Schumacher v. Tyson Fresh Meats, Inc., CIV 02-1027.

Decision Date16 August 2006
Docket NumberNo. CIV 02-1027.,CIV 02-1027.
Citation447 F.Supp.2d 1078,2006 DSD 12
PartiesHerman SCHUMACHER, Michael P. Callicrate, and Roger D. Koch, Plaintiffs, v. TYSON FRESH MEATS, INC., Cargill Meat Solutions Corporation, d/b/a Excel Corporation, Swift Beef Company, and National Beef Packing Company, L.L.C., Defendants.
CourtU.S. District Court — District of South Dakota

David F. Herr, Elizabeth J. Anderson, Elizabeth Snyder Poeschl, James Duffy O'Connor, Kirk O. Kolbo, Matthew P. Lewis, R. Christopher Sur, Maslon, Edelman, Borman & Brand, Minneapolis, MN, Reed A. Rasmussen, Siegel, Barnett & Schutz, Aberdeen, SD, Stephen O. Broghammer, Thomas M. White, White, Wulff & Smart, Omaha, NE, for Plaintiffs.

Brad P. Rosenberg, Mark W. Ryan, Michael E. Lackey, Jr., Mayer Brown Rowe & Maw LLP, Washington, DC, Kennith L. Gosch, Bantz, Gosch, Cremer, Peterson, Sommers & Wager, Jack H. Hieb, Richardson, Groseclose, Wyly, Wise & Sauck, Aberdeen, SD, Christopher Wayne Madsen, Thomas John Welk, Boyce Greenfield

Pashby & Welk, LLP, Sioux Falls, SD, Patrick E. Brookhouser, Jr., McGrath North Mullin & Kratz, PC LLO, Omaha, NE, Louis A. Huber, III, Schlee Huber McMullen & Krause, Kansas City, MO, Louis E. Fogel, Sherry A. Knutson, Susan A. Weber, William H. Baumgartner, Jr., Sidley Austin LLP, Chicago, IL, for Defendants.


KORNMANN, District Judge.

[¶ 1] The defendants (other than National Beef and hereinafter "defendants") have filed a renewed motion for judgment as a matter of law (Doc. 1035). Defendants correctly point out that, based on the Professor Schroeder formula, Schroeder being the expert witness for plaintiffs, the plaintiffs demanded $38,319,545.00 from all defendants. The jury obviously decided to award plaintiffs nothing as to National Beef. They found no liability on the part of National Beef. The jury did award damages of $9,250,000.00 in separate amounts against the defendants. The award against Tyson was $4,000,000.00. The award against Excel was $3,000,000.00. The award against Swift was $2,250,000.00.

[¶ 2] There is no dispute that the jury found defendants liable for damages for violations of the Packers and Stockyards Act ("PSA"). Carried to a logical conclusion, it would seem that defendants now advance the proposition that the jury had no basis to award damages less than the amount sought by plaintiffs, as explained by Professor Schroeder. It may turn out, of course, that the amounts awarded will be insufficient to fully compensate class members who did not opt out and still have valid claims. But of what concern is that to defendants? Valid and supportable individual claims from class members may need pro rata reductions. That remains to be seen. It is frankly a curious argument for defendants to complain about the action of the jury in awarding less than was sought under the Professor Schroeder formula. Defendants are the beneficiaries of the jury action and are certainly not damaged, assuming that liability exists, as found by the jury. Defendants have no standing to complain about an inadequate jury verdict. The "standing doctrine" is usually applied in examining questions of federal jurisdiction. It embraces several judicially self-imposed limits on the exercise of federal jurisdiction, such as the general prohibition on a litigant's raising another person's legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and the requirement that a plaintiff's complaint fall within the zone of interests protected by the law invoked. See, for example, Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). I have been a lawyer since 1962. Most of my law practice before taking the bench in 1995 was composed of insurance defense work. I have not previously heard of defendants in effect attacking a jury verdict as being too low because a formula called for a much larger award. Defendants have no standing in that regard. I fully realize, of course, that defendants have the right and the "standing" to attack a jury verdict as being based on what they claim is nothing but speculation. That will be discussed in due course.

[¶ 3] Defendants had the same rights as the plaintiffs to request special interrogatories to the jury. They did not ask for a better or more detailed "break-down" of the damages or methods used by the jury to determine damages although they knew the court had already prepared a significant number of special interrogatories and intended to use them pursuant to Fed.R.Civ.P. 49. Any jury instruction not requested is waived pursuant to Fed R.Civ.P. 51. Daggitt v. United Food & Com. Workers Int'l Union, Local 304A, 245 F.3d 981, 985 (8th Cir.2001). The jury was not asked to find anything as to the formula but only to decide on a dollar amount of damages. No special interrogatory to the jury was proposed by defendants as to the formula. Thus, it is impossible to sort out what portion of the Schroeder formula was used by the jury.

[¶ 4] The court is to assume that the jury followed the instructions of the court as to the applicable law. The jury was instructed in instruction 16, in part, as follows: "Whether any damages have been proved by the evidence is for you to determine. Your verdicts must be based on evidence and not upon speculation, guesswork, or conjecture. In determining the amount of damages, if any, you may estimate the amount as a matter of just and reasonable inference without resorting to speculation or guesswork." The jury was also instructed that they could "believe all of what a witness said, or only part of it, or none of it." The jury obviously believed only part of the testimony of Dr. Schroeder. The jury was also instructed that they could give the testimony of any witness such credibility or weight as they thought it deserved. They were also told that they could give the testimony of experts such weight as they thought the testimony deserved. It is obvious that the jury did that.

[¶ 5] This trial was, of course, designed to first answer questions of liability on the part of defendants. The jury answered that in no uncertain terms. The jury decided the exact basis of liability. The jury carefully found that defendants knew of the USDA reporting errors on April 24, 2001, and took advantage of such knowledge thereafter. I determine that there was a sufficient basis in the evidence for a reasonable jury to find liability on the part of defendants. The motion has no merit as to the question of liability.

[¶ 6] The jury also decided issues of damages. I find that there was a sufficient basis in the evidence for a reasonable jury to find that defendants damaged plaintiffs and that National did not. I find also that there was a sufficient basis in the evidence for a reasonable jury to find that the damages amounted to as much as $38,319,545.00. As explained above, defendants claim there was no sufficient basis in the evidence for a reasonable jury to find that the damages amounted to $9,250,000.00. One might categorize that position as "looking a gift horse in the mouth."

[¶ 7] It is of some note that defendants have not sought, in the alternative, a new trial. The wisdom of such strategy is obvious. The last thing defendants would want would be a new trial on damages only, liability having been determined as a matter of law. Yet that would be the normal remedy should the court determine that the jury awarded damages without any reasonable basis in the evidence to do so. The court could have proceeded sua sponte to grant a new trial on the issue of damages only. Fed.R.Civ.P. 59(d). The time to do so has passed. It would be an enormous injustice to grant a judgment as a matter of law based on the amount of the damages awarded where liability for substantial damages was clearly established.

[¶ 8] The contentions of defendants that the class cannot ultimately recover damages suffered by opt-outs is true, of course. Only class members who provide a sufficient basis to recover from a portion of the jury awards will recover. It is possible that the total recoveries will be less than the jury awards. If so, the defendants are the beneficiaries. They are not harmed in any way by such procedure. It is no concern of the court as to what damages were sustained by the 244 producer opt-outs. The ultimate question will be what damages were sustained by class members individually. There is no risk of multiple liabilities being incurred by defendants.

[¶ 9] Defendants again raise the claim that successful hedgers were not damaged by defendants and therefore cannot recover. For all we know, the jury may have bought, wholly or in part, the arguments of defendants in that regard and reduced the damages accordingly. Questions as to claims of successful hedgers who are class members remain to be answered. As I have previously ruled, the question of mitigation of damages would be items of proof by defendants. Finally, questions of successful hedgers within the class raise legal questions as to whether and how to apply the collateral source doctrine. This is ultimately a matter of law for the court.

[¶ 10] The jury may also have decided, based on evidence and arguments submitted by the defendants, that many cattle producers paid little or no attention to the USDA cutout averages. The jury may have reduced the damages accordingly. Defendants made many arguments to the jury and now complain that the jury may have "bought" some of them. Defendants were all represented by very able attorneys. They continuously fired salvos at the plaintiffs' case and the witnesses for plaintiffs. Defendants presented excellent defenses and mitigating circumstances. The jury was appropriately instructed as to the claims and defenses in this case. The jury obviously bought some of the arguments of defendants but not all. The jury was asked to answer the question as to when the...

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