Eastman Chemical Company v. PlastiPure, Inc. et al
Filing
249
OPINION AND ORDERED DENYING Defendants PlastiPure, Inc. and CertiChem, Inc.'s "Rule 50(b) Renewed Motion for Judgment as a Matter of Law" # 229 ;FURTHER ORDERED that Defendants PlastiPure, Inc. and CertiChem, Inc.'s Motion for New Trial # 231 is DENIED; FINALLY ORDERED that Plaintiff Eastman Chemical Company's Unopposed Motions to Exceed Page Limits # 240 & # 242 are GRANTED. Signed by Judge Sam Sparks. (td)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
2013 Ocr 31
CLE;
WESTL,
AN
10:
TcC COURT
rCT OF TEXAS
ti
EASTMAN CHEMICAL COMPANY,
Plaintiff,
Case No. A-12-CA-057-SS
-vs-
PLASTIPURE, INC. and CERTICHEM, INC.,
Defendants.
ORDER
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and
specifically Defendants PlastiPure, Inc. and CertiChem, Inc.'s "Rule 50(b) Renewed Motion for
Judgment as a Matter of Law" [#229], and PlaintiffEastman Chemical Company's Response [#243];
Defendants' Motion for New Trial [#231], and Plaintiff's Response [#241]; and Plaintiffs
Unopposed Motions to Exceed Page Limits [##240, 242].' Having reviewed the documents, the
governing law, and the file as a whole, the Court now enters the following opinion and orders.
Background
A jury trial was held in this Lanham Act false advertising case from July 15, 2013 to July 24,
2013. More than three months after the jury returned a total verdict in favor of Plaintiff Eastman
Chemical Company, this case remains active on this Court's docket. On August 30,2013, this Court
entered a twenty-three page order denying Defendants' Rule 5 0(a) and Rule 5 0(b) challenges, and
fashioning a permanent injunction, which was included in thejudgment entered the same day. Order
of Aug. 30,2013 [#219]. On October 4,2013, this Court entered an order denying Eastman's request
The unopposed motions [##240, 242] are GRANTED.
11
for attorney's fees and awarding limited costs. Order of Oct. 4, 2013 [#239]. Defendants now move
again for judgment as a matter of law and for a new trial, raising largely the same arguments
previously rejected by this Court.
Analysis
I.
Renewed Rule 50(b) Motion
A.
Legal Standard
When ruling on a Rule 50(b) motion for judgment as a matter of law, "[a] jury verdict must
stand unless there is a lack of substantial evidence, in the light most favorable to the successful party,
to support the verdict." Am. Home Assurance Co.
v.
United Space Alliance, LLC, 378 F.3d 482,487
(5th Cir. 2004). Accordingly, the question for this Court "is whether the state of proof is such that
reasonable and impartial minds could reach the conclusion the jury expressed in its verdict." Id.
(internal quotation marks omitted); see also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.s.
133, 151(2000) ("Thus, although the court should review the record as a whole, it must disregard
all evidence favorable to the moving party that the jury is not required to believe.")
B.
Application
After the evidence was presented at trial, Defendants moved forjudgment as a matter of law
pursuant to Rule 50(a). Defs.' Rule 50(a) Mot. [#185]. Defendants sought judgment on Eastman's
false advertising claim on, among
others,2
the following grounds: (1) no evidence of commercial
competition; (2) no evidence of statements of fact about Tritan; (3) no evidence of literal falsity; (4)
no evidence of actual deception; (5) no evidence of materiality; (6) no evidence of harm; (7) press
Several of Defendants' arguments were directed at issues not ultimately submitted to the jury, including
statements not included in this Court's jury charge and issues related to damages, which were not submitted to the jury
at Eastman's request.
2
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releases are not "commercial advertising or promotion"; and (8) website statements do not reference
Eastman or Tritan. Id. Defendants also soughtj udgment on Eastman's unfair competition claims for
the same reasons, and on Eastman's conspiracy and aiding-and-abetting claims on the grounds there
was no evidence to support any of the elements of those causes of action. Id. This Court carried the
motion. See FED. R. Civ. P. 50(b) ("If the court does not grant a motion for judgment as a matter of
law made under Rule 5 0(a), the court is considered to have submitted the action to the jury subject
to the court's later deciding the legal questions raised by the motion.").
Approximately two weeks after the jury returned its verdict, Defendants filed a "Motion for
Judgment." Defs.' Mot. J. [#205]. Defendants reasserted many of the same sufficiency of the
evidence type challenges to the jury's verdict. Although "a party may not base a motion forj udgment
[as a matter of law] on a ground that was not included in a prior motion for directed verdict,"
Defendants also raised new arguments concerning prudential standing and willfulness. Bay Colony,
Ltd.
v.
Trendmaker, Inc., 121 F.3d 998, 1003 (5th Cir. 1997). The Court construed Defendants'
second motion as a Rule 5 0(b) motion, and rejected all of Defendants' arguments, finding the
evidence sufficient to sustain the jury's verdict. Order of Aug. 30, 2013 [#219], at 1-15.
Defendants' Renewed Rule 5 0(b) motion reasserts all of these grounds for relief previously
rejected by the Court. The Court again denies the motion for the reasons previously stated. Id.; see
Saffran v. Johnson & Johnson, No. 2:07-C V-451 (TJW), 2011 WL 4378030, at
*1
(E.D. Tex. Sept.
20, 2011) ("The Defendants have preserved their record, and the Court DENIES Defendants'
renewed motion [for judgment as a matter of law under Rule 50(b)] for the same reasons it denied
Defendants' original motion.").
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II.
Motion for New Trial
A.
Legal Standard
A motion for new trial may be granted if the jury's verdict was against the great weight of
the evidence, the trial was unfair, or some prejudicial error was committed during the trial. FED.
CIV. P.
59; Smith
v.
R.
Transworld Drilling Co., 773 F.2d 610, 613 (5th Cir. 1985); Conway v. Chem.
Leaman TankLines, Inc., 610 F.2d 360, 363 (5th Cir. 1980). As with a Rule 50(b) motion, the Court
views the evidence "in the light most favorable to the jury verdict." Seidman
v. Am.
Airlines, Inc.,
923 F.2d 1134, 1140 (5th Cir. 1991).
B.
Application
Defendants raise a number of arguments in their Motion for New Trial, many of which have
been raised repeatedly in the hundreds of pages of post-verdict briefing in this case. For example,
Defendants again challenge the sufficiency of the evidence to sustain the jury's verdict on each
question submitted to the jury. The Court rejects those arguments for the reasons previously stated.
Defendants new arguments in support of a new trial are: (1) the Court erred in admitting Defendants'
press releases into evidence; (2) the Court's jury charge was erroneous; and (3) the Court erred in
denying Defendants' motion for leave to amend their counterclaims. The Court will consider those
new arguments in turn.
1.
Admission of Press Releases
"Generally, any error in admitting or excluding evidence is not grounds for a new trial."
Baisden
v.
I'm Ready Productions, Inc., 693 F.3d 491, 508 (5th Cir. 2012) (citing FED. R. Civ. P.
61). Defendants argue the Court improperly admitted into evidence two of Defendants' press
releases, arguing those press releases do not amount to "commercial advertising or promotion" under
the Lanham Act. Defendants previously raised this argument in their Rule 5 0(a) motion, and the
Court rejected it then. Order of Aug. 30, 2013 [#2 19], at 7. The Court does so again for the reasons
stated previously.
2.
Jury Charge
Defendants fault the Court's jury charge for: (1) not including Defendants' Lanham Act
counterclaim; (2) not including Defendants' business disparagement counterclaim; (3) not including
Defendants' affirmative defenses; (4) characterizing Defendants' statements as a group; (5) including
an instruction on "falsity by necessary implication"; (6) instructing the jury on assuming materiality
for literally false statements; and (7) referencing PlastiPure's website.
a.
Lanham Act Counterclaim
Defendants first argue the Court erred in not submitting Defendants' Lanham Act
counterclaim to the jury. As pleaded, Defendants charged Eastman with making "false and
misleading statements to its [Eastman's] customers regarding Defendants' testing procedures, test
results and practices." 2d Am. Answers [##50, 51] ΒΆ 62.
The Court prepared ajury charge which did not include instructions or questions concerning
Defendants' Lanham Act counterclaim because there was insufficient evidence to support giving
such instructions or questions to thejury. Defendants technically objected, as shown in the following
exchange:
Defendants' Counsel: Your Honor, with respect to the verdict form, defendants
object to the failure to submit the counterclaims on the ground that there is evidence
to support all the necessary elements under the Lanham Act, including damages
because the statute permits the Court to equitably award damages independent of
evidence having been produced on that other than evidence of profits.
The Court:
Just out of curiosity, what evidence was produced?
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Defendants' Counsel: What evidence was actually introduced by Eastman that it was
profitable and the amount of money that had been spent totalin total. And under
the Lanham Act all that's actually required is that the counter-claimant in this case
prove how much was spent. And then, it is up to the counter-defendant to provide
evidence of costs to reduce that amount. And then, the court in equity can award
based on that. So that's our objection.
Defs.' Mot. New Trial {#231-9], Ex. 9 (Charge Conf. Tr.)., at 14.
Counsel did not identify any evidence of statements Eastman made to its customers regarding
Defendants' testing procedures, results, or practices. Nor did counsel identify any evidence
suggesting those statements were false or misleading. Nor did counsel identify any evidence
suggesting those statements actually deceived any of Defendants' customers, or were material to
those customers' purchasing decisions. Nor did Defendants introduce any evidence of actual harm
to them caused by Eastman's statements to its own customers. The Court, having sat through the
entire trial, heard all of the evidence, and heard no evidence to support giving the counterclaim to
the jury. The Court thus properly overruled Defendants' objection.
Defendants now proffer specific evidence they claim supported their counterclaim at the trial.
Defendants reference: (1) a statement Eastman made about Tritan' s composition; (2) statements
Eastman made about the rejection of Defendants' MCF-7 assay from inclusion in the Endocrine
Disruptor Screening Program; and (3) statements Eastman made about the MCF-7 assay not being
a definitive test for estrogenic activity. Defs.' Mot. New Trial [#231-9], at 16-20.
First, Eastman's statements about Tritan' s composition are irrelevant to Defendants'
counterclaim because they are not statements about Defendants' tests. Second, assuming the
statements about the efficacy and definitiveness of the MCF-7 assay are actionable, Defendants still
have not identified any evidence those statements deceived any consumers of Defendants' services,
were material to any consumers' purchasing decisions, or resulted in any injury at all to Defendants.
Defendants did not present any evidence they were injured in any way by anything Eastman said or
did with regards to Defendants' testing procedures. This was reason enough to withhold Defendants'
counterclaims from the jury.
b.
Business Disparagement Counterclaim
Defendants also pleaded a business disparagement counterclaim, which the Court did not
include in its charge because there was insufficient evidence to justify giving the question to thej ury.
Defendants claim they objected to the noninclusion of this claim through the same objection
discussed above. Generously construing Defendants' objection as covering the business
disparagement claim, Defendants' objection again failed to identify a single piece of evidence
specific to business disparagement. This is because there was no evidence of Eastman's malice in
publishing any false or disparaging words about Defendants' interests, or of any "special damages"
suffered by Defendants. In implicit recognition of this fact, Defendants' motion does not even
attempt to identify any particular evidence, much less identify what "special damages" Defendants
suffered.
c.
Affirmative Defenses
Defendants pleaded a smattering of affirmative defenses, including waiver, acquiescence,
equitable estoppel, privilege, unclean hands, and First Amendment. The Court did not include
instructions or questions on any of them because there was insufficient evidence to justify giving
those questions to thejury. Defendants' counsel again objected to this noninclusion in generic terms:
Defendants' counsel: Our second objection with respect to the verdict form is the
failure to submit questions on affirmative defenses. We believe that there is evidence
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in the record with respect to each of defendants' affirmative defenses, and I think
there should be questions on those.
Thejuiy wouldn't have any idea what we're talking about. There's no
The Court:
evidence on any affirmative defenses. They were submitted perhaps as humor.
They're overruled.
Charge Conf. Tr. at 15.
As the Court's comments at the time suggested, there was insufficient evidence to submit any
affirmative defense to the jury. There was no evidence Defendants were in any way harmed by any
inequitable, bad faith conduct of Eastman. Defendants' waiver argument was premised on a confused
and strained interpretation of the doctrine to bar Eastman from suing for false advertising because
Eastman did not attempt to replicate Defendants' particular tests. No authority supports the use of
waiver in this way, and the evidence at trial certainly did not show Eastman intentionally
relinquishing any of its rights. Defendants' acquiescence and equitable estoppel claims are similar,
based on stretching those doctrines to somehow prevent Eastman from suing despite the total lack
of evidence Eastman ever represented it would not enforce its Lanham Act rights. Finally,
Defendants' privilege and First Amendment arguments are based on Defendants' repeatedly raised
and repeatedly rejected theory of this case in which they were merely engaged in scientific debate,
rather than in publishing commercial advertisements and promotions suggesting Tritan was capable
of leaching estrogenically active chemicals and causing harm.
d.
Group Statements
The Court's charge identified three actionable statements made by Defendants. Two of the
three were direct quotes taken from Defendants' press releases. The third was described as follows:
The second statement is not a direct quote, but a statement to the effect that Tritan,
or products made from Tritan, are dangerous to human health because they exhibit
estrogenic activity. You may, but are not required to, infer such a statement was made
from evidence such as Exhibits P108, P11, and P 112.
Jury Instruction [#195], at 6.
Defendants claim they were prejudiced (though they do not explain how) by this instruction
because it "allow[ed] the jury to evaluate three of Defendants' statements in concert to determine
if a false statement of fact was made." Defs.' Mot. New Trial [#23 1], at 26. Even if Defendants had
identified some binding authority precluding this "grouping" (they do not), and even if Defendants
had objected to this "grouping" when given an opportunity to object to the charge (they did not), a
new trial would not be warranted. The Court's instruction was a practical recognition of the fact
Defendants never expressly stated "Tritan is harmful." The evidence at trial showed Defendants
made statements about Tritan exhibiting estrogenic activity, and about estrogenic activity being
harmful to humans or the environment. The Court's instruction merely identified potential
evidentiary bases from which jurors could have inferred such statements were made, although there
was no direct quote for the Court to provide.
e.
Falsity by Necessary Implication
Defendants fault the Court's charge for including an instruction on the Lanham Act theory
of "falsity by necessary implication." This rule allows the jury to find a statement was false "if the
words or images, considered in context, necessarily imply a false message," even if the false
statement is not explicit. Hall v. Bed Bath & Beyond, Inc., 705 F.3d 1357, 1367 (Fed. Cir. 2013).
Although the Fifth Circuit has not expressly adopted this rule, numerous other circuits have done so.
E.g., Hall, 705 F.3d at 1367; Time Warner Cable, Inc.
2007); Novartis Consumer Health, Inc.
v.
v.
DIRECTV, Inc., 497 F.3d 144, 158 (2d Cir.
Johnson & Johnson-Merck Consumer Pharms. Co., 290
F.3d 578, 589 (3d Cir. 2002); Southland Sod Farms
v.
Stover Seed Co., 108 F.3d 1134, 1139 (9th
Cir. 1997). Even if instructing the jury on this theory was error, Defendants have not shown it was
prejudicial because the jury found all of Defendants' statements were both literally false and
misleading.
f.
Materiality
Defendants fault the Court's charge for instructing the jury it could presume materiality if
it found a statement to be literally false. "With respect to materiality, when the statements of fact at
issue are shown to be literally false, the plaintiff need not introduce evidence on the issue of the
impact the statements had on consumers. In such a circumstance, the court will assume that the
statements actually misled consumers." Pizza Hut, Inc. v. Papa John 's Int'l, Inc., 227 F.3d 489, 497
(5th Cir. 2000) (citations omitted).The Court's charge followed Pizza Hut, and thus was not error.
Even if it was, Defendants have not shown prejudice because the jury independently found all of
Defendants' statements were misleading and material.
g.
PlastiPure's Website
Defendants fault the Court's charge for including a reference to Plaintiff sExhibit 111, taken
from PlastiPure' s website, on the grounds the website did not reference Eastman or Tritan. When
viewed in context, especially the presence of Defendants' brochure specifically discussing Eastman's
Tritan on PlastiPure' s website before and throughout the trial, there was ample reason to direct the
jury to Exhibit 111 as an example. Even if the Court had not done so, the exhibit was in evidence
and thej ury could have considered it anyway; the Court's instructions merely aided thej ury in sifting
through the hundreds of exhibits produced in the case.
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3.
Motion for Leave to Amend
Defendants also argue this Court erred in not allowing Defendants to amend their
counterclaims. Defendants filed their motion on April 30, 2013, nearly ten months after the amended
pleadings deadline chosen by the parties and nearly a full month after the dispositive motions
deadline set by the Court. The Court denied the motion as "inexcusably late" and too prejudicial to
Eastman unless the trial date was continued (with the Court's next available setting then being March
2015). Order of June 3, 2013 [#1331, at 5-6.
As a threshold matter, this Court's pretrial ruling on a discretionary motion for leave to
amend filed after the deadlines agreed to by the parties provides no proper basis for ordering a new
trial in this case. Motions for new trial "cannot be used to raise arguments which could, and should,
have been made before the judgment issued." Simon v.
United States, 891
F.2d 1154, 1159 (5th Cir.
1990) (internal quotation marks omitted). Defendants' argument was raised, and rejected, prior to
jury selection.
Alternatively, even if the Court were to consider the merits of Defendants' argument, the
Court would not order a new trial. The Court rightly denied the amendment as prejudicial because
allowing Defendants to expand the scope of their counterclaims from "Eastman made false
statements about Defendants' tests to its customers" to "Eastman made false statements about Tritan
to consumers" would have radically altered the nature of the evidence at trial, required the
designation of new experts, and possibly necessitated new discovery on issues like deception,
materiality, and injury. Defendants had ample time to plead such counterclaims between the filing
of this lawsuit on January 18, 2012, and the July 13, 2012 amended pleadings deadline agreed to by
the parties. This Court's refusal to allow Defendants' April 30, 2013 amendment to plead the
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counterclaims they wanted to assert at their July2013 trial does not entitle them to relief under Rule
59.
Conclusion
Accordingly,
IT IS ORDERED that Defendants PlastiPure, Inc. and CertiChem, Inc.'s "Rule
5 0(b)
Renewed Motion for Judgment as a Matter of Law" [#229] is DENIED;
IT IS FURTHER ORDERED that Defendants PlastiPure, Inc. and CertiChem,
Inc.'s Motion for New Trial [#23 1] is DENIED;
IT IS FINALLY ORDERED that Plaintiff Eastman Chemical Company's
Unopposed Motions to Exceed Page Limits [##240, 242] are GRANTED.
SIGNED this the
day of October 2013.
UNITED STATES DISTRICT JUDGE
057 new
trial
ord kkt.frm
12
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