SOLIDFX LLC v. Jeppesen Sanderson Inc

Filing 463

ORDER Denying 442 Motion to Reconsider, by Judge William J. Martinez on 2/9/2018. (angar, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 11-cv-1468-WJM-BNB
SOLIDFX, LLC,
Plaintiff,
v.
JEPPESEN SANDERSON, INC.,
Defendant.

ORDER DENYING MOTION TO RECONSIDER

Now before the Court is Plaintiff Solid FX, LLC’s (“SOLIDFX”) Motion to
Reconsider (ECF No. 442) (the “Motion”), which asks this Court to reinstate the
damages award of more than $42 million previously vacated by the Tenth Circuit Court
of Appeals, on the grounds that the contract provision which the Tenth Circuit
interpreted as a complete bar to those damages should nevertheless be held
unenforceable. As explained below, the Tenth Circuit’s mandate plainly forecloses
SOLIDFX’s argument, and so the Motion to Reconsider is denied.
I. BACKGROUND
More detailed background of this case has been set out in prior orders, and in
the Tenth Circuit’s opinion, SOLIDFX, LLC v. Jeppesen Sanderson, Inc., 841 F.3d 827,
836–38 (10th Cir. 2016) (“SOLIDFX”), cert. denied, 138 S. Ct. 75, 199 L. Ed. 2d 183
(2017), and is not repeated here. Familiarity with the more detailed background of this
case is presumed.

In brief summary, SOLIDFX is a software development company which entered
into a license agreement with Defendant Jeppesen Sanderson, Inc. (“Jeppesen”), giving
SOLIDFX access to certain of Jeppesen’s proprietary products in exchange for
SOLIDFX’s agreement to create software platforms to display Jeppesen’s terminal
charts, which are used by pilots worldwide, on electronic tablets or e-books. W hen
Jeppesen instead developed its own applications to display its terminal charts on Apple
iPads, SOLIDFX sued Jeppesen on antitrust claims and for breach of contract and
related claims.
After the Court granted summary judgment against SOLIDFX’s antitrust claims,
the case proceeded to trial. Ruling from the bench on the parties’ cross-motions for
judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(a)(1), the
Court addressed both parties’ arguments regarding the application and consequence of
§ 8.2 of the license agreement. Jeppesen argued, inter alia, that this provision barred
SOLIDFX from recovering any lost profit damages. SOLIDFX argued, inter alia, that
§ 8.2 did not bar all lost profit damages, and that § 8.2 should be held unenf orceable as
a matter of public policy, at least to the extent that it barred recovery to an
unconscionable degree and/or because Jeppesen’s conduct had been w illful or wanton.
(See generally Trial Tr. at 1407– 31, 1855–73 (ECF Nos. 355, 356).)
In its Rule 50(a)(1) rulings, this Court interpreted § 8.2 of the license agreement
as a matter of law, concluding it prohibited recovery of lost profit damages only to the
extent such amounts constituted consequential damages, but did not preclude
SOLIDFX from recovering lost profits that amounted to direct damages. (Trial Tr. at
1865–070.)
2

In addition—and most relevant here—the Court rejected SOLIDFX’s argument
that § 8.2 is unenforceable. In particular, the Court rejected SOLIDFX’s argument that
under Core-Mark Midcontinent, Inc. v. Sonitrol Corporation, 300 P.3d 963 (Colo. App.
2012) (“Core-Mark”), and a related line of authority, § 8.2 should be held unenforceable
“if the jury find[s] that the defendant willfully and wantonly breached the contract.” (Trial
Tr. at 1864.) The Court reasoned that the facts here are readily distinguishable from the
concerns implicated in Core-Mark (id.), and that, “[Core-Mark] and many other Colorado
cases, have recognized that damages limitations provisions are generally enforceable,”
(id. at 1865). The Court further concluded that “Section 8.2 . . . does not lim it damages
to an unconscionable degree,” since it “does not cover any direct damages flowing from
the breach of contract.” (Id. at 1864–65.) Given those observations, the Court ruled
that SOLIDFX had “failed to put forth any reason why [the Court] should refuse to give
the parties what they bargained for and enforce Section 8.2.” (Id. at 1865.) It is this
holding that § 8.2 is enforceable which SOLIDFX’s present Motion asks the Court to
reconsider.
After the Court entered its Rule 50(a) rulings, the matter was submitted to the
jury, which found for SOLIDFX on all claims, awarding over $42 million in damages on
SOLIDFX’s breach of contract claims, an additional $173,000 for Jeppesen’s fraudulent
misrepresentation (an amount later vacated based on the economic loss doctrine (ECF
No. 369))1, and $1 for each of SOLIDFX’s other claims. (ECF No. 343-6.)

1

The Court later clarified that its application of the economic loss rule barred recovery
on both the fraudulent misrepresentation claim and also the fraudulent concealment claim, on
which the jury had awarded $1 in nominal damages. (ECF No. 408.)

3

Following extensive post-trial motions practice, in which the parties raised,
renewed, and exhaustively briefed their respective arguments related to § 8.2, the Court
entered final judgment in SOLIDFX’s favor, awarding a total of $42,923,000 on the
breach of contract claims, reflecting three kinds of damages. (See ECF Nos. 370, 407;
SOLIDFX, 841 F.3d at 832.) 2
On appeal, the Tenth Circuit reversed this Court’s interpretation of § 8.2 of the
license agreement, holding that it “unambiguously precludes either party from
recovering lost profits,” and that “[w]e must enforce the unambiguous exclusion of lost
profits contained in Subsection 8.2.1.” SOLIDFX, 841 F.3d at 838. Accordingly, the
Tenth Circuit vacated the damages award “to the extent it includes lost profits of any
stripe,” while concluding that all components of the damages for breach of contract
amounted to lost profits, thus, “vacat[ing] the portions of the jury’s verdict that awarded
$20,922,500 in lost profits from SOLIDFX’s projected iPad app sales during the initial
term of the contract; $21,385,500 for lost business value based on anticipated lost
profits after the initial contract term; and $615,000 for lost profits for tailored terminal
charts for the iRex device.” Id. at 838, 843. 3
Thus, the result on appeal vitiated SOLIDFX’s damages recovery as a practical
matter, while leaving undisturbed the jury’s findings of liability, as well as its nominal
2

The extensive post-trial motions briefing raised and addressed Renewed Motions for
Judgment as a Matter of Law (see ECF Nos. 360, 361, 363, 366, 377, 394, 401, 409, 412, 413),
a Motion for New Trial or Remittitur (ECF Nos. 380, 395, 402), and also a Motion to Amend
Judgment (376, 389, 406).
3

The Tenth Circuit also held that all of the categories of contract damages awarded by
the jury constituted consequential lost profit damages, SOLIDFX, 841 F.3d at 838–41, and also
affirmed this Court’s grant of summary judgment against SOLIDFX’s antitrust claims. Id. at
841–43.

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damages awards of $1 for each of SOLIDFX’s claims of breach of the duty good of
good faith and fair dealing and for intentional interference with business relations.
II. LEGAL STANDARDS
A.

Rules 59(e) & 60(b)
SOLIDFX’s Motion is styled as a Motion for Reconsideration but invokes and

seeks review under Federal Rule of Civil Procedure 60(b)(5) & (6). (ECF No. 441 at
6–7.)
Under Rule 60(b)(5), the Court, “[o]n motion and just terms,” may relieve a party
from a final judgment or other order, if “the judgment has been satisfied, released or
discharged; it is based on an earlier judgment that has been reversed or vacated; or
applying it prospectively would no longer be equitable.”
Rule 60(b)(6) permits the Court to similarly relieve a party from judgment or a
prior order for “any other reason that justifies relief.”
Generally speaking, the grant of relief under Rule 60(b) lies within the Court’s
discretion, but is “extraordinary and may only be granted in exceptional circumstances.”
Servants of Paraclete v. Does, 204 F.3d 1005, 1009 (10th Cir. 2000) (internal quotation
marks omitted). Similarly, to the extent SOLIDFX’s Motion qualifies as a motion for
reconsideration under Rule 59(e), the limited grounds that may support such a motion
include “(1) an intervening change in the controlling law, (2) new evidence previously
unavailable, and (3) the need to correct clear error or prevent manifest injustice. Thus,
a motion for reconsideration is appropriate where the court has misapprehended the
facts, a party’s position, or the controlling law. It is not appropriate to revisit issues

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already addressed or advance arguments that could have been raised in prior briefing.”
Id. at 1012.
B.

Mandate Rule
In addition, because the parties dispute whether the relief sought by SOLIDFX is

foreclosed by the Tenth Circuit’s previous opinion on appeal, resolution requires
analysis under the “mandate rule.”
“The mandate rule is a discretion-guiding rule that generally requires trial court
conformity with the articulated appellate remand.” United States v. Hicks, 146 F.3d
1198, 1200 (10th Cir. 1998). Sometimes described as a corollary to the law of the case
doctrine, “the ‘mandate rule,’ provides that a district court must comply strictly with the
mandate rendered by the reviewing court.” Zinna v. Congrove, 755 F.3d 1177, 1182
(10th Cir. 2014) (internal quotation marks omitted). “A lower court is ‘bound to carry the
mandate of the upper court into execution and cannot consider the questions which the
mandate laid at rest.’” Estate of Cummings by & through Montoya v. Cmty. Health Sys.,
Inc., ___ F. 3d, ___, 2018 W L 577695, at *5 (10th Cir. Jan. 29, 2018) (quoting Sprague
v. Ticonic Nat’l Bank, 307 U.S. 161, 168 (1939)).
For these purposes, “[t]he mandate consists of [the Court of Appeals’]
instructions to the district court at the conclusion of the opinion, and the entire opinion
that preceded those instructions.” Proctor & Gamble Co. v. Haugen, 317 F.3d 1121,
1126 (10th Cir. 2003). The mandate “controls all matters within its scope,” but leaves
the district court “free to pass upon any issue which was not expressly or impliedly
disposed of on appeal.” Id. (internal quotation marks omitted). Therefore, “when the

6

remand is general . . . the district court is free to decide anything not foreclosed by the
mandate.’” Id. at 1125 (10th Cir. 2003).
Where the parties dispute the scope of the mandate, and whether it did or did
not decide a particular issue, the district court must exercise discretion to determine the
scope of any proceedings on remand and what issues remain undecided, unless the
mandate has “specifically cabined” the district court’s discretion:
The scope of the mandate on remand in the Tenth Circuit is
carved out by exclusion: unless the district court’s discretion
is specifically cabined, it may exercise discretion on what
may be heard. Therefore we do not make inquiry into
whether the issue presented is antecedent to or arises out of
the correction on appeal. Instead the district court is to look
to the mandate for any limitations on the scope of the
remand and, in the absence of such limitations, exercise
discretion in determining the appropriate scope. This
approach has been characterized as a presumption in favor
of a general remand. Notably, the mandate rule is a rule of
policy and practice, not a jurisdictional limitation, which thus
allows some flexibility in exceptional circumstances.
Dish Network Corp. v. Arrowood Indem. Co., 772 F.3d 856, 864 (10th Cir. 2014).
III. ANALYSIS
SOLIDFX argues that although it raised the issue of whether § 8.2 is enforceable
before the Court of Appeals, the panel did not decide that issue, a nd that the Panel’s
opinion and mandate addressed only the interpretation of § 8.2, without resolving
whether § 8.2 should be held unenf orceable. In particular, SOLIDFX argues that the
Tenth Circuit did not resolve the “willful and wanton issue.” (See ECF No. 461 at 1.)
Therefore, argues SOLIDFX, this Court should revisit its own conclusion that § 8.2 may
be enforced, should reverse that ruling, and should reinstate the award of lost profit

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damages which the Tenth Circuit vacated.
SOLIDFX’s Motion argues two related grounds for declining to enforce § 8.2.
First, SOLIDFX argues that the jury’s liability findings, including that Jeppesen engaged
in fraudulent concealment and misrepresentation, are equivalent to finding willful and
wanton conduct, and that Colorado case law “prevents a breaching party from hiding
behind a contractual damages limitation after engaging in willful and wanton conduct.”
(ECF No. 441 at 6 (citing U.S. Fire Ins. Co. v. Sonitrol Mgmt. Corp., 192 P.3d 543 (Colo
App. 2008) and Core-Mark, 300 P.3d 963).) Second, SOLIDFX argues that “[t]he
central premise for [this] Court’s enforcement of Section 8.2—that it did not bar
SOLIDFX’s direct lost profit damages—collapsed when the Tenth Circuit ruled,” and
“[b]ecause [the Tenth Circuit’s] reading of Section 8.2 does indeed ‘limit damages to an
unconscionable degree,’ this Court should hold the damages limitation unenforceable.”
(ECF No. 441 at 6.)
SOLIDFX attempts a subtle procedural argument, but one that is nonetheless
indisputably foreclosed by the Tenth Circuit’s mandate. To be sure, the Tenth Circuit
might have been more explicit in addressing SOLIDFX’s “willful and wanton” argument.
Nevertheless, the Tenth Circuit’s opinion refutes all the arguments that SOLIDFX reraises here.
In a lengthy discussion that is fatal to SOLIDFX’s argument, the Tenth Circuit
reasoned that courts may not “draft a better contract for the parties than they did for
themselves,” generally “will uphold an exculpatory provision . . . between two
established and sophisticated business entities,” that “parties are f ree to agree” to such
provisions, “even if [they] severely . . . restrict [a party’s] ability to recover,” that “[b]ut
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for” the waiver of lost profit damages, “Jeppesen would not have waived the license
fee,” that “[e]ven if” a different provision “would have been a better deal for SOLIDFX, it
is not the bargain it made,” that the Tenth Circuit’s interpretation “does not leave
SOLIDFX without a remedy,” that the Court “must enforce the unambiguous exclusion
of lost profits contained in Subsection 8.2.1,” and that “the verdict must be vacated to
the extent it includes lost profits of any stripe”:
[I]t is not the business of the courts to draft a better
contract for the parties than they did for themselves.
See Allstate Ins. Co. v. Huizar, 52 P.3d 816, 820 (Colo.
2002) (“[C]lear and unambiguous provisions cannot simply
be rewritten by the courts”); Kansas City Life Ins. Co. v.
Pettit, 99 Colo. 268, 61 P.2d 1027, 1028 (1936) (“It is
elementary that neither this court nor any other court can
make a new contract in lieu of the one originally entered into
by the parties themselves.”). “The intent of the parties to a
contract is to be determined primarily from the language of
the instrument itself.” Ad Two, Inc. v. City & Cnty. of Denver
ex rel. Manager of Aviation, 9 P.3d 373, 376 (Colo. 2000).
As discussed, Subsection 8.2.1 [of the license agreement]
unambiguously establishes the parties’ intent to preclude
recovery by either party of any lost profits.
Furthermore, “[a]s a general rule, courts will uphold an
exculpatory provision in a contract between two
established and sophisticated business entities that
have negotiated their agreement at arm’s length.” Rhino
Fund, LLLP v. Hutchins, 215 P.3d 1186, 1191 (Colo. App.
2008); see also CompuSpa, Inc. v. Int’l Bus. Machs. Corp.,
228 F.Supp.2d 613, 626–27 (D. Md. 2002) (“[T ]here is no
public policy against enforcement of limited liability clauses
for abandonment of a contractual obligation, even if
deliberate.”). Even if the relevant contract provision “may
severely if not completely restrict [a party’s] ability to recover
for [the relevant] breach of contract, parties are free to
agree to such provisions.” [Imaging Sys. Int’l, Inc. v.
Magnetic Resonance Plus, Inc., 490 S.E.2d 124, 127
(1997)]. Indeed, parties to a contract “must be able to
confidently allocate risks and costs during their bargaining
9

without fear that unanticipated liability may arise in the
future, effectively negating the parties’ efforts to build these
cost considerations into the contract.” Vanderbeek v. Vernon
Corp., 50 P.3d 866, 871 (Colo. 2002).
Both SOLIDFX and Jeppesen agreed they would bear the
risk of their own lost profits and forego other damages as
identified in Section 8.2. And, in the License Agreement
itself, they explained the reason for their decision to limit the
damages available in the event of breach:
8.4 Effect of Limitation. The parties acknowledge that
the limitations set forth in this Section are integral to
the amount of fees specified within this Agreement,
and recognize that were Jeppesen to assume any
further liability beyond that set forth herein, such fees
could be substantially higher.
In other words, SOLIDFX expressly waived its ability to
recover several types of damages, including lost profits, and
waived the warranties listed in Section 8.1.5. But for these
waivers, Jeppesen would not have waived the license fee to
access its proprietary toolkits. The inclusion of this
acknowledgment further supports the reading of Section
8.2.1 as meaning exactly what it says: “NEITHER PARTY
WILL HAVE ANY OBLIGATION OR LIABILITY
WHATSOEVER ... FOR LOSS OF USE, REVENUE OR
PROFIT.” Even if an agreement to limit only
consequential lost profits would have been a better deal
for SOLIDFX, it is not the bargain it made.
And this interpretation does not leave SOLIDFX without
a remedy as it contends. SOLIDFX and Jeppesen both
contractually waived the right to recover lost profits in
Subsection 8.2.1; the damages listed in Subsection 8.2.2
with respect to the products and services provided under the
License Agreement; and the defect and nonconformance
damages described in Subsection 8.2.3. But they did not
exclude reliance damages—damages incurred when
products or services promised under the License Agreement
were not provided. Such damages “includ[e] expenditures
made in preparation for performance or in performance, less
any loss that the party in breach can prove with reasonable
certainty the injured party would have suffered had the
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contract been performed.” Restatement (Second) of
Contracts § 349; see also Bunch v. Signal Oil & Gas Co.,
505 P.2d 41, 43 (Colo. App. 1972) (“The fact that plaintiff
failed to prove his damages concerning loss of profits will not
prevent his recovery for actual expenditures made in
reasonable reliance on the performance of the contract or
made because of the breach of the contract.”).
Here, SOLIDFX originally claimed $173,000 in “wasted
costs,” which SOLIDFX’s expert explained were not lost
profits but were “monies that were spent by SOLIDFX
because Jeppesen did not adhere to the term s of the
contract.” Although SOLIDFX’s expert included wasted
costs in her original damage calculations, SOLIDFX omitted
them from the damages it sought at trial. Essentially,
SOLIDFX made the tactical decision to drop its claim for
the type of damages available under the License
Agreement in the hope of recovering the much greater
sums it claimed as lost profits. But SOLIDFX was bound
by the terms of the License Agreement, including the
exclusion of any lost profit damages. And because it did not
offer the evidence of “wasted costs” to the jury, SOLIDFX
has not made a record of the damages recoverable under
the License Agreement.
In summary, the Licensing Agreement unambiguously
precludes either party from recovering lost profits. * * *
Although Section 8.2 greatly limits the available damages
either party can recover in the event of breach, it is not the
courts’ role to create or enforce a different contract than the
one the parties negotiated. We must enforce the
unambiguous exclusion of lost profits contained in
Subsection 8.2.1. Accordingly, the verdict must be
vacated to the extent it includes lost profits of any
stripe.
SOLIDFX, 841 F.3d at 836–38 (emphasis added). This language constitutes part of the
mandate which this Court must apply. Proctor & Gamble, 317 F.3d at 1126. The
Court has little difficulty concluding that the language excerpted above places clear
“limitations on the scope of the remand,” and has “specifically cabined” the scope of this

11

Court’s discretion regarding what issues may be heard on remand. See Dish Network,
772 F.3d at 864.
Furthermore, the concluding paragraph of the Tenth Circuit’s opinion forecloses
the relief which SOLIDFX seeks, holding without equivocation that “lost profits are not
recoverable,” and “vacat[ing] the portions of the jury’s verdict that awarded $20,922,500
in lost profits from SOLIDFX’s projected iPad app sales during the initial term of the
contract; $21,385,500 for lost business value based on anticipated lost profits after the
initial contract term; and $615,000 for lost profits for tailored terminal charts for the iRex
device.” SOLIDFX, 841 F.3d at 843. Thus, the Tenth Circuit vacated exactly those
damages which SOLIDFX asks this Court to reinstate, having held they “are not
recoverable” and that the Court “must enforce . . . Subsection 8.2.1.” Id. at 838, 843
(emphasis added). This language leaves no discretion for the Court to find § 8.2
unenforceable.
For all these reasons, the enforceability of § 8.2, which SOLIDFX asks the Court
to revisit, is among those “questions which the mandate laid at rest,” and which this
Court therefore “cannot consider.” Estate of Cummings, ___ F. 3d at ___, 2018 W L
577695, at *5. SOLIDFX’s efforts to escape the Tenth Circuit’s mandate are unavailing.
SOLIDFX invokes the case law articulating a “presumption in favor of a general
remand.” (ECF No. 441 at 7 (citing United States v. West, 646 F.3d 1121, 1126 (10th
Cir. 2003)).) But this is neither an open-ended general remand nor a circumstance
where the Court of Appeals was not presented with the issues now re-raised by
SOLIDFX on remand. See note 4, infra.

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SOLIDFX’s reliance on Cook v. Rockwell International Corporation, 790 F.3d
1088 (10th Cir. 2015) is also unavailing. (See ECF No. 461 at 5–6.) In Cook, a first
appeal addressed only federal statutory claims, while leaving undisturbed the legally
sufficient grounds to enter judgment on independent state law claims. See id. at 1101.
Unlike the specific vacatur of damages here, in Cook the Tenth Circuit open-endedly
directed “further proceedings not inconsistent with this opinion.” Id. at 1102. When the
district court then declined to enter judgment in favor of plaintiffs’ state law claims, the
Tenth Circuit reversed, noting that it “happens all the time,” that “a district court on
remand . . . will enter a new judgment in the same party’s favor on the existing record if
one can be had unaffected by the error found in the appeal .” Id. (emphasis added).
None of that applies here, where the Court is not addressing a separate claim or an
independent ground for awarding the same damages which the Court of Appeals has
explicitly vacated, and SOLIDFX’s argument for such reinstatement is directly affected
by the same “error found in the [first] appeal.”
Finally, SOLIDFX’s insistence that the Tenth Circuit “did not determine the willful
and wanton issue” misses the mark by framing the issue too narrowly. (See ECF No.
461 at 6–7.) The controlling question is not simply the “willful and wanton issue” or the
correct application of Core-Mark and related authorities, but both more simply and more
generally, whether § 8.2 is enforceable. The Tenth Circuit has resolved that issue
unequivocally. Moreover, although the Tenth Circuit’s opinion did not expressly use the
words “willful and wanton,” SOLIDFX argued exactly this same contention before the

13

Tenth Circuit, citing the same authorities.4 The Tenth Circuit heard and rejected those
arguments, holding the Court “must enforce” § 8.2. SOLIDFX, 841 F.3d at 838.
Thus, even if this Court were inclined to reconsider the enforceability of § 8.2,
the mandate rule precludes it. The Court therefore need not reach any additional
questions raised by SOLIDFX’s Motion. SOLIDFX’s subsidiary request for a new trial to
prove that Jeppesen’s conduct was willful and wanton (to the extent that might differ
from the existing fraud findings) also must be rejected. (See ECF No. 441 at 20.) The
Tenth Circuit’s mandate does not leave open the possibility that some additional factual
showing in a second trial might prove § 8.2 unenforceable. Moreover, a request for a
new trial is an “extreme remedy” which is “disfavored and rarely granted.” See Crew
Tile Distribution, Inc. v. Porcelanosa Los Angeles, Inc., 2017 WL 6729621, at *4 (D.
Colo. Dec. 29, 2017) (internal quotation marks and citations omitted). The Court will not
contemplate such relief on the basis of SOLIDFX’s underdeveloped, one-paragraph
request. Similarly, SOLIDFX’s request for oral argument on its Motion (ECF No. 441 at
20) is denied, since the issues raised are readily resolved “on the papers.”

4

See, e.g., SOLIDFX, LLC’s Opening-Answer Brief, Doc No. 01019523640 at 44–46,
Case No. 15-1079 (10th Cir. Nov. 13, 2015) (arguing—exactly as SOLIDFX argues here—that
under Core-Mark and related authorities, the damages limitation set by § 8.2 of the license
agreement should be found unenforceable as a consequence of Jeppesen’s fraudulent or willful
and wanton conduct).

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IV. CONCLUSION
For the reasons set forth above, Plaintiff SOLIDFX, LLC’s Motion to Reconsider
(ECF No. 442)5 is DENIED. This includes denial of SOLIDFX’s request for a new trial
and request for oral argument.
Dated this 9th day of February, 2018.
BY THE COURT:

William J. Martínez
United States District Judge

5

The Motion itself was originally filed under restriction and is at ECF No. 441; the public
docket entry reflecting the pending motion is at ECF No. 442.

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