Been v. O.K. Industries, Inc.

FILED
United States Court of Appeals
Tenth Circuit
October 13, 2010
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
CHARLES BEEN, individually, d/b/a
Creekside Farm, Inc.; DONALD
FROST; EDWIN JOHNSTON; BOB
FIELDS, individually, d/b/a Okie Blue
Sky Farm, Inc.; GENE BLACKWELL,
Plaintiffs-Appellees,
v. No. 08-7078
(D.C. No. 6:CV-02-00285-RAW)
O.K. INDUSTRIES, INC., an (E. D. Okla)
Arkansas corporation and as
administrator of health and benefit
plans; O.K. FOODS, INC., an
Arkansas corporation and as
administrator of health and benefit
plans; O.K. FARMS, INC., an
Arkansas corporation and as
administrator of health and benefit
plans; O.K. BROILER FARMS
LIMITED PARTNERSHIP, an
Arkansas limited partnership and as
administrator health and benefit plans,
Defendants-Appellants.
ORDER AND JUDGMENT *
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 (eff. Dec.
1, 2006) and 10th Cir. R. 32.1 (eff. Jan. 1, 2007).
Before BRISCOE, Chief Judge, BALDOCK, and GORSUCH, Circuit Judges.
Plaintiffs-Appellees (“Growers”) filed this action alleging that Defendants-
Appellants O.K. Industries, Inc., O.K. Farms, Inc., O.K. Foods, Inc., and O.K.
Broiler Farms Limited Partnership (collectively “OK”) violated § 202(a) of the
Packers and Stockyards Act (PSA), 7 U.S.C. § 192(a). After a jury trial, the
Growers prevailed on their claim and were awarded $21,141,975, which the
district court reduced to $14,511,935. OK appeals, arguing: (1) the Growers
failed to prove that OK engaged in an unfair practice “with respect to live
poultry” under the PSA; (2) the Growers failed to prove that OK’s allegedly
unfair practices injured consumers and that OK had sufficient market power in the
output market; (3) there was insufficient evidence to support two of the five
possible theories of liability; (4) the district court erroneously admitted expert
testimony; and (5) the district court failed to instruct the jury on the statute of
limitations. As discussed below, we have jurisdiction pursuant to 28 U.S.C. §
1291, and affirm.
I
OK is a vertically integrated poultry producer operating in Arkansas and
Oklahoma, and it is the largest poultry integrator in Oklahoma. OK is involved in
almost every stage of the production and wholesale of poultry. However, OK
2
does not handle the raising of broiler chickens to slaughtering age, but instead
enters into contracts with various “growers” who raise the chickens.
Under OK’s standard, non-negotiable contracts, these growers agree to use
only chicks and supplies provided by OK. The individual growers also agree not
to sell their chickens to other poultry integrators. In turn, OK agrees to provide a
grower with only one flock of chicks, which typically takes seven weeks to raise.
Then, OK may provide the grower with replacement flocks. Additionally, OK
requires each grower to obtain financing and build chicken houses to OK’s
specifications, which can cost nearly $160,000. OK periodically requires growers
to update their chicken houses to meet recent updated specifications.
Plaintiffs-Appellees are a class of growers operating in Oklahoma under
contract with OK. They brought this suit alleging, in part, that the terms of OK’s
non-negotiable contracts and OK’s performance under those contracts violate the
PSA as unfair practices.
OK filed a motion for summary judgment, and the district court ruled that
the PSA required proof of injury to competition, and the Growers failed to
establish a genuine issue of material fact regarding competitive injury. The
district court granted summary judgment for OK on the PSA claims, as well as on
state law claims of unconscionability. The Growers appealed the grant of
summary judgment.
On appeal, we held that “a plaintiff who challenges a practice under [PSA]
3
§ 202(a) [must] show that the practice injures or is likely to injure competition.”
Been v. O.K. Indus., Inc., 495 F.3d 1217, 1230 (10th Cir. 2007). Applying that
holding to the evidence presented by the parties on summary judgment, we first
concluded that “[t]he record contain[ed] evidence that support[ed] the Growers’
contention that OK [wa]s a monopsony in the relevant regional market.” Id. at
1231. 1 We in turn held that, “to establish that the practices of a monopsonist have
injured or are likely to injure competition, a plaintiff does not have to be a
competitor of the buyer or demonstrate that the buyer has improperly excluded
other competitors. Instead, the plaintiff must show that the monopsonist’s
practices have caused or are likely to cause the anticompetitive effect associated
with monopsonies, namely the arbitrary manipulation of market prices by
unilaterally depressing seller prices on the input market with the effect (or likely
effect) of increasing prices on the output market.” Id. at 1232. We ultimately
concluded “that a genuine issue of material fact exist[ed] as to whether OK
engaged in unfair practices in violation of § 202(a).” Id. at 1233. “In particular,
we note[d] that the record contain[ed] evidence,” most notably “expert
testimony,” “of the classic monopsony injury, namely that OK [wa]s depressing
1
A monopsony is a “condition of the market in which there is but one
buyer for a particular commodity.” Telecor Commc’ns, Inc. v. Sw. Bell Tel. Co.,
305 F.3d 1124, 1133 n.4 (10th Cir. 2002) (internal quotation marks omitted). “As
such, a monopsony is to the buy side of the market what a monopoly is to the sell
side . . . .’” Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc.,
549 U.S. 312, 320 (2007).
4
the prices it pa[id] the Growers and reselling at inflated prices.” Id. We thus
reversed the district court’s grant of summary judgment for OK on the PSA claim
but affirmed the grant of summary judgment regarding the unconscionability of
the contracts under state law.
The case proceeded to a jury trial, where the Growers alleged five specific
unfair practices that purportedly caused competitive injury in violation of the
PSA. The Growers offered testimony that: (1) OK exercised extensive control
over the Growers in almost every aspect of production and pay; (2) OK increased
the number of days between chicken flocks that it placed with the Growers; (3)
OK reduced the number of chickens per square foot of housing space, or “bird
density,” placed with the Growers; (4) OK exercised control over the
specifications for the chicken houses; and (5) OK shared detailed information
with other integrators in the form of “Agri Stats,” but did not share this
information with the Growers, leading to a severe asymmetry of information.
At trial, the Growers offered the expert testimony of Dr. C. Robert Taylor,
a professor of agricultural economics, who concluded that each of the above
practices reduced production, depressed Grower pay compared to competitive-
market levels, and likely increased output prices. Taylor also testified that OK’s
production practices impacted immediate resale and national prices, conclusions
he reached after performing four regression analyses.
Taylor further testified regarding his methodology for calculating the
5
Growers’ damages. Taylor calculated the difference between the profits that the
Growers actually received and the profits they would have earned in a competitive
market, i.e., one free of the alleged violations of the PSA. He concluded that OK
underpaid the Growers by up to $14,511,935 as a result of their violations during
the class period. OK repeatedly objected to Taylor’s testimony, requesting an
opportunity to voir dire the witness. The district court denied each request,
stating that OK would have its opportunity on cross-examination. Following
cross-examination, there was no request to exclude Taylor’s testimony, in whole
or in part.
The jury returned a verdict, finding that OK violated § 202(a) of the PSA,
and awarded the Growers $21,141,975. The district court entered judgment
reflecting the verdict and damages on March 25, 2008. On April 8, 2008, OK
filed motions for judgment as a matter of law and for a new trial. On July 3,
2008, the district court denied OK’s motion for judgment as a matter of law, and
it denied OK’s motion for a new trial on the condition that the Growers consent to
remittitur, reducing the damages to $14,511,935. The district court stated that it
would enter an amended judgment upon Grower’s acceptance of the remittitur.
The Growers consented to the remittitur on July 14, 2008, by filing a document
titled “Plaintiffs’ Consent to Remittitur,” but the district court never entered an
amended judgment after that consent was filed. On August 7, 2008, the Growers
and OK stipulated to dismissing with prejudice all remaining individual claims.
6
OK filed a notice of appeal on August 12, 2008.
II
A. Appellate Jurisdiction
Before considering the merits of this appeal, we must determine whether
we have appellate jurisdiction. We raised this issue sua sponte and have received
supplemental briefing from the parties.
Generally, we have jurisdiction only over “final decisions” from the district
courts. 28 U.S.C. § 1291. In a civil case, a notice of appeal must be filed within
thirty days after the entry of judgment. Fed. R. App. P. 4(a)(1)(A). However,
when a party files a motion for a new trial, “the time to file an appeal runs for all
parties from the entry of the order disposing of” that motion. Fed. R. App. P.
4(a)(4)(A)(v).
Here, OK filed a motion for a new trial after the district court entered a
judgment reflecting the jury’s verdict and award of damages. The district court
then conditionally denied OK’s motion, after raising sua sponte the issue of
remittitur. Specifically, the district court’s July 3, 2008 order stated:
It is the Order of the Court that the motion of the defendants for new
trial . . . is hereby DENIED. . . . The court suggests remittitur of the
damages award to $14,511,935. Plaintiffs are given ten days from the
date of this order to file a consent to remittitur, at which time an
amended judgment will be entered. If plaintiffs do not consent to the
remittitur, a new trial as to damages will be ordered.
7
Appellees’ App. at 93. The Growers filed a document labeled “Plaintiffs’
Consent to Remittitur” with the district court, stating: “Pursuant to the Court’s
Order of July 3, 2008, Plaintiffs hereby consent to remittitur of the damages
award in this case from $21,141,975 to $14,511,935.” Appellees’ App. at 94.
However, the district court never entered an amended judgment after the Growers
filed their consent to remittitur.
The critical issue in the present case is whether OK could have filed an
appeal once the Growers consented to the remittitur, or if OK was required to
wait for the district court to enter an amended judgment. Other circuits have
considered this issue, with conflicting results.
The majority of our sister circuits that have considered this issue have
concluded that acceptance of remittitur renders the district court’s decision final.
The Eleventh Circuit was faced with an identical situation in Wright v. Preferred
Research, Inc., 891 F.2d 886 (11th Cir. 1990) (per curiam). In Wright, the district
court denied the defendant’s motion for new trial on the condition that the
plaintiff consent to remittitur. See id. at 888. The Eleventh Circuit stated:
“When [plaintiff] accepted the remittitur . . . the judgment became final and
appealable, actuating the 30-day period within which a notice of appeal must be
filed.” Id.; see also Mauriello v. Univ. of Medicine and Dentistry of N.J., 781
F.2d 46, 49 (3d Cir. 1986) (“The question is whether the judgment became final
when the remittitur order was entered or when the plaintiff’s acceptance was
8
filed. We conclude that the latter date is determinative for computing the time for
appeal.”); Howell v. Marmpegaso Compania Naviera, S.A., 566 F.2d 992, 993
(5th Cir. 1978) (per curiam) (concluding that the plaintiff’s “acceptance of the
remittitur rendered the judgment final and appealable, and actuated the 30-day
time limit within which notice of appeal must be filed”).
On the other hand, the Sixth Circuit appears to require entry of a separate,
amended judgment before a party may appeal from remittitur. See Anderson v.
Roberson, 249 F.3d 539, 542–43 (6th Cir. 2001). In Anderson, the jury returned
its verdict for the plaintiffs, and the defendants filed motions for judgment as a
matter of law, new trial, and remittitur. Id. at 541. The district court ruled that
defendants would be granted a new trial if plaintiffs rejected the remittitur. Id.Although it was unclear whether the plaintiffs ever actually accepted or rejected
the remittitur, the Sixth Circuit reasoned:
Both plaintiffs and defendants have missed the point. Once the district
court entered its order giving the plaintiffs the choice between
accepting the remittitur or having a new trial, there was no final order
from which the parties could appeal. The parties appear to believe that
the plaintiffs’ action — either accepting or rejecting the remittitur —
ends the district court’s jurisdiction and opens the door for the case to
proceed on appeal. The parties are mistaken. Except for those well-
defined occasions when we have jurisdiction over an interlocutory
appeal, we do not have jurisdiction over an appeal until the district
court issues a final, appealable order. . . . Until the district court either
enters a final order based upon the plaintiffs’ election to accept the
remittitur, or proceeds to judgment after a new trial, there is nothing for
this court to review.
Id. at 542–43 (citations omitted).
9
The Growers also direct our attention to language from the Second
Circuit’s opinion in Ortiz-Del Valle v. Nat’l Basketball Ass’n, 190 F.3d 598, 600
(2d Cir. 1999) (per curiam). In Ortiz-Del Valle, the district court denied the
defendant’s motion for a new trial conditioned upon plaintiff’s acceptance of a
new trial or remittitur. Id. at 599. The plaintiff rejected the remittitur and opted
for a new trial. Id. The defendants appealed, arguing that the order conditionally
denying the motion for a new trial was final and appealable on the date of entry of
that order. Id. The Second Circuit disagreed, and noted in dicta that “[w]here the
plaintiff elects the remittitur, the defendant’s time for filing the notice of appeal
runs from the date of entry of the amended judgment reduced as a result of the
remittitur. See Fed. R. Civ. P. 58 (judgment not effective until set forth in
separate document and entered on civil docket) . . . .” Id. at 600. The Growers
contend that this language supports the conclusion that we lack jurisdiction until
the district court enters a separate, amended judgment. We disagree.
The above-quoted language from Ortiz-Del Valle does not speak to the
finality of the district court’s decision. Rather, the quoted portion of the Second
Circuit’s ruling addresses only the running of the time to file a notice of appeal,
explicitly relying on Federal Rule of Civil Procedure 58. Under the version of
Rule 58 and the Federal Rules of Appellate Procedure in effect in 1999, some
courts had held that the time to file a notice of appeal began to run only once a
separate judgment was entered; if a district court never entered a separate
10
judgment, the time to appeal never began to run. See Fed. R. Civ. P. 58 advisory
committee’s note (2002 amendments); see also Casey v. Long Island R.R. Co.,
406 F.3d 142, 148 (2d Cir. 2005). However, in 2002, the Federal Rules of Civil
and Appellate Procedure were amended to address this problem and ensure that
the time to appeal was not indefinite. See Fed. R. Civ. P. 58 advisory
committee’s note (2002 amendments). Therefore, the Second Circuit’s opinion
that “the defendant’s time for filing the notice of appeal runs from the date of
entry of the amended judgment,” Ortiz-Del Valle, 190 F.3d at 600, is not helpful
in resolving the jurisdictional issue in the present appeal.
If anything, the reasoning in Ortiz-Del Valle supports the conclusion that
an order becomes final on the date that a party consents to remittitur. Notably,
the Second Circuit stated that “[t]he motion [for a new trial] . . . was disposed of
on the date when plaintiff rejected the remittitur and instead opted for a new
trial.” Ortiz-Del Valle, 190 F.3d at 600. By the same logic, OK’s motion for a
new trial would have been disposed of on the date when Growers consented to the
remittitur.
We find the reasoning of the Third, Fifth, and Eleventh Circuits to be more
persuasive. When a district court enters an order denying a motion for a new trial
on the condition that a plaintiff accept a remittitur for specified damages, the
decision is deemed final once the plaintiff accepts the remittitur. “For a ruling to
be final, ‘it must end the litigation on the merits, and the [district court] must
11
clearly declare [its] intention in this respect.’” Harbert v. Healthcare Serv.
Group, Inc., 391 F.3d 1140, 1145 (10th Cir. 2004) (quoting FirsTier Mortgage Co.
v. Investors Mortgage Ins. Co., 498 U.S. 269, 273–74 (1991)). A final decision
leaves nothing for the district court but to execute the judgment. Id. “[T]he
touchstone of a final order is a decision by the court that a party shall recover
only a sum certain.” Id. (internal quotation marks omitted). In the case at bar,
liability had already been determined, and damages were set by the district court
and the Growers’ consent. See Green Tree Fin. Corp.-Alabama v. Randolph, 531
U.S. 79, 86 (2000) (“[T]he term ‘final decision’ . . . is a decision that ends the
litigation on the merits and leaves nothing more for the court to do but execute
the judgment.” (internal quotation marks omitted)). Accordingly, Growers’
acceptance of the remittitur rendered the district court’s order final. See Howell,
566 F.2d at 993.
Although the district court stated that it would enter an amended judgment
after the Growers consented to the remittitur, that fact does not affect our
appellate jurisdiction. The district court’s decision was final regardless of the
court’s failure to file a separate judgment. We find persuasive a recent decision
of the Seventh Circuit, Davis v. Advocate Health Center Patient Care Express,
523 F.3d 681 (7th Cir. 2008). In Davis, the district court gave the plaintiff
twenty-five days to pay a filing fee and “noted that if [he] failed to comply with
that deadline, his suit would be dismissed.” Id. at 683. The plaintiff never paid
12
the fee, but instead, he waited for the deadline to pass and then filed a notice of
appeal. Id. The Seventh Circuit acknowledged that “the district court stated a
plan to enter a final judgment in [twenty-five] days unless [the plaintiff] paid his
fee, and when [he] refused to pay the fee the court neglected to follow through
with its plan,” and enter a separate order dismissing the case. Id. Nonetheless,
the Seventh Circuit concluded that the “suit ha[d] ended at the district court
level,” and thus, the decision was final and appealable. See id.Similarly, although the district court in the case at bar did not follow
through with its plan to enter an amended judgment reflecting the reduced
damages, the decision was nonetheless final upon the Growers’ consent to the
remittitur. The district court indicated its intent that its decision was final,
explicitly ordering that the Growers had ten days to consent to the remittitur, “at
which time an amended judgment will be entered.” Appellees’ App. at 93
(emphasis added); see Davis, 523 F.3d at 683 (“[T]he district court ordered that,
unless [plaintiff] paid his fee, the case would be dismissed (though the court
never actually issued a separate order carrying out that threat).”). All that
remained at the district court level was for the “ministerial” act of entering an
amended judgment. See Star Ins. Co. v. Risk Mktg. Group Inc., 561 F.3d 656,
658 (7th Cir. 2009) (“[O]rders that specifically contemplate further activity in the
district court are generally not final. However, if an order contemplates only
ministerial actions by the court, finality may exist.” (citations and internal
13
quotation marks omitted)); see also Thompson v. Gibson, 289 F.3d 1218, 1221
(10th Cir. 2002) (“[P]reparing and entering a judgment is a ministerial task that
can be easily and routinely performed by the Clerk of the Court or his deputies.”).
Additionally, even though an amended judgment was never set out in a
separate document, we still have jurisdiction over the final decision of the district
court. Generally, “[e]very judgment and amended judgment must be set out in a
separate document . . . .” Fed. R. Civ. P. 58(a). However, “a separate document
is not required for an order disposing of a motion . . . for a new trial, or to alter or
amend the judgment, under Rule 59 . . . .” Fed. R. Civ. P. 58(a)(4); but see Fed.
R. Civ. P. 58 advisory committee’s note (2002 amendments) (“[I]f disposition of
the [Rule 59] motion results in an amended judgment, the amended judgment
must be set forth on a separate document.”); Employers Ins. of Wausau v. Titan
Int’l, Inc., 400 F.3d 486, 489 (7th Cir. 2005) (concluding that an order granting a
motion for an amended judgment requires a separate document).
We need not decide whether the district court’s order—which denied OK’s
motion for a new trial, but amended the award of damages—required entry of a
separate document. Even if the district court should have entered an amended
judgment in a separate document, “[a] failure to set forth a judgment or order on a
separate document . . . does not affect the validity of an appeal from that
judgment or order.” Fed. R. App. P. 4(a)(7)(B).
Moreover, we note that the separate-document requirement does not affect
14
the timeliness of this appeal. Generally, if a separate document is not required,
then a judgment or order is considered entered when it is entered in the docket.
Fed. R. App. P. 4(a)(7)(A)(I); see also Fed. R. Civ. P. 58(c)(1). 2 If, on the other
hand, a separate document is required, then the judgment or order is considered
entered when it is entered in the docket “and when the earlier of these events
occurs: [1] the judgment or order is set forth on a separate document, or [2] 150
days have run from entry of the judgment or order in the civil docket under
Federal Rule of Civil Procedure 79(a).” Fed. R. App. P. 4(a)(7)(A)(ii); see
also Fed. R. Civ. P. 58(c)(2). 3 OK filed its notice of appeal within thirty days of
the Growers’ consent to remittitur. Thus, under either scenario, the appeal was
timely. See Fed. R. App. P. 4(a)(4)(A).
Additionally, we note when OK filed its notice of appeal, there were no
individual claims pending before the district court. When the Growers consented
to the remittitur on July 14, individual plaintiffs still had unresolved claims
against OK. “As a general matter, a judgment in a consolidated action that does
2
Although, as discussed above, the district court’s order conditionally
denying the motion for a new trial was not final when it was entered. Rather, it
became final once the Growers satisfied the district court’s condition of
consenting to the remittitur. See Davis, 523 F.3d at 683 (“[M]ore than 150 days
have passed since [plaintiff’s] deadline to pay the fee, and the separate document
requirement is now moot.”).
3
In such a case, although the notice of appeal would have been premature
when filed, it would have been effective when the judgment was deemed entered,
Fed. R. App. P. 4(a)(2), 150 days after consent to remittitur. Cf. Davis, 523 F.3d
at 683.
15
not dispose of all claims is not considered a final appealable decision under §
1291.” Jackson v. Volvo Trucks N. Am., Inc., 462 F.3d 1234, 1238 (10th Cir.
2006). On the other hand, “where [a] dismissal finally disposes of [a] case so that
it is not subject to further proceedings in federal court, the dismissal is final and
appealable.” Id. (internal quotation marks omitted). And here, the individual
plaintiffs and OK stipulated to dismissing with prejudice the remaining claims on
August 7, 2008. See Green Tree, 531 U.S. at 86 (“The District Court’s order . . .
dismissed respondent’s claims with prejudice, leaving the court nothing to do but
execute the judgment. That order plainly disposed of the entire case on the merits
and left no part of it pending before the court.”); Rabbi Jacob Joseph Sch. v.
Province of Mendoza, 425 F.3d 207, 210 (2d Cir. 2005) (“Immediate appeal is
available to a party willing to suffer voluntarily the district court’s dismissal of
the whole action with prejudice . . . .”). Thus, when OK filed its notice of appeal,
there were no other claims pending before the district court. 4
Because OK filed a timely notice of appeal from a final decision of the
district court, we have jurisdiction over this appeal. Accordingly, we turn to the
4
Growers accepted the remittitur on July 14, 2008, and OK then timely
filed its notice of appeal on August 12, 2008. We offer no opinion on whether the
time to file a notice of appeal may be tolled until the remaining claims were
dismissed with prejudice because OK’s notice of appeal was timely from the date
of the Growers’ acceptance of the remittitur.
16
merits of OK’s arguments. 5
B. Merits
OK argues on appeal that several trial errors require that the judgment be
reversed and dismissed, or in the alternative, a new trial should be granted.
Specifically, OK contends (1) the Growers failed to prove that OK used an unfair
practice “with respect to live poultry” under the PSA; (2) the Growers failed to
prove that OK had sufficient market power in the output market; (3) there was
insufficient evidence to support two of the five possible theories of liability; (4)
the district court erroneously admitted expert testimony; and (5) the district court
failed to instruct the jury on the statute of limitations. As outlined below, we
reject each of these contentions.
1. The meaning of an unfair practice “with respect to live poultry”
OK argues that the PSA requires the Growers to prove that OK used an
unfair practice with respect to actual, live birds that have already hatched. In
particular, OK argues that under the statute, the Growers were required to show
that OK produced certain actual, live chicks, and then either destroyed them or
otherwise refused to allow the Growers to raise them. We review issues of
5
The Growers request that we should direct the district court to enter an
amended judgment, and inform the district court that it has jurisdiction to act on a
motion dated July 18th regarding collateral matters such as costs and fees.
Whether the district court retains jurisdiction over any remaining collateral
matters has not been presented as an issue on appeal. Our role is not to advise the
district court regarding motions that may currently be pending.
17
statutory interpretation de novo, beginning with the plain language of the text and
interpreting “the words of the statute in light of the purposes Congress sought to
serve.” Been, 495 F.3d at 1227 (internal quotation marks omitted).
Section 202 of the PSA provides: “It shall be unlawful . . . for any live
poultry dealer with respect to live poultry, to: (a) Engage in or use any unfair . . .
practice or device . . . .” 7 U.S.C. § 192. In interpreting this statute, we are
mindful that the PSA is a remedial statute, and thus, it is to be “construed
liberally in accord with its purpose to prevent economic harm to producers and
consumers at the expense of middlemen.” Swift & Co. v. United States, 393 F.2d
247, 253 (7th Cir. 1968). “[T]he primary purpose of the PSA [was] to assure fair
competition and fair trade practices in livestock marketing and in the meatpacking
industry and to safeguard farmers against receiving less than the true market
value of their livestock.” Been, 495 F.3d at 1228 (alterations omitted) (internal
quotation marks omitted).
OK contends that the PSA applies only to unfair practices involving
chickens that have actually hatched. This argument is without merit. As we have
previously recognized, price manipulation in the form of arbitrarily reducing
production may violate the PSA as an unfair practice. See Been, 495 F.3d at1233–34. And a practice that reduces chick production by incubating fewer eggs,
for example, is a practice “with respect to live poultry” as much as a practice that
reduces chick production by destroying chicks that have already hatched. Both
18
practices result in fewer live chickens being delivered to the Growers to raise and
sell back to OK. Thus, either way, OK is reducing the price it pays its Growers
for live poultry. In light of plain statutory language and the remedial purpose of
the PSA, we reject OK’s strained interpretation of the phrase “with respect to live
poultry.”
Additionally, OK asserts that it cannot be held liable because it delivered
all the chicks that it could produce. Conceivably, this is an argument that OK
was entitled to a new trial based on insufficient evidence to prove that OK
actually reduced production in violation of the PSA. “Where a new trial motion
asserts that the jury verdict is not supported by the evidence, the verdict must
stand unless it is clearly, decidedly, or overwhelmingly against the weight of the
evidence.” Anaeme v. Diagnostek, Inc., 164 F.3d 1275, 1284 (10th Cir. 1999)
(internal quotation marks omitted). We review the evidence “in the light most
favorable to the prevailing party . . . .” Id. Upon review of the record, there was
sufficient evidence to support the verdict.
OK contends that it could not have reduced the chick population because it
always operated its hatcheries at full capacity. But at trial, the Growers’ expert,
Dr. Taylor, testified that his regression analysis indicated “that when [OK’s]
returns are low, then they increase days out between flocks which depresses total
grower pay.” Appellants’ App. at 304. Taylor acknowledged that he did not have
any knowledge of OK’s hatchery capacity, but testified that OK’s production
19
levels could vary and the evidence of days between flocks “implies that
somewhere they’re getting the chicks to put out there.” Appellants’ App. at 358.
Additionally, OK’s president testified that production levels vary depending on
demand. Viewing this evidence in the light most favorably to the Growers, we
conclude that there was sufficient evidence that OK’s production levels varied,
and that OK did not always operate at full capacity.
2. OK’s alleged lack of market power
Next, OK argues that because it only has a 2% share of the national poultry
market, it necessarily lacked the power to raise consumer prices by suppressing
production. OK first raised this argument in its motion for summary judgment,
following remand, and renewed it in its post-trial motion for judgment as a matter
of law. We review de novo the district court’s denial of a motion for judgment as
a matter of law. Rocky Mountain Christian Church v. Bd. of Cnty. Comm’rs, 613
F.3d 1229, 1235 (10th Cir. 2010).
We conclude, after reviewing the trial record, that the district court did not
err in denying OK’s motion for judgment as a matter of law. The Growers’
expert, Taylor, opined that OK’s production practices impacted immediate resale
and national prices. That testimony, notwithstanding OK’s own evidence of its
purported lack of market power, was sufficient in our view both to create a
genuine issue of material fact as to whether OK’s production practices “over time
[were] likely to increase consumer prices for [OK’s] products in comparison to
20
what prices would have been but for the practice,” 6 Aplee. Supp. App. at 412
(jury instructions), and to support the jury’s verdict in favor of the Growers. See
generally FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 460-61 (1986) (“Since
the purpose of the inquiries into market definition and market power is to
determine whether an arrangement has the potential for genuine adverse effects
on competition, proof of actual detrimental effects . . . can obviate the need for an
inquiry into market power, which is but a surrogate for detrimental effects.”)
(internal quotation marks omitted).
3. Sufficiency of the evidence to support all the theories of liability
OK argues that the general verdict returned by the jury must be overturned
and the case remanded for new trial because the Growers failed to present
sufficient evidence to establish that two of the five challenged practices, i.e.,
OK’s possession of asymmetrical information and OK’s requirements regarding
housing specifications, resulted in consumer injury.
The Growers correctly note that OK has not preserved this issue for appeal.
“To preserve a sufficiency of the evidence claim for appellate review, a party
must move for summary judgment as a matter of law (directed verdict) under
Federal Rule of Civil Procedure 50(a) at the close of the evidence.” United Int’l
6
We reach no conclusion as to whether the district court correctly
instructed the jury that, as to one of the two alternate methods of proof relied on
by the Growers at trial, the Growers were required to prove that OK’s practices
over time were likely to increase consumer prices for OK’s products.
21
Holdings, Inc. v. Wharf (Holdings) Ltd., 210 F.3d 1207, 1228 (10th Cir. 2000).
“Failure to sufficiently raise an issue in a [Rule 50(a)] motion . . . bars appellate
review of that issue.” Miller v. Eby Realty Group LLC, 396 F.3d 1105, 1114
(10th Cir. 2005). We do not require technical precision, but liberally construe the
Rule 50(a) motion, asking whether the moving party adequately notified the
district court of the issues raised. See id.In the first Rule 50(a) motion, at the end of the Growers’ case, OK’s
arguments focused on the statute of limitations, the statutory meaning of “with
respect to live poultry,” and the theory of liability based on density reductions. 7
Then, OK renewed its motion at the close of all the evidence. At that time, OK
added that there was insufficient evidence regarding the commodity market and
consumer injury, and regarding any decrease in production (arguments similar to
those asserted in its summary judgment motion). Nowhere in the Rule 50(a)
7
At the outset of its arguments, OK’s counsel stated: “we would renew our
motion for summary judgment on the [PSA] . . . .” Appellant’s App. at 423. In
its motion for summary judgment, OK argued, under a heading entitled “THERE
IS NO EVIDENCE THAT O.K.’S CONDUCT WAS LIKELY TO INJURE
COMPETITION IN A RELEVANT MARKET,” Appellant’s App. at 73, that (a)
the majority of the birds processed by OK were dedicated to negotiated, one-year,
fixed-price contracts with buyers like Burger King and Wendy’s, and as a result,
was unable to reduce its production significantly, (b) OK only held a 2% market
share in the United States and was thus unable to control prices or eliminate
competition, and (c) the average retail price per pound for whole chickens at the
time of trial was lower than it was in 2001. Id. at 19-20. Nowhere in its
summary judgment motion did OK assert the sufficiency of evidence argument it
now seeks to assert on appeal.
22
motions did OK discuss or even mention liability based on asymmetrical
information or housing specifications. 8
OK first raised these issues in its post-judgment motion for new trial. 9 The
Growers correctly noted in their response to that motion that, under Tenth Circuit
law, OK waived any right to a new trial on the basis of insufficiency of the
evidence by failing to raise the issues in its Rule 50(a) motions. “A party may
not circumvent Rule 50(a) by raising for the first time in a post-trial motion issues
not raised in an earlier motion for directed verdict.” United Int’l Holdings, 210
F.3d at 1228. The Rule 50(a) motion “is a prerequisite to a post-verdict motion
under Rule 50(b). The renewed motion cannot assert grounds for relief not
asserted in the original motion.” Marshall v. Columbia Lea Reg’l Hosp., 474
F.3d 733, 738 (10th Cir. 2007) (footnote omitted). Because OK did not address
these two arguments in its Rule 50(a) motion, we will not consider them on
8
Nor were these arguments discussed or mentioned in OK’s post-trial
motion for judgment as a matter of law. That motion instead argued that (a) the
Growers failed to produce any evidence that OK sold its products directly to
consumers, and (b) the Growers’ statistical evidence was insufficient to establish
consumer injury.
9
In its motion for new trial, OK complained for the first time that the
Growers had failed to present sufficient evidence to establish that three of the
practices challenged by the Growers (i.e., “density reduction,” “information
sharing,” and “building specification control”) resulted in consumer injury.
Appellant’s App. at 757-762.
23
appeal. 10
4. Admission of Expert Testimony
Next, OK argues that the district court erroneously admitted evidence
presented by the Growers’ expert witness, Dr. Taylor. Under the Federal Rules of
Evidence, the district court must ensure that an expert’s testimony is relevant and
reliable. Daubert v. Merrill Dow Pharm., 509 U.S. 579, 589 (1993). Federal Rule
of Evidence 702 provides:
If scientific, technical, or other specialized knowledge will assist the
trier of fact to understand the evidence or to determine a fact in issue,
a witness qualified as an expert by knowledge, skill, experience,
training, or education, may testify thereto in the form of an opinion or
otherwise, if (1) the testimony is based upon sufficient facts or data, (2)
the testimony is the product of reliable principles and methods, and (3)
the witness has applied the principles and methods reliably to the facts
of the case.
Generally, there are two separate inquiries in addressing whether a district
court properly admitted an expert’s testimony. First, “we review de novo whether
the district court applied the proper standard and actually performed its
10
Although the district court discussed these arguments on the merits in its
denial of OK’s post-judgment motion for a new trial, we are not bound by that
action. And, even if we were to ignore OK’s procedural default, it would be
unnecessary to address OK’s arguments on the merits because, by challenging the
sufficiency of evidence with respect to only two of the five theories of liability
submitted to the jury, it has effectively conceded that sufficient evidence existed
to support the jury’s general verdict. See Nanodetex Corp. v. Defiant Tech., 349
F. App’x 312, 317-18 (10th Cir. 2009) (“Because the case was tried using a
general verdict, we do not know which theory the jury adopted and consequently
must affirm if legally sufficient evidence exists to support either theory.”).
24
gatekeeper role in the first instance.” Dodge v. Cotter Corp., 328 F.3d 1212,
1223 (10th Cir. 2003). We then review for an abuse of discretion the manner in
which the district court exercises its gatekeeping role in deciding whether to
admit or exclude expert testimony. Id. Because the district court has “broad
discretion” in deciding whether to admit or exclude such testimony, we “will not
disturb the district court’s ruling unless it is arbitrary, capricious, whimsical or
manifestly unreasonable or when we are convinced that the district court made a
clear error of judgment or exceeded the bounds of permissible choice in the
circumstances.” Id. (internal quotation marks omitted).
OK contends that the district court committed several errors in admitting
Taylor’s testimony. OK argues that the district court improperly admitted
testimony regarding the level of asymmetrical information, the calculation of
damages, and causation of consumer injury.
a. Testimony Regarding Asymmetrical Information
Beginning with Taylor’s testimony regarding asymmetrical information,
OK argues that Taylor provided no gauge, test, or data for measuring the severity
of the asymmetry. At trial, Taylor testified that the problems of asymmetrical
information “are much more severe when it’s way out of whack.” Appellants’
App. at 328. When questioned, Taylor agreed that there is no published economic
analysis of what constitutes “way out of whack.” Appellants’ App. at 331–32.
On appeal, OK argues that it was error to admit this “ipse dixit” conclusion.
25
But at trial, OK did not object to this testimony on those grounds. OK’s only
objections to the testimony regarding asymmetrical information involved the
relevance of the testimony. 11 OK did not object on the grounds of reliability
under Rule 702 and Daubert. Because OK did not object to the expert testimony
at trial on the same grounds that they argue on appeal, we review only for plain
error. See McKenzie v. Benton, 388 F.3d 1342, 1350 (10th Cir. 2004) (reviewing
for plain error where party objected to expert testimony on qualification, but
argued relevance on appeal).
To establish plain error, OK must demonstrate “(1) error, (2) that is plain,
which (3) affects substantial rights, and which (4) seriously affects the fairness,
integrity, or public reputation of judicial proceedings.” Morales-Fernandez v.
INS, 418 F.3d 1116, 1123–24 (10th Cir. 2005). This final requirement “is an
extraordinary, nearly insurmountable burden.” Phillips v. Hillcrest Med. Ctr., 244
F.3d 790, 802 (10th Cir. 2001). Notably, OK never mentions the plain error
standard in its appellate briefs, nor marshals its arguments accordingly, and “[f]or
that reason alone, we [could] conclude [it] has failed to carry the nearly
11
Although OK filed a motion to exclude Taylor’s testimony, the district
court did not rule on the issue of asymmetrical information, but instead stated that
it would “monitor this testimony closely.” Appellants’ Add. at 34. Thus, it was
OK’s responsibility to make a timely, specific objection to the particular
testimony offered at trial. See Marbled Murrelet v. Babbitt, 83 F.3d 1060, 1066
(9th Cir. 1996) (“[T]he appropriate time to raise Daubert challenges is at trial. By
failing to object to evidence at trial and request a ruling on such an objection, a
party waives the right to raise admissibility issues on appeal.”).
26
insurmountable burden that the plain error standard imposes.” Herrera v. City of
Albuquerque, 589 F.3d 1064, 1075 (10th Cir. 2009) (citations omitted) (internal
quotation marks omitted). Nonetheless, reviewing OK’s arguments, it has not met
its burden to demonstrate plain error.
Reviewing Taylor’s testimony, he did not provide specific data, or a gauge
by which to measure the severity of asymmetrical information, which he
described as “way out of whack.” Even assuming that this was error, OK has not
met the high burden of demonstrating plain error resulting in manifest injustice.
The jury did not need to rely on Taylor’s opinion testimony because the jury had
evidence of the information that was actually provided to the Growers and the
information allegedly withheld. Additionally, the theory regarding asymmetry of
information was only one of five potential theories of liability. Thus, OK has not
shown plain error resulting in manifest injustice in admitting Taylor’s testimony
regarding the asymmetry of information. See McKenzie, 388 F.3d at 1350–51.
b. Testimony Regarding Damages
OK further contends that the district court erroneously admitted evidence
regarding the measurement of damages. In support, OK appears to make two
separate arguments. First, OK suggests that the district court erroneously
instructed the jury on damages. Second, OK argues that Taylor’s testimony on
damages was irrelevant and unreliable.
I. Jury instructions regarding damages
27
Turning to the jury instructions, we review the jury instructions as a whole
de novo to determine whether the district court “correctly stated the governing
law and provided the jury with an ample understanding of the issues and
applicable standards.” Martinez v. Caterpillar, Inc., 572 F.3d 1129, 1132 (10th
Cir. 2009) (internal quotation marks omitted). We review for abuse of discretion
the district court’s decision to give a particular instruction. Id. “We reverse only
in those cases where we have a substantial doubt whether the jury was fairly
guided in its deliberations.” Id. (alterations omitted) (internal quotation marks
omitted).
The district court instructed the jury on damages in part as follows:
when determining plaintiffs’ lost profits, you should compare the
amount of profit that plaintiffs would have earned in a fair and
competitive market with the amount of profit that plaintiffs have
earned. The difference between these two figures is the amount of
profits the plaintiffs lost because of defendants’ alleged violation of the
PSA.
Appellees’ Supp. App. at 420. Upon reviewing the jury instructions, we conclude
the district court did not err in allowing the jury to calculate damages based on
the profits that the Growers actually received in comparison to profits in a
hypothetical competitive market.
In competitive injury cases, it is often difficult to measure business
damages. See J. Truett Payne Co., Inc. v. Chrysler Motors Corp., 451 U.S. 557,
566 (1981). “The vagaries of the marketplace usually deny us sure knowledge of
28
what plaintiff’s situation would have been in the absence of the defendant’s
antitrust violation.” Id. In a typical antitrust competitive injury case, damages
are calculated “by comparison of profits, prices and values as affected by the
[unlawful act], with what they would have been in its absence under freely
competitive conditions.” See Bigelow v. RKO Radio Pictures, 327 U.S. 251, 264
(1946) (discussing damages in monopolization under the Sherman Act); see also
Nat’l Farmers’ Org., Inc. v. Associated Milk Producers, Inc., 850 F.2d 1286, 1306
(8th Cir. 1988) (“At base, an antitrust plaintiff’s damages should reflect the
difference between its performance in a hypothetical market free of all antitrust
violations and its actual performance in the market infected by the
anticompetitive conduct.”). We find no error in the district court instructing the
jury to compare what the Growers actually received with what they would have
received in a competitive marketplace, absent OK’s violations of the PSA.
ii. Testimony calculating damages
Next, OK argues that the district court erred in admitting Taylor’s
testimony regarding damages. More specifically, OK contends that testimony
regarding competitive pay was irrelevant, and Taylor’s metric for calculating
damages was erroneously admitted.
Beginning with the issue of relevance, OK’s argument is without merit. As
discussed above, the district court appropriately instructed the jury on calculating
damages by comparing profits received and profits in a hypothetical, competitive
29
market. Naturally, testimony regarding underpayment in reference to such a
competitive market would be relevant.
Turning to Taylor’s metric for calculating damages, OK contends that there
were two errors in Taylor’s methodology: (1) Dr. Taylor used cost assumptions in
a model developed for Alabama, not Oklahoma; and (2) the damages model
included the opportunity costs of grower labor.
OK failed to object to Taylor’s use of Alabama figures in the damages
model. In the pretrial motion to exclude Taylor’s testimony, OK mentioned in
passing that Taylor used assumptions from Alabama in the motion to exclude his
testimony, but it did not argue that the use of data from Alabama was unreliable
or improper under Daubert, as is now suggested on appeal. And at trial, OK did
not object to Taylor’s testimony regarding the use of data from Alabama.
Consequently, we review for plain error. McKenzie, 388 F.3d at 1350.
Upon reviewing the record, we conclude that there was no plain error in
admitting the testimony regarding damages using data from Alabama. OK
contends that the use of data from Alabama has previously been criticized. See
Wheeler v. Pilgrim’s Pride, Inc., 246 F.R.D. 532, 542–43 (E.D. Tex. 2007). But
in Wheeler, the district court noted that the expert made no attempt to compare
the Alabama data to the relevant market or members of the class. See id. at 543.
Additionally, the expert in Wheeler conceded that he did not use the best
information available. See id. In the present case, however, Taylor testified that
30
the Alabama data was “the only source of actual information detail on . . . the
out-of-pocket cost for raising broilers.” Appellants’ App. at 340–41. Further,
Taylor also examined the operating costs on an actual OK farm and compared
them to the Alabama data. Taylor testified that the Alabama data he used resulted
in lower damages than if he used the figure from the actual OK farm. If the
calculations are “estimated in any reasonable way” and the expert’s assumptions
“are not without support in the record, the calculations may be upheld . . . .”
Aspen Highlands Skiing Corp. v. Aspen Skiing Co., 738 F.2d 1509, 1526 (10th
Cir. 1984) (emphasis omitted) (internal quotation marks omitted). Accordingly,
OK has not demonstrated plain error.
Next, we turn to OK’s argument that the district court erroneously allowed
Taylor to testify about a damages model that included opportunity costs. OK did
not object to Taylor’s use of opportunity costs in either the motion to exclude
Taylor’s testimony or during trial, and thus, we review only for plain error. See
McKenzie, 388 F.3d at 1350.
OK contends that courts have disapproved of the use of opportunity costs as
a matter of law. But this assertion is an extreme overstatement. Courts refer to
“opportunity costs” in a wide variety of contexts, often using the term in several
different ways. See Fishman v. Estate of Wirtz, 807 F.2d 520, 556 (7th Cir.
1986) (“The economic concept of ‘opportunity cost’ has been used in a variety of
cases as a loose label for any of a number of adjustments to value involving the
31
idea that for every use of one’s resources there is an alternative use, with its own
return, foregone.”). Thus, whether “opportunity costs” are admissible depends on
the context of a given case.
OK has not argued how the use of opportunity costs is improper in the
calculation of damages using a hypothetical competitive market. Instead, OK
relies on two district court cases involving predatory pricing: In re IBM
Peripheral EDP Devices Antitrust Litigation, 459 F. Supp. 626, 631 (N.D. Cal.
1978), and Continental Airlines, Inc. v. American Airlines, Inc., 824 F. Supp.
689, 701 (S.D. Tex. 1993). Neither case, however, is relevant to the
determination of whether it was plain error to use opportunity costs to calculate
damages using a hypothetical competitive market. Therefore, OK has not
established it was error, let alone plain error for the district court to admit
testimony regarding opportunity costs.
c. Testimony regarding consumer injury
OK also argues that Taylor’s testimony on causation of consumer injury
was inadmissible. Specifically, OK argues that Taylor testified at a professionally
impermissible level of confidence, and Taylor erroneously calculated the time
difference between when OK decided to produce chickens and when it obtained a
price.
At trial, Taylor testified that there was a 71% probability that OK’s
production has an impact on the nationwide price. Appellants’ App. at 316. OK
32
does not contest the relevance of the evidence or the method used to calculate the
relationship between OK’s production and nationwide prices, but instead asserts
that the 71% confidence level renders the testimony inadmissible. We need not
resolve the precise confidence level at which such testimony becomes
inadmissible. Even assuming the challenged testimony was inadmissible, it was
harmless in the context of all the evidence produced by the Growers. As noted by
the Growers, they presented four regression analyses demonstrating actual harm
to consumers, and OK does not challenge two of those analyses.
Next, OK argues that the district court erred in admitting Taylor’s
testimony regarding the relationship between OK’s production decisions and
average sales prices. Specifically, OK contends that Taylor mistakenly assumed
that the decision to produce was made on the day OK delivered chicks to the
Growers, rather than when OK chose to hatch the chicks three weeks prior.
Therefore, OK argues that Taylor correlated market prices and production levels
using the wrong time interval.
Again, OK has failed to properly preserve this issue for appeal. At trial,
OK objected to the admission of this evidence, suggesting that there were
reliability questions and asked to voir dire the witness. Appellants’ App. at 307.
The district court refused to allow OK to voir dire Taylor at that time, and instead
told OK that it would have the opportunity to bring out issues of reliability on
cross-examination. But after cross-examining Taylor, OK never moved to
33
exclude Taylor’s testimony or otherwise requested a ruling on the admissibility of
his testimony under Rule 702. Thus, the district court was never asked to make
specific findings on the record analyzing the admissibility of Taylor’s testimony
under Daubert. Accordingly, we review for plain error. See McKenzie, 388 F.3d
at 1350. And, after examining the record on appeal, we are not persuaded the
admission of this evidence, even if erroneous, resulted in a miscarriage of justice.
5. Statute of Limitations
Finally, OK argues that the district court failed to instruct the jury on the
statute of limitations. However, OK did not request such an instruction on the
record during the jury instruction conference. Where a party fails to make a
proper objection to jury instructions, we review for plain error. Greene v.
Safeway Stores, Inc., 210 F.3d 1237, 1245 (10th Cir. 2000). “Under that
standard, we will affirm unless the instructions were patently, plainly erroneous
and prejudicial.” Id. (internal quotation marks omitted).
OK contends that the general verdict allowed the jury to find OK liable
based on its control over building specifications. According to OK, the named
plaintiffs entered into their contracts with OK outside the statute of limitations
period, and thus, OK was entitled to an instruction on the statute of limitations.
Although the district court noted that OK never raised this specific objection on
the record during the jury instruction conference, the district court discussed the
statute of limitations argument in denying OK’s motion for a new trial. The
34
district court concluded that a statute of limitations instruction was not required
because of the continuing harm and speculative damages doctrines.
OK argues that the continuing harm doctrine was rejected in a similar case,
citing Varner v. Peterson Farms, 371 F.3d 1011, 1019 (8th Cir. 2004). But unlike
the plaintiffs in Varner, the Growers did not allege that they were harmed based
on an enforcement of the original contract entered before the statute of
limitations. Rather, the Growers argued, and provided evidence, that the Growers
and OK repeatedly entered new contracts throughout the period of the statute of
limitations, and those contracts demanded new building specifications, which the
Growers alleged violated the PSA. OK offers no other argument regarding the
continuing harm doctrine save for its misplaced reliance on Varner. Therefore,
we conclude that OK has failed to demonstrate that the instructions were patently,
plainly erroneous and prejudicial.
The judgment of the district court is AFFIRMED.
Entered for the Court
Mary Beck Briscoe
Chief Judge
35