G.P.P., Inc. v. Guardian Protection Products, Inc. ( 2023 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 3 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
G.P.P., INC., DBA Guardian Innovative No. 22-15569
Solutions,
D.C. No. 1:15-cv-00321-SKO
Plaintiff-Appellant,
v. MEMORANDUM*
GUARDIAN PROTECTION PRODUCTS,
INC.,
Defendant-Appellee,
and
RPM WOOD FINISHES GROUP, INC.,
Defendant.
G.P.P., INC., DBA Guardian Innovative No. 22-15638
Solutions,
D.C. No. 1:15-cv-00321-SKO
Plaintiff-Appellee,
v.
GUARDIAN PROTECTION PRODUCTS,
INC.,
Defendant-Appellant,
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
and
RPM WOOD FINISHES GROUP, INC.,
Defendant.
Appeal from the United States District Court
for the Eastern District of California
Sheila K. Oberto, Magistrate Judge, Presiding
Argued and Submitted June 23, 2023
Seattle, Washington
Before: GOULD, BEA, and FRIEDLAND, Circuit Judges.
G.P.P., Inc., which does business as Guardian Innovative Solutions (“GIS”),
and Guardian Protection Products, Inc. (“Guardian”) cross-appeal the district court’s
entry of judgment on the jury verdict in favor of GIS for $6 million. The parties are
familiar with the facts and procedural history, so we do not recite them here. For the
reasons stated below, we affirm.
1. GIS argues that the district court erred when it permitted Guardian to present
to the jury various affirmative defenses (unclean hands, offset, and/or failure of
consideration) which were based, at least in part, on CDFC, Inc.’s sale of
dreamGUARD products. GIS also argues that the district court erred when it
instructed the jury that the sales were attributable to GIS, that the sales constituted a
breach of GIS’s contractual duty to refrain from selling products which competed
with Guardian’s products, and that “GIS unfairly interfered with Guardian’s right to
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receive the benefits of the Warehousing Distributor Agreements.” We hold that any
error was more likely than not harmless because the jury rejected each of Guardian’s
said affirmative defenses.
GIS raises only one argument on the harmfulness of the district court’s rulings
in its opening brief: GIS argues that the district court’s instructions to the jury that
GIS breached the agreements through its sale of dreamGUARD products “tarnished
GIS in the eyes of the jury,” which GIS believes must have led to a lower award of
damages than the jury otherwise would have awarded.1 But the jury was told to
calculate the damages that would “reasonably compensate GIS for the harm caused
by the breach,” and was told that they “must not be influenced by any personal likes
or dislikes, opinions, prejudices or sympathy.” “[J]uries are presumed to follow the
court’s instructions.” CSX Transp., Inc. v. Hensley, 556 U.S. 838, 841 (2009) (per
curiam).
Further, we must accord “substantial deference to a jury’s finding of the
appropriate amount of damages.” Del Monte Dunes at Monterey, Ltd. v. City of
Monterey, 95 F.3d 1422, 1435 (9th Cir. 1996), aff’d, 526 U.S. 687 (1999). “We
1
At oral argument, GIS argued a different theory of prejudice: that the jury may
have concluded that GIS’s sale of dreamGUARD products was evidence of GIS’s
failure to mitigate its damages. GIS forfeited this theory when it failed to raise the
theory specifically and distinctly in its opening brief. See Cruz v. Int’l Collection
Corp., 673 F.3d 991, 998 (9th Cir. 2012) (“We review only issues which are argued
specifically and distinctly in a party’s opening brief.” (quoting Greenwood v. F.A.A.,
28 F.3d 971, 977 (9th Cir. 1994))).
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must uphold the jury’s finding unless the amount is grossly excessive or monstrous,
clearly not supported by the evidence, or based only on speculation or guesswork.”
Id. And the jury’s award of damages in this case was supported by the evidence.
2. GIS next argues that the district court erred when it permitted Guardian to
present an affirmative defense at trial which was beyond the scope of the Answer
and the pretrial order. Guardian’s defense—a limitation of liability defense based
on an interpretation of Section 6(b) of the agreements—would have limited GIS’s
damages to $2.67 million if accepted by the jury. However, the jury found that GIS
incurred $12 million in damages. Because the jury found that GIS failed to mitigate
$6 million in damages, the jury ultimately awarded $6 million in damages. In sum,
the jury’s verdict reflects a rejection of the limitation on damages which Guardian
claimed under Section 6(b) of the agreements. Once rejected, there is no indication
that the Section 6(b) defense had any effect on the outcome of the proceedings.
Thus, we hold that district court’s order which permitted Guardian to advance the
defense was more probably than not harmless. See Obrey v. Johnson, 400 F.3d 691,
699 (9th Cir. 2005).
3. GIS argues that the district court erred when it failed to instruct the jury that
the Bob’s Agreement2 between Guardian and GIS was supported by valid
2
An agreement by Guardian to pay a five percent commission to GIS on all sales by
Guardian made directly to Bob’s Discount Furniture stores in GIS’s territory.
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consideration, based on either our previous memorandum disposition or based on
the evidence at trial. Both arguments are meritless.
a. The district court’s compliance with the scope of our mandate is
reviewed de novo. Hall v. City of Los Angeles, 697 F.3d 1059, 1066 (9th Cir. 2012).
Our prior memorandum disposition did not clearly require the district court to grant
judgment as a matter of law to GIS on the issue whether the Bob’s Agreement is
supported by valid consideration. We held that the district court’s assessment of
consideration was too narrow, but we did not hold that GIS’s evidence of
consideration entitled it to judgment as a matter of law. Instead, we “reverse[d] the
district court’s grant of judgment as a matter of law [in favor of] Guardian as to
[whether the Bob’s Agreement was supported by consideration] and remand[ed] it
for retrial.” G.P.P. Inc. v. Guardian Prot. Prod., Inc., 788 F. App’x 452, 455 (9th
Cir. 2019). In any case, it was not “clear” that the issue was foreclosed by this
court’s mandate, and thus the district court was free to reconsider this issue on
remand. Hall, 697 F.3d at 1067.3
3
GIS also argues that the district court should have used our language in the jury
instructions. “We review a district court’s formulation of civil jury instructions for
abuse of discretion.” Transue v. Aesthetech Corp., 341 F.3d 911, 920 (9th Cir.
2003). GIS argues that its proposed instruction would have provided better
“context” as opposed to the model instruction. However, the district court’s
instructions on the issue of consideration were not misstatements of the law nor did
the district court otherwise abuse its discretion. See United States v. Hinkson, 585
F.3d 1247, 1251 (9th Cir. 2009) (en banc).
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b. “A denial of a motion for judgment as a matter of law is reviewed de
novo.” McClaran v. Plastic Indus., Inc., 97 F.3d 347, 354 (9th Cir. 1996). Although
the evidence tends to favor the conclusion that the Bob’s Agreement was the
settlement of a dispute and was supported by consideration, Guardian did introduce
some evidence that the Bob’s Agreement was gratuitous. This evidence was more
than a mere scintilla. See Lakeside-Scott v. Multnomah Cnty., 556 F.3d 797, 802
(9th Cir. 2009). Thus, the evidence does not mandate the conclusion that Guardian’s
payment of the commission was induced by either an offer from GIS not to enforce
its exclusivity rights or Guardian’s desire to avoid litigation and debate over the
scope of GIS’s exclusivity rights, and the district court was correct to deny judgment
as a matter of law. See Santos v. Gates, 287 F.3d 846, 851 (9th Cir. 2002) (holding
that judgment as a matter of law is appropriate only when “the evidence presented
at trial permits only one reasonable conclusion”).
4. Last, we decline to address GIS’s argument that the district court erred when
it limited GIS’s discovery on damages for Guardian’s breach of the Bob’s
Agreement to particular territories. The jury never reached the question of damages
because the jury ruled that Guardian did not breach the Bob’s Agreement. Because
the jury did not reach the issue of damages, any error in the district court’s discovery
order was more probably than not harmless.
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5. Guardian has waived all claims of error if the panel denies relief to GIS on
GIS’s appeal. Because we deny relief to GIS for the reasons stated above, we
acknowledge Guardian’s waiver and deny relief on the cross-appeal.4
AFFIRMED.
4
Guardian has moved to strike certain portions of GIS’s Further Excerpts of Record
and certain portions of GIS’s yellow brief. Dkt. No. 37. We find that the documents
at issue are pertinent to the cross-appeal only. Because we deny relief on the cross-
appeal without reaching its merits, we deny the motion to strike as moot.
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