The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
SMART VENT PRODUCTS, INC.
Plaintiff, Hon. Joseph H. Rodriguez
v. Civil No. 13-5691 (JHR/KMW)
CRAWL SPACE DOOR SYSTEM INC.,
d/b/a CRAWL SPACE DOOR SYSTEMS, OPINION
INC.,
Defendant.
There are currently five motions pending before the Court in this case. The first is
Defendant/Counterclaim Plaintiff Crawl Space Door System Inc.’s Motion for New Trial
on Damages. [Docket No. 329.] The second is Crawl Space Doors’ Motion for Sanctions.
[Docket No. 330.] The third and fourth are Smart Vent’s Motions for Judgment as
Matter of Law. [Docket Nos. 331, 332.] Finally, the fifth is Smart Vent’s Motion for a
Permanent Injunction. [Docket No. 333.] For the reasons expressed below, the Court
will deny all of the motions.
I. Background
As this Opinion is written primarily for the parties, the Court will not restate
herein the robust factual background of this case. A thorough description of that
background can be found in Smart Vent Products, Inc. v. Crawl Space Door System,
Inc., No. 13-5691, 2016 WL 4408818, at *2-4 (D.N.J. Aug. 16, 2016). In the past several
years, however, important developments have occurred.
This case was reassigned to this Court in August of 2019. At that time, there were
several pending motions in limine and a new trial date was set.1 During the previous six
years of litigation, the Honorable Judge Jerome B. Simandle issued a number of
Opinions. Notably, in November 2017, Judge Simandle granted partial summary
judgment to Smart Vent as to its claim for unfair competition, finding that Crawl Space
Doors disseminated literally false statements regarding TB-1 compliance of their flood
vents, and issued a permeant injunction.2 Central to the present motions is the fact that
the case was tried before a jury, as scheduled, over the course of three weeks—beginning
on October 7, 2019, and ending October 29, 2019.
The trial was bifurcated with respect to liability and damages. At the liability
phase of the trial, the jury found that Crawl Space Doors had made false statements
about its products’ compliance with industry standards, but that the false statements
caused no harm to Smart Vent. The jury found that Smart Vent otherwise failed to prove
its allegations of wrongdoing by Crawl Space Doors. With respect to Crawl Space Doors’
counterclaims, the jury found that Smart Vent (1) made false statements about the
coverage area of Crawl Space Doors’ flood vents, which statements harmed Crawl Space
1 The trial date in this case was rescheduled several times including on May 7, 2019 when the
Honorable Judge Jerome B. Simandle moved the trial date from June 10, 2019 to September 9,
2019. During the course of that summer, Judge Simandle fell ill and suddenly passed away. The
case was reassigned to this Court. Given the age of the case and the impending trial date, the
Court gave this case preference on its calendar and moved the trial by one month to October 17,
2019 to permit consideration of the eleven pending in limine motions and other outstanding
issues.
2 This particular Judge Simandle Opinion, dated October 31, 2017 (Filed November 1, 2017), was
referenced and discussed on multiple occasions while the Case was on trial. Crawl Space Doors
and Smart Vent also discuss Judge Simandle’s previous Opinion in their briefing on the present
Motions—Crawl Space Doors’ discusses a particular comment made about the Opinion by the
Court, and Smart Vent takes issue with Crawl Space Doors’ comments regarding the previous
Opinion made to the jury.
Doors; (2) made false statements about Crawl Space Doors’ non-compliance with the
Federal Emergency Management Act (“FEMA”) and/or the National Flood Insurance
Program (“NFIP”), which statements harmed Crawl Space Doors; and (3) made literally
false statements that Smart Vent’s flood vents are the “only” product certified to meet
the requirements of both FEMA and the NFIP.
The jury determined that only Smart Vent was liable, the trial then turned to the
damages phase. The jury ultimately awarded $300,000.00 in damages to Crawl Space
Doors. This part of the trial is the subject of Crawl Space Doors’ Motion for a New Trial
on Damages. [Docket No. 329.] Crawl Space Doors now contends that the Court erred in
multiple ways during the damages phase and as a result, the jury’s award was smaller
than it otherwise would have been. In its first Motion, Crawl Space Doors also argues
that the Court should award attorneys’ fees and costs because this case was
“exceptional” as defined by the Lanham Act. [Id. at 21-23; see also Docket No. 286.]
Meanwhile, on the second day of trial, after six years of litigation, during the
testimony of one of Smart Vent’s witnesses, it came to light that Smart Vent had
performed and videotaped physical tests on Crawl Space Doors’ flood vents. The videos
in question had not been disclosed during discovery. This development is the subject of
Crawl Space Doors’ Motion for Sanctions, wherein Crawl Space Doors seeks attorneys’
fees and costs in addition to default judgment as against Smart Vent’s claims.
During the damages phase, part of Crawl Space Doors’ argument in support of
seeking several million dollars in damages was that Smart Vent’s wrongdoing cost Crawl
Space Doors a significant portion of the market share over the course of several years.
This theory was supported primarily by the testimony of Crawl Space Doors’ President
and CEO William Sykes. Smart Vent argues now that Crawl Space Doors presented
insufficient evidence to support the jury’s award of $300,000. Therefore, in its first
Motion for Judgment as a Matter of Law, it seeks a reduction of the jury award.
Smart Vent’s second Motion for Judgment as a Matter of Law argues that one of
Crawl Space Doors’ experts should not have been permitted to testify and that Crawl
Space Doors mischaracterized certain evidence and confused the jury on pertinent
issues. For these alleged transgressions, Smart Vent seeks judgment as a matter of law
or a new trial.
The final pending motion is Smart Vent’s Motion for a Permanent Injunction, in
which it argues that Crawl Space Doors should be enjoined from making advertising
claims about compliance with industry standards. Smart Vent’s argument derives from
the jury’s conclusion that Crawl Space Doors did, in fact, make literally false statements
about compliance with industry standards.
The Court will address each motion in turn and will ultimately deny each of them.
II. Crawl Space Doors’ Motion for a New Trial
As noted above, Crawl Space Doors’ first motion seeks a new trial with respect to
damages. It also seeks attorneys’ fees and costs pursuant to the Lanham Act. The Court
will address each aspect of the Motion in turn.
A. Motion for a New Trial
1. Standard
Rule 59 of the Federal Rules of Civil Procedure permits a court to “grant a new
trial on all or some of the issues — and to any party — as allows . . . after a jury trial, for
any reason for which a new trial has heretofore been granted in an action at law in
federal court.” FED. R. CIV. P. 59(a)(1)(A). “The decision to grant or deny a new trial is
almost exclusively within the province of the District Court.” John M. Floyd & Assocs. v.
Ocean City Home Bank, Civil Action No. 03-1473, 2008 WL 4534079, at *7 (D.N.J. Oct.
2, 2008) (citing Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 36 (1980)). “The
traditional bases for granting such a motion are: (1) where the verdict rendered is wholly
against the weight of the evidence; (2) where the verdict rendered is excessive; (3) where
improper motives have swayed the jury; . . . (4) where gross error has been committed
by the jury;” and (5) where the Court provided erroneous jury instructions. Id. (citing
Hayes v. Cha, 388 F. Supp. 2d. 470, 496 (D.N.J. 2004); Finch v. Hercules, Inc., 941 F.
Supp. 1395, 1413 (D. Del. 1996).
“A new trial may be granted ‘when the verdict is contrary to the great weight of
the evidence; that is where a miscarriage of justice would result if the verdict were to
stand.’” Brown v. Nutrition Mgmt. Servs. Co., 370 F. App’x 267, 269-70 (3d Cir. 2010)
(quoting Pryer v. C.O. 3 Slavic, 251 F.3d 448, 453 (3d Cir. 2001)). “In considering a
motion for a new trial, in addition to determining whether there was error, a court must
determine whether the [moving party] suffered ‘substantial prejudice’ from the alleged
error. Only where there is a reasonable probability that trial error could have had a
substantial impact on the jury’s decision must a court grant a new trial.” U.S. v. Bertoli,
854 F. Supp. 975, 1093 (D.N.J. 1994).
2. Analysis
Crawl Space Doors presents three arguments that it believes warrant a new trial.
i. Inadmissibility of certain evidence
First, Crawl Space Doors claims that “the Court erred in allowing the jury to hear
evidence and by instructing the jury to consider comparative harm caused by Crawl
Space Doors after the jury determined that Crawl Space Doors’ actions did not harm
Smart Vent.” [Docket No. 329, at 8 (alterations omitted).] Crawl Space Doors points out
that in the liability phase of the trial, the jury found that while Crawl Space Doors in fact
made literally false statements regarding compliance with industry standards, it did not
cause any actual harm to Smart Vent. [Id. at 3, 8.] Nevertheless, in the damages phase,
“the Court allowed both testimony and argument before the jury with regards to harm
and/or potential harm caused by Crawl Space Doors’ incorrect statements.” [Id. at 8.]
This, Crawl Space Doors argues, was an error because it allowed the jury “to consider
evidence and argument on matters that were already decided.” [Id. at 9.] In short, the
Court should not have allowed the jury to consider comparative harm when the jury had
already decided that Crawl Space Doors’ actions did not harm Smart Vent. Crawl Space
Doors argues that the only way to correct this error, which was prejudicial, is by
awarding a new trial on damages. [Id.]
Smart Vent responds with several arguments of its own that the Court finds
compelling. First, Smart Vent argues that its “evidence and arguments in [the damages
phase] showed the jury that [Crawl Space Doors’] literally false statements about
complying with industry standards . . . had real-world consequences that undermined
[Crawl Space Doors’] entitlement to the amount of damages it sought.” [Docket No. 340,
at 2, 7-17.] Specifically, Crawl Space Doors’ “central argument” in the damages phase
“was that but for Smart Vent’s misconduct, it was ‘common sense’ that [Crawl Space
Doors] would have become the dominant market player in the industry, with over 60%
of the market’s flood vent sales.” [Id. (emphasis in original).] Smart Vent argues that the
evidence in question, which shows that Crawl Space Doors made literally false claims
about regulatory standards, would preclude that breadth of damages because Crawl
Space Doors did not meet the same standards as Smart Vent did. [Id.] Smart Vent also
makes a compelling argument that, even putting aside the evidence in question here,
Crawl Space Doors simply failed to meet its burden in proving damages. [Id. at 7-17.]
The jury was presented with several reasons to dispel Crawl Space Doors’ theory of how
much of the market it would have overtaken but for Smart Vent’s actions. [Id.] Crawl
Space Doors does not now establish that the alleged admission of evidence about its own
behavior was in fact prejudicial, given the rest of the evidence presented to the jury.
Therefore, the Court agrees with Smart Vent that Crawl Space Doors’ first argument is
insufficient to grant a new trial on damages.
Additionally, Smart Vent points out that Crawl Space Doors sought compensatory
damages based on harm to Crawl Space Doors’ goodwill and reputation. [Id. at 3 & n.1,
17.] The Court agrees with Smart Vent that it was appropriate for the jury to consider
Crawl Space Doors’ own bad acts in determining the extent to which Crawl Space Doors’
goodwill and reputation were damaged. Finally, Smart Vent points out that the jury was
the same in both phases of the trial. [Id. at 3-4.] Not only had the jury already heard all
of the evidence of Crawl Space Doors’ bad acts, it had found that Crawl Space Doors did
in fact make literally false statements about regulatory compliance. It follows that Crawl
Space Doors cannot now prove that the admission of that evidence in the damages phase
was so prejudicial as to cause a “miscarriage of justice.”
The Court agrees with Smart Vent’s arguments. The evidence and arguments
presented during the damages phase do not warrant a new trial on damages. Therefore,
the Court will not grant Crawl Space Doors’ Motion on that basis.
ii. Disgorgement
Next, Crawl Space Doors argues that “the Court erred in preventing the jury from
considering disgorgement.” [Docket No. 329, at 12 (alterations omitted).] The jury
instructions here, stated that
[t]he jury is not to consider Smart Vent’s financial status in its award of
monetary damages, nor should the amount of Smart Vent’s revenue or
profit influence the determination of monetary damages in any way.
Damages may not be awarded by the way of disgorging profits that Smart
Vent earned, rather only by compensating Crawl Space Doors for injury
that Crawl Space Doors sustained or may sustain in the future.
[Id. at 13.] As Crawl Space Doors concedes, however, “the Lanham Act [does] not give .
. . the absolute right to try [a] disgorgement claim to the jury.” [Id. at 13.] In fact,
“[u]pon [a plaintiff’s] establishing a violation of the Lanham Act, actual harm to its
business, and proving the defendant’s sales, courts must nevertheless consider whether
disgorgement of profits is appropriate.” MB Imports, Inc. v. T&M Imports, LLC, No. 10-
cv-3445, 2016 WL 8674609, at *6 (D.N.J. Dec. 23, 2016). Nonetheless, Crawl Space
Doors contends that “[i]n deciding that Crawl Space Doors would not be allowed to seek
disgorgement of Smart Vent’s profits, the Court erroneously characterized disgorgement
as ‘punitive.’” [Docket No. 329, at 12].
In that regard, Crawl Space Doors refers to a single statement made by the Court
in addressing the question of damages before it. The Court stated: “we're left in a
difficult position as a Court, in view of these circumstances, to say that there was
sufficient clear and convincing proof to impose what would appear to be a punitive
aspect in determining disgorgement.” [Id. (quoting the Transcript); see also Docket No.
325 at 1818:19-1821:9]. Crawl Space Doors, however, overstates the Court’s reliance on
this language in coming to the equitable decision to preclude disgorgement.
The Lanham Act states a prevailing party “shall be entitled, subject to the
provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to
recover . . . defendant’s profits.” 15 U.S.C. § 1117(a). The Court, immediately prior to
using the word “punitive”, explicitly stated that “[d]isgorgement is an equitable issue.”
[See Docket No. 340, at 22-23 (quoting transcript).] The Court was clear that, “[w]hen
the word "equity" is used, that it's usually a matter for the Court, that I look at this and
say, as a matter of equity, we don't have the question asked to the jury.” [Docket No. 325
at 1832:1-7]. In its determination, the Court considered the actions of both parties,
including most prominently the jury’s finding that there were mutual
misrepresentations made by both Smart Vent and Crawl Space Doors. [See Docket No.
340, at 22-23 (quoting transcript).] The Court also permitted briefing on the issue, and
weighed the parties written submissions, as well as the arguments advanced orally,
before concluding that disgorgement was not in the interest of equity, given the facts
present in this case.
Crawl Space Doors’ argument does little to address this reality, instead focusing
in on the Court’s one-time use of the word “punitive” on the record. There can be no
argument that the Court did not adequately weigh the facts of the case to determine that
disgorgement was not in the interest of equity here. This determination was squarely in
the province of the Court, so Crawl Space Doors’ other arguments that the Court
overstepped its bounds are unfounded.3 See Steak Umm Co., LLC v. Steak "Em Up, Inc.,
3 Crawl Space Doors suggests that “the Court should not have ‘substitute[d] its own judgment
for that of the jury simply because the court might have come to a different conclusion.’” [Docket
No. 329, at 18 (quoting Lightning Lube v. Witco Corp., 802 F. Supp. 1180, 1186 (D.N.J. 1992)].
Crawl Space Doors, however, again mischaracterizes the Court’s action. The Court consistently
recognized that the jury found that the false statement Crawl Space Doors made about FEMA’s
Technical Bulletin 1 certification did not cause “actual harm” to Smart Vent. Those findings, by
preponderance of the evidence, did not preclude the Court from finding that it could not “ignore
the fact that there was joint participation in certain activity up to 2017;” nor that the jury found
misrepresentations by Crawl Space Doors. The Court clarified:
both [parties] were charged with misrepresentation, up to November 1st. So to
show damages, there should be more specific direction as to in spite of the fact
that both are there misinterpreting how much of the damages can be attributed
against the plaintiff and for the defendant. It’s an issue that’s there, . . . So I can’s
say that everything prior to November 1st is simon-pure, because there has been
No. CIV.A. 09-2857, 2011 WL 3679155, at *10 (E.D. Pa. Aug. 23, 2011) (“Disgorgement
of profits is an equitable remedy that lies within the discretion of the court.”)
In this case, the Court fulfilled its duty of determining whether principles of
equity militated the availability of disgorgement. It found that disgorgement was not
appropriate, and Crawl Space Doors has not presented evidence here upon which the
Court will change that determination. The Court will therefore not grant Crawl Space
Doors’ Motion based on this argument.
iii. Cross-examination
Finally, Crawl Space Doors argues that the Court’s decision to limit Crawl Space
Doors’ cross-examination of Dana Trexler, Smart Vent’s damages expert, was erroneous.
[Docket No. 329, at 21.] Namely, the Court did not permit Crawl Space Doors to cross-
examine Trexler with respect to the damage calculations that she had made on Smart
Vent’s behalf. [Id.] This “precluded the jury from hearing key evidence related to [Crawl
Space Doors’] claim for damages,” according to Crawl Space Doors. [Id.]
Crawl Space Doors’ argument on this issue spans but a single paragraph that
plainly does not develop in any significant way how the Court’s sustaining of certain
objections created a miscarriage of justice or so prejudiced Crawl Space Doors as to
warrant a new trial. The Court granted Crawl Space Doors wide latitude in cross-
examining Ms. Trexler, which Crawl Space Doors took full advantage of. [See Docket
a determination by the Court that in that period of time it was also
misrepresentation by the defendant.
[Docket No. 325, Trial Transcript at 1821:15-25]. The Court did not express any “reservations”
regarding harm to Smart Vent, rather, the Court expressed that “there is sufficient contradiction
up to November 1st as to how influential any of the misrepresentations were.” [Id. at 1821:1-9].
In other words, “we don’t know, when we try to articulate the amount of damage in this trial,
how much of it should have a consideration of the fact that they were both out there doing the
same thing.” [Id. at 1830:8-11].
No. 340, at 32-37.] There is no basis for granting a new trial due to what appears to be
the Court’s sustaining of a single objection made during Crawl Space Doors’ cross-
examination of Ms. Trexler. [Docket No. 326, Trial Transcript, at 1910-11]. Therefore,
the Court will not grant Crawl Space Doors’ Motion on that basis.
In conclusion, the Court is not persuaded by any of Crawl Space Doors’
arguments in favor of its Motion for a New Trial. Therefore, the Court will deny that
aspect of the Motion.
B. Motion for Attorneys’ Fees
Crawl Space Doors’ Motion for a New Trial also seeks attorneys’ fees pursuant to
the Lanham Act. The Lanham Act states that a “court in exceptional cases may award
reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a). In the Third
Circuit, “a district court may find a case ‘exceptional,’ and therefore award fees to the
prevailing party, when (a) there is an unusual discrepancy in the merits of the positions
taken by the parties or (b) the losing party has litigated the case in an ‘unreasonable
manner.’” Fair Wind Sailing, Inc. v. Dempster, 764 F.3d 303, 314-15 (3d Cir. 2014)
(quoting Octane Fitness, LLC v. Icon Health & Fitness, Inc., 572 U.S. 545 (2014)).
Here, Crawl Space Doors points out that the jury ruled against Smart Vent and
that Smart Vent failed to disclose that it had tested Crawl Space Doors’ vents, which
tests allegedly showed that Smart Vent’s claims were “baseless.” [Docket No. 329, at 22-
23.] This, Crawl Space Doors argues, shows both that there was an “unusual
discrepancy” in this case and that Smart Vent litigated the case in an “unreasonable
manner.” [See id.] The allegations made with respect to this aspect of Crawl Space
Doors’ Motion are discussed in more detail below, as they are also raised in its Motion
for Sanctions. But in considering the totality of the circumstances here, see Octane
Fitness, 572 U.S. at 554, the “exceptional case” threshold is not met. The
characterization of Smart Vent’s case as “baseless,” particularly when the jury did in fact
rule in its favor on one liability issue, is itself unsubstantiated. As will be discussed
further below, the nondisclosure of certain documents is not illustrative of an
“unreasonable” approach to the litigation by Smart Vent either, despite Crawl Space
Doors’ protestations. The Court cannot reasonably hold that this is an exceptional case
under the Third Circuit’s interpretation of the Lanham Act. Therefore, the Court will
deny this aspect of Crawl Space Doors’ Motion, as well.
III. Crawl Space Doors’ Motion for Sanctions
Crawl Space Doors’ second motion seeks sanctions for Smart Vent’s alleged
discovery violations revolving around the video of Smart Vent testing a Crawl Space
Doors vent. [Docket No. 330.] Crawl Space Doors claims that Smart Vent intentionally
hid the video and other related documents throughout the course of litigation. [See id. at
2-5.] It also claims that one of Smart Vent’s witnesses, Michael Graham, gave false
deposition testimony and another, Thomas Little, gave false trial testimony. [Id. at 5-
13.] Crawl Space Doors alleges that Smart Vent “buried” the relevant documents and
evidence, even though such evidence was “the best evidence of whether Crawl Space
Doors misrepresented the coverage area of its flood vents.” [Id. at 13-17 (alterations
omitted).] Crawl Space Doors now seeks sanctions in the form of attorney’s fees and
costs and the dismissal of Smart Vent’s complaint.
A. Standard
Under Federal Rule of Civil Procedure 26(a), except under certain circumstances
not present here,
a party must, without awaiting a discovery request, provide to the other
parties:
(i) the name and, if known, the address and telephone number of each
individual likely to have discoverable information — along with the
subjects of that information — that the disclosing party may use to support
its claims or defenses, unless the use would be solely for impeachment;
(ii) a copy — or a description by category and location — of all
documents, electronically stored information, and tangible things that the
disclosing party has in its possession, custody, or control and may use to
support its claims or defenses, unless the use would be solely for
impeachment.
FED. R. CIV. P. 26(a)(1)(A)(i)-(ii). Additionally,
[a] party who has made a disclosure under Rule 26(a) — or who has
responded to an interrogatory, request for production, or request for
admission — must supplement or correct its disclosure or response . . . in a
timely manner if the party learns that in some material respect the
disclosure or response is incomplete or incorrect.
FED. R. CIV. P. 26(e)(1)(A).
Rule 37 addresses the ramifications of a party failing to satisfy Rule 26’s
requirements:
If a party fails to provide information or identify a witness as required by
Rule 26(a) or (3), the party is not allowed to use that information or
witness to supply evidence on a motion, at a hearing, or at a trial, unless
the failure was substantially justified or is harmless.
FED. R. CIV. P. 37(c)(1). Alternatively, the court “may order payment of the reasonable
expenses, including attorney’s fees, caused by the failure; . . . may inform the jury of the
party’s failure; and . . . may impose other appropriate sanctions.” Id. In determining
whether to impose sanctions pursuant to Rule 37(c)(1), courts will consider: “(1)
prejudice or surprise to the [opposing party]; (2) the ability of [the opposing party] to
cure the prejudice; (3) the likelihood of disruption; and (4) the [non-disclosing party’s]
bad faith or unwillingness to comply.” Wachtel v. Health Net, Inc., 239 F.R.D. 81, 104-
05 (D.N.J. 2006) (citing Newman v. GHS Osteopathic, Inc., 60 F.3d 153, 156 (3d Cir.
1995)).
Moreover, a court has the inherent power to determine whether a fraud has been
committed upon the court. This requires a party to prove “clearly and convincingly” that
the opposing party “has sentiently set in motion some unconscionable scheme
calculated to interfere with the judicial system’s ability impartially to adjudicate a
matter by improperly influencing the trier or unfairly hampering the presentation of the
opposing party’s claim or defense.” Perna v. Elec. Data Sys. Corp., 916 F. Supp. 388, 397
(D.N.J. 1995) (quoting Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989)). In
deciding to enforce its inherent powers, a district court should consider the same factors
as it uses in applying Rule 37. See Republic of the Philippines v. Westinghouse Elec.
Corp., 43 F.3d 65, 74 (3d Cir. 1994). The following factors must be considered prior to
the court dismissing a case as a sanction for misconduct:
(1) the extent of the party’s personal responsibility; (2) the prejudice to the
adversary caused by the failure to meet scheduling orders and respond to
discovery; (3) a history of dilatoriness; (4) whether the conduct of the
party or the attorney was willful or in bad faith; (5) the effectiveness of
sanctions other than dismissal, which entails an analysis of alternative
sanctions; and (6) the meritoriousness of the claim or defense.
Poulis v. State Farm Fire & Casualty Co., 747 F.2d 863, 868 (3d Cir. 1984).
B. Analysis
As noted above, Crawl Space Doors argues that three alleged violations warrant
the desired sanctions: the intentional “burying” of the video and related documents, the
false deposition testimony of Michael Graham, and the false trial testimony of Thomas
Little. The Court will first consider the Rule 37 factors outlined above. To the extent that
Crawl Space Doors was prejudiced by these issues, the Court finds that, by the Court’s
actions and by Crawl Space Doors’ opportunities to confront the issues on cross-
examination at trial, the prejudice was substantially mitigated. The Court precluded any
use of the video at trial, at the request of Crawl Space Doors, 4 and instructed the jury
not to consider any evidence presented about the video. [Docket No. 305, Trial
Transcript, October 21, 2019, at 1429:11-1430:15.] This was done precisely “in order that
there be no prejudice to either side.” [Id.] The Court finds that, given the unique
circumstances surrounding this case and this issue in particular, this approach was
adequate to alleviate any prejudice as to either party.
Additionally, the Court rejects the assertion that these issues were the result of
Smart Vent’s willful or bad faith conduct. Voluminous discovery was exchanged in this
case, which included portions of the videos in question and documents making
reference to those videos. [See Docket No. 339, at 6-14.] Moreover, after extensive back-
and-forth between the parties’ attorneys, several search terms were agreed upon for
electronically stored information; unfortunately, the videos were not marked with any of
those terms, and therefore did not show up in Smart Vent’s searches. [See id. at 24-25.]
While it is regrettable that the videos were not produced until after the trial began,
Crawl Space Doors has not provided sufficient evidence for the Court to make a finding
that Smart Vent intentionally “buried” the relevant documents and evidence in this case.
The Court will find, therefore, that Smart Vent’s actions were not in bad faith.
4 During the litigation phase of the trial, Smart Vent moved to admit the video at issue, as well as
photographs to the jury, claiming that the video was “consistent with the statements made by
Smart Vent at trial,” meaning that they “do not show that a CSD louvered flood vent passes an
AC 364 debris test.” [Docket No. 300-1, at 5.] Crawl Space Doors opposed and asked the Court
to “preclude Smart Vent from offering any further testimony or evidence about the performance
testing of Crawl Space Doors’ flood vents.” [Docket No. 301, at 6-7.] The Court determined “that
the video will not be used, will not be admitted in evidence, and this is in keeping with the
request of the defendant.” [Docket No. 305, Trial Transcript, October 21, 2019, at 1429:11-
1430:15.]
Therefore, the Court will hold that, under Rule 37, sanctions in the form of
attorney’s fees and costs are not appropriate in this instance. It follows that default
judgment — a decidedly more extreme sanction — is also inappropriate here. With
respect to the Poulis factors, the Court finds that each of them, too, cut against imposing
default judgment. Several of the Poulis factors follow the same discussion as above:
Smart Vent’s personal responsibility is negligible here, as the non-disclosure was
unintentional; any prejudice that resulted was already addressed by the Court; and
Smart Vent did not act willfully or in bad faith. As to the remaining factors, there is no
evidence of Smart Vent’s history of dilatoriness; to the contrary, once Smart Vent
learned of the non-disclosure of the video, it turned it over promptly. The Court has
already determined that other sanctions are not necessary, meaning that the fifth Poulis
factor cuts against default judgment. And finally, the sixth factor — the meritoriousness
of Smart Vent’s claim or defense — is not extremely relevant here given that the jury has
already heard the case and decided the merits of those claims and defenses.
In sum, the various factors regarding the imposition of sanctions indicate that
sanctions are not appropriate in this case. The Court will therefore deny Crawl Space
Doors’ Motion for Sanctions.
IV. Smart Vent’s First Motion for Judgment as a Matter of Law
A. Standard
Smart Vent’s first Motion for Judgment as a Matter of Law seeks a reduction of
the damages award to either nothing or a nominal amount. [Docket No. 331, at 3.]
Judgment as a matter of law is appropriate “only if, viewing the evidence in the light
most favorable to the nonmovant and giving it the advantage of every fair and
reasonable inference, there is insufficient evidence from which a jury reasonably could
find” in the nonmovant’s favor. Moyer v. United Dominion Indus., Inc., 473 F.3d 532,
545 n.8 (3d Cir. 2007) (quoting Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166
(3d Cir. 1993)). “The question is not whether there is literally no evidence supporting
the party against whom the motion is directed but whether there is evidence upon which
the jury could properly find a verdict for that party.” Erhart v. City of Atlantic City, No.
00-cv-6209, 2005 WL 8174791, at *2 (D.N.J. Feb. 10, 2005) (quoting Walter v. Holiday
Inns, Inc., 985 F.2d 1232, 1238 (3d Cir. 1998)).
Remittitur — the reduction of a jury award in a civil case — “is well established as
a device employed when the trial judge finds that a decision of the jury is clearly
unsupported and/or excessive.” Cortez v. Trans Union, LLC, 617 F.3d 688, 715 (3d Cir.
2010) (quoting Spence v. Bd. of Educ. of Christina Sch. Dist., 806 F.2d 1198, 1201 (3d
Cir. 1986)). A court’s conclusion that it would have awarded a smaller amount of
damages is an insufficient basis to grant remittitur. See Motter v. Everest & Jennings,
Inc., 883 F.2d 1223, 1230 (3d Cir. 1989). Rather, “the damages assessed by the jury
must be so unreasonable as to offend the conscience of the Court.” Id. (quoting Murray
v. Fairbanks Morse, 610 F.2d 149, 152 (3d Cir. 1979)). Finally, “a court cannot reduce an
award without affording the [party whose award is being reduced] the option of a new
trial.” Cortez, 617 F.3d at 717.
B. Analysis
“[V]iewing the evidence in the light most favorable to” Crawl Space Doors, the
nonmoving party here, “and giving it the advantage of every fair and reasonable
inference,” the Court will hold that there was sufficient evidence to support the jury’s
award of $300,000 in damages to Crawl Space Doors. The jury calculated that sum of
damages as the amount of lost sales and/or loss of reputation or goodwill due to Smart
Vent’s false advertising about the coverage area of Crawl Space Doors’ flood vents and
their compliance with FEMA and/or the NFIP.
Crawl Space Doors argued during the damages phase that Smart Vent’s false
advertising resulted in Crawl Space Doors having a smaller market share, and therefore
fewer profits, than it otherwise would have had. Crawl Space Doors relied on the
testimony of William Sykes — its President, co-owner, and designated Rule 30(b)(6)
witness — to support this theory. Smart Vent characterizes his testimony as
“speculative, inaccurate, and unreliable.” [Id. at 15 (alterations omitted).] Mr. Sykes
based his analysis merely on his “common sense” conclusion that false advertising that
paints one’s products in a negative light will negatively affect that individual’s sales. [See
id. at 16.] Smart Vent argues that the “market share” theory is belied by the fact that
Crawl Space Doors’ sales have steadily increased since June 2015, apparently in spite of
Smart Vent’s false advertising. [Id. at 18.] Furthermore, Smart Vent argues that Mr.
Sykes’ calculations were inflated by the fact that he did not consider the extent to which
Crawl Space Doors’ own false advertising — in which it claimed that its vents were TB-1
compliant when they were not — might have affected its sales. [Id. at 19-21.] Mr. Sykes’
calculations were also erroneous, according to Smart Vent, because he included
products that Crawl Space Doors did not even sell in his analysis of the proportion of
Smart Vent sales that would have gone to Crawl Space Doors but for the false
advertising. [See id. at 21.] Finally, and broadly, Mr. Sykes’ analysis did not consider
external forces, new competitors, and other relevant factors. [Id. at 22-24.]
Smart Vent also contends that Crawl Space Doors did not suffer any reputational
harm or loss of goodwill, pointing to the fact that Mr. Sykes’ testimony only included the
words “goodwill” or “reputation” once. [Id. at 24-25.] Furthermore, Smart Vent points
to the testimony of its own damages expert, Dana Trexler, which Smart Vent claims was
unrebutted and called into question various aspects of Mr. Sykes’ analysis. [Id. at 25-
27.] Ms. Trexler alluded to many of the same issues listed above in her testimony,
ultimately concluding that Crawl Space Doors’ damages were $0. [Id. at 27.]
Crawl Space Doors rebuts that, even if the jury completely discredited Mr. Sykes’
market loss theory, there was still “sufficient evidence . . . to justify an award of
$300,000 in compensatory damages” due to loss of goodwill and reputational harm.
[See Docket No. 336, at 7.] Smart Vent’s argument that Mr. Sykes’ testimony did not
include the words “goodwill” or “reputation” is irrelevant, especially when the Court
considers the evidence that was presented. Although not couched precisely in those
terms, Crawl Space Doors did present evidence to show that how Smart Vent’s false
statements negatively affected Crawl Space Doors. [See Docket No. 336, at 8-9.] This
included evidence of Smart Vent’s employees misinforming consumers directly about
the performance of Crawl Space Doors’ vents, even after Judge Simandle clarified the
issue in an earlier decision. [Id.]
Crawl Space Doors sought several million dollars in damages due to lost profits
and/or loss of goodwill and reputational harm. [Id. at 1-2.] The jury returned an award
of only $300,000. Viewing the evidence in the light most favorable to Crawl Space
Doors, it is reasonable that the jury carefully considered the evidence, rejected various
portions of it, perhaps including Mr. Sykes’ “market share” theory, and yet gave
credence to enough of it to warrant the award. The Court is not in a position to know
precisely what swayed the jury and what did not; however, given the evidence presented
and the standard that applies to a motion for judgment as a matter of law, the Court will
hold that there was sufficient evidence for the jury to reach its conclusion in the
damages phase of trial. Furthermore, the Court does not find that the award “offend[s]
the conscience” so as to warrant remittitur. Therefore, Smart Vent’s Motion will be
denied in its entirety.
V. Smart Vent’s Second Motion for Judgment as a Matter of Law
In this Motion, Smart Vent seeks both judgment as a matter of law and a new
trial, for distinct reasons. The Court will analyze each argument separately.
A. Motion for Judgment as a Matter of Law
Smart Vent’s second Motion for Judgment as a Matter of Law argues that Crawl
Space Doors’ expert Dr. James Rice should have been precluded from testifying. [Docket
No. 332.] It also argues that a new trial should be granted under Rule 59 because of
what Smart Vent characterizes as Crawl Space Doors’ misleading presentation of certain
pieces of evidence.
At the outset, the second Motion for Judgment as a Matter of Law is procedurally
barred because Smart Vent failed to bring a Rule 50(a) motion at the close of evidence
during the liability phase of the trial, which is the phase during which Dr. Rice testified.
The Third Circuit has adopted a strict rule on this issue: “The failure of [a party] to move
for a directed verdict against [its opposition] at the close of all the evidence foreclose[s] .
. . its right to move for judgment notwithstanding the verdict.” Gebhardt v. Wilson
Freight Forwarding Co., 348 F.2d 129, 132 (3d Cir. 1965). As the Circuit later explained,
“Gebhardt totally forecloses any consideration of sufficiency questions in the absence of
a proper motion for directed verdict.” Yohannon v. Keene Corp., 924 F.2d 1255, 1262
(3d Cir. 1991). Nevertheless, this Court will consider the merits of the Motion.
Smart Vent argues that Dr. Rice should not have been qualified to testify as an
expert because he did not employ adequate methodologies in reaching his conclusions.
[See Docket No. 332, at 9-19.] Namely, Smart Vent contends that Dr. Rice’s application
of industry standards — namely FEMA’s Technical Bulletin 1 (“TB-1”), the American
Society of Civil Engineers standard 24 (“ASCE 24”), and Air Movement and Control
Association (“AMCA”) standards — was inconsistent at best and completely lacking at
worst. [Id.] Crawl Space Doors argues that, in fact, neither FEMA nor ASCE have
“prescribed the method by which the net open area of a flood vent can, should, or must
be measured.” [Docket No. 337, at 5.]
At their core, Smart Vent’s issues with Dr. Rice’s opinion were primarily ones that
were best addressed on cross-examination and by the testimony of Smart Vent’s own
experts. As Crawl Space Doors now argues, the majority of the issues presently raised by
Smart Vent — many of which were also raised in an earlier Daubert motion that the
Court denied — are better characterized as differences of opinion and interpretation
than as examples of Dr. Rice’s lack of proper methodology in coming to his conclusions.
Smart Vent’s best argument revolves around Dr. Rice’s apparent misinterpretation of
certain TB-1 guidelines — namely the definition of obstructions and of “R.” [See Docket
No. 332, at 14-18.] However, the Court will hold that these discrepancies are insufficient
to render Dr. Rice’s opinion unreliable on the whole.
As a result, the Court will hold that Smart Vent has not met the standard for
judgment as a matter of law: that is, that “there is insufficient evidence from which a
jury reasonably could find” in the nonmovant’s favor. Moyer, 473 F.3d at 545 n.8
(quoting Lightning Lube, 4 F.3d at 1166). Here, in addition to Dr. Rice’s testimony, there
was substantial evidence to support the jury’s verdict, including fact witnesses,
engineers, Smart Vent’s own experts, and other evidence. [See Docket No. 337, at 7-8.]
Therefore, for the various reasons listed above, Smart Vent has not met its burden with
respect to the second Motion for Judgment as a Matter of Law, and the Court will deny
it.
B. Motion for a New Trial
Next, Smart Vent argues that it is entitled to a new trial with respect to liability.
As noted above, “[a] new trial may be granted ‘when the verdict is contrary to the great
weight of the evidence; that is where a miscarriage of justice would result if the verdict
were to stand.’” Brown v. Nutrition Mgmt. Servs. Co., 370 F. App’x 267, 269-70 (3d Cir.
2010) (quoting Pryer v. C.O. 3 Slavic, 251 F.3d 448, 453 (3d Cir. 2001)). “In considering
a motion for a new trial, in addition to determining whether there was error, a court
must determine whether the [moving party] suffered ‘substantial prejudice’ from the
alleged error. Only where there is a reasonable probability that trial error could have
had a substantial impact on the jury’s decision must a court grant a new trial.” U.S. v.
Bertoli, 854 F. Supp. 975, 1093 (D.N.J. 1994).
Smart Vent believes it is entitled to a new trial for two reasons. First, Smart Vent
argues that Crawl Space Doors improperly suggested to the jury that Smart Vent
engaged in discovery violations with respect to the video discussed above. [See Docket
No. 332, at 24-27.] Second, Smart Vent argues that Crawl Space Doors improperly
presented legal arguments to the jury about Judge Simandle’s previous Opinion. [See id.
at 28-35.]
In short, neither of these arguments, even if true, resulted in “substantial
prejudice” against Smart Vent, and therefore will not be the basis for a new trial. Smart
Vent argues that the jury was affected by these issues based on “the single question from
the jury during deliberations,” which asked whether liability issues were “only based on
the situation after Judge Simandle’s ruling.” [Id. at 35-36.] Smart Vent argues that the
way in which Crawl Space Doors made these arguments “suggested to the jury that
Smart Vent had no respect for the Court or its processes.” [Id. at 37.]
The Court disagrees with these conclusions. As Smart Vent’s own recounting of
the trial illustrate quite clearly, the Court intervened on numerous occasions to limit the
scope of Crawl Space Doors’ questioning of witnesses. Specifically, the discussions of
Judge Simandle’s Opinion were repeatedly reined in by the Court. [See id. at 28-35.]
Additionally, the Court gave a curative instruction with respect to the video. [See Docket
No. 337, at 12.] In other words, the Court took necessary steps to ensure that the jury’s
decision was not affected by improper arguments, such as those now complained of by
Smart Vent. Based on how the Court handled these issues at trial, and based on the lack
of any real argument that these issues created “substantial prejudice” against Smart
Vent, the Court will deny Smart Vent’s Motion for a New Trial.
VI. Smart Vent’s Motion for a Permanent Injunction
The final motion to be decided is Smart Vent’s Motion for a Permanent
Injunction. [Docket No. 333.] Smart Vent argues that, because the jury found that Crawl
Space Doors made literally false statements with respect to Crawl Space Doors’ vent’s
compliance with industry standards, Crawl Space Doors should now be “enjoin[ed] . . .
from marketing, advertising and/or certifying its mass-produced louvered flood vents as
compliant with industry standards,” namely TB-1, ASCE 24-05, ASCE 24-14, the IRC,
the IBC, and the Lowest Floor Guide. [Id. at 2-3.]
“In deciding whether a permanent injunction should be issued, the court must
[first] determine if the plaintiff has actually succeeded on the merits (i.e. met its burden
of proof).” Ciba-Geigy Corp. v. Bolar Pharmaceutical Co., Inc., 747 F.2d 844, 850 (3d
Cir. 1984). The prevailing party must also demonstrate
(1) that it has suffered an irreparable injury; (2) that the remedies
available at law, such as monetary damages, prove inadequate to
compensate for that injury; (3) that the balance of hardships between the
plaintiff and defendant favor equitable relief; and (4) that the public
interest would not be disserved by a permanent injunction.
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).
The principal issue with Smart Vent’s Motion is that the jury merely found that
that Crawl Space Doors made literally false statements regarding compliance with
industry standards. It did not indicate, because it was not asked to indicate, precisely
which industry standards Crawl Space Doors made literally false statements about.
Therefore, as Crawl Space Doors argues in its response to this Motion, “Smart Vent
cannot credibly argue that it succeeded on the merits of a claim that Crawl Space Doors
made literally false statements regarding its compliance with any or all of” the industry
standards Smart Vent now invokes. Without such specificity, it would be inappropriate
for the Court to grant Smart Vent’s Motion.
The jury’s findings cut against all four of the eBay factors, too, and the Court is
“prohibited from reconsidering any issues necessarily and actually decided by the jury.”
EEOC v. Century Broad. Corp., 957 F.2d 1446, 1463 (7th Cir. 1992); see also Squires v.
Bonser, 54 F.3d 168, 174 (3d Cir. 1995) (citing Century Broad. Corp., 957 F.2d at 1463)).
Smart Vent cannot show irreparable harm because the jury already decided that Smart
Vent was not, in fact, harmed by the false statements. Because Smart Vent was not
harmed, it received no remedy. It strains reason to argue that this is inadequate when
the jury ruled the way it did. Enjoining Crawl Space Doors from engaging in any
advertising that references industry standard compliance, when it has not been
determined that such advertisements would in fact be false, would be an immense and
unsubstantiated burden on Crawl Space Doors. Conversely, the only burden Smart Vent
claims is the potential for future lost sales — despite the fact, it bears repeating, that the
jury already found that Smart Vent was not damaged by the same alleged activities in
the past. Thus, the balance of hardships does not favor an injunction. Finally, Smart
Vent argues that an injunction would be in the public interest because it would “stop the
fraud perpetrated on consumers who are led to believe by [Crawl Space Doors] that its
louvered flood vents are compliant with industry standards, including ASCE 24-05,
ASCE 24-14, the IRC, the IBC, and the Lowest Floor Guide, when they are not.” [Docket
No. 333, at 10.] Once again, this argument is undermined by the fact that there has been
no explicit finding that Crawl Space Doors has defrauded consumers in this respect.
Smart Vent’s arguments in favor of a permanent injunction are unavailing in light
of the ruling that the jury made during the liability phase of this trial. Therefore, the
Court will deny Smart Vent’s Motion for a Permanent Injunction.
VII. Conclusion
For the reasons expressed above, the Court will deny all of the motions currently
pending before it. An accompanying Order shall issue.
Dated: September 24, 2020
/s/ Joseph H. Rodriguez
JOSEPH H. RODRIGUEZ
United States District Judge