CSX Transp., Inc. v. Peirce

• Decision Date: 25 September 2013
• Docket Number: Civil Action No. 5:05CV202.
• Citation: 974 F.Supp.2d 927
• Parties: CSX TRANSPORTATION, INC., Plaintiff, v. Robert N. PEIRCE, Jr., Louis A. Raimond, and Ray Harron, M.D., Defendants.
• Court: U.S. District Court — Northern District of West Virginia

974 F.Supp.2d 927

CSX TRANSPORTATION, INC., Plaintiff,

v.Robert N. PEIRCE, Jr., Louis A. Raimond, and Ray Harron, M.D., Defendants.

Civil Action No. 5:05CV202.

United States District Court, N.D. West Virginia.

Sept. 25, 2013.

Dan Himmelfarb, Joanne M. Savage, Reginald R. Goeke, Washington, DC, Lindsey L. Hargrove, Ronald G. Franklin, McGuireWoods LLP, Houston, TX, Marc E. Williams, Robert L. Massie, Huntington, WV, Mitchell K. Morris, Samuel L. Tarry, Jr., McGuireWoods, LLP, Richmond, VA, for Plaintiff.

David J. Berardinelli, Walter P. DeForest, DeForest, Koscelnik, Yokitis, Kaplan & Berardinelli, Pittsburgh, PA, Jerald E. Jones, West & Jones, Clarksburg, WV, Ron Barroso, Corpus Christi, TX, for Defendant.

MEMORANDUM OPINION AND ORDER DENYING LAWYER DEFENDANTS' MOTION FOR JUDGMENT AS A MATTER OF LAW OR IN THE ALTERNATIVE FOR A NEW TRIAL

FREDERICK P. STAMP, JR., District Judge.

I. Background

On December 20, 2012, a jury rendered a verdict in favor of the plaintiff, CSX Transportation, Inc. (“CSX”), finding that the above-named defendants' conduct violated the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq. Further, the jury found that Robert N. Peirce, Jr. and Louis A. Raimond (collectively the “lawyer defendants”) were liable to CSX for fraud, and had participated in a conspiracy to commit fraud with defendant Ray A. Harron, M.D. (“Harron”). The jury, however, did not find that CSX was liable for fraud based on its representations made during this litigation, as was alleged in the defendants' counterclaims. The jury awarded CSX $429,240.47 in relation to the RICO violations, but did not award CSX any monetary relief in relation to the fraud claims. This Court then entered a judgment in favor of CSX as to these verdicts and ordered that CSX also recover any post-judgment interest in accordance with 28 U.S.C. § 1961.

Thereafter, the parties filed various post-judgment motions. At issue is the lawyer defendants' motion for judgment as a matter of law or in the alternative for a new trial. In this motion, the lawyer defendants argue that: (1) the jury's verdict is not supported by substantial admissible evidence or, in the alternative, is against the weight of the evidence and is a miscarriage of justice; (2) judgment must be entered for the defendants under the Noerr–Pennington doctrine; or, in the alternative, (3) the jury verdict must be remitted from $429,240.47 to $95,368.98. CSX timely responded in opposition to the lawyer defendants' motion arguing that: (1) judgment as a matter of law is not warranted; (2) there is no basis for the grant of a new trial; (3) the jury permissibly rejected the lawyer defendants' Noerr–Pennington defense; and (4) remittitur is inappropriate. The lawyer defendants then filed a timely reply.

For the reasons set forth below, this Court denies the lawyer defendants' motion for judgment as a matter of law.

II. Applicable Law

A. Renewed motion for judgment as a matter of law

Federal Rule of Civil Procedure 50(b) provides:

[i]f the court does not grant a motion for judgment as a matter of law made under Rule 50(a), .... the movant may file a renewed motion for judgment as a matter of law.... In ruling on the renewed motion, the court may:

(1) allow judgment on the verdict, if the jury returned a verdict; (2) order a new trial; or (3) direct the entry of judgment as a matter of law.

Fed.R.Civ.P. 50(b). Generally, a judgment as a matter of law is appropriate “when, without weighing the credibility of the evidence, there can be but one reasonable conclusion as to the proper judgment.” United States ex rel. DRC, Inc. v. Custer Battles, LLC, 562 F.3d 295, 305 (4th Cir.2009) (citations omitted). The movant is entitled to judgment pursuant to Rule 50(b) “if the nonmoving party failed to make a showing on an essential element of his case with respect to which he had the burden of proof.” Wheatley v. Wicomico County, Md., 390 F.3d 328, 332 (4th Cir.2006) (citing Singer v. Dungan, 45 F.3d 823, 826–27 (4th Cir.1995)). This Court reviews “the evidence in the light most favorable to the nonmoving party” in making this determination. Myrick v. Prime Ins. Syndicate, Inc., 395 F.3d 485, 490 (4th Cir.2005).

B. Motion for new trial

When determining whether to grant a new trial under Federal Rule of Civil Procedure 59(a), this Court is “permitted to weigh the evidence and consider the credibility of witnesses.” Cline v. Wal–Mart Stores, Inc., 144 F.3d 294, 301 (4th Cir.1998) (citation omitted). This Court, however, may only grant a new trial if “(1) the verdict is against the clear weight of the evidence, or (2) is based upon evidence which is false, or (3) will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict.” Atlas Food Sys. & Servs., Inc. v. Crane Nat'l Vendors, Inc., 99 F.3d 587, 594 (4th Cir.1996).

III. Discussion

A. Motion for judgment as a matter of law based on insufficient evidence

The lawyer defendants in their motion begin by arguing that CSX obtained a verdict in its favor not by providing actual evidence that could support such a verdict, but instead obtained the verdict based on the jurors' passion and prejudice. Thus, the lawyer defendants are initially seeming to claim that CSX failed to establish the elements of the RICO, fraud, and conspiracy claims. This Court notes, however, that the lawyer defendants do not explain exactly which elements CSX did not support with proper evidence.

As indicated above, judgment as a matter of law should be granted when “there can be but one conclusion as to the verdict that reasonable jurors could have reached.” Wheatley v. Gladden, 660 F.2d 1024, 1027 (4th Cir.1981) (citing Nationwide Mut. Ins. Co. v. McLaughlin, 429 F.2d 1317 (4th Cir.1970)). This Court notes that the jury was presented with a great deal of evidence during the two-week long trial that supported the jury's findings on the RICO, fraud, and conspiracy claims. Thus, this Court cannot find that the jury only rendered a verdict in CSX's favor as a result of passion and prejudice, as suggested by the lawyer defendants.

B. Motion for new trial

The lawyer defendants next argue that certain evidence presented by CSX requires that this Court grant the lawyer defendants a new trial because the verdict is against the clear weight of the evidence or allowing the verdict to stand will result in a miscarriage of justice. This Court will now review these contentions in turn.

1. James Corbitt's testimony

The lawyer defendants first argue that by allowing argument and testimony concerning James Corbitt's failure to obtain regulatory approvals and the lack of prescriptions for the x-rays taken by Mr. Corbitt prejudiced the lawyer defendants and “cast a pall over the entire trial.” The lawyer defendants argue that this evidence should have been precluded as irrelevant and unfairly prejudicial, as the lawyer defendants argue that this was the Court's original ruling in its order on the lawyer defendants' motion in limine regarding Mr. Corbitt.¹ CSX responds to such argument by stating that the evidence of Mr. Corbitt's noncompliance with the applicable law was relevant because the evidence demonstrated that the lawyer defendants' screenings and the lawsuits they generated did not “conform to the standards of moral uprightness, fundamental honesty, and fair play” for purposes of the federal mail fraud statute. ECF No. 1588 (citing United States v. Mandel, 591 F.2d 1347, 1360–61 (4th Cir.1979)).

In order to prove a RICO violation, a party must prove that the lawyer defendants engaged in a form of racketeering activity, which can include mail fraud. See18 U.S.C. § 1961 et seq. This Court agrees with CSX in that such evidence of Mr. Corbitt's conduct was relevant to proving violations of the federal mail fraud statute. One of the elements that must be shown to prove a violation of the mail fraud statute is that the defendants engaged in a scheme to defraud. United States v. Brewer, 528 F.2d 492, 494 (4th Cir.1975). As indicated by CSX, a scheme to defraud is one that is “contrary to public policy and conflicts with accepted standards of moral uprightness, fundamental honesty, fair play, and right dealing.” Mandel, 591 F.2d at 1361. The lawyer defendants' association with Mr. Corbitt, who engaged in questionable conduct by not complying with regulations and laws, is relevant in proving that the lawyer defendants engaged in such a scheme. Thus, the introduction of such evidence does not entitle the lawyer defendants to a new trial.

2. Lawyer Defendants' Motion in Limine No. 1

The lawyer defendants next argue that CSX's repeated violations of this Court's order on the lawyer defendants' Motion in Limine No. 1, which precluded CSX from presenting evidence or argument that any claims other than the eleven claims at issue were fraudulent, planted the seed for the jury to conclude that thousands of other claims filed by the Peirce firm were fraudulent. The lawyer defendants argue that an instruction to disregard such evidence was insufficient and could not cure the prejudice that resulted from the violations. CSX argues in response that despite the lawyer defendants' allegations, CSX did not violate this Court's order regarding defendants' Motion in Limine No. 1.

“In order for a violation of an order granting an in limine motion to serve as a basis for a new trial, the order must be specific in its prohibition and the violation must be clear.” Pullman v. Land O'Lakes, Inc., 262 F.3d 759, 762 (8th Cir.2001) (citing Mouton v. Tug Ironworker, 811 F.2d 946, 948 (5th Cir.1987)). Not only must the violation be clear and the order be specific, the violation must also have either prejudiced the parties or denied the parties a fair trial. Id. (citing Blevins v. Cessna Aircraft Co., 728 F.2d 1576, 1579 (10th Cir.1984)). This Court has reviewed the record in relation to the various...