`United States Court of Appeals
`For the Seventh Circuit
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`No. 16‐4197
`PRIME CHOICE SERVICES, INC.,
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`Plaintiff‐Appellant,
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`v.
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`SCHNEIDER LOGISTICS TRANSLOADING AND DISTRIBUTION, INC.,
`Defendant‐Appellee.
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`____________________
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`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
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`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
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`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
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`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.
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`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.
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`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
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`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
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`discretion, I would thus have affirmed the district court’s
`decision.1
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`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.
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