In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 16‐4197
PRIME CHOICE SERVICES, INC.,
Plaintiff‐Appellant,
v.
SCHNEIDER LOGISTICS TRANSLOADING AND DISTRIBUTION, INC.,
Defendant‐Appellee.
____________________
Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 2:13‐cv‐01435‐WCG — William C. Griesbach, Chief Judge.
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ARGUED MAY 24, 2017 — DECIDED JUNE 28, 2017
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Before POSNER, MANION, and KANNE, Circuit Judges.
POSNER, Circuit Judge. Defendant Schneider is a logistics
firm—a firm that manages the flow and storage of goods, in
order to meet a customer’s requirements. A branch of
Schneider’s business was and we assume still is located near
Savannah, Georgia. Freight entering the port of Savannah
was trucked to Schneider’s building, unloaded on one side,
sorted, and then reloaded on the other side of the building
2 No. 16‐4197
onto outgoing trucks; such reloading is called in the trade
“cross docking.” Prime, the plaintiff, sought to do the cross‐
docking work and after multiple discussions was hired by
Schneider to do so. Prime was to be paid for what it moved.
It was paid, but for the most part not paid timely and not
paid enough to break even, let alone make a profit, and it
complained about that and also about a lack of communica‐
tion from Schneider concerning assignments to Prime and
support for its labors. The final straw for Prime was Schnei‐
der’s failure—without explanation—to pay Prime $82,464.71
for services that Prime had rendered to it. Not being paid,
Prime removed its employees from Schneider’s Savannah
building; and eventually brought this suit for the money it
claimed to be owed, which had now climbed, according to
Prime and not contested by Schneider, to $289,059.95.
Schneider responded that Prime’s repudiation of the con‐
tract by removing its employees from Schneider’s building
had caused Schneider damages of $853,401.49, amounting to
a net loss to that company of $564,341.54 ($853,401.49 ‐
$289,059.95). The case went to the jury on Schneider’s coun‐
terclaim. The jury was asked to answer two questions. The
first was whether Prime had repudiated its contract with
Schneider, and the second was, if so, what Schneider’s dam‐
ages were. The jury answered yes to the first question, zero
to the second.
Schneider moved for a new trial under Fed. R. Civ. P. 59,
limited to damages. Rule 59, though vague (see subsection
(a)(1)) has been interpreted to give a trial judge “ample pow‐
er to prevent what he considers to be a miscarriage of justice.
It is his right, and indeed his duty, to order a new trial if he
deems it in the interest of justice to do so.” Juneau Square
Corp. v. First Wisconsin National Bank of Milwaukee, 624 F.2d
No. 16‐4197 3
798, 806 n. 11 (7th Cir. 1980). That of course is imprecise; “in‐
terest of justice” is so vague that read literally it would give
the judge carte blanche to set aside a jury verdict. And that
can’t be right; a judge can’t set aside a jury verdict just be‐
cause had he been a member of the jury he would have vot‐
ed for a different verdict. Such a power would emasculate
the jury system. As explained in Latino v. Kaizer, 58 F.3d 310,
315 (7th Cir. 1995), a judge is permitted to grant a new trial
because the jury’s verdict was against the weight of the evi‐
dence “only when the record shows that the jury’s verdict
resulted in a miscarriage of justice or where the ver‐
dict … cries out to be overturned or shocks our conscience.”
The judge in this case did set aside the jury verdict, ordered
a new trial before a different jury, and submitted only the
issue of damages (question number 2 in the first trial) to that
jury, which awarded Schneider $853,401.49 in damages. Af‐
ter the court accounted for Prime’s uncontested losses, how‐
ever, Schneider’s award was reduced to $564,341.54. But the
judge was wrong to set aside the first verdict, odd though it
was. He thought the first jury had contradicted itself by find‐
ing that Prime had repudiated its agreement with Schneider
yet awarding Schneider no damages for the repudiation. But
a rational jury could find that a zero damages award would
(in the language of the second question posed to the jury)
fairly compensate Schneider; to put it more bluntly, the jury
could find that Schneider deserved no more. The first jury
may have concluded that Schneider had failed to mitigate its
damages. It may have thought that had Schneider simply
paid Prime what it owed it, Prime would have returned to
work and Schneider would have avoided incurring any
damages. The jury was not told that Schneider was entitled
to damages despite its having made no attempt to resolve
4 No. 16‐4197
the payment dispute with Prime. The judge overlooked this
possibility, a legally sufficient basis for the first jury’s refusal
to award any damages to Schneider.
Notice too that dealing with a much smaller firm
(Prime’s quarterly revenues most likely never exceeded $1
million, while Schneider’s parent company had operating
revenues of $1 billion in the first quarter of 2017, see
“Schneider National, Inc. Reports First Quarter 2017 Re‐
sults,” Business Wire, May 11, 2017, www.business
wire.com/news/home/20170511005293/en/), Schneider had
undoubtedly hurt little Prime more by failing to pay on time
the $289,059.95 it owed Prime than Prime had hurt Schnei‐
der by causing it to pay $853,401.49 more for the cross‐
docking work than it would have had Prime not repudiated
the contract, spread out over a few months—peanuts to such
a large firm. And finally in the second trial the judge had ar‐
bitrarily excluded evidence favorable to Prime, such as
Schneider’s failure to make timely payment of the money
owed Prime, and the relative size and financial condition of
the two firms. In short, the first verdict, awarding no dam‐
ages to Schneider, was reasonable, and we hereby instruct
the district court to reinstate it and order the second verdict
and the judgment entered in conformity with it vacated.
VACATED AND REMANDED.
No. 16‐4197 5
MANION, Circuit Judge, dissenting. Dissatisfied with
delayed payments and locked into a negative return contract,
Prime Choice withdrew its workers from the job site. When
the Prime workers didn’t show up, Schneider had to quickly
round up qualified replacements. That required higher
wages. Schneider sued Prime Choice and a jury found that
Prime Choice breached its contract, but nevertheless awarded
zero damages to Schneider. In this appeal, the court finds that
it was an abuse of discretion for the trial judge to order a new
trial on damages only. Because of the obvious inconsistency
in the first jury verdict, I would sustain the order of the district
judge granting a new trial on damages
This contract case reads a bit like a broken engagement.
Prime Choice entered into a contract with Schneider by
promising more than it could deliver: in this case, to provide
labor at sub‐market rates. For its part, Schneider never paid
its invoices on time. Anticipating that Prime Choice couldn’t
keep up, Schneider would occasionally seek supplemental
labor contracts with other companies. For five months
Schneider also, gratuitously, paid Prime Choice extra money.
Still Prime Choice was stuck in a losing contract. Schneider
was fine with the rates, but it knew that it couldn’t fully rely
upon Prime Choice. Both sides were less than satisfied with
the arrangement, but they kept communications lines open
and tolerated each other’s’ faults. That is, until Prime Choice
threw in the towel and repudiated the contract.
While one could understand why a company would seek
to exit a losing contract, that company should be expected to
accept the consequences of that exit. In the first trial, both
parties agreed that Schneider owed Prime Choice $289,059.95
in unpaid invoices. Certainly, this non‐payment is relevant to
why Prime Choice decided to repudiate the contract. It is not
relevant, however, to what damages Schneider suffered when
Prime Choice walked off the job. It is undisputed that
Schneider suffered more than zero damages when this
occurred. It follows that the district judge did not abuse his
discretion by ordering a new trial on damages.
6 No. 16‐4197
The court today correctly notes that it would “emasculate
the jury system” were a trial judge empowered to order a new
trial whenever “he would have voted for a different verdict”
had he been a member of the jury. Fed. R. Civ. P. 59(a)(1) has
some limits. The text of the rule allows for displacing a jury
verdict “for any reason for which a new trial has heretofore
been granted in an action at law in federal court,” an explicit
reference to positive law and settled practice.
Our case law delimiting Rule 59 can be broken down quite
plainly. Reasonable, but wrongheaded jury verdicts cannot be
disturbed. The Seventh Amendment commands this.
Conversely, unreasonable jury verdicts, such as verdicts that
are contrary to the manifest weight of the evidence, cannot
stand. When a district judge denies a motion for a new trial,
to prevail on appeal the moving party must demonstrate that
the verdict was unreasonable: that it was against the manifest
weight of the evidence or was otherwise arbitrary or unjust.
By contrast, when a district judge grants a motion for a new
trial, the appellant seeking to reinstate the original verdict
must show that the district judge abused its discretion,
demonstrating both that the original verdict was reasonable
and that there was nothing unjust about the original verdict.
The reasonableness of a jury verdict is presumed greatest
where disputes at trial are factual, rather than legal in nature.
While it is true that jury verdicts should not be wantonly
disturbed by a district judge, that judge’s decision to overturn
a jury verdict is still entitled to substantial deference,
reviewed only for “abuse of discretion.” See McClain v.
Owens‐Corning Fiberglass Corp., 139 F.3d 1124, 1127–28 (7th
Cir. 1998) (finding no abuse of discretion in a grant of a new
trial solely on damages even where law supported “either the
grant or denial of a new trial”); see also Vojdani v. Pharmsan
Labs, Inc., 741 F.3d 777, 781–82 (7th Cir. 2013).
In this case, a short review of the district court record
clearly shows that the $0 jury verdict was contrary to the
manifest weight of the evidence. The uncontroverted facts in
the record show that Prime Choice was locked into a contract
more favorable to Schneider and the labor market in
Savannah was very tight. So when Prime Choice abandoned
No. 16‐4197 7
the job, Schneider was put in the difficult position of having
to find many workers on short notice, a major and expensive
obligation. In other words, all the record evidence shows that
Schneider was harmed when Prime Choice quit. Schneider
was not in the same position, but in an undisputedly worse
position once Prime Choice repudiated the contract,
withdrawing its workers. While this possibly could have
sustained a more modest damage award, it could not support
zero damages. As the district judge noted, “Prime Choice’s
strategy during trial consisted primarily of contesting
liability, not damages. Prime Choice called no expert to refute
Schneider’s calculations and expert witness testimony [or to]
contest Schneider’s damages calculations[, nor did they]
present any independent documentary evidence challenging
Schneider’s calculation of damages.” The only conceivable
basis for the $0 jury verdict is that the jury believed Schneider
to be a deep pocket, and could easily absorb the loss. Thus,
not only was the verdict contrary to the manifest weight of the
evidence, but it was arbitrary.
In seeking to avoid reading Rule 59 as a “carte blanche”
for a district judge to overturn jury verdicts, the court today
goes too far in the other direction. It holds that it is improper
for a district judge to order a new trial even where the only
conceivable basis for the jury verdict that does not rely upon
internal inconsistency is that damage to that large‐sized party
was “peanuts.” In other words, the court endorses the first
jury’s erasing Schneider’s damages as a punitive award
simply because it is big and can easily afford the loss. It might
be true that Schneider could have avoided the whole situation
by paying Prime Choice on time: but this isn’t a question of
damages, but of contract repudiation—an issue not now
before the court. So surely if “miscarriage of justice” is to
mean anything, it must apply to a situation where a jury was
misled into awarding no damages to a party purely out of
animus towards large companies. Since ordering a new trial
limited to damages on either basis would not be an abuse of
8 No. 16‐4197
discretion, I would thus have affirmed the district court’s
decision.1
1
I also do not believe the evidentiary rulings of the district judge in the
second trial were improper. Yet even if they were improper, the remedy
would be remanding for a third trial, not reinstating the irrational first
verdict.