, 296, 142 P.3d 374, 377 (Ct.App.2006). There are only a few categories within which claims might fall—"[t]ort cases, i.e. all `civil wrongs,' are one class; contracts, i.e., every kind of enforceable promise, is another single class." James Audley McLaughlin, Conflict of Laws: the Choice of Law Lex Loci Doctrine, the Beguiling Appeal of a Dead Tradition, Part One, 93 W. Va. L.Rev. 957, 989 (1991)(describing the categories as "tort, contract, or some other").
The Court concluded in its September 8, 2009 Memorandum Opinion and Order that Guidance's NMUPA claim was a statutory tort and thus applied New Mexico's choice-of-law rule for tort claims. See Guidance Endodontics, LLC v. Dentsply Int'l, Inc., 663 F.Supp.2d 1138, 1150-51 (D.N.M.2009) (Browning, J.). The Court also concluded that New Mexico applies the rule of lex loci delicti commissi—the law of the place where the wrong occurred—to tort claims. See id. at 1151 (citing Torres v. State, 119 N.M. 609, 613, 894 P.2d 386, 390 (1995), and Terrazas v. Garland & Loman, Inc., 140 N.M. at 296, 142 P.3d at 377). The lex loci delicti rule defines the state where the wrong occurred as "the state where the last event necessary to make an actor liable for an alleged tort takes place." Zamora v.
The NMUPA makes unlawful any "[u]nfair or deceptive trade practices [or] unconscionable trade practices in the conduct of any trade or commerce." NMSA 1978, § 57-12-3. The NMUPA defines the term "unfair or deceptive trade practice" as
NMSA 1978, § 57-12-2D.
NMSA 1978, § 57-12-2D.
New Mexico law has now established that a claim under the NMUPA has four elements.
Stevenson v. Louis Dreyfus Corp., 112 N.M. at 100, 811 P.2d at 1311 (italics added). See Lohman v. Daimler-Chrysler Corp., 142 N.M. 437, 439, 166 P.3d 1091, 1093 (Ct.App.2007), cert. denied 142 N.M. 434, 166 P.3d 1088 (2007). "The `knowingly
In this motion for judgment as a matter or law, or, alternatively, motion for new trial, the Defendants advance three arguments why the existing verdict and judgment are improper. First, they assert Guidance failed to establish that certain representations by the Defendants—the Newell and Addison letters—were of a type that "may, tends to, or does deceive or mislead any person." Second, the Defendants contend that Guidance failed to sufficiently inform the Court or the Defendants about its only surviving theory of NMUPA liability—the Defendants' failure to provide the quality or quantity of goods for which Guidance contracted. Finally, the Defendants assert that the Court should reconsider finding that New Mexico law applies to Guidance's NMUPA claim because Guidance did not provide evidence of actual damages incurred in New Mexico. Guidance resists all three arguments, but first asserts that the Defendants have failed to preserve these arguments for post-judgment review by failing to make a sufficiently specific objection or pre-verdict rule 50(a) motion. While the Court concludes that the Defendants' objections and 50(a) motion were specific enough to warrant entertaining this motion, the motion fails on its merits.
A sufficiently specific pre-verdict rule 50(a) motion is a prerequisite to any rule 50(b) motion for judgment as a matter of law post-verdict, and the moving party may raise in a rule 50(b) motion only the issues that were raised in the rule 50(a) motion. See M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d at 762; Marshall v. Columbia Lea Regional Hosp., 474 F.3d at 738; United Int'l Holdings, Inc. v. Wharf (Holdings) Ltd., 210 F.3d at 1229; First Sec. Bank of Beaver v. Taylor, 964 F.2d at 1057; Karns v. Emerson Elec. Co., 817 F.2d at 1455 n. 2; 9B C. Wright & A. Miller, Fed. Prac. & Proc. Civ. § 2537, at 602-06 (3d ed.2008). The same rule applies to a motion for new trial under rule 59. See Cottman v. Aurora Pub. Schs., 85 Fed.Appx. at 88; Nissho-Iwai Co. v. Occidental Crude Sales, Inc., 848 F.2d at 619; 11 C. Wright, A. Miller, & M. Kane, Fed. Prac. & Proc. Civ. § 2805, at 57-58 (2d ed.1995). Before the Court proceeds to the merits, therefore, it must determine whether the Defendants properly preserved the issues in their motion for post-verdict review. Although the Defendants could have been substantially more specific than they were, the Court finds that Guidance and the Court were both put adequately on notice by the arguments that the Defendants made.
As Guidance has repeatedly reminded the Court and opposing counsel, there is only one NMUPA claim. See Response at 11 (noting the Defendants' "erroneous" assumption that the subsections of 57-12-2D are separate claims); Tr. at 274:25-276:6 (DeCandia)("Another issue that I should clean up right away is the fact that . . . (D)(17) is not itself a separate claim."). That claim, as became more apparent as the trial progressed, was predicated on several theories and on several categories
Guidance argues to the contrary, insisting that, every time the Defendants argued that Guidance had no evidence of false and/or misleading statements, the Defendants were arguing against a different NMUPA theory. In other words, Guidance argues that the Defendants were asserting that there was insufficient evidence of a false or misleading statement to Guidance's customers, but that the Defendants never specifically argued that there was no evidence of a false or misleading statement from the Defendants to Guidance regarding the Newell and Addison letters. See Response at 2. Guidance has not provided—and the Court has not found—any case law requiring such specificity. As the Court found, and as Guidance repeatedly reiterated, there exists one NMUPA claim, and the Defendants asserted that Guidance had supplied insufficient evidence of a false or misleading representation. Although Thomas Gulley, the Defendants' attorney, argued only toward the sufficiency of the evidence regarding false or misleading representations made to Guidance customers—rather than representations made to Guidance— he was arguing to a specific element of a specific claim of Guidance's Complaint, and the Court finds that to be sufficient to raise an insufficient-evidence argument on that same element of that same claim in this rule 50(b) motion.
The Court's conclusion is the same with respect to the Defendants' argument that Guidance is not entitled to recover because it proceeded to trial on a theory that was not adequately disclosed. Mr. Gulley addressed the issue during the argument on the Defendants' rule 50(a) motion, and Guidance did not object at that time. See Transcript of Trial at 247:12-250:23 (taken October 1, 2009)("Oct. 1 Tr.")(Gulley). Although Mr. Gulley's argument did not explicitly ask the Court to bar Guidance from proceeding on NMUPA theories other than the alleged false and disparaging statements to Guidance customers, the intent was apparent. The Court also effectively ruled on this objection in its opinion granting in
The Defendants' final argument is also legal in nature, although it has at its roots an insufficiency of evidence. The Defendants propose that, because Guidance provided insufficient evidence of actual damages supporting its NMUPA claim, there is no longer a basis for applying New Mexico law to Guidance's NMUPA claim, and that therefore the Court should dismiss that claim. While there is an underlying predicate of a lack of evidence, the Court finds that the bulk of the argument regards the legal result of that lack of evidence, and thus the issue is not properly considered part of the Defendants' rule 50(b) motion. Rather, again, the Court will consider it a question of law that could be raised only as part of the Defendants' motion for new trial. See M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d at 762 n. 4
The Defendants failed, however, to properly preserve this issue. The issue of choice-of-law for Guidance's NMUPA claim has not been raised since the parties' pre-trial motions, and, at that time, the argument presented was that application of the NMUPA when there was no evidence that any of the Defendants' conduct occurred in New Mexico would give the state's law impermissible extraterritorial effect. See Dentsply/TDP's Reply to Plaintiff's Memorandum of Law in Opposition to Defendants' (Dentsply/TDP's) Motion for Summary Judgment on Counrts IV, V and VI of Plaintiff's Complaint [Doc. 211] at 1-2, filed August 4, 2009 (Doc. 230). The current motion contains no arguments regarding preservation. The reply contains only a weak argument in footnote 14. See Dentsply/TDP's Reply in Support of Their Motion to Set Aside the UPA Verdict and Enter Judgment as a Matter of Law or Order a New Trial at 13 n. 14, filed March 3, 2010 (Doc. 518)("Reply"). Similarly, at the hearing, Mr. Cruz concluded his opening argument by addressing how the Defendants preserved the first two of these issues, but did not argue preservation of the third. See Tr. at 259:19-262:22 (Cruz); id. at 290:16-293:18 (Cruz)(briefly discussing preservation in his rebuttal argument).
The argument made in the footnote in the Defendants' reply does not show preservation of the choice-of-law argument that the Defendants make in this motion. The two documents that the Defendants call to the Court's attention are a letter from Mr. Gulley to the Court (dated October 7, 2009)(Doc. 416), and the trial transcript for that day. See Reply at 13 n. 14. As the footnote indicates, these documents reference only the general argument that Guidance has provided no evidence of an NMUPA violation; it does not resemble the complex choice-of-law argument, based on an insufficiency-of-the-evidence argument, that the Defendants now graft on that simple objection. See Letter from Thomas Gulley to the Court (dated Oct. 7, 2009), filed October 7, 2009 (Doc. 416)(insisting instructions 27 and 28 should be removed "because there has [sic] no evidence to support Guidance's New Mexico Unfair Practices Act claim."); Transcript of Trial at 168:22-169:2 (taken October 7, 2009)(Avitia)("[W]e also object to any of the Lanham Act, UPA and breach of implied covenant of good faith and fair dealing instructions because we don't believe they have any evidence to support this."). These general objections to the sufficiency of the evidence for the entirety of the NMUPA claim, unspecific as to any particular element of that claim, are insufficient to preserve the complex choice-of-law argument the Defendants now put forth. For the Court and Guidance to have meaningfully addressed pre-trial or at trial this new argument, the Defendants would have had to elaborate; this novel and new argument appears to be the creative product of the Defendants' new counsel.
The Defendants' first argument in its rule 50(b) motion is that Guidance provided insufficient evidence of a communication by the Defendants that "may, tends to, or does deceive or mislead any person." Motion at 2-7. They insist that Guidance's NMUPA claim must be based upon two letters, sent by Newell and Addison, which informed Guidance that the Defendants believed that Guidance was in violation of the Supply Agreement and federal law, and that the Defendants would cease supplying Guidance with obturators. The Defendants further argue that those letters, as a matter of law, cannot be communications that "may, tend[] to, or do[] deceive or mislead any person," and therefore the Court should enter judgment for the Defendants as to that claim. Guidance contends that other misleading and deceptive conduct underlies its NMUPA claim, and that those letters, even if factually true, were misleading and deceptive because they did not state the Defendants' true motivation for cutting off Guidance's supply of obturators. The Court agrees with Guidance on this issue.
One element of the NMUPA, and the element that the Defendants are attacking in this rule 50(b) motion, is that the defendant make a "representation . . . of the type that `may, tends to or does, deceive or mislead any person.'" Stevenson v. Louis Dreyfus Corp., 112 N.M. at 100, 811 P.2d at 1311. The Defendants' argument that the Newell and Addison letters could not be of the type that "may, tend[] to, or do[] deceive or mislead any person," because the allegations therein were true, has some force. As the Defendants point out, the jury found that Guidance breached the Supply Agreement and violated the Lanham Act with their conduct. See Verdict Form ¶¶ 24-27, at 6-7. The Defendants argue that, because the statements—that Guidance violated the NMUPA and the Lanham Act—were true, they could not possibly deceive or mislead any person as the NMUPA defines those terms. The Court disagrees.
First, the Court notes that the parties appear to agree that whether a certain act is deceptive or misleading for the purposes of a consumer-protection statute is question of fact that the fact-finder must decide. Although the Court has found no New Mexico case discussing this issue, the weight of authority from other jurisdictions leans in this direction as well. See Naples v. Keystone Bldg. & Dev.
The jury could reasonably have found that the letters were misleading because they appeared to state the reason for withholding obturators from Guidance, and the jury could reasonably have concluded that the reason represented was not the actual reason. The Defendants' primary defense against the challenged letters being of the type that "may, tends to, or does deceive or mislead any person" is that the letters were not false, and thus could not have misled or deceived. As the Court suggested at the hearing, however, there was substantial evidence from which the jury could reasonably conclude that the purported reason that the Defendants cut off the supply of obturators to Guidance was not the actual reason. The Newell letter indicates that the Defendants cut off the supply of obturators because he had heard reports that Guidance had breached the Supply Agreement.
Response Exhibit A pp. 15 (electronic-mail chain). See id. at p. 33 (electronic-mail transmission) ("Making [sales] quota is tough this year already, and now our customers can buy cheaper through the Dentsply back door."); id. at pp. 39-42 (North American NiTi Strategic Assessment). If the jury concluded that the Defendants stopped supplying obturators because Guidance was becoming a threat to its market share, rather than because Guidance breached the Supply Agreement, it would not be unreasonable for the jury to consider the Newell letter to be a representation that "may [have], tend[ed] to or d[id] deceive or mislead" Guidance.
Moreover, Guidance provided evidence that the Newell and Addison letters misled Goodis. The Defendants argue that the evidence shows that the letters did not deceive or mislead Goodis, see Motion at 5-7, but the Court believes the evidence shows the contrary. For example, Goodis' response to the Newell letter stated that Goodis had "investigated the allegations in [the Newell] letter [and] reaffirmed that Guidance's sales representatives are not [breaching the Supply Agreement]." Letter from Dr. Charles Goodis to Bill Newell (dated October 1, 2008), filed February 24, 2010 (Doc. 508-2, pp. 29). Although Goodis stated that he "dispute[s] [Newell's] allegation that [Guidance is in] default of
Moreover, to require the communication to be false to justify imposition of liability under the NMUPA would force the Court to read words in the statute as surplusage, which New Mexico law disfavors. See Benny v. Moberg Welding, 142 N.M. 501, 504, 167 P.3d 949, 952 (Ct.App.2007) (rejecting an interpretation that would render a statute's "provisions surplusage" because such a construction would be "contrary to ordinary rules of statutory construction"); Souter v. Ancae Heating & Air Conditioning, 132 N.M. 608, 612, 52 P.3d 980, 984 (Ct.App.2002) ("We will reject an interpretation of a statute that makes part of it surplusage[.]"); State v. Johnson, 124 N.M. 647, 653, 954 P.2d 79, 85 (Ct.App. 1997) ("We have always rejected an interpretation of a statute that would make parts of it mere surplusage or meaningless."). A communication that constitutes a violation of the NMUPA must be one that "may, tends to or does deceive or mislead any person." NMSA 57-12-2D. The New Mexico legislature included two categories of wrongful conduct—deception and misleading. The two terms have different meanings. If the New Mexico legislature had intended to include within the NMUPA's scope only statements that were false, it could have used the phrase "may, tends to or does deceive any person." The American Heritage Dictionary of the English Language at 482 (3d ed.1992) (
Moreover, the jury could reasonably have based its NMUPA verdict on the two other categories of conduct that Guidance sought to prove at trial: (i) that the Defendants insisted on Goodis providing detailed engineering drawings before they would produce the V2 file when this requirement was a pretext for keeping the V2 file off the market; and (ii) that the Defendants' sales force was spreading false or misleading statements to Guidance's customers to compel them to buy the Defendants' products instead of Guidance's. There was evidence supporting both of these allegations, and it is not clear from the briefing why the Defendants asserted that the NMUPA claim could be premised only upon the Newell and Addison letters. Guidance argues that these other forms of conduct can constitute the communications that "may, tends to or does deceive or mislead any person." Response at 4-13. Guidance asserts that there is plenty of evidence from which a reasonable jury could conclude that the Defendants made the requisite "false or misleading oral or written statement . . . or other representation of any kind" that "may [have], tend[ed] to or d[id] deceive or mislead any person."
The Court discussed the latter basis— the false and/or misleading statements to Guidance customers—in its opinion granting in part and denying in part the Defendants' rule 50(a) motion. The Court need not reiterate the basis upon which it concluded that the jurors could reasonably have found that the Defendants' sales force was making misleading and disparaging statements to Guidance's customers about Guidance going out of business or becoming unable to supply those customers with products. See Guidance Endodontics, LLC v. Dentsply Int'l, Inc., 708 F.Supp.2d at 1277-81. See also Response at 9-10 (tracing the evidence that could support this inference in more detail). It
The same conclusion is true of the Defendants' insistence that Guidance provide detailed engineering drawings before they would produce the V2 file. The demand for engineering-drawings was a part of the overarching plot of which Guidance provided evidence, and that the jury apparently believed, which made the representation occur "in connection with" the sale of the goods. Guidance provided evidence that the engineering drawings were not necessary to produce the V2 file, and that therefore any communication to Guidance insisting that it provide those drawings before the Defendants produced the V2 would be of a type that "may, tends to or does deceive or mislead." Response at 12-13 (citing Exhibit A at pp. 5, 20-22, 45); Transcript of Trial at 112:5-115:8 (taken September 29, 2009, 2009 WL 3672502)(Kelly, Higgins)(Eric Higgins testifying that the engineers rarely look at the engineering drawings because the data
The Defendants have not presented any new arguments or evidence regarding the final issue. The Defendants insist that the Court should not have permitted a NMUPA claim to go to the jury based on the Newell and Addison letters because Guidance did not properly bring that theory to the Defendants' attention in the Complaint, the Pretrial Order, or in response to discovery requests. Guidance responds that: (i) it need not plead its theories of NMUPA liability explicitly; (ii) the Complaint and the Pretrial Order both include the factual allegations upon which it bases its NMUPA claim, and those are incorporated by reference into the discussion of that claim; and (iii) the Defendants did not send Guidance any interrogatories seeking an exhaustive list of the factual and/or theoretical bases for its NMUPA claim.
First and foremost, the Court has concluded that Guidance provided sufficient evidence from which the jury could have found an NMUPA violation on either a quality-or-quantity theory or a disparaging-statements theory based on the misleading and/or disparaging statements to Guidance's customers. Based upon that finding, the Court could fairly disregard this argument. That theory, which Guidance clearly pled in the Complaint and indicated in the Pretrial Order, would be sufficient, without more, to sustain the jury's NMUPA verdict.
Moreover, with respect to the other two theories, the Court has addressed this issue in its prior opinion:
Guidance Endodontics, LLC v. Dentsply Int'l, Inc., 708 F.Supp.2d at 1279-80. The Defendants have provided no sound reason to alter this analysis.
With respect to the Complaint and Pretrial Order, the Court finds that the facts underlying these theories were sufficiently, if not fully, pled. Although Guidance did not reiterate all three bases for its NMUPA claim in the paragraphs beneath the heading "FIFTH CLAIM FOR RELIEF (Violation of the New Mexico Unfair Practices Act, § 57-12-1, et seq.)," it alleged the facts underlying these two theories in the factual recitation of the Complaint and incorporated those by reference into Count V. See Complaint ¶¶ 26-29, at 6-7, ¶¶ 47-48, at 10-11, ¶¶ 60-71, at 13-15, ¶¶ 79-88, at 17-19, ¶¶ 92-105, at 19-22; id. ¶ 198, at 34 (incorporating the factual paragraphs). The Pretrial Order discussed the V2-engineering-drawings and Newell-letter bases for Guidance's NMUPA claim in its factual statement, as well as through numerous disputed facts that were incorporated by reference into the Pretrial Order. See Pretrial Order at 4-7 ("As a result of Defendant's behavior, Guidance seeks recovery under the following causes of action: . . . (5) violation of the New Mexico Unfair Practices Act."); id. Exhibit B ¶¶ 21-25, at 7, ¶¶ 37-39, at 9-10, ¶ 41, at 10, ¶¶ 50-59, at 12-13, ¶¶ 72-74, at 14-15, ¶¶ 86-90, at 16-17, ¶¶ 179-97, at 28-31. These facts were also central to the trial and made up the bulk of Guidance's evidence. The Defendants could not have been caught wholly unaware of them, and, in fact, put up a vigorous defense at trial. Although Guidance's pleadings were not the model of clarity, the factual allegations are present, and the Defendants were free to seek clarification of Guidance's theories through discovery.
With respect to the Defendants' claim that Guidance failed to disclose its plethora of NMUPA theories in response to discovery requests, the Defendants run into a rather substantial problem: they made no discovery requests aimed at discovering the factual basis of Guidance's NMUPA claim. Mr. Cruz conceded this omission during oral argument. See Tr. at 253:24-254:19 (Cruz)("Dentsply made an inadvertent error in propounding interrogatories directed to paragraphs 190 and 191, which are the paragraphs of the Complaint addressed to the Delaware UPA but it did not propound interrogatories directed to paragraphs 200 and 201 which is the New Mexico UPA[.]"). The Defendants' position is that, because paragraphs 190 and 191 of the Complaint, referring to the Delaware Deceptive Trade Practices Act, were identical to paragraphs 200 and 201 of the Complaint, referring to the NMUPA the same underlying conduct must form the basis of both the NMUPA claim and the Delaware DTPA claim. Therefore, the Defendants insist, the theories that Guidance can pursue under the NMUPA are limited to the conduct that it disclosed to the Defendants in response to the interrogatory regarding the Delaware DTPA. See Motion at 10-12 & n. 6; Reply at 11-13.
The Court finds this logical chain insufficient for two reasons. First, the Delaware DTPA and the New Mexico UPA are different statutes and have the potential to encompass different conduct.
Fed.R.Civ.P. 50 advisory committee's note.
