UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 96-30420
MAC SALES INC., ET AL,
Plaintiffs,
KENNETH P. CHOINA, SR.,
Plaintiff-Appellant,
VERSUS
E. I. DUPONT DE NEMOURS, AND COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
(89-CV-4571-N)
July 7, 1997
Before REYNALDO G. GARZA, EMILIO M. GARZA, and DeMOSS, Circuit
Judges.
DeMOSS, Circuit Judge:*
Plaintiff Kenneth Choina sued defendant E.I. duPont de Nemours
& Co. (“DuPont”) for breach of contract. The district court
granted judgment as a matter of law in favor of DuPont after the
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
first trial. We reversed that judgment and remanded the case in
Mac Sales, Inc. v. E.I. du Pont de Nemours & Co., 24 F.3d 747 (5th
Cir. 1994). The jury in the second trial found for Choina,
awarding damages of $11.3 million. The district court, however,
determined that Choina’s marketing expert perjured himself. The
district court, pursuant to Federal Rule of Civil Procedure
60(b)(6), vacated the judgment and ordered a new trial. Choina
obtained a favorable jury verdict in the third trial, but the jury
awarded him only $176,000.
Choina appeals, arguing that the district court erred in (1)
setting aside the second trial, (2) sanctioning him because of his
marketing expert’s conduct, and (3) lowering his damages for
failure to mitigate. Finding no reversible error, we affirm the
judgment of the district court.
BACKGROUND
Choina claims that DuPont breached its agreement giving him
the exclusive right to market a flame resistant fabric manufactured
by DuPont. Specifically, Choina contends that DuPont’s improper
requirement that he use only approved fabric cutters raised his
costs so high that he could not sell the clothes for a profit.
The first jury trial took place in April 1993, with the
district court granting judgment as a matter of law in favor of
DuPont. Choina appealed and a panel of our Court reversed, sending
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the case back for trial. See Mac Sales, Inc. v. E.I. du Pont de
Nemours & Co., 24 F.3d 747 (5th Cir. 1994).
At the second trial, in June 1995, marketing expert Randolph
Trappey testified for Choina. Trappey conducted a market survey
which determined that almost the entire market for Choina’s clothes
existed at a cost of less than the $40 per outfit Choina had to
charge if he used DuPont’s approved cutters. Exactly how the
survey was conducted and how Trappey described the survey to the
jury is the main issue in this case.
Trappey testified at trial that he interviewed 500 companies
for his survey. This was done by selecting 500 companies which
bought fire resistant clothes. He and his research assistant then
phoned the safety director at each company, described the clothes
and asked how much the company would be willing to pay for such a
product. Trappey failed to inform the jury that, of the 500
companies called, he was only able to complete interviews with 100.
As Trappey explained after the trial, the act of calling a company,
regardless of whether the company answered his questions, was
referred to by Trappey as an “interview.” Trappey referred to
those complete questionnaires as “completed interviews.”
During the second trial, Trappey emphasized to the jury that
he interviewed 500 companies in coming to his conclusions about
Choina’s losses. For example, he said, “I might also add that we
interviewed in excess of 500 -- we pulled more than 500 people from
3
our ‘barrel’ when we talked to them.” Trappey later said “I think
the final number came out to in excess of 580 people actually
interviewed throughout the United States.”
In support of his claim that 500 people had been interviewed,
Trappey produced data sheets showing 500 separate phone calls.
During cross-examination, DuPont’s counsel showed that of the 36
pages of data sheets, all but nine pages were duplicates. Thus,
the data sheets showed only 100 completed interviews.
The jury in the second trial found for Choina and awarded
damages of $11.3 million. Following the second jury trial, DuPont
filed a motion under Federal Rule of Civil Procedure 60(b)(6)1 to
set aside the verdict on the ground that Trappey falsified his data
and perjured himself at trial. The district court required Choina
to turn over Trappey’s data and allowed DuPont to depose Raoul
Rosha, Trappey’s research assistant. After a hearing, the district
court granted DuPont’s motion to set aside the verdict. The
district court found clear and convincing evidence that Trappey
falsified his data and perjured himself at trial.2
1
Federal Rules of Civil Procedure provides that “[o]n motion
and upon such terms as are just, the court may relieve a party . .
. from a final judgment . . . for (6) any other reason justifying
relief from the operation of the judgment.”
2
The district court stated that:
Mr. Trappey’s testimony today highlights the
misrepresentation upon which the jury relied. The
evidence that Mr. Trappey falsified his data and his
report and that he perjured himself is clear and
convincing.
4
A third jury trial was held in March 1996. Trappey refused to
testify in that trial unless he was granted immunity. Choina used
a different marketing expert in this trial and DuPont also used a
marketing expert. The jury again found for plaintiff, but awarded
only $176,000.
Choina filed a timely notice of appeal.
While his methodology may have been correct, he
misrepresented his methodology to the jury. While this
fraud was not committed with the complicity of Plaintiff
or his Counsel, the court nevertheless concludes that
Plaintiff has prevailed in this case because of Mr.
Trappey’s fraudulent testimony.
That not only is the Defendant injured in this event, but
the entire judicial system and the Court suffers as a
result.
The Court will not allow a verdict founded upon
unmitigated fraud to stand.
Mr. Trappey’s testimony provided the entire basis for the
jury’s award. Without Mr. Trappey, there was no evidence
of a market for Plaintiff’s product. There is no basis
for Dr. Wood’s testimony.
This case is extraordinary, in that the sole evidence
supporting a multi-million dollar verdict is the clearly
fraudulent testimony of an expert witness who supplied
Defense counsel with fraudulent documents that prevented
Defendant from fully presenting its case.
Allowing this verdict to stand would cause substantial
injustice. The Court will not sit idly by and allow Mr.
Trappey to visit this injustice on the Defendant or the
Court. Accordingly, pursuant to Rule 60(b)(6), the Court
grants Defendant’s motion and the judgment entered in
accordance with the jury’s answers be set aside.
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DISCUSSION
Rule 60(b)(6) Motion
“We employ an abuse of discretion standard in our review of
the district court's denial of Appellant's Rule 60(b)(6) motion.”
Pease v. Pakhoed Corp., 980 F.2d 995, 998 (5th Cir. 1993). Choina
argues that the district court abused its discretion in granting
the Rule 60(b)(6) motion for two reasons: (1) Trappey did not
perjure himself while testifying, and (2) because DuPont made the
strategic choice of attacking Trappey’s credibility and sending the
case to the jury, rather than seeking a recess or continuance, it
is not entitled to this extraordinary remedy.
Choina contends that Trappey did not lie. He may not have
been as clear as he could have about the difference between
interviews and completed interviews, but he did not commit perjury.
He contends that marketing research textbooks support his
interview/completed interview distinction. Choina argues that the
only evidence that Trappey lied comes from Rosha, his assistant,
who is only a graduate student.3 This evidence, he maintains, is
3
Rosha testified that Trappey asked him how many surveys he
had done, to which he responded:
I said, “Well, yes, I remember it was around a hundred.”
And he said, ‘Well, I told the court 600.’
So -- I mean I -- I didn’t know what -- I mean I was
silent.
6
insufficient to support a finding of perjury. Any confusion from
his testimony is because of a “testimonial mishap,” not perjury.
See Bronston v. United States, 409 U.S. 352, 358 (1973) (discussing
distinction between testimonial mishap and perjury).
Choina argues that even if Trappey committed perjury, the
verdict should not have been reversed. He contends that DuPont
became aware of the printout error before Trappey testified. Yet,
rather than seek a continuance to try and obtain the correct data,
DuPont chose to ambush Trappey with the mistake, trying to make him
look like a liar in front of the jury. Choina asserts that only
after this strategy backfired to the tune of $11.3 million did
DuPont claim that the verdict should be set aside. Choina
maintains that Rule 60(b)(6) is inappropriate where a party made a
“voluntary, deliberate, free, untrammeled choice.” Ackermann v.
United States, 304 U.S. 193, 198-201 (1950). Choina argues that
DuPont took a gamble and lost. A verdict should not be set aside
after a party makes a deliberate, although ultimately unsuccessful,
And then he said, “No. What I really meant was that I
know you did a hundred, but when I said 600, what I meant
was 600 people was [sic] contacted. So did -- did you --
didn’t you contact 600?”
So I told him that “Well, I couldn’t exactly say 600,
but, yes a lot of people were contacted.”
But, I mean, again as a -- I was surprised, because the
market research people whom you contact are not -- I mean
they are not part of -- they don’t constitute anything.
Its the same that responds.
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choice.
We agree with DuPont that the district court’s grant of the
Rule 60(b)(6) motion should be affirmed. The district court’s
perjury finding is a factfinding, which we review only for clear
error. See Accura Systems, Inc. v. Watkins Motor Lines, Inc., 98
F.3d 874, 876 (5th Cir. 1996). There is ample evidence to support
the district court’s finding of perjury. First, only nine of the
36 pages of data Trappey gave were original, while the rest were
duplications. Second, Trappey testified that the data sheets
represented information obtained from over 500 respondents. Only
after being confronted did be correct himself and say only 100
interviews were completed. Third, Trappey never explained to the
jury the difference between interviews and completed interviews.
This shows that he intended the jury to think he received data from
over 500 companies. Finally, Trappey’s comments to Rosha indicate
that he knew he misled the jury when he said he performed over 500
interviews.
It is likely that Trappey is correct in distinguishing between
interviews and completed interviews. That is not the issue,
though. What matters is that Trappey intentionally misled the
jury, leading it to think that he had actually received information
from 500 people, when he had only received information from 100
people. The district court determined that Trappey intentionally
misled the jury regarding the number of interviews conducted. The
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district court observed the second trial, as well as the Rule 60(b)
hearing, and was in a better position to determine the credibility
of the witnesses and the harmful effect of Trappey’s testimony.
After reviewing the record, we cannot say that the district court’s
finding of perjury was clearly erroneous.
Choina argues that the district court erred in granting Rule
60(b) relief because DuPont failed to seek a continuance after
learning of Trappey’s perjury. We disagree. Rule 60(b)(6) motions
are appropriate to remedy fraud by a third-party witness.4 11
WRIGHT, MILLER & KANE, FEDERAL PRACTICE & PROCEDURE § 2864 at 352-53 (1995)
(“WRIGHT & MILLER”). The Supreme Court has stated that Rule 60(b)(6)
relief is appropriate only in extraordinary circumstances.
Ackermann, 304 U.S. at 199; see also Batts v. Tow-Motor Forklift,
Co., 66 F.3d 743, 747 (5th Cir. 1995), cert. denied, 116 S. Ct.
1851 (1996). We have said that the district court’s Rule 60(b)(6)
powers do not provide relief when a party could have, but did not,
present evidence at trial. See Government Financial Services v.
Peyton Place, Inc., 62 F.3d 767, 774 (5th Cir. 1995) (“[W]e have
expressly held that a district court's equitable powers under
section (b)(6) do not extend to considering evidence that could
have been presented at trial.” ); United States v. 329.73 Acres of
4
Rule 60(b)(3) allows relief from judgments when there is
fraud by a party. Wright and Miller have noted that Rule 60(b)(6)
provides similar relief when, as in the instant case, the fraud is
not by a party but by a third-party witness. WRIGHT & MILLER § 2864
at 353 n.8.
9
Land, 695 F.2d 922, 926 (5th Cir. 1983) (“This clause of the Rule
provides a grand reservoir of equitable power to do justice in a
particular case, but that well is not tapped by a request to
present evidence that could have been discovered and presented at
trial through the exercise of due diligence.”) (internal quotation
omitted); WRIGHT & MILLER § 2864 at 370 (Rule 60(b)(6) motion should
be denied when “the movant made a fair and deliberate choice at
some earlier time not to move for relief.”).
After reviewing the record, we are convinced that DuPont took
appropriate steps after learning of Trappey’s perjury. DuPont
learned that the computer printout contained duplications only
hours before Trappey testified. Rather than seeking a continuance,
DuPont chose to vigorously cross-examine Trappey on the duplica-
tions. Given the circumstances of this case, we cannot say that
DuPont waived its right to Rule 60(b)(6) relief by not seeking a
continuance and instead cross-examining Trappey about his perjury.
DuPont’s choice to try and expose the perjury and hope the jury
disbelieved the witness is not the complete failure to present
evidence of which the Peyton Place Court spoke. Peyton Place, 62
F.3d at 774.
Sanctions
The district court sanctioned Choina by (1) tolling pre-
judgment interest between the second and third trials and (2)
10
awarding DuPont reasonable costs incurred because of Choina’s new
marketing expert. Choina argues that the prejudgment interest
tolling was inappropriate because it gave DuPont a windfall.
During the time between the two trials, DuPont kept the money it
ultimately paid Choina, earning interest the whole time. Any
increase in prejudgment interest because of the delay did not harm
DuPont, because the interest was money it would not have earned but
for the delay. Choina contends that the award of costs is improper
because it is not justified under 28 U.S.C. § 1920 (the costs
statute) or Rule 54.
A district court has inherent power “to manage [its] own
affairs so as to achieve the orderly and expeditious disposition of
cases.” Natural Gas Pipeline Co. v. Energy Gathering, Inc., 2 F.3d
1397, 1406 (5th Cir. 1993) (quoting Link v. Wabash R. Co., 370 U.S.
626, 630 (1962)), cert. denied, 510 U.S. 1073 (1994). We have
recognized that district courts’ inherent power “is not a broad
reservoir of power, . . . but a limited source. . . .” NASCO, Inc.
v. Calcasieu Television & Radio, Inc., 894 F.2d 696, 702 (5th Cir.
1990), quoted with approval and aff’d, 501 U.S. 32, 42 (1991).
Nonetheless, we are persuaded that the district court did not abuse
its discretion in sanctioning Choina under its inherent power by
tolling the running of pre-judgment interest and awarding DuPont
its costs incurred because of Choina’s new marketing expert.
11
Mitigation of Damages
In its charge in the third trial, the district court asked the
jury whether Choina failed to mitigate his damages. The jury
answered in the affirmative, lowering the verdict by 10%. Choina
argues that the district court erred in including an instruction
and interrogatory on mitigation, because there is no evidence in
the record of failure to mitigate.
Choina also complains that the district court erred in using
a comparative fault method of determining mitigation. Specifically
the district court inquired as to “what percentage [did the jury]
find that the damages . . . were caused by the plaintiff’s failure
to mitigate his damages. . . .” The proper inquiry, Choina
contends, is by what dollar amount he failed to mitigate. Choina
cites no law for this proposition.
When reviewing jury instructions, we examine whether the
charge as a whole creates substantial doubt as to whether the jury
has been properly guided in its deliberations. See Davis v.
Avondale Indus., Inc., 975 F.2d 169, 174-75 (5th Cir. 1992). After
reviewing the record, we have no such doubt. DuPont presented
evidence of Choina’s failure to mitigate damages, and under
Louisiana law contract damages are to be reduced for failure to
mitigate. See Stanley v. Guy, 442 So.2d 579, 581 (La. Ct. App.
1983).
Likewise, the district court did not err in using a percentage
12
rather than a dollar amount in its failure to mitigate
interrogatory. Under Louisiana law, failure to mitigate is the
equivalent of comparative fault. See Thibaut v. Thibaut, 607 So.2d
587, 614 (La. Ct. App. 1992) (Gonzales, J., concurring) (“Mitiga-
tion of damages is the functional equivalent of comparative fault
within the framework of a damage claim for breach of contract.”).
Therefore, a percentage decrease in recovery is not inappropriate.
Additionally, once the jury has found damages, there is no
real difference between asking that the jury find a specific dollar
amount as opposed to a percentage of a known amount. After the
jury had determined that damages were $140,000, its finding that
the damages resulting from failure to mitigate were 10% of $140,000
was the same as the jury finding that the damages resulting from
the failure to mitigate were $14,000. The only difference is who
performs the mathematical calculation, the judge or the jury.
CONCLUSION
After reviewing the record and briefs, we are convinced that
the district court committed no reversible error. Accordingly, the
judgment of the district court is AFFIRMED.
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