In the
United States Court of Appeals
For the Seventh Circuit
Nos. 09-2646 & 09-2812
T HE S MART M ARKETING G ROUP INC.,
Plaintiff-Appellee/
Cross-Appellant,
v.
P UBLICATIONS INTERNATIONAL L TD.,
Defendant-Appellant/
Cross-Appellee.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 04 C 146—Joan B. Gottschall, Judge.
____________
A RGUED A PRIL 7, 2010—D ECIDED O CTOBER 28, 2010
____________
Before W OOD , E VANS, and SYKES, Circuit Judges.
W OOD , Circuit Judge. Online commerce has ballooned in
importance over recent years, and it is no surprise that
automobile dealers are among those who are interested in
exploiting its possibilities. This case, brought under the
diversity jurisdiction, involves an effort by two companies
to develop programs that would deliver location-specific,
2 Nos. 09-2646 & 09-2812
brand specific, internet sales leads to auto dealers. Publica-
tions International Ltd. (“Publications”) ran a website that
collected the raw sales leads, and Smart Marketing Group
(“Smart”) promised to develop programs that would
market that information to auto dealers. Unfortunately,
things did not go as planned. Publications terminated the
agreement, and Smart sued for breach of contract. A jury
saw things Smart’s way and awarded it $5.6 million in
damages. Given the deference we owe to the jury, we
refrain from disturbing its verdict on liability. Its damages
award, however, finds such slim support in the evidence
that we conclude that there must be a new trial limited to
damages.
I
In an effort to get a good buy on a new car, millions of
Americans now turn to the web in search of free price
quotes from local dealers. Publications for some time has
run a popular website, called ConsumerGuide.com, that
furnishes these quotes. Its website is based on a well-
established automotive guide. Provision of these quotes
has been profitable for Publications, because the quotes
generate sales leads that can be sold to wholesalers, who in
turn sell them to auto dealers. In 2003, Publications de-
cided that it could earn more from its leads if it cut out
the middlemen and sold directly to the dealers. In order to
carry out this plan, it hired Smart to market its leads.
Smart’s two principals, Michael Welch and William
Magarity, had extensive experience selling conventional
leads and other promotions to car dealers, but neither had
much familiarity with internet leads.
Nos. 09-2646 & 09-2812 3
Initially, Publications and Smart developed two separate
programs that Publications planned to sell to auto dealers
nationwide. The first was called the Approved program; it
involved selling dealers the right to be designated as a
Consumer Guide Approved Dealership. This designation
was supposed to entitle the dealer to use the Consumer
Guide logo, to advertise in Consumer Guide’s print
publications and on its website, to display a plaque in the
showroom, and to obtain 40 vehicle-history reports per
month. The other program was called Leads & Listings;
in principle, it was supposed to exploit the internet more
effectively. The parties planned that each member dealer-
ship would receive an average of 16 location-specific,
brand-specific internet leads per m onth from
ConsumerGuide.com. A standard Leads & Listings con-
tract was supposed to last for 12 months, although in
practice it turned out that some dealers preferred shorter
terms, and it appears that their wishes were respected.
The parties executed two temporary agreements
in March and July 2003, under which Smart began actively
selling both programs to dealers. To hear Publications
tell the story, the Approved program was a dud. Smart
began selling the program to dealers on a commission
basis after the March agreement was executed, but
the dealers did not like it. Publications says that it took
too long for a dealership ad to appear in the bi-monthly
Consumer Guide magazine, the dealers received paper
certificates rather than wooden plaques, and worst,
the dealers were not getting any leads. Many dealers
demanded refunds, which they received, and Smart’s
sales of Approved contracts fell off sharply, down to
4 Nos. 09-2646 & 09-2812
five in July, eight in August, two in September, and none
in October and November.
Still according to Publications, this put pressure on the
parties to launch the Leads & Listings program quickly. In
the July 2003 agreement, the parties decided to begin
marketing the Leads & Listings program, which was set to
become operational sometime in the fall. Smart was also to
be paid on a commission basis under this program. Be-
tween late July and November 2003, Smart sold 428 Leads
& Listings contracts; the contracts had varying terms and
durations ranging from monthly to annual.
Smart’s account of this early stage of the business reflects
a different tone. The March 2003 agreement engaged Smart
to sell the Approved program plus two others that were
never launched. Publications was entitled to cancel the
agreement for cause if Smart failed to enroll 240 dealers by
March 31, 2004. Smart asserts that it had great success
selling the Approved program. It had nearly 50 dealers
enrolled by the end of April, and it added another 30 in
May. By the end of June it had signed up 113 dealers and
was on track to meet the contractual goal. Smart concedes
that the dealers were grumbling about the program; in
Smart’s view, however, this was because Publications was
not delivering what it had promised: dealers enrolled
between March and May did not receive their “welcome”
kit from Publications until early June; instead of plaques
they got paper certificates; and their ads did not appear in
the Consumer Guide magazine until October.
Smart recounts that the parties had delayed the Leads &
Listings program while Publications worked on software
Nos. 09-2646 & 09-2812 5
designed to distribute the leads. By July, however, they
decided to put the Approved program on hold and to focus
their efforts on launching Leads & Listings. Smart was to
contact Approved dealers first and offer them a discount if
they agreed to participate in the Leads & Listings program.
As of July 25, 2003, Smart was authorized to begin selling
Leads & Listings contracts to dealers. A performance
clause in the agreement required it to enroll an average of
30 dealers per month, for minimum monthly fees of $295 to
$495 depending on the dealer’s size. Smart enrolled over
100 dealers in the program by August 30. It continued to
enroll dealers, while at the same time the parties attempted
to negotiate a more permanent contract.
By the end of September, Publications had still not
finalized the necessary software that was to deliver the
promised leads. It asked Smart to limit new contracts to
125 per month; Smart complied with that request. It signed
114 new dealers in October and another 51 by mid-Novem-
ber. All was not well, however. Smart was having trouble
getting paid for its efforts, and the parties could not agree
on the compensation due for contracts that were converted
from the Approved program to Leads & Listings. On
October 21, Publications admitted that it owed Smart
roughly $120,000. On October 24 the parties signed a two-
year contract in which Publications agreed to have Smart
sell both programs to dealers. That contract declared all
prior agreements “null and void and superseded and
replaced in full” by the October agreement. The October
agreement included a commission schedule and provisions
on termination. It allowed Publications to terminate the
arrangement for cause if Smart misrepresented the Con-
6 Nos. 09-2646 & 09-2812
sumer Guide or its programs, if Smart engaged in business
practices “that Consumer Guide in its sole judgment may
negatively impact the Consumer Guide brand [sic],” or the
attrition rate in any program exceeded 10% per month
prior to the third month’s bill.
Very soon after that agreement was signed, Publications
decided to pull the plug on the entire relationship with
Smart. Publications had not figured out how to deliver the
promised leads, and the gap between its promises and its
ability to fulfill them had become too wide. Its president,
Richard Maddrell, had his lawyer write a letter to Smart on
November 18 telling Smart that Publications was terminat-
ing the October agreement. The letter relied on each of the
three reasons noted in the October agreement: it said that
Smart had misrepresented Consumer Guide’s programs;
that Smart had engaged in practices that had a negative
effect on the Guide; and that the attrition rate was in excess
of 10% per month. The letter offered no explanation for
these conclusions. Publications finally succeeded in
bringing its software up to snuff in mid-December 2003.
It contracted in mid-2004 with a different sales force to sell
a similar leads-distribution program to auto dealers.
Publications continued servicing auto dealers with leads
until late 2005, when it sold the Consumer Guide automo-
tive business.
II
Displeased with its termination, Smart filed this suit in
the district court on January 9, 2004. Smart is incorporated
in California and has its principal place of business in that
Nos. 09-2646 & 09-2812 7
state; third-party defendants Michael Welch, William
Magarity, and Paul West, who are all affiliated with Smart,
are also citizens of California. Publications is part of a
chain of companies that begins with Consumer Guide LLC,
a limited liability company. The sole member of Consumer
Guide is PIL New Medial LLC; the latter’s sole member is
PIL E-Commerce LLC; and E-Commerce’s sole member is
Publications International Ltd., which is a corporation
incorporated and with its principal place of business in
Illinois. The amount in controversy exceeds $75,000, and so
the district court had jurisdiction over the case under 28
U.S.C. § 1332.
Smart’s amended complaint accused Publications (and
Consumer Guide, which we do not need to address
separately) of breaching its contract with Smart in three
different ways; it also included one count of fraud and
duress, and two quasi-contract counts. Publications filed
counterclaims and cross-claims, but those have dropped
out of the case by this time. The district court ruled on
September 11, 2008, that the October agreement was valid
and enforceable, and that this rendered the earlier agree-
ments of no moment. It therefore dismissed Smart’s claims
alleging breach of the March and July agreements; it
retained Smart’s claims alleging a right to commissions on
a quasi-contract basis for work done before the October
agreement. The court rejected Publications’s argument that
it was entitled to cancel the October agreement, ruling
instead that the contractual right to terminate had to be
exercised in good faith, and whether Publications had done
so was a jury issue.
8 Nos. 09-2646 & 09-2812
On that basis, the case proceeded to trial. The central
question, given the earlier rulings, had to do with Smart’s
damages. Smart was asking for lost profits of approxi-
mately $8.8 million. It relied on an accounting expert,
Martin Birnbaum, to support that number. Birnbaum
reviewed each of the 555 dealer contracts that Smart had
sold and summarized their terms in a spreadsheet. Using
that information, Birnbaum then projected the profits that
Smart would have earned over the remainder of the two-
year term of the October agreement. He assumed that
Smart would have enrolled 37 Approved and 110 Leads &
Listings dealers each month, less attrition of 2% and 1%
respectively. He also assumed that there would be a 25%
annual increase in the number of leads available.
Publications contested Birnbaum’s qualifications as an
expert. The court agreed that Birnbaum had no firsthand
knowledge of the automotive industry, and so he knew
nothing special about attrition and renewal rates for
contracts like the ones Smart was selling. Birnbaum
conceded that he had relied for that information on Smart’s
founders, Welch and Magarity, and that he did not know
whether their estimates were typical in the industry. The
court ruled that he was not qualified to render an expert
opinion on the final damages figure, but it permitted him
to explain his spreadsheet so that the jury would under-
stand how Smart arrived at its lost profits figure.
Publications called two experts at trial. The first, Dillon
MacDonald, was presented as an expert in the business of
marketing to car dealers. His past experience was thin, but
the court allowed him to testify that Birnbaum’s assump-
Nos. 09-2646 & 09-2812 9
tions were unreasonable and that it was not possible for the
Consumer Guide website to produce enough leads to
provide a dealer with an average of 16 targeted leads per
month. Smart criticized MacDonald for badly underesti-
mating the number of visitors to Consumer Guide’s
website and for failing to take into account the possibility
that Publications might purchase additional leads on the
wholesale market. Publications’s second expert was Jeffrey
Katz, an accountant. Katz adjusted Birnbaum’s calculations
to reflect what he regarded as more realistic assumptions:
no sales of the Approved program, 35 sales per month of
Leads & Listings, and attrition of 10% enrolled dealers per
month. Katz also assumed that dealers would enroll in
only one of the two programs.
The jury found that Publications breached the October
agreement when it terminated Smart in November 2003,
and that Smart was entitled to recover lost profits of
$5,612,500. After the verdict was entered, Smart moved for
prejudgment interest under the Illinois Interest Act, 815
ILCS 205/2. The district court, citing First National Bank of
LaGrange v. Lowrey, 872 N.E.2d 447, 479 (Ill. App. Ct. 2007),
denied the motion on the ground that the amount owed
was not a fixed or easily calculated amount due. Publica-
tions then moved for judgment as a matter of law pursuant
to Federal Rule of Civil Procedure 50(b), or in the alterna-
tive for a new trial or remittitur of damages under Rule 59,
arguing that the evidence did not support the verdict of
liability or the damages awarded for lost profits. The court
denied those motions. Publications has appealed on both
points, and Smart has cross-appealed from the denial of its
motion for prejudgment interest.
10 Nos. 09-2646 & 09-2812
III
Logically, the first question is whether there is any
reason to upset the jury’s finding that Publications
breached the October agreement when it informed Smart
on November 18, 2003, that it was canceling the deal. We
do not need to concern ourselves with that, however,
because Publications has limited its arguments on appeal
to the damages issue. On the latter point, Publications
offers two general arguments: first, that Smart’s case was
so deficient that the district court erred by denying its
motion under Rule 50(b); second, that the damages award
rested on such shaky ground that a new trial on damages
is necessary. We address these points in turn.
A
Under Illinois law, which applies to this case, Smart had
the burden of presenting to the jury sufficient evidence on
which to determine the amount of its lost profits to a
reasonable degree of certainty. Chicago’s Pizza, Inc. v.
Chicago’s Pizza Franchise Ltd. USA, 893 N.E.2d 981, 994
(Ill. App. Ct. 2008). While courts do not ask for mathemati-
cal precision, they demand more than conjecture or
speculation to support the jury’s award. In re Estate of
Talty, 877 N.E.2d 1195, 1207 (Ill. App. Ct. 2007). Normally,
an established business is able to satisfy its evidentiary
burden by providing data about its past profits. Tri-G,
Inc. v. Burke, Bosselman & Weaver, 856 N.E.2d 389, 407
(Ill. 2006). New businesses have more trouble coming up
with hard evidence, though they are entitled to try. As
the Supreme Court of Illinois has observed, “Generally
Nos. 09-2646 & 09-2812 11
speaking, . . . courts consider evidence of lost profits in a
new business too speculative to sustain the burden of
proof.” Id. Even with these favorable legal rules, however,
Publications faces a difficult task. Only if we are con-
vinced, after looking at all of the evidence in the record,
that there was not enough to support the jury’s
verdict may we find that Publications was entitled as
a matter of law to a ruling that damages were not estab-
lished. Tate v. Exec. Mgmt. Servs., Inc., 546 F.3d 528, 532
(7th Cir. 2008).
One preliminary question is whether the venture be-
tween Publications and Smart falls within the category of
“new businesses” at all. Publications had been supplying
internet leads to car dealers through middlemen, and
Smart’s principals had experience with conventional
(i.e., non-web-based) promotions for car dealers. Neither
side had ever engaged in an enterprise that wedded
these two elements. The record leaves no doubt that
the web-based element of the program was critical. Publi-
cations points out that the Leads & Listings program
depended on the ability of the Consumer Guide website
to generate enough leads to satisfy the average dealer’s
entitlement to 16 leads per month. The hard part was
to develop a software program that would eliminate
false leads, such as those with incorrect contact informa-
tion, and then sort the remaining leads by geography
and car-make. Publications initially looked into purchas-
ing software from a middleman it had been using,
Dealix, but it ultimately chose to develop its own product
(and in the course of doing so failed to meet several
deadlines). We are satisfied that the evidence readily
12 Nos. 09-2646 & 09-2812
supports the application of the “new-business” rules to
this arrangement.
Much of the evidence tended to show how difficult it
is to predict how successful the parties’ venture would
have been. Publications’s problems with the software
affected not only the Leads & Listings program, but also
the Approved program. Some evidence indicates that the
dealers did not want the Approved program without
internet leads. Apparently there were no dealers in the end
who chose to participate only in the Approved program,
once Leads & Listings was available. There must have been
some independent value to the Approved program,
however, because 77 dealers remained in it after they
signed up for Leads & Listings.
The efforts that Smart had made before the October
agreement was signed are inconclusive, because all of this
work was done before the software was ready in December
2003. Smart had to prove what its profits would have been
from the date of the breach, November 18, 2003, until the
contract expired in October 2005. The record is sorely
lacking in concrete proof of that number. Neither party
appears to have been able to track down the number of
leads actually generated during the contract period (recall
that Publications wound up selling leads through a third
party). Their estimates are not based on anything obvious
and they vary widely: Publications thought it was about
5,000 leads per month, and Smart thought it was some-
where between 10,000 and 40,000 per month. These num-
bers, however, are just guesses. And they seem to be
guesses about gross numbers of leads, not the number that
Smart in the end could have sold to dealers.
Nos. 09-2646 & 09-2812 13
Without an established inventory of leads in hand, ready
to be sold, both parties’ forecasts are at best predic-
tions—more or less optimistic—comparable to those that
courts have seen in other start-up cases. See, e.g., Drs.
Sellke & Conlon, Ltd. v. Twin Oaks Realty, Inc., 491 N.E.2d
912, 916-17 (Ill. App. Ct. 1986) (holding that a doctor could
not recover lost profits related to the delayed opening
of his new office); see also Mindgames, Inc. v. Western
Publishing Co., 218 F.3d 652, 658-59 (7th Cir. 2000) (rejecting
a claim for lost profits in connection with sales of a new
board game). Given the fact that both parties’ projections
of leads necessarily depended on Publications’s successful
development and deployment of the sorting software,
Publications argues that this case is no different from
Computrol, Inc. v. Newtrend, L.P., which also happened to
be governed by Illinois law. 203 F.3d 1064, 1070 (8th Cir.
2000). In Computrol, the Eighth Circuit found that the
plaintiff’s estimates of likely profits from a new software
program were too speculative to satisfy Illinois law. It was
influenced in this holding by the fact that the party claim-
ing breach of contract had assumed that the program
would be ready to use on schedule, even though there
already had been delays in its development. Id. at 1071.
Publications points out that other courts similarly have
been resistant to awarding lost profits for new businesses
that rely on cutting-edge technology. See, e.g., Trademark
Research Corp. v. Maxwell Online, Inc., 995 F.2d 326, 333
(2d Cir. 1993) (holding that lost profit estimates for CD-
ROM sales were too speculative when the CD-ROM
database technology had never been implemented in the
trademark field).
14 Nos. 09-2646 & 09-2812
Smart counters that the general concept for the business
that the parties were trying to establish was far from new
in the market—many other wholesalers had already
perfected the process of sorting internet leads. Moreover,
it says, neither the Approved program nor the Leads &
Listings program were the kind of new business venture
that has concerned Illinois courts. Smart had been promot-
ing both programs for many months by the time the
October agreement was signed, and it had already built up
a track record with the 428 Leads & Listings contracts it
had sold. Publications notes that Smart’s records reveal
that it actually lost $475,805 during its relationship with
Publications; there is no evidence that the deal would have
become profitable after mid-November 2003. (Many new
business ventures fail, after all; evidence is necessary
before a court can conclude that any particular one would
have been successful.) But Smart responds that these
figures represented start-up costs, not losses, and that even
those expenses would have been smaller had Publications
paid the commissions that it owed.
In the end, one cannot escape the conclusion that Smart’s
sale of 428 Leads & Listings contracts represented only pre-
orders for future, hoped-for leads. Those projections rested
on the available evidence of the predictable number
of monthly leads. MacDonald, one of the experts called
by Publications, conceded that the website produced about
5,000 leads per month in 2005. Publications had been
selling the leads on the wholesale market to Dealix and
Info4Cars for some time. Smart reasons that this number
represents proven market demand for the leads, and that
this in turn shows that this was an established market, not
Nos. 09-2646 & 09-2812 15
a new one. See Milex Prods., Inc. v. Alra Labs., Inc.,
603 N.E.2d 1226, 1237 (Ill. App. Ct. 1992) (concluding that
lost profits were reasonably certain where evidence
showed that a new product had an established market).
Even if we thought that the price of the internet leads
was established, Smart would still need to show how
successful it would have been in selling those leads to car
dealers. Its evidence on this point fell short. Welch based
his estimate of the number of leads Smart could sell to
dealers in part on his experience selling Consumer Guide
in 2001, but he did not provide any hard data from compa-
rable firms to corroborate his calculation. We cannot find
any place where Smart even estimated the ratio of whole-
sale leads to retail sales. The most we see is the conserva-
tive estimate advanced by Publications, which is based on
MacDonald’s testimony that Smart might be able to sell
dealers 350 leads out of an inventory of 5,000. But even this
estimate is problematic, largely because it was not contem-
poraneous. It was based instead on MacDonald’s experi-
ence with Consumer Guide 18 months after Publications
canceled the contract.
There are other reasons, too, why MacDonald’s testi-
mony does not provide the necessary precision. When his
firm sold leads to dealers, it appears to have bundled the
Consumer Guide leads with leads drawn from 180 other
websites; only in that way could a dealer be sure of receiv-
ing 33-34 leads per month. There is no evidence that
dealers would want to receive only the two to three leads
that MacDonald estimated Smart would have been able to
deliver. Compare TAS Distributing Co., Inc. v. Cummins
16 Nos. 09-2646 & 09-2812
Engine Co., Inc., 491 F.3d 625, 635-36 (7th Cir. 2007) (ex-
plaining that it was speculative under Illinois law for a
plaintiff to compare its sales to those of a third party
selling a slightly different product). Thus, while Smart
might have shown that dealers were eager to sign up for a
Leads & Listings contract promising 16 leads per month, it
has not demonstrated that the same dealers would have
wanted a contract that delivered only two or three leads
per month.
Publications insists that any assessment of Smart’s
damages requires heaping one speculative inference on
another, and another, and another. To calculate damages,
the jury had to assume first that Publications’s software
would work properly, next that it would produce the
promised number of leads for enough dealers, and finally
that Smart would be able to sell these leads to the dealers.
The evidence of Smart’s past profits was predicated on its
projections about the likely inventory of leads, but these
predictions were unreliable. The jury’s task would have
been easier if either party had provided solid evidence of
other closely analogous businesses, but they did not. That
said, we are reluctant to treat this as a case in which the
court erred by sending the matter to the jury at all. It is
conceivable that the evidence taken as a whole might have
supported some level of damages for Smart. Rather than
engaging in conjecture ourselves about what that number
might have been, however, we prefer to say only that we
find no error in the court’s denial of Publications’s Rule
50(b) motion for judgment as a matter of law, and to move
on to its motion for a new trial on damages under Rule 59.
Nos. 09-2646 & 09-2812 17
B
In our view, Publications has succeeded in showing that
the jury’s verdict was excessive, and thus that it is entitled
to a new trial limited to damages. The question whether
the jury’s damages award was excessive is controlled by
Illinois law, and we review the district court’s ruling on
Publications’s Rule 59 motion for an abuse of discretion.
Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 418-19
(1996); Shick v. Illinois Dept. of Human Servs., 307 F.3d
605, 611 (7th Cir. 2002); Briggs v. Marshall, 93 F.3d 355, 360
(7th Cir. 1996). A district court is entitled to find that an
award is unsupported by the evidence and thus that a
motion for a new trial under Rule 59 should be granted,
even if there was enough evidence in the record to justify
sending the issue to the jury in the first instance (a finding
that would require denial of a motion for judgment as a
matter of law under Rule 50). See 9B C HARLES A LAN
W RIGHT & A RTHUR R. M ILLER, F EDERAL P RACTICE AND
P ROCEDURE § 2531, at 65-67 (2d ed. 1995).
In Illinois, “[a]n award of damages will be deemed
excessive if it falls outside the range of fair and reasonable
compensation or results from passion or prejudice, or if it
is so large that it shocks the judicial conscience.” Best v.
Taylor Mach. Works, 689 N.E.2d 1057, 1079 (Ill. 1997)
(internal quotation marks omitted). Publications first
attempts to satisfy this standard with the argument that
the district court should have disregarded some of the
evidence on which the jury was permitted to rely. We
are not persuaded, however, that the district court erred
when it allowed the jury to hear evidence about the parties’
18 Nos. 09-2646 & 09-2812
course of dealing before the October 2003 agreement
was concluded. Smart wanted to use this evidence to
estimate what Publications’s commission payments to it
would have been if Publications had not breached. Publica-
tions is on somewhat firmer ground when it objects that
Welch and Magarity (Smart’s principals) improperly
offered lay testimony about their projections for the
attrition and renewal rates for the two programs. Neither
one was basing his estimates on his own experience in the
day-to-day affairs of the (new) business. See Von der Ruhr
v. Immtech Int’l, Inc., 570 F.3d 858, 862-65 (7th Cir.
2009) (excluding a business owner’s testimony about
marketing a new drug because he had little personal
experience with the process). It is difficult to say, however,
how much this testimony harmed Publications. Welch’s
and Magarity’s estimates were the only foundation for
Smart’s damages model, but the jury did not accept that
model in its entirety. Instead, the jury awarded 64% of
Smart’s requested $8.8 million. How it came up with that
discount rate is unclear.
Indeed, the record is sorely lacking in evidence that
would have supported such a high estimate of Smart’s
damages. There were numerous weaknesses in Smart’s
case: Welch and Magarity were starting up a new internet
business for which they had little to no relevant prior
experience; Smart had no solid evidence about the number
of leads that the Consumer Guide website was producing;
and Smart did not provide reliable evidence about the ratio
of wholesale leads to retail sales. Smart has no answer to
these problems apart from its insistence that it had a
proven track record of sales for the two programs during
Nos. 09-2646 & 09-2812 19
the period before the October agreement and before the
breach. But, as Smart itself admits while discussing a
different point, almost all of those sales were made in
contemplation of a future program, and the dealers were
becoming frustrated by Publications’s failure to deliver
what it had promised. Smart was not going to earn much
if Publications continued to struggle with its software or if
the website proved incapable of delivering approximately
16 leads per month. Publications itself might have fallen
into the trap of taking too rosy a look at its prospects; there
is no evidence suggesting that the Consumer Guide
website would produce anything more than 10,000 leads a
month, which is nowhere near the 40,000 leads that Smart
projected. And, it is worth repeating, these leads had to be
converted into information tailored to each dealer’s
location and brand of auto.
We conclude that this damage award fell so far outside
anything the evidence might have supported that the
district court abused its discretion in refusing to order a
new trial on damages.
IV
The only question that remains is Smart’s cross-appeal on
the issue of prejudgment interest. Although this is no
longer directly relevant, given our decision to set aside the
damages verdict, we will say a word about it since the
same question is likely to arise again.
Publications complains that Smart filed its motion too
late and thus forfeited this issue, but we do not read the
20 Nos. 09-2646 & 09-2812
rules that rigidly. Rule 59(e) motions for prejudgment
interest must be filed before judgment is entered, First
State Bank of Monticello v. Ohio Cas. Ins. Co., 555 F.3d
564, 572 (7th Cir. 2009), and Smart complied with this rule
(even though it did not submit the motion before the jury
rendered its verdict). See Osterneck v. Ernst & Whinney, 489
U.S. 169, 175-76 (1989). The district court thus correctly
reached the merits of Smart’s motion.
In Illinois, plaintiffs may be entitled to prejudgment
interest for contractual damages if the damages are
“subject to easy computation.” Oldenburg v. Hagemann,
565 N.E.2d 1021, 1029 (Ill. App. Ct. 1991). Everything we
have said thus far demonstrates why this case fails to meet
that standard. See also Cushman & Wakefield of Illinois,
Inc. v. Northbrook 500 Ltd. Partnership, 445 N.E.2d 1313,
1321 (Ill. App. Ct. 1983) (denying prejudgment interest on
damages award for lost future commissions). The district
court committed no error, clear or otherwise, when it
rejected Smart’s request.
* * *
The judgment of the district court on liability was not
challenged on appeal, and so we do not disturb it. The
judgment on damages, however, is V ACATED and the case
is R EMANDED for further proceedings consistent with this
opinion.
10-28-10