Taylor Publishing Co. v. Jostens Inc.

• Decision Date: 10 July 2000
• Docket Number: No. 99-40154,99-40154
• Citation: 216 F.3d 465
• Parties: (5th Cir. 2000) TAYLOR PUBLISHING COMPANY, Plaintiff-Appellant-Cross-Appellee, v. JOSTENS INC, Defendant-Appellee-Cross-Appellant
• Court: U.S. Court of Appeals — Fifth Circuit

Page 465

216 F.3d 465 (5th Cir. 2000)

TAYLOR PUBLISHING COMPANY, Plaintiff-Appellant-Cross-Appellee, v. JOSTENS INC, Defendant-Appellee-Cross-Appellant.

No. 99-40154

UNITED STATES COURT OF APPEALS FIFTH CIRCUIT

July 10, 2000

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[Copyrighted Material Omitted] Appeals from the United States District Court For the Eastern District of Texas

Before JOLLY, EMILIO M. GARZA, and BENAVIDES, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Taylor Publishing Company ("Taylor") sued Jostens, Inc. ("Jostens"), alleging antitrust violations and related torts. After a jury found in Taylor's favor on all but one of its claims, the trial court granted judgment as a matter of law for Jostens. Taylor appeals, and we affirm.

I

Jostens and Taylor are competing school yearbook manufacturers. They are part of a national market with two other major competitors. Jostens has the largest market share, at somewhere between 40% and 50%. Taylor and Herff-Jones Company ("Herff-Jones") follow, each with about 20% of the market. Walsworth has about a 10% share and LifeTouch holds a minor share. Before Herff-Jones acquired it in 1996, Delmar was another major participant. Only Jostens, Taylor, and Herff-Jones compete nationally at all educational levels.

The yearbook market is static in several regards. The customer base is fairly fixed, meaning that each company competes for business from the same schools. Also, because the business is annual, opportunities to compete are practically limited to certain times during the year. Contracts between manufacturers and schools are typically negotiated once a year, and the remainder of the year is spent preparing the individual school's yearbook. The manufacturer's sales representative works with school staff and students to prepare a single yearbook for the school, which is then purchased by students of that school. The entire product is shipped to the school for distribution to its students in a single shipment sometime near the end of the school year.

Schools contract with a single manufacturer at a time, meaning that once a school has chosen a manufacturer for the year, other manufacturers lose their opportunity to acquire that school as a customer until at least the next year. This combines with moderate customer loyalty to reduce the amount of customer exchange and to increase competition for available individual customers.

The relationship between school staff and sales representatives provides a representative with several opportunities to sell services to a school and its students. The most prominent opportunity is when the initial contract is negotiated. At this time, the school commits to a single manufacturer and sets its initial specifications for that year's yearbook. Because these specifications are typically not final, however, other opportunities to sell services arise during the preparation process. Schools frequently request modifications to their original specifications, which allows the representatives to sell additional services at extra cost.

Although it remained profitable during this period, Taylor lost market share from 1994 to 1997. Two factors allegedly contributed to this loss. First, Taylor experienced production problems in 1994 that led to late deliveries. There was testimony that these and other production problems persisted for at least one school until 1997.

Second, Taylor alleges that Jostens developed a plan in 1994 to become "the only national yearbook company in the United States." This plan was allegedly targeted at Taylor. For example, in a quarterly update, former Jostens Senior Vice-President Jack Thornton stated: "I really think it is in the best interest of our sales people, our employees, customers and shareholders to take Taylor out of business over the next several years." To implement this plan, Jostens allegedly engaged in several practices which form the basis of this lawsuit. According to Taylor, Jostens instituted a campaign to hire away key Taylor sales representatives. It misappropriated confidential Taylor information from these representatives and others which it then used in its sales plans. Additionally, it encouraged its sales representatives to attempt to break multi-year contracts between Taylor and some of its customers. Further, Taylor alleges that Jostens attempted to obtain Taylor customers for itself by offering them cheaper-than-usual contracts which it would then "upgrade" to a higher price by selling additional services. Taylor also alleges that Jostens targeted Taylor customers with predatory pricing by selling them yearbooks at prices below Jostens's cost of production and by giving away free yearbooks through a promotional contest.

Taylor filed this suit against Jostens in the Eastern District of Texas in 1997. Taylor charged Jostens with attempted monopolization in violation of § 2 of the Sherman Act, price discrimination in violation of the Robinson-Patman Act, and the state law torts of tortious interference with contracts (both sales representatives' and customers' contracts), knowing participation in the breach of fiduciary duties, conspiracy in breach of duties, and unfair competition.

The case was tried before a jury, which found in Taylor's favor on most of its claims: attempted monopolization, illegal price discrimination, tortious interference with contracts between Taylor and its employees, knowing participation in the breach of fiduciary duties, conspiracy in breach of duties, and unfair competition. The jury ruled in Jostens's favor only on Taylor's claim that Jostens tortiously interfered with its contracts with its customers. The jury awarded damages on each claim, and to avoid repetition of damages, the district court entered judgment for Taylor on its attempted monopolization claim in the amount of $25,225,000.

Jostens moved for judgment as a matter of law and for a new trial. The court granted Jostens's motion for judgment as a matter of law as to each count and vacated the judgment for Taylor. See Taylor Publishing Co. v. Jostens, Inc., 36 F. Supp. 2d 360 (E.D. Tex. 1999). Taylor appeals. Jostens cross-appeals on a single issue: whether the district court erred when it granted Jostens's JML motion but did not rule on its alternative motion for a new trial.

II

Taylor asserts that the district court erred by considering Jostens's post-judgment motion for judgment as a matter of law ("JML") because Jostens waived the right to file a post-judgment JML motion by not moving for Rule 50 judgment at the close of all evidence. We disagree.

A motion for JML "may be made at any time before submission of the case to the jury." Fed. R. Civ. P. 50(a)(2). Rule 50(b) allows the moving party to renew that motion after judgment. It is well-established that to preserve the right to file a Rule 50(b) motion the moving party must first request JML at the close of all evidence. See Fed. R. Civ. P. 50(b); Tamez v. City of San Marcos, 118 F.3d 1085, 1089 (5th Cir. 1997). However, "[w]e have approached this requirement with a liberal spirit." Alcatel USA, Inc. v. DCI Tech. Inc., 166 F.3d 772, 781 (5th Cir. 1999); see also Polanco v. City of Austin, 78 F.3d 968, 974 (5th Cir. 1996) (same). Therefore, "this court has not required strict compliance with Rule 50(b) and has excused technical noncompliance where the purposes of the requirement have been satisfied." Greenwood v. Societe Francaise De, 111 F.3d 1239, 1244 (5th Cir. 1997); see also Scottish Heritable Trust v. Peat Marwick Main & Co., 81 F.3d 606, 610 (5th Cir. 1996) ("Technical noncompliance with Rule 50(b) may be excused in situations in which the purposes of the rule are satisfied."); Polanco, 78 F.3d at 974 ("Technical noncompliance with rule 50(b) is gauged by whether the purposes of the rule are satisfied, not by a formula regarding the number of witnesses, the amount of testimony, or the passage of time after the initial motion.").

The requirement that a party file a motion for JML before the case is submitted to the jury "serves two basic purposes: to enable the trial court to re-examine the sufficiency of the evidence as a matter of law if, after verdict, the court must address a motion for judgment as a matter of law, and to alert the opposing party to the insufficiency of his case before being submitted to the jury." Polanco, 78 F.3d at 974 (quoting MacArthur v. University of Tex. Health Ctr., 45 F.3d 890, 897 (5th Cir. 1995)). "These purposes are met when the court and the plaintiff are alerted to the grounds on which the defendant contends the evidence is insufficient prior to the submission of the case to the jury." Greenwood, 111 F.3d at 1244-45; see also Polanco, 78 F.3d at 974-75 ("Thus, even when substantial evidence is presented after the motion, we may still find that only a 'de minimis' departure from the 50(b) requirement has occurred if the court and the opposing party have been put on notice, before the case goes to the jury, that the plaintiff's proof may be lacking."). When these purposes are met, we routinely excuse technical noncompliance with the pre-submission requirement by invoking a "de minimis" exception to the rule. See, e.g., Greenwood, 111 F.3d at 1244-45; Tamez, 118 F.3d at 1090-91.

The facts here fit within our de minimis exception. The trial lasted over six days. To accommodate the parties, witnesses from both sides were taken out of order, resulting in Taylor completing its case-in-chief after its own rebuttal case and after Jostens's case-in-chief. Near the end of trial, Jostens inquired as to the best time for presenting its Rule 50 motion. Jostens's attorney indicated that he wanted to present his motion after Taylor had concluded its case. The court stated that it would consider the motion timely filed, but wished to consider it "after we finish the evidence." Jostens agreed to postpone the motion until then, and Taylor did...