Supreme Court Reverses Unitherm Antitrust Decision on Procedural Grounds

In Unitherm Food Systems V. Swift-Eckrich (January 23, 2006) the U.S. Supreme Court reversed the antitrust judgment of Federal Circuit Court of Appeals on procedural grounds holding "that since respondent failed to renew its preverdict motion as specified in Rule 50(b), there was no basis for review of respondent’s sufficiency of the evidence challenge in the Court of Appeals. "

In the district court (of first instance) the Defendant's had sought a declaration that ConAgra’s patent was invalid and unenforceable and alleged that ConAgra had violated §2 of the Sherman Act by attempting to enforce a patent obtained by fraud on the Patent and Trademark Office, see Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 174. The District Court found the patent invalid and allowed the Walker Process claim to proceed to trial. Before the case was submitted to the jury, ConAgra moved for a directed verdict under Federal Rule of Civil Procedure 50(a) based on legal insufficiency of the evidence. The court denied the motion, the jury returned a verdict for Unitherm, and ConAgra neither renewed its motion for judgment as a matter of law pursuant to Rule 50(b) nor moved for a new trial on antitrust liability pursuant to Rule 59.

On appeal to the Federal Circuit, ConAgra maintained that there was insufficient evidence to sustain the Walker Process verdict. The court applied Tenth Circuit law, under which a party that has failed to file a postverdict sufficiency of the evidence challenge may nonetheless raise such a claim on appeal, so long as the party filed a Rule 50(a) motion before submission of the case to the jury. The only available relief in such a circumstance is a new trial. Freed to examine the sufficiency of the evidence, the Federal Circuit vacated the judgment and ordered a new trial.

According to Justice Thomas writing for the majority,

The text of [Federal Rule of Civil Procedure] Rule 50(b) confirms that respondent’s preverdict Rule 50(a) motion did not present the District Court with the option of ordering a new trial. That text provides that a district court may only order a new trial on the basis of issues raised in a preverdict Rule 50(a) motion when “ruling on a renewed motion” under Rule 50(b). Accordingly, even if the District Court was inclined to grant a new trial on the basis of arguments raised in respondent’s preverdict motion, it was without the power to do so under Rule 50(b) absent a postverdict motion pursuant to that Rule. Consequently, the Court of Appeals was similarly powerless.

. . . Thus, the District Court’s denial of respondent’s preverdict motion cannot form the basis of respondent’s appeal, because the denial of that motion was not error. It was merely an exercise of the District Court’s discretion, in accordance with the text of the Rule and the accepted practice of permitting the jury to make an initial judgment about the sufficiency of the evidence. The only error here was counsel’s failure to file a postverdict motion pursuant to Rule 50(b).