Inter Medical Supplies Ltd. v. Ebi Medical Systems
| Decision Date | 28 August 1997 |
| Docket Number | Civil Action No. 95-6035.,Civil Action No. 96-1047. |
| Citation | 975 F.Supp. 681 |
| Parties | INTER MEDICAL SUPPLIES LIMITED, Plaintiff, v. EBI MEDICAL SYSTEMS, INC., Electro-Biology, Inc., and Biomet, Inc., Defendants/Counterclaimants. ORTHOFIX, INC., and Orthofix S.r.l., Plaintiffs, v. EBI MEDICAL SYSTEMS, INC., Electro-Biology, Inc., and Biomet, Inc., Defendants/Counterclaimants. |
| Court | U.S. District Court — District of New Jersey |
Joel Schneider, Archer & Greiner, Haddonfield, NJ, Dennis P. Orr, Mayer, Brown & Platt, New York City, Stephen Marzen, Shearman & Sterling, Washington, DC, for Plaintiffs, Counterclaim-Defendants.
James J. Ferrelli, Duane, Morris & Heckscher, Cherry Hill, NJ, Arthur P. Kallares, Thomas E. Mixdorf, Fred R. Biesecker, Ice, Miller, Donadio & Ryan, Indianapolis, IN, Richard D. Harris, John S. Pacocha, Dick & Harris, Chicago, IL, for Defendants, Counterclaimants.
This case was tried before a jury which returned a verdict in favor of the plaintiffs on their claims for breach of contract, breach of the duty of good faith and fair dealing, tortious interference with prospective economic advantage, tortious interference with contract, defamation, unfair competition, and violation of the Lanham Act. The jury awarded the plaintiffs compensatory damages in the amount of $48,000,000.00, and $100,600,000.00 in punitive damages. The jury separately awarded plaintiff, Inter Medical Systems Ltd., $875,399.00 in damages for goods sold and delivered. The jury also found in favor of the defendants on their counterclaims for breach of contract, breach of the duty of good faith and fair dealing, tortious interference with prospective economic advantage, and tortious interference with contract. The jury awarded the defendants $1.00 in damages on these claims. The jury also found in favor of defendant, EBI Medical Systems ("EBIMS"), on its claim for breach of certain purchase order contracts, and awarded it $1.00 as a set-off against the claim of plaintiff, Inter Medical Systems ("IMS"), for goods sold and delivered.
Defendants have renewed their motion for judgment as a matter of law, made at the close of all the evidence, and have moved, in the alternative, for a new trial or remittitur of the jury's $100,600,000.00 punitive damages award. For the reasons set forth below, defendants' motion for judgment as a matter of law will be denied, and their alternative motions for a new trial or remittitur will be granted in part, and a remittitur of the punitive damages award to $50,000,000.00 will be ordered.
While these post-trial motions raise complex issues of law, many of which have been addressed by the court during the course of the trial of this case, one issue of particular interest not previously addressed requires this court to analyze the punitive damages award under New Jersey's Punitive Damages Act, which took effect on October 27, 1995. N.J. Stat. Ann. § 2A:15-5.14(a) (West Supp. 1997). There are no reported New Jersey cases construing this subsection of the Act, or applying it to a case such as this. Therefore, this court must predict, without the benefit of guidance from any New Jersey court, how to construe and apply the Act in these circumstances.
Orthofix, S.r.l., based in Milan, Italy, is a manufacturer of medical devices, including External Dynamic Axial Bone Fixator Systems, which are used in the treatment of severe fractures. These bone fixators attach to the bone through the skin, allowing the surgeon to manipulate the bone without repeated surgeries. The sale and distribution of these fixators form the subject matter of this litigation.
Plaintiffs, Orthofix S.r.l., Inter Medical Systems ("IMS"), a Cyprus-based marketing affiliate of Orthofix S.r.l. and a worldwide distributor of Orthofix products, and Orthofix, Ltd., based in London, England, are subsidiaries of Orthofix International B.V., which is based in the Netherlands. Orthofix International B.V., in turn, and Orthofix, Inc., a Texas corporation, formerly American Medical Electronics, Inc. ("AME"), are wholly-owned subsidiaries of Orthofix N.V., which is a publicly traded corporation.
For many years, the exclusive distributor of Orthofix products in North America and the Caribbean Basin was EBIMS, a Delaware corporation, having its principal place of business in Parsippany, New Jersey. EBIMS is a wholly-owned subsidiary of Electro-Biology Inc. ("EBI"), which, in turn, is a wholly-owned subsidiary of defendant, Biomet, Inc. Orthofix, Inc. is currently the exclusive distributor of Orthofix bone fixators in the United States.
EBIMS began distributing Orthofix products under an exclusive agreement in 1983. This relationship was memorialized in a series of written agreements, most recently, an agreement (the "Distributor Agreement"), entered into between EBIMS and Orthofix S.r.l. on June 1, 1990, which expired on May 31, 1995. The claims and counterclaims in this action arise out of the termination of the Distributor Agreement and the events surrounding it. When it became clear that EBIMS would not be renewed as the exclusive North American distributor of Orthofix products, EBI/Biomet decided to develop external bone fixators which would compete directly with Orthofix's products. In an effort to maintain their commanding position as the leading United States marketer of external bone fixators until such time as their own products could be successfully launched, defendants attempted to secure a large inventory of Orthofix products. That plan was largely successful, and Orthofix is no longer a major force in the United States market for external bone fixation devices.
Following a two month trial, at which the jury heard more than 5000 pages of testimony and endured numerous lengthy hiatuses while the parties debated points of law, the jury deliberated for over two days before reaching the verdict described above. It would disserve the jury system and dishonor the contribution of this dedicated jury to that system were the verdict to be lightly overturned.
A motion for judgment as a matter of law "should be granted only if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability." Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir.1993) (citations omitted). The standard for deciding a motion for judgment as a matter of law under Rule 50(b) is the same as it is under Rule 50(a). 9A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 2537, at 347 (2d ed.1995). This court may not question the credibility of witnesses or weigh conflicting evidence on a motion for judgment as a matter of law. See Parkway Garage, Inc. v. City of Philadelphia, 5 F.3d 685, 691 (3d Cir.1993). Applying these principles, a renewed, post-verdict motion for judgment as a matter of law must be denied unless, viewing the evidence in the light most favorable to the verdict winner, "the record is critically deficient of that minimum quantum of evidence from which a jury might reasonably afford relief." Rotondo v. Keene Corp., 956 F.2d 436, 438 (3d Cir.1992) (internal citations and quotations omitted). Not only the facts of record, but all reasonable inferences which might be drawn from those facts must be viewed in the light most favorable to the verdict winner. Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 183 (3d Cir.1992).
The decision whether to grant a new trial pursuant to Federal Rule of Civil Procedure 59(a) lies within the district court's sound discretion. Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 190, 66 L.Ed.2d 193 (1980); Wagner v. Fair Acres Geriatric Ctr., 49 F.3d 1002, 1017 (3d Cir. 1995). A new trial may be granted, on the basis that the verdict is against the weight of the evidence, "`only where a miscarriage of justice would result if the verdict were to stand.'" Klein v. Hollings, 992 F.2d 1285, 1290 (3d Cir.1993) (quoting Williamson v. Consolidated Rail Corp., 926 F.2d 1344, 1352 (3d Cir.1991)). A new trial motion based upon the sufficiency of the evidence deserves especially close scrutiny because such a motion resembles a motion for judgment as a matter of law, inasmuch as it invites the court to substitute its judgment for that of the jury. Id. On the other hand, when the movant seeks a new trial based upon trial error, the district court has somewhat greater discretion. Errors in judicial rulings or in the conduct of the court permit the court to order a new trial where the error or conduct was prejudicial. 6A James Wm. Moore, Moore's Federal Practice § 59.08(2) (2d ed.1996). However, even if the court determines that an error was made, it should not grant a new trial unless it also determines that the error was so prejudicial that "refusal to take such action appears to the court inconsistent with substantial justice." Fed. R.Civ.P. 61. See also Bhaya v. Westinghouse Elec. Corp., 709 F.Supp. 600, 601 (E.D.Pa.1989), aff'd, 922 F.2d 184 (3d Cir. 1990). In order to mandate a new trial, an error in a jury instruction must be so substantial that, viewed in light of the charge as a whole, "`the instruction was capable of confusing and thereby misleading the jury.'" Link v. Mercedes-Benz, 788 F.2d 918, 922 (3d Cir.1986) (quoting United States v. Fischbach & Moore, Inc., 750 F.2d 1183, 1195 (3d Cir.1984)).
Defendants contend that the jury's verdict as to liability must be set aside. I will first address the numerous reasons defendants offer in support of this contention before turning to the award of punitive damages, which defendants also contest in this motion. Obviously, the jury's award of punitive damages, cannot stand in the event its...
To continue reading
Request your trial
-
In re NJ Affordable Homes Corp.
...not grant equitable relief to a party who is a wrongdoer with respect to the subject matter of the suit." Inter Med. Supplies v. EBI Med. Sys.,975 F. Supp. 681, 687 (D.N.J. 1997) (quoting Pellitteri v. Pellitteri, 266 N.J. Super. 56, 65, 628 A.2d 784 (App. Div. 1993) (internal citation omit......
-
Glynn v. Impact Sci.
...I note that other courts have not required an itemized list of damages on a claim-by-claim basis. See, e.g., Inter Med. Supplies v. EBI Med. Sys., 975 F.Supp. 681, 687 (D.N.J.1997) ("[R]equiring plaintiffs to itemize their damages as to each legal claim would be unnecessarily confusing to t......
-
Cargill, Inc. v. WDS, Inc.
...confusion and to avoid the possibility of an excessive or duplicative award of damages. See generally Inter Med. Supplies Ltd. v. EBI Med. Sys., Inc., 975 F. Supp. 681, 691 (D.N.J. 1997), aff'd & remanded, 181 F.3d 446 (3d Cir. 1999) (rejecting defendants' post-trial argument of error for t......
-
Inter Med Supplies v. EBI Med Systems Inc.
...or for a new trial but granted a remittitur reducing the award of punitive damages to $50 million. Inter Med. Supplies, Ltd. v. EBI Med. Sys., Inc., 975 F. Supp. 681, 685 (D.N.J. 1997). On appeal, defendants focus on certain of the bases for recovery, but, understandably, direct their most ......