Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 1 of 20 PageID #: 9600
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`LUV N’ CARE, LTD. and ADMAR
`INTERNATIONAL, INC.,
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`
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`Plaintiffs, Counter-Defendants,
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`v.
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`ROYAL KING INFANT PRODUCTS CO.
`LTD.,
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`Civil Action No. 2:10-cv-461-JRG
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`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
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`Defendant, Counter-Plaintiff.
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`MEMORANDUM OPINION AND ORDER
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`Before the Court are the post-trial motions pending in this case relating to damages and
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`remedies. Defendant Royal King Infant Products Co., Ltd. (“RK”) filed a (1) Motion in the
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`Alternative for a New Trial on Damages on Plaintiff’s Count I for Breach of Contract (Or, At
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`Least, Reducing the Damage Award) and (2) a Motion for a New Trial on Damages. (Dkt. No.
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`240.) Plaintiffs Luv n’ Care Ltd. and Admar International, Inc. (collectively, “LNC” or
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`“Plaintiffs”) oppose RK’s Motions. (Dkt. No. 251.) Also before the Court is LNC’s Motion for
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`Post-Verdict Damages (Dkt. No. 243), which RK opposes (Dkt. No. 252). The Court also takes
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`up LNC’s Motion for a Permanent Injunction (Dkt. No. 237), which RK opposes (Dkt. No. 238).
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`The Court previously denied RK’s motion to amend (Dkt. No. 240) the Court’s February
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`14, 2014 Memorandum Opinion and Order (Dkt. No. 234) regarding RK’s equitable estoppel
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`defense and fraudulent inducement claim. (Dkt. No. 282.) The Court has also, by prior order,
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`separately addressed the parties’ post-trial motions relating to liability (Dkt. No. 283). The Court
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`turns now to the area of damages and remedies issues. For the reasons set forth below, the
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`parties’ motions relating to damages and remedies are DENIED.
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`

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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 2 of 20 PageID #: 9601
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`I.
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`BACKGROUND
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`A.
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`Settlement Agreement
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`On June 22, 2009, the parties executed a settlement agreement (Dkt. No. 1-1, “Settlement
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`Agreement”) to resolve a 2008 trademark case previously before this Court. (Dkt. No. 192.)
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`Under the terms of the Settlement Agreement, RK would pay royalties on sales of certain
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`products that RK made before the Settlement Agreement and would stop making the same:
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`1) Royal King shall pay a 12% royalty on all past sales of the products
`listed on the spreadsheet attached hereto as Exhibit A (hereinafter “the
`Products”). The total royalty for all U.S. and international sales is
`$396,000 USD, based on Royal King’s representations as to the total US
`and international sales of the Products.
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`. . .
`6) Royal King will immediately cease and desist worldwide from making,
`selling, offering to sell, marketing, and/or promoting the Products,
`including any versions of the Products or their packaging that are likely to
`cause confusion with LNC’s products or packaging. In the event that
`Royal King has any remaining Products in inventory, Royal King shall
`have 30 days from execution of this Settlement to sell-off any such
`remaining Products, shall report any sales beyond those paid for in this
`Agreement, and shall pay the 12% royalty on such sales. Any products,
`and the Molds for such products, remaining more than 30 days from
`execution of this Settlement shall be destroyed, and Royal King shall
`provide proof of same.
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`(Dkt. No. 1-1 (“Settlement Agreement”).) The terms of the Settlement Agreement also provided
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`for a release of past and present claims relating to the products at issue:
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`5) LNC and Royal King agree that this is a global settlement of all past
`and present claims LNC had or has against Royal King with respect to the
`Products up through the date of the present Agreement, and that this
`settlement and the Products in this Agreement are not limited to the colors
`in the images below, or any particular colors. . . . .
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`. . .
`8) Subject to the provisions in this Agreement, LNC and Royal King
`hereby release, acquit and discharge one another . . . from and against any
`and all past and present claims, demands, obligations, liabilities, and
`causes of action worldwide, of any nature whatsoever, at law or in equity,
`asserted or unasserted, known or unknown arising out of or in connection
`with the Products. . . .
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 3 of 20 PageID #: 9602
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`(Settlement Agreement ¶¶ 5, 8.)
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`On November 4, 2010, LNC brought this suit against RK alleging breach of contract,
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`fraud in the inducement, tortious interference with existing and prospective contractual or
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`business relations, and patent infringement. (Dkt. No. 20.) In response, RK raised a number of
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`affirmative defenses including equitable estoppel and the statutes of limitation. (Dkt. No. 116.)
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`RK brought counterclaims accusing LNC of breach of contract, tortious interference with
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`existing and prospective contractual or business relations, and fraud in the inducement. (Id.)
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`B.
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`Jury Trial
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`The Court began a jury trial in the present case on October 7, 2013. Three days later, the
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`Jury returned a unanimous verdict. In its verdict, the Jury found that RK had violated Paragraph
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`1 of the Settlement Agreement by under-reporting sales and underpaying royalties on the
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`Settlement Products for the period before the Settlement Agreement; that RK had violated
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`Paragraph 6 of the Settlement Agreement by selling versions of the Settlement Products that
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`were likely to cause confusion with LNC’s products for the period after the Settlement
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`Agreement; and that $10,000,000.00 was the “sum of money, if paid now” which would
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`“adequately compensate Plaintiffs Luv N’ Care and Admar as to . . . [LNC’s claim of] breach of
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`contract.” (Dkt. No. 195 (“Verdict”) ¶¶ 1–2, 4(A).)
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`The Jury further found that RK did not engage in intentional interference with LNC
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`and/or Admar’s existing or prospective contractual or business relations regarding any of LNC
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`and/or Admar’s customers; and that $0.00 was the “sum of money, if paid now” which would
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`“adequately compensate Plaintiffs Luv N’ Care and Admar as to . . . [LNC’s claim of]
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`intentional interference.” (Verdict ¶¶ 3, 4(B).) The Court has reaffirmed the Jury’s findings on
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`this count. (Dkt. No. 283.)
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 4 of 20 PageID #: 9603
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`The Jury further found that LNC and/or Admar did engage in intentional interference
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`with RK’s existing or prospective contractual or business relations regarding any of RK’s
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`customers but that $0.00 was the “sum of money, if paid now” which would “adequately
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`compensate Defendant Royal King as to . . . [RK’s claim of] intentional interference.” (Verdict
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`¶¶ 8, 9(B).) The Court previously granted a motion filed by LNC for judgment as a matter of law
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`under Rule 50(b) on liability on these claims, finding that there was no support for the Jury’s
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`finding of Plaintiff’s liability. (Dkt. No. 283.)
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`C.
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`Bench Trial
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`On December 4, 2013, the Court held a bench trial to hear additional evidence presented
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`solely on RK’s fraud in the inducement claim. (See Dkt. No. 213.) The Court also heard
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`arguments relating to RK’s equitable estoppel defense. (See Dkt. No. 213 at 3–4; Dkt. No. 198 at
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`1.) On February 14, 2014, this Court entered its Findings of Fact and Conclusions of Law
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`relating to RK’s fraud in the inducement claim and equitable estoppel defense. (Dkt. No. 234.)
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`This Court found that RK had not demonstrated by a preponderance of the evidence that LNC
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`had fraudulently induced RK to enter into the Settlement Agreement, or that LNC’s breach of
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`contract claim should be barred by the doctrine of equitable estoppel. (Id.) Accordingly,
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`judgment was entered in favor of LNC and against RK on RK’s claim for fraudulent inducement
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`and defense of equitable estoppel. (Id.)
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`RK moved the Court to amend, under Rule 52(b), the Court’s findings in the February 14,
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`2014 Memorandum Opinion and Order (Dkt. No. 234 (“Memorandum Opinion”)) denying RK’s
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`claim for fraud in the inducement and RK’s defense of equitable estoppel. (Dkt. No. 240.) RK
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`asserted that the Court should find additional facts that would support a finding that RK had
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`proven by a preponderance of the evidence its claim for fraud in the inducement and its defense
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 5 of 20 PageID #: 9604
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`of equitable estoppel. (See Dkt. No. 240.) The Court denied RK’s motion. (Dkt. No. 282.)
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`II.
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`DAMAGES FOR LNC’S CONTRACT CLAIM AGAINST RK
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`On LNC’s breach of contract claim against RK, the Jury found that RK was liable and
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`awarded a $10 million lump sum to LNC. (Verdict ¶¶ 1, 2, 4(A)). RK seeks a new trial or, in the
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`alternative, reduction of the Jury’s award, while LNC seeks additional post-verdict damages.
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`A.
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`RK’s Motion for New Trial on Damages or Reduction of Award
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`RK moves the Court to grant a new trial on the amount of LNC’s damages, or, at least, to
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`reduce the Jury’s $10 million lump sum damages award. (Dkt. No. 240 at 27–28.)
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`1.
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`Applicable Law
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`Under FRCP 59(a), a new trial can be granted to any party after a jury trial on any or all
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`issues “for any reason for which a new trial has heretofore been granted in an action at law in
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`federal court.” FRCP 59(a). In considering a motion for a new trial, the Court applies the law of
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`the Fifth Circuit, where “[a] new trial may be granted, for example, if the district court finds the
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`verdict is against the weight of the evidence, the damages awarded are excessive, the trial was
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`unfair, or prejudicial error was committed in its course.” Smith v. Transworld Drilling Co., 773
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`F.2d 610, 612–13 (5th Cir. 1985). “The decision to grant or deny a motion for a new trial is
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`within the discretion of the trial court and will not be disturbed absent an abuse of discretion or a
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`misapprehension of the law.” Prytania Park Hotel, Ltd. v. General Star Indem. Co., 179 F.3d
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`169, 173 (5th Cir. 1999).
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`Remittitur, a reduction of a damages award, is appropriate where the award “is greater
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`than the maximum amount the trier of fact could have properly awarded,” Delahoussaye v.
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`Performance Energy Servs., L.L.C., 734 F.3d 389, 394 (5th Cir. 2013), or is “clearly excessive,”
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`Thompson v. Connick, 553 F.3d 836, 865 (5th Cir. 2008). However, the Fifth Circuit “will not
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`reverse a jury verdict for excessiveness except on the strongest of showings.” Knight v. Texaco,
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 6 of 20 PageID #: 9605
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`Inc., 786 F.2d 1296, 1299 (5th Cir. 1986). In Caldarera, the Fifth Circuit explained that the
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`jury’s award should stand unless it is entirely disproportionate to the injury sustained, such as
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`awards so large as to “shock the judicial conscience,” “so gross or inordinately large as to be
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`contrary to right reason,” so exaggerated as to indicate “bias, passion, prejudice, corruption, or
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`other improper motive,” or as “clearly exceed[ing] that amount that any reasonable man could
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`feel the claimant is entitled to.” Caldarera v. E. Airlines, Inc., 705 F.2d 778, 784 (5th Cir. 1983)
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`(internal citations omitted); see also Ham Marine, Inc. v. Dresser Indus., Inc., 72 F.3d 454, 462
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`(5th Cir. 1995) (per curiam). In the Fifth Circuit, if the jury’s award is remitted and the Plaintiff
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`declines the remitted award, the Plaintiff may choose to have a new trial on damages alone.
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`Eiland v. Westinghouse Elec. Corp., 58 F.3d 176, 183 (5th Cir. 1995).
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`2.
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`Background
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`RK argues that the record lacks substantial evidence supporting the Jury’s $10 million
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`lump sum damages award. (Id. at 27.) Mr. Eddie Hakim, Plaintiffs’ CEO, testified that damages
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`reached at least $8.4 million, but RK argues that the Court should disregard this testimony as
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`both hearsay and as being based on speculation and guesswork. (Id. at 27 n.10.) Instead, RK
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`asserts, Plaintiff’s only reliable evidence supports at most $1.8 million in damages, as presented
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`in testimony from Plaintiff’s damages expert, Mr. Payne. (Id. at 27.) Therefore, RK argues, $1.8
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`million should be the absolute maximum for Plaintiff’s damages, and the $10 million jury award
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`should be reduced because it far exceeds that maximum. (Id.)
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`In response, LNC argues that the Jury had the right to accept any of the testimony
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`presented by LNC, whether by Mr. Hakim or Mr. Payne. (Dkt. No. 251 at 23.) LNC argues that
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`the two witnesses’ testimony regarding the proper amount of damages may have differed
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`because of their different perspectives: Mr. Hakim’s testimony was presented from his
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 7 of 20 PageID #: 9606
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`perspective as LNC’s CEO and as a businessman with a lifetime of experience in the industry.
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`(Id.) In contrast, Mr. Payne’s expert testimony was based on his analysis of the documents
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`produced by RK and third-party customers. (Id.) LNC further argues that the Jury was presented
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`with evidence that RK’s imperfect record-keeping practices made it virtually impossible for Mr.
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`Payne, LNC’s forensic accounting expert, to prove damages precisely, and therefore RK cannot
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`complain about Mr. Hakim’s method of calculating damages. (Id. at 24.) In light of the Court’s
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`jury instructions and RK’s deficient record-keeping, LNC argues, the Jury was entitled to award
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`LNC $10 million in damages based on Mr. Hakim’s testimony in support of at least $8.4 million
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`in damages.
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`3.
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`Mr. Hakim’s testimony
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`On the first day of trial, Mr. Hakim, the CEO of Plaintiffs Luv N’ Care and Admar
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`International, testified for Plaintiffs. Mr. Hakim had been in the baby bottle industry since the
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`mid-1980s and testified at length about his experience in the baby products markets and his
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`knowledge of his competitors’ business. (10/7/2013 P.M. Tr. (Hakim), Dkt. No. 200, at 66:3–
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`12.) Mr. Hakim discussed the history of the case, including the previous litigation that resulted in
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`the Settlement Agreement at the heart of this case. As part of the settlement, RK had agreed to
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`pay 12% royalties on pre-settlement sales of specific RK products. (Settlement Agreement at
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`¶ 1.) The accused sales in this case involved both under-reported pre-settlement sales of certain
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`products and post-settlement sales of confusingly similar products, which LNC claimed should
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`all be subject to the 12% royalty from the Settlement Agreement.
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`To establish the base sales amount that the royalty would apply to, Mr. Hakim testified
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`“[b]ased on his experience and knowledge of the industry” that RK had relevant pre-settlement
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`sales of $21 million and relevant post-settlement sales of $50 million. (10/7/2013 P.M. Tr.
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 8 of 20 PageID #: 9607
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`(Hakim), Dkt. No. 200, at 150:18–151:25.) Combining the pre-and post-settlement sales, he
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`estimated that the base sales number was $70 million (made up of $20 million in pre-settlement
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`sales and $50 million in post-settlement sales), of which 12% is $8.4 million. (Dkt. No. 251 at
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`23–24.)
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`i.
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`Pre-settlement under-reported sales
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`RK objects that Mr. Hakim’s testimony that $20 million in pre-settlement sales were
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`under-reported was based on unreliable evidence—conversations with others, seeing products on
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`the shelf after the signing date of the Settlement Agreement, and the Walgreens Spreadsheet (DX
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`1037).
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`RK argues that both Mr. Hakim and Mr. Payne (LNC’s damages expert) relied on the
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`same document—the Walgreens Spreadsheet—to estimate pre-settlement sales, but each testified
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`as to very different totals ($21 million and $4 million, respectively), and therefore Mr. Hakim’s
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`testimony is not credible. (Dkt. No. 254 at 9.) On cross examination, Mr. Hakim stated that he
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`relied on documents produced in the LNC-Walgreens lawsuit in New York, which he was
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`prohibited from viewing under New York lawsuit’s protective order, but had been shown earlier
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`in this trial. RK’s counsel attempted to determine what Walgreens documents Mr. Hakim had
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`relied on to reach his $21 million calculation, displaying the Walgreens Spreadsheet (DX 1037)
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`and asking Mr. Hakim whether or not he had relied on it. (10/8/2013 A.M. Tr. (Hakim), Dkt. No.
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`201, at 58:20–59:22.) Mr. Hakim testified that he did not recognize the Walgreens Spreadsheet,
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`and stated that the document he relied on had a totals page, which the Walgreens Spreadsheet did
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`not have. (Id.) RK is incorrect—Mr. Hakim never testified that he had relied specifically on the
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`Walgreens Spreadsheet (DX 1037), only that he relied on documents produced in the LNC-
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`Walgreens lawsuit, which he saw briefly during trial, and that the Walgreens Spreadsheet did not
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 9 of 20 PageID #: 9608
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`have a “totals page” that was in the document he relied on. (Id. at 56:8–57:2.)
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`A reasonable jury could have determined, based on Mr. Hakim’s testimony that he did
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`not recognize the Walgreens Spreadsheet, that he relied on a different Walgreens document to
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`calculate his damages, explaining the discrepancies between Mr. Hakim and Mr. Payne’s
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`calculations.
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`Notably, Mr. Hakim did not rely only on a Walgreens document to establish his pre-
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`settlement under-reported sales figure. Mr. Hakim testified at length that he believed RK
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`underreported its pre-agreement sales because the records for sales and conversations with
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`customers did not match up to LNC’s figures, providing as a specific example his observation of
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`discrepancies regarding sales to customers in Mexico and to Dollar General. (10/7/2013 P.M. Tr.
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`(Hakim), Dkt. No. 200, at 128:18–131:24.)
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`The Jury was entitled to take into account, as the foundation for Mr. Hakim’s opinion
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`regarding the damages amount, his testimony regarding his reliance on conversations and
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`documents in addition to his observations of products on shelves after the Settlement Agreement
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`was signed. (10/8/2013 A.M. Tr. (Hakim), Dkt. No. 201, at 58:20–59:22.)
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`ii.
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`Post-settlement sales of confusingly similar products
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`Mr. Hakim also testified as to the damages for RK’s post-settlement alleged sales of
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`confusingly similar products. Based on his experience and knowledge of the industry, Mr. Hakim
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`testified that the amount of relevant RK sales for the post-settlement time period was
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`approximately $50 million. (10/7/2013 P.M. Tr. (Hakim), Dkt. No. 200, at 150:18–24.) Using the
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`logic that sales of confusingly similar products violated the Settlement Agreement, and that those
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`sales should be subject to the same 12% royalty rate from the Settlement Agreement, Mr. Hakim
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`estimated that the post-settlement damages from those sales was $6 million. (Id. at 151:2–152:3.)
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 10 of 20 PageID #: 9609
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`RK objects that Mr. Hakim’s testimony of $50 million in post-settlement sales was a
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`number for which he did not even attempt to provide a basis, arguing that his testimony was so
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`unreliable that LNC’s own expert, Mr. Payne, did not rely on it. (Dkt. No. 240 at 27 n.10; Dkt.
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`No. 254 at 8 (citing 10/9/2013 P.M. Tr. (Payne), Dkt. No. 204, at 85:19–86:15).) Notably,
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`however, Mr. Payne only remarked that he did not rely on Mr. Hakim’s pre-settlement sales
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`calculation and did not discuss whether he had considered Mr. Hakim’s testimony regarding
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`post-settlement sales of $50 million. (10/9/2013 P.M. Tr. (Payne), Dkt. No. 204, at 85:19–86:15.)
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`Accordingly, Mr. Payne’s testimony that he did not rely on Mr. Hakim’s pre-settlement sales
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`estimate is inapposite and does not reflect upon the reliability of Mr. Hakim’s testimony.
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`The Jury, in its role as fact finder, was entitled to take into account, as the foundation for
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`Mr. Hakim’s opinion regarding the post-settlement damages amount, his testimony regarding his
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`reliance on his experience and knowledge of the industry. (10/8/2013 A.M. Tr. (Hakim), Dkt.
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`No. 201, at 58:20–59:22.)
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`4.
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`Mr. Payne’s testimony
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`Mr. Payne, Plaintiff’s damages expert, was a forensic accountant tasked with calculating
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`damages for this case and was tendered without objection as an expert in the areas of forensic
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`accounting, fiduciary services, and economic damages assessment. (10/9/2013 P.M. Tr. (Payne),
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`Dkt. No. 204, at 4:6–6:17.)
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`RK generated and produced sales reports in this case, which Mr. Payne found unreliable.
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`(Id. at 9:24–10:3.) Indeed, Mr. Payne explained to the Jury in great detail the discrepancies he
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`found in the twelve sales reports that RK produced, detailing why the sales reports did not
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`accurately summarize all the underlying sales transactions for the accused products. (Id. at 12:1–
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`22:9.)
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 11 of 20 PageID #: 9610
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`Specifically, Mr. Payne pointed out to the Jury a discrepancy where RK listed exactly
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`$3,059,000 worth of sales in two reports, but reflected different quantities sold in the two
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`reports—over 3 million units in one report but almost 4.7 million units in another report. (Id. at
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`16:1–17:22.) Suspicious of RK’s sales reports, Mr. Payne determined that third-party sales
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`invoices generated in the ordinary course of business—also known as pro forma sales invoices—
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`were more reliable than RK’s sales reports. (Id. at 17:23–19:14.) Using the pro forma sales
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`invoices, he recreated the sales for the same time frame, finding $5,127,956 in sales and
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`7,221,635 units sold, much higher in both sales units and dollars than reported by RK. (Id.) In
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`light of this analysis and other analysis he presented to the Jury, Mr. Payne concluded that there
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`was a general pattern of underreporting in RK’s sales reports. (Id. at 28:13–25.) Therefore, Mr.
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`Payne determined that he should use the pro forma sales invoices, instead of RK’s sales reports,
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`as the basis for his opinions on relevant sales and damages in his expert report and in his
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`testimony. (Id. at 9:24–10:22.)
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`Mr. Payne’s expert report set out both pre-settlement and post-settlement sales. However,
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`with regard to damages, Mr. Payne opined as to actual dollar amounts for only post-settlement
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`damages, not pre-settlement damages. (10/9/2013 P.M. Tr. (Payne), Dkt. No. 204, at 44:17–21.)
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`Accordingly, Mr. Payne testified as to the amount of pre-settlement sales, post-settlement sales,
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`and damages on post-settlement sales, but did not testify as to damages on pre-settlement sales.
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`As to the period before settlement, Mr. Payne testified that there were $35 million in pre-
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`settlement sales. (10/9/2013 P.M. Tr. (Payne), Dkt. No. 204, at 43:2–9.) However, due to Mr.
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`Payne’s assessment that the documentation RK produced in support of those pre-settlement sales
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`was unreliable, he did not take the next step of calculating pre-settlement damages based on the
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`$35 million pre-settlement sales base. Nevertheless, the Jury, provided with the sales base and
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 12 of 20 PageID #: 9611
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`the Settlement Agreement royalty rate, could have drawn its own conclusions based on Mr.
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`Payne’s testimony.
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`As to the period after settlement, Mr. Payne found that post-settlement sales were
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`$20,185,000. (Id. at 33:16–34:5.) After subtracting $1,285,000 in sales that were involved in
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`prior Atico/Walgreens litigation to avoid double recovery, the base for post-settlement sales was
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`$18,900,000. (Id. at 34:5–17.) Applying the 12% royalty rate, Mr. Payne arrived at $2,422,000 in
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`royalties. (Id. at 34:17–35:9.) Further applying RK’s previous $396,000 payment to LNC at the
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`time of the settlement agreement, Mr. Payne found $1,872,000 in post-settlement royalty
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`damages. (Id. at 35:9–16.) During the trial, in light of testimony from LNC’s witness that one of
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`the accused products should not be included, Mr. Payne removed that accused product from his
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`analysis and ultimately concluded that LNC was entitled to $1,809,000 in monetary damages for
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`post-settlement sales. (Id. at 35:16–36:4.)
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`5.
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`The Court’s Instructions to the Jury
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`After the close of evidence, the Court instructed the Jury on calculating damages. The
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`parties submitted the compensatory damages instructions jointly and neither objected during the
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`formal charge conference. (Dkt. No. 194 at 22; 10/10/2013 A.M. Tr. (Charge Conference), Dkt.
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`No. 205, at 76:6–82:4.)
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`Without objection, the Court charged the Jury in computing damages as follows:
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`Computing damages may be difficult, but you must not let -- let that
`difficulty lead you to engage in arbitrary guesswork. On the other hand,
`the law does not require that a party prove the amount of its losses and
`damages with mathematical precision but only with as much definiteness
`and accuracy as the circumstances permit.
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`Difficulty in ascertaining the amount of damages is not to be confused
`with the right of recovery. When wrongdoers, by their actions, make it
`virtually impossible to prove damages precisely, they should not be able to
`complain of the method of proof as long as it is reasonable.
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 13 of 20 PageID #: 9612
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`You must use sound discretion in fixing an award of damages, drawing
`reasonable inferences where you find them appropriate from the facts and
`circumstances in evidence.
`
`(10/10/2013 A.M. Tr. (Jury Charge), Dkt. No. 205, at 103:1–17) (paraphrasing N. Texas
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`Producers Ass’n v. Young, 308 F.2d 235, 245 (5th Cir. 1962)).
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`In awarding LNC $10 million in damages, the Jury properly relied upon Mr. Payne’s
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`testimony that the sales reports produced by RK were unreliable and Mr. Hakim’s testimony
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`regarding the sum of damages as an experienced CEO of a company in the baby products
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`industry. Indeed, in view of evidence that RK’s recordkeeping practices were deficient, evidence
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`that RK’s sales reports were unreliable, and the fact that one of the claims in this suit was that
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`RK had been underreporting sales, the Jury was entitled to consider the proof of damages as
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`presented through testimony from Mr. Hakim and Mr. Payne. RK never offered any testimony to
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`rebut the testimony of LNC’s witnesses. The Jury’s reliance on the proof presented during trial
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`was reasonable.
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`6.
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`The Jury’s award is not clearly excessive
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`RK moves the Court to grant a new trial if it finds the verdict is against the weight of the
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`evidence, the damages awarded are excessive, the trial was unfair, or prejudicial error was
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`committed in its course. (Dkt. No. 240 at 5) (citing Smith v. Transworld Drilling Co., 773 F.2d
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`610, 613 (5th Cir. 1985)). However, a new trial may only be granted if the jury’s award is
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`“against the clear weight of the evidence” or will result in a “miscarriage of justice.” Pryor v.
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`Trane Co., 138 F.3d 1024, 1026 n.3.; (Dkt. No. 251 at 22).
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`Alternatively, RK moves for remittitur—reduction of the damages award—which is
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`within the sound discretion of this Court but is only appropriate if the award “is greater than the
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`maximum amount the trier of fact could have properly awarded,” Delahoussaye v. Performance
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`Energy Servs., L.L.C., 734 F.3d 389, 394 (5th Cir. 2013), or is “clearly excessive,” Thompson v.
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 14 of 20 PageID #: 9613
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`Connick, 553 F.3d 836, 865 (5th Cir. 2008).
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`Here, as discussed above, the Jury’s award of $10 million is within the realm of
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`appropriate damages drawing upon the testimony of Mr. Hakim and Mr. Payne and making
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`reasonable inferences based thereon. While the Jury’s award did go beyond LNC’s estimate, the
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`evidence upon which the Jury relied—including testimony regarding the unreliability of RK’s
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`sales data—supports the verdict. The verdict is not against the clear weight of the evidence, nor
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`does it result in a miscarriage of justice. The evidence of destruction of evidence and inadequate
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`recordkeeping, in combination with reasonable inferences the Jury may have drawn regarding
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`the actual sales numbers, the circumstances of this case, and the actions of RK, support the
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`Jury’s verdict. The verdict is not clearly excessive. Accordingly, RK’s motions for a new trial
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`and for remittitur (Dkt. No. 240) are DENIED.
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`B.
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`LNC’s Motion for Post-Verdict Damages
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`On LNC’s breach of contract claim against RK, LNC moves for an award of post-verdict
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`damages in addition to the Jury’s $10 million award. (Dkt. No. 243; Verdict ¶ 4(A).)
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`LNC argues that it is entitled to damages on post-verdict sales of the accused products,
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`because the Jury’s damages award only accounted for damages up to the time of trial. (Dkt. No.
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`243 at 2.) RK responds that there is no basis—either in case law or by statute—by which LNC
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`may recover post-verdict damages in a breach of contract suit under Texas law. (Dkt. No. 252 at
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`2–3.)
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`The cases LNC cites in support of its request are inapposite. See (Dkt. No. 243 at 3–5.)
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`Of the ten cases LNC cites, seven involve claims for post-verdict damages in cases where the
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 15 of 20 PageID #: 9614
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`court had express statutory power to award post-verdict damages.1 Two cases hold only that
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`ongoing conduct gives rise to claims, without saying whether or not post-verdict damages are
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`actually recoverable.2 Finally, LNC cites a single case in which a court has granted post-verdict
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`damages on a claim for breach of contract—a Louisiana state trial court’s order in a lawsuit filed
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`by Plaintiffs under Louisiana state law. (Dkt. No. 258 at 3); Luv N’ Care, Ltd. v. Jackal Int’l Ltd.,
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`Case No. 10-1891 (La. 4th District Ct.—Ouachita Parish June 27, 2013). This unpublished order
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`is not entitled to any precedential weight because it does not apply Texas state law, and therefore
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`does not establish the availability of post-verdict damages in this case.
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`The Court finds that LNC has failed to meet its burden of proving that it is entitled to
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`post-verdict damages on its breach of contract claim in this case and therefore LNC’s motion for
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`post-verdict damages (Dkt. No. 243) is DENIED.
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`III. DAMAGES FOR RK’S INTENTIONAL INTERFERENCE CLAIM AGAINST
`LNC
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`On RK’s tortious intentional interference claim against LNC, the Jury found that LNC
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`was liable, but did not award any damages to RK. (Verdict at ¶¶ 8, 9(B).) However, the Court
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`found that, as a matter of law, RK was not liable for intentional interference. (Dkt. No. 283.)
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`RK moves for a new trial on the damages amount for RK’s claims for tortious
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`interference. (Dkt. No. 240 at 29–30). However, in light of the Court’s finding that RK was not
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`liable for intentional interference, RK’s motion (Dkt. No. 240) for a new trial on damages on that
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`
`
`1 See Fresenius USA, Inc. v. Baxter Int’l, Inc., 582 F.3d 1288, 1303 (Fed. Cir. 2009) (patent claim); Brunswick Corp.
`v. Spinit Reel Co., 832 F.2d 513, 526 (10th Cir. 1987) (allowing discovery of post-verdict sales in a Lanham Act
`case); Clearline Techs., Ltd., 948 F. Supp. 2d at 710–11 (Lanham Act claim); Mondis Tech., Ltd. v. Chimei Innolux
`Corp., 822 F. Supp. 2d 639, 642 (E.D. Tex. 2011) (patent claim); i4i Ltd. P’ship v. Microsoft Corp., 670 F. Supp. 2d
`568, 597 (E.D. Tex. 2009) (patent claim), aff’d, 598 F.3d 831 (Fed. Cir. 2010); Nat’l Instruments Corp. v.
`Mathworks, Inc., No. 01-CV-11, 2003 WL 24049230, *4 (E.D. Tex. June 23, 2003) (patent claim), aff’d, 164 Fed.
`App’x 997 (Fed. Cir. 2006); City of San Antonio v. Hotels.com, L.P., No. SA-06-CA-381, 2012 WL 9033363, *2
`(W.D. Tex. Aug. 27, 2012).
`2 See James Burrough Ltd. v. Sign of the Beefeater, Inc., 572 F.2d 574, 578 (7th Cir. 1978); Arquette v. Hancock,
`656 S.W.2d 627, 629 (Tex. App. – San Antonio 1983).
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`Case 2:10-cv-00461-JRG Document 288 Filed 07/06/16 Page 16 of 20 PageID #: 9615
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`claim is DENIED AS MOOT.
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`IV.
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`PERMANENT INJUNCTION
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`Aside from the damages award and in light of the Jury’s finding of RK’s liability on
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`LNC’s breach of contract claim and the Court’s judgment on the remaining equitable claims and
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`defenses in favor of LNC, LNC moves for a permanent injunction enjoining RK from further
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`violation of the Settlement Agreement, including manufacture or sale by RK of the products
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`established to be unlawful or other versions of those products. (Dkt. No. 237).3
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`A.
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`Applicable Law
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`Under Texas law,