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July 2020

How (or how not) to fix an erroneous damages award in federal court

Last week, the U.S. Fifth Circuit issued a valuable opinion on how to fix erroneous awards of damages in the federal system. As explained by the court, “the Federal Rules of Civil Procedure provide several ways for a federal litigant to seek a different damages figure than that which the jury awards. And [plaintiff] chose exactly none of them.” Acadian Diagnostic Labs., LLC v. Quality Toxicology, LLC, No. 19-30320, slip op. at 10 (5th Cir. July 13, 2020). The court’s opinion is a handy summary of the motions available in federal court to address errors in the district court, before the cement dries on the final judgment.

The case was a suit for breach of two contracts involving payment for testing lab specimens. Before trial, Judge Brade (M.D. La.) rendered partial summary judgment in the plaintiff’s favor on one of the contracts, finding that the defendant owed damages for 2,027 of the 2,679 contested specimens. As to the 2,027 undisputed samples, Judge Brady concluded that the defendant owed the plaintiff $1,017,528.20, less $73,134.34 already paid (the difference is $944,393.86). The judge apparently left for the jury the question of damages for the remaining 652 specimens.

The jury returned a verdict in plaintiff’s favor on both contracts. For the contract on which Judge Brady had granted partial summary judgment, the jury awarded damages of $269,706.50. The verdict form did not specify whether this figure was for all 2,679 specimens or just the 652 specimens on which Judge Brady had denied summary judgment.

Shortly after the verdict, Judge Brady died. Fifteen months later, another judge entered final judgment for plaintiff on the jury verdict. The final judgment didn’t mention Judge Brady’s prior summary judgment or his damages calculation for the 2,027 undisputed specimens.

Both sides appealed. In its cross-appeal, the plaintiff argued that the $269,706.50 award was too low and should be amended to reflect total damages of over $1.3 million or, alternatively, at least the $1,017,528.20 found to be owed by Judge Brady’s partial summary judgment.

The Fifth Circuit rejected the plaintiff’s argument and affirmed the final judgment. The court began by citing the Seventh Amendment, which prevents an appellate court from simply increasing the damages awarded in a verdict. The court then went on to list the motions available in the trial court to head off or correct an erroneous verdict:

  • A pre-verdict motion for judgment as a matter of law under Fed. R. Civ. P. 50(a)
  • If a pre-verdict motion for JMOL has been filed, a renewed post-verdict motion for judgment as a matter of law under Fed. R. Civ. P. 50(b)
  • A motion for new trial (in this instance, a new trial on damages) under Fed. R. Civ. P. 59(a)

Because the plaintiff failed to file any of these motions in the district court, it forfeited its ability to seek appellate review of the jury verdict.

The Fifth Circuit went on to describe motions that were available to address the inconsistency between Judge Brady’s partial summary judgment for $1,017,528.20 and the final judgment awarding only $269,706.50:

  • A request that the judgment be set out in a separate document under Fed. R. Civ. P. 58(d). The plaintiff could have used this rule to request entry of a final judgment reflecting both the jury verdict and the partial summary-judgment opinion, but failed to do so.
  • Within 28 days after entry of the final judgment, a motion to alter or amend under Fed. R. Civ. P. 59(e). This rule, the Fifth Circuit pointed out, is designed to enable the district court to fix its own errors and, if successful, can make an appeal unnecessary.
  • Even after the time for a Rule 59(e) motion, a motion for relief from the judgment under Fed. R. Civ. P. 60(b). Among the grounds for this motion is “mistake,” including a judicial mistake.

But because the plaintiff failed to use any of these procedures to address the inconsistency in the district court, the plaintiff forfeited its right to raise the inconsistency on appeal.