In a decision that may cause a patentee to pay its rival more than $20 million, the U.S. Supreme Court ruled that a post-verdict motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b) is a prerequisite to seeking appellate challenges to the sufficiency of the evidence. Unitherm Food Systems v. Swift-Eckrich, Case No. 04-597 (Supreme Court, January 23, 2005 by Justice Thomas)
The lawsuit began when Unitherm, a manufacturer and supplier of food processing machinery, filed a complaint against its competitor, ConAgra. Unitherm sought a declaratory judgment that ConAgra’s patent covering a method for browning precooked meat was invalid and unenforceable and also alleged ConAgra had violated § 2 of the Sherman Act by attempting to enforce a fraudulently obtained patent. The district court found the patent invalid and allowed the Sherman Act claim to proceed to trial. After the presentation of all evidence, ConAgra moved for a directed verdict under Rule 50(a). The court denied that motion, and the jury returned a verdict against ConAgra. Following the verdict, ConAgra did not renew its motion for judgment as a matter of law under Rule 50(b), nor did it move for a new trial under Rule 59.
Despite’s ConAgra’s failures to challenge insufficiency of evidence in a post-verdict motion at the district court, on appeal to the Federal Circuit ConAgra argued there was insufficient evidence in the record to sustain the jury’s Sherman Act verdict. The Federal Circuit observed that on this procedural issue, it was bound by Tenth Circuit case law, which allows a party that has failed to file a post-verdict motion challenging the sufficiency of evidence to raise such a claim on appeal as long as the party had previously filed a Rule 50(a) motion. Under Tenth Circuit case law the only available relief in such a situation is a new trial—not a directed verdict—even if the court of appeals concludes the jury verdict lacks evidentiary basis. The Federal Circuit, therefore, ruled that ConAgra was free to raise insufficiency of evidence on appeal despite its failure to renew its pre-verdict motion as required by Rule 50(b), found the evidence to be insufficient to support the verdict and ordered a new trial. Unitherm appealed, arguing the Federal Circuit had used "extraordinary reach to decide issues of fact and law which were not necessary to its decision and which were never addressed by the trial court or the parties’ appellate briefs."
With Justice Thomas writing for the majority, in a 7-2 vote the Supreme Court reversed the Federal Circuit (dissent by Justice Stevens joined by Justice Kennedy). Relying on its precedent, the Court stated it had previously held that if a party received an adverse verdict in a civil jury trial but failed to submit a post-verdict motion under Rule 50(b), appellate courts lacked power to direct the trial courts to enter a judgment contrary to the jury verdict. The Court explained: "determination of whether a new trial should be granted or a judgment entered under Rule 50(b) calls for the judgment in the first instance of the judge who saw and heard the witness and has the feel of the case which no appellate printed transcript can impart." The Court also rejected the argument that its prior decisions on this issue could be distinguished on the basis that they involved appellate courts entering judgments absent a post-verdict motion as opposed to ordering a new trial (as the Federal Circuit had done and as the Tenth Circuit case law allowed). The Court stated the benefit and wisdom of requiring a post-verdict motion under Rule 50(b) applies "with equal force whether a party is seeking judgment as a matter of law or simply a new trial."
As further justification for its holding, the Court observed that the purported basis for ConAgra’s appeal was to seek a new trial based upon the legal sufficiency of the evidence rather than a review of the trial court’s denial of ConAgra’s Rule 50(a) motion. As the Court explained, entitlement to a motion for judgment as a matter of law under Rule 50(a) cannot be appealed unless the motion is renewed under Rule 50(b). Quoting a prior decision, the Court stated "no procedural principle is more familiar to this Court than that a … right may be forfeited … by the failure to make timely assertion of the right before a tribunal having jurisdiction to determine it." The Court reasoned that if ConAgra was barred from seeking the relief it sought in its Rule 50(a) motion by reason of its failure to renew that motion as required by the Federal Rules, it must necessarily be foreclosed from seeking appellate relief that it did not (and could not) seek in the context of its pre-verdict motion. The Court explained: "even if the District Court was inclined to grant a new trial on the basis of arguments raised in [ConAgra’s] pre-verdict motion, it was without the power to do so under Rule 50(b) absent a post-verdict motion pursuant to that Rule. Consequently, the Court of Appeals was similarly powerless."
Further, as the Supreme Court observed, even when it is possible for a district court to grant a judgment as a matter of law under Rule 50(a), it may serve judicial economy to submit the case to the jury. Specifically, an appellate reversal of a judgment as a matter of law would require a new trial: a costly endeavor. On the other hand, if the jury finds liability, but the court then grants a renewed motion for judgment as a matter of law under Rule 50(b), an appellate reversal would simply lead to a reinstatement of the jury verdict. Based upon this logic, requiring a full briefing of arguments for and against the sufficiency of the evidence and a review of those issues by the trial judge who observed presentation of the evidence and witnesses, would enable the appellate courts to exercise their mandate more efficiently.
The dissent argued that federal appellate courts have the power to correct plain error, notwithstanding an "omission" by trial counsel that would "ordinarily give rise to a binding waiver." In the dissent’s view, there is no basis for the majority’s determination "that the courts of appeals lack the ‘power’ to review the sufficiency of the evidence and order appropriate relief ...’."
The Supreme Court’s decision reaffirms that parties must file a post-verdict motion under Rule 50(b) before seeking appellate review of the sufficiency of the evidence presented at trial. Beyond the now-obvious wisdom of doing so, the requirement adds a level of fairness to the appellate process; a Rule 50(b) motion illuminates the specific issues likely to be raised on appeal and limits the wasteful exercise of briefing and arguing irrelevant issues on appeal.
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