Alphamed, Inc. v. B. Braun Medical, Inc.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
April 30, 2004
No. 03-13266 THOMAS K. KAHN
CLERK

D. C. Docket No. 98-01360 CV-CAM-1

ALPHAMED, INCORPORATED,
Plaintiff-Counter-
Defendant-Appellant,
Cross-Appellee,

versus

B. BRAUN MEDICAL, INC.,
MCGAW, INC.,
Defendants-Counter-
Claimants-Appellees,
Cross-Appellants.

Appeals from the United States District Court
for the Northern District of Georgia

(April 30, 2004)

Before DUBINA and HILL, Circuit Judges, and OWENS*, District Judge.
_________________________
*Honorable Wilbur D. Owens, Jr., United States District Judge for the Middle District of
Georgia, sitting by designation.
DUBINA, Circuit Judge:

After three jury trials and more than five years of heated litigation in this

Georgia contract dispute, Appellant/Cross-Appellee Alphamed, Inc. (“Alphamed”)

appeals from the district court’s amended entry of judgment, following a jury

verdict in Alphamed’s favor, in which the district court reduced the judgment to

preclude Alphamed from recovering overhead costs that Alphamed never incurred,

and reduced Alphamed’s award of prejudgment interest. Appellees/Cross-

Appellants B. Braun Medical, Inc. and McGaw, Inc.1 (collectively “Braun”) also

appeal on the ground that the district court erred in concluding that the law of the

case doctrine precluded it from granting Braun’s motion for judgment as a matter

of law. In the alternative, Braun contends that the district court should have

permitted the jury to calculate the “gross revenues” portion of Alphamed’s

contractual damages and Alphamed’s prejudgment interest. For the reasons that

follow, we affirm the district court’s entry of judgment in all respects.

I. FACTS AND PROCEDURAL HISTORY

In September 1995, the parties entered into an agreement for the

manufacture and sale of ambulatory infusion pumps (the “Agreement”), which

obligated Alphamed to produce 7,600 pumps over a four-year term, and to sell

1
B. Braun Medical, Inc. acquired McGaw, Inc. in 1997.

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them to Braun at fixed prices. Unsure of its ability to comply with the terms of the

Agreement, Alphamed bargained for a default provision with a broad cure right

that precluded Braun from terminating the Agreement in the event of Alphamed’s

default unless Alphamed failed to take “steps” to cure the default, which were to

Braun’s reasonable satisfaction, within thirty days of notice of default.

After more than two years of delays, Alphamed had not produced a single

marketable pump, and the parties’ relationship began to deteriorate. The few

pumps that Alphamed produced regularly suffered from serious infirmities and

regularly failed Braun’s quality assurance protocols. In December 1997, Braun

sent Alphamed a notice of default, alleging that Alphamed had failed to supply

pumps within the time frame specified in the Agreement. While Braun assured

Alphamed that it intended this notice of default to serve as a “wake up call,” and

withdrew it shortly thereafter, Braun sent Alphamed a second default notice in

February 1998, and rejected Alphamed’s efforts to cure the default. In March

1998, Braun terminated the Agreement.

In April 1998, Alphamed commenced this breach of contract action in a

Georgia superior court. Braun removed the case on the basis of diversity and

asserted a counterclaim for the return of a $2 million deposit that it had paid to

Alphamed upon the execution of the Agreement. Following extensive discovery,

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the district court referred the case to a special master for an evidentiary hearing.

After a two-week hearing, the special master found that Braun had rightfully

terminated the Agreement and was entitled to the return of its $2 million deposit.

During the first of the three jury trials, the district court reduced the liability

issues presented in the case to three questions, which it submitted to the jury as

special interrogatories: (1) whether Alphamed was in substantial compliance in

February 1998, when Braun served its second notice of default; (2) if not, whether

Alphamed initiated steps to cure within the 30-day period following the notice of

default; and (3) if so, whether Braun was unreasonable in deciding that Alphamed

had not initiated reasonably satisfactory steps to cure its default within the 30-day

period. The jury found that Alphamed was in substantial compliance when Braun

served its second notice of default and, therefore, did not proceed to questions two

and three. The jury awarded Alphamed $4.4 million in damages.

After the first trial, Braun moved for judgment as a matter of law and,

alternatively, for a new trial. The district court granted this motion in August

2001, vacating Alphamed’s judgment and entering judgment for Braun in the

amount of $1.85 million. The district court further granted Braun’s motion for a

new trial in the event of vacatur on appeal after concluding that “the verdict was

most probably due to the seriously improper closing argument by plaintiff’s

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counsel,” Ben F. Easterlin IV. During the rebuttal portion of his closing argument,

Easterlin was determined to introduce evidence of the pump’s safety by

demonstrating that he was personally willing to hook himself up to the pump.

Even after the district court instructed him, then admonished him, not to introduce

such evidence, Easterlin stated during his rebuttal that “[i]f this were not a safe

pump, would I risk the future of my wife and three children by hooking myself up?

This was a quality pump.”

On appeal, we reversed the district court’s entry of judgment as a matter of

law. Alphamed, Inc. v. B. Braun Med., Inc., No. 01-14662 (11th Cir. Sept. 30,

2002) (“Alphamed I”). In doing so, we stated that judgment as a matter of law

would only have been appropriate in this case if there was no evidence sufficient

to sustain a jury’s verdict on any of the three special interrogatories. Id., at *10

(“To find as a matter of law for Braun, . . . there must be no substantial evidence to

support either the jury’s verdict or its potential verdict for Alphamed as to [special

interrogatories] two and three.”). While we commented that “[i]t appears that

substantial evidence exists to support the determination of ‘substantial

compliance’ by the jury,” we concluded that the sufficiency of evidence

supporting the jury’s potential verdict on the third interrogatory–concerning

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whether Braun acted unreasonably in rejecting Alphamed’s attempts to cure the

alleged default–was “clearly dispositive.” Id., at *11.

We also rejected the district court’s contention that Alphamed sought future

profits that were too speculative to recover, as opposed to verifiable contractual

damages. Id., at *17-19. We noted that “[t]he Agreement sets forth specific

quantity and price terms for the duration of the contract,” and concluded that, “[i]n

the event that Alphamed prevails in the new trial, recovery of [damages based on

these specific quantity and price terms] is not speculative.” Id., at *18.

Although we held that the grant of judgment as a matter of law was

inappropriate, we affirmed the district court’s grant of a new trial in light of

Easterlin’s thoroughly unprofessional conduct during his closing argument. While

we chose not to sanction Easterlin, we commented that “[i]t is a sufficient rebuke

to observe that in light of our decision today that had Easterlin not engaged in

such conduct, he and his client might be enjoying a jury verdict in their favor

rather than awaiting a new trial.” Id., at *17.

On remand, the district court commenced a second trial, which ended in a

mistrial after the jury failed to reach a verdict. The court then commenced the

third jury trial in February 2003, which is the subject of this appeal. In addressing

the liability issues presented, the court submitted two special interrogatories to the

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jury that were identical in all material respects to the first and third interrogatories

that it had submitted to the jury in the first trial: (1) whether Alphamed was in

substantial compliance with the Agreement in February 1998; and, if not (2)

whether Braun was unreasonable in deciding that Alphamed had not initiated

reasonably satisfactory steps to cure its default within the 30-day period following

the notice of default. Consistent with the result in the first trial, the jury found

unanimously that Alphamed was in substantial compliance in February 1998, and

did not proceed to the second issue.

With respect to Alphamed’s damages, the district court submitted a special

verdict form to the jury, on which the district court directed the jury to enter

$17,867,001 for Alphamed’s projected gross revenues. The court arrived at this

figure by multiplying the quantity and price terms set forth in the Agreement, in

accordance with our instruction in Alphamed I that Alphamed’s recovery could be

based on the assumption that the parties would have fully performed were it not

for Braun’s breach. See id., at *18. The district court also asked the jury to

determine whether or not Alphamed was entitled to prejudgment interest, but did

not give the jury the opportunity to fix its value. Based on the jury’s findings, the

district court entered judgment for Alphamed and awarded Alphamed damages of

$9,045,099 and $1,968,759 of prejudgment interest.

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 Braun once again moved for judgment as a matter of law. The district court

granted Braun’s motion in part, solely due to the insufficiency of evidence

supporting the jury’s determination of the “reasonably allocated overhead”

deduction from Alphamed’s recovery. The jury had fixed the deduction at

$815,364, even though the undisputed testimony at trial projected Alphamed’s

overhead for the four-year contract term to be $4,529,085. The district court

increased this deduction to preclude Alphamed from recovering costs that it would

never incur.

In addition, the district court reduced its prejudgment interest calculation,

after concluding that Alphamed was not entitled to interest on the $2 million that

Braun had advanced to Alphamed prior to Braun’s termination of the Agreement.

In light of these adjustments, the district court directed an altered judgment in

favor of Alphamed for $5,331,377 in damages and $1,067,081 in prejudgment

interest.

The district court denied Braun’s motion in all other respects. On the

threshold issue of Braun’s liability, the district court commented that “[w]hile the

Court . . . remains of the opinion expressed in its prior order of August 2, 2001 []

as to the liability issues herein, now it is foreclosed from granting a judgment as a

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matter of law on the liability issues by the opinion and judgment of the Court of

Appeals in [Alphamed I].”

II. ISSUES2

1. Whether the law of the case doctrine precluded judgment as a matter of law on

the issue of Braun’s contractual liability.

2. Whether the district court erred in precluding the jury from calculating the

“projected gross revenues” component of Alphamed’s recovery.

3. Whether the district court erred in precluding the jury from calculating

Alphamed’s prejudgment interest.

III. STANDARD OF REVIEW

We review de novo the district court’s application of the law of the case

doctrine. Field v. Mans, 157 F.3d 35, 40 (1st Cir. 1998). We also review de novo

the district court’s calculation of contractual damages and prejudgment interest

2
In addition to these issues, Alphamed asks us to consider whether the district court erred by
subtracting Braun’s $2 million offset before calculating Alphamed’s prejudgment interest, and by
concluding as a matter of law that Alphamed could not recover overhead costs that it never incurred.
Alphamed’s arguments with respect to each of these issues are irreconcilable with the fundamental
tenet of contract law that “‘(a)n injured party can not be placed in a better position than he would
have been in if the contract had not been breached.’” Amalgamated Transit Union Local 1324 v.
Roberts, 434 S.E.2d 450, 452 (Ga. 1993) (quoting Gainesville Glass Co. v. Don Hammond, Inc., 278
S.E.2d 182, 186 (Ga. Ct. App. 1981)); see also Jefferson Randolph Corp. v. Progressive Data Sys.,
Inc., 553 S.E.2d 304, 308 (Ga. Ct. App. 2001), rev’d on other grounds, 568 S.E.2d 474 (Ga. 2002)
(“[T]he claimant is not permitted to recover expenses never incurred, putting him in a better position
than if the contract had been performed.”). We thus conclude that Alphamed’s arguments concerning
these alleged errors are devoid of merit, and we need not discuss them further.

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where the calculation is dependent upon the district court’s construction of state

law. See Softball Country Club-Atlanta v. Decatur Fed. Sav. & Loan Ass’n, 121

F.3d 649, 653 (11th Cir. 1997); Venn v. St. Paul Fire & Marine Ins. Co., 99 F.3d

1058, 1066 (11th Cir. 1996).

IV. DISCUSSION

A. Whether the law of the case doctrine precluded judgment as a matter of law on

the issue of Braun’s contractual liability.

Under the law of the case doctrine, both district courts and appellate courts

are generally bound by a prior appellate decision in the same case.3 Venn, 99 F.3d

at 1063. The doctrine “is based on the salutary and sound public policy that

litigation should come to an end.” White v. Murtha, 377 F.2d 428, 431 (5th Cir.

1967).4 If it not for the law of the case doctrine, “there would be no end to a suit

3
The law of the case doctrine will bar us from reconsideration of an issue we have previously
decided unless (1) our prior decision resulted from a trial where the parties presented substantially
different evidence from the case at bar; (2) subsequently released controlling authority dictates a
contrary result; or (3) the prior decision was clearly erroneous and would work manifest injustice.
Joshi v. Florida State Univ. Health Ctr., 763 F.2d 1227, 1231 (11th Cir. 1985). None of these
exceptions bar the application of the doctrine in the instant case. While Braun argued in the district
court that our holding in Alphamed I was clearly erroneous, Braun has abandoned this argument on
appeal. See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1114 n.1 (11th Cir. 1993). In a similar vein,
Braun has waived its argument that the parties presented substantially different evidence in the first
and third jury trials by failing to raise the issue prior to oral argument. See Softball Country Club-
Atlanta v. Decatur Fed. Sav. & Loan Ass’n, 121 F.3d at 654 n.9.
4
In Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc), we adopted
as binding precedent all decisions of the former Fifth Circuit rendered prior to October 1, 1981.

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[because] every obstinate litigant could, by repeated appeals, compel a court to

listen to criticisms on their opinions or speculate of chances from changes in its

members.” Id. (internal quotations omitted).

Braun urges us to conclude that the law of the case doctrine did not preclude

the district court from granting Braun’s motion for judgment as a matter of law

because our discussion in Alphamed I relevant to the jury’s verdict–addressing

only the issue of Alphamed’s substantial compliance with the Agreement–was

dicta. Thus, Braun contends that the district court was free to analyze the

sustainability of the jury’s verdict, even though it was identical to the jury’s

verdict in Alphamed I.

In making this argument, however, Braun ignores that our holding in

Alphamed I was that, “[t]o find as a matter of law for Braun, . . . there must be no

substantial evidence to support either the jury’s verdict or its potential verdict for

Alphamed as to [the reasonableness of Braun’s conduct in rejecting Alphamed’s

attempts to cure after notice of default].” Alphamed I, at *10 (emphasis added).

Braun concedes that we held in Alphamed I that the evidence was sufficient to

sustain the jury’s potential verdict on this secondary issue. Because the special

interrogatory verdict form was materially identical in both trials, our holding in

Alphamed I thus controls the outcome of this case. Accordingly, the district court

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did not err in concluding that the law of the case doctrine precluded judgment as a

matter of law on the issue of Braun’s contractual liability, notwithstanding the fact

that our discussion of the sufficiency of evidence supporting the jury’s verdict was

dicta.

B. Whether the district court erred in precluding the jury from calculating the

“projected gross revenues” component of Alphamed’s recovery.

Pursuant to O.C.G.A. § 11-2-708(2), an aggrieved seller may recover “profit

(including reasonable overhead) which the seller would have made from full

performance by the buyer, . . . due allowance for costs reasonably incurred and due

credit for payments or proceeds of resale.” Braun contends that the “profit”

component of Alphamed’s recovery is inflated because the special verdict form

precluded the jury from considering whether Alphamed would not have been able

to produce all 7,600 pumps called for in the Agreement, or whether the Agreement

had been modified such that Alphamed’s production expectations were reduced.

Although Braun’s contention in this regard has some arguable merit in light

of the jury’s implicit finding that the quantity/time provisions of the Agreement

had been modified, we specifically addressed the issue of whether Alphamed’s

recovery could be based on its full performance in Alphamed I in rejecting the

district court’s conclusion that Alphamed, as a start-up business, could not recover

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“future profits” under Georgia law. Alphamed I, at *17-19. Because we held in

Alphamed I that Alphamed could recover contractual damages established by the

“specific quantity and price terms” set forth in the Agreement if it prevailed at

trial, the district court did not err in concluding that Alphamed’s recovery could be

based on the expectation of full performance.

C. Whether the district court erred in precluding the jury from calculating

prejudgment interest.

Section 13-6-13 of the Official Code of Georgia Annotated provides that,

“[i]n all cases where an amount ascertained would be the damages at the time of

the breach, it may be increased by the addition of legal interest from that time until

the recovery.” The award of prejudgment interest under O.C.G.A. § 13-6-13 is a

matter for the jury’s discretion. American Family Life Assurance Co. of

Columbus, Ga. v. United States Fire Co., 885 F.2d 826, 835-36 (11th Cir. 1989).

O.C.G.A. § 7-4-2(a)(1)(A) fixes the legal rate of interest for O.C.G.A. § 13-6-13

unliquidated contractual damages at seven percent unless the contract provides

otherwise. O.C.G.A. § 7-4-2(a)(1)(A); see Southern Water Techs., Inc. v. Kile,

481 S.E.2d 826, 829 (Ga. Ct. App. 1997).

Braun contends that the district court should have permitted the jury to

calculate Alphamed’s prejudgment interest, and the few Georgia cases on point

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arguably support Braun’s contention. See Southern Water Techs., 481 S.E.2d at

829 (vacating jury prejudgment interest calculation that was not supported by the

record); see also Wheels & Brakes, Inc. v. Capital Ford Truck Sales, Inc., 307

S.E.2d 13, 15 (Ga. Ct. App. 1983) (“[I]t is proper for the court to instruct the jury

that where damages are unliquidated, interest at the legal rate may be awarded at

the jury’s discretion.”). Nonetheless, we conclude that the district court’s error, if

any, was harmless because the legal rate of interest was determined by statute, and

the district court permitted the jury to determine whether or not to award

prejudgment interest and to calculate Alphamed’s damages, which formed the

basis for the award. If the jury had properly performed the calculation, it would

have necessarily arrived at the exact same figure.

V. CONCLUSION

As stated above, the law of the case doctrine is grounded in the salutary

public policy that all litigation should come to an end. This case exemplifies the

purpose underlying the doctrine. After three trials and two appeals, this case too

must come to an end.

Although we are not entirely unsympathetic to some of the arguments raised

by Braun in this appeal, the law of the case doctrine precludes us from

reconsidering the merits of issues that we resolved in Alphamed I. Because we

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conclude that the district court properly applied the law of the case doctrine, and

properly rejected the arguments that we did not address in Alphamed I, we affirm

the district court’s judgment.

AFFIRMED.

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