Appendix — Overseas Motors, Inc. v. Import Motors Ltd.

v.

Buprene Court,

FILED

| MICHAEL ROVAS. Sh ‘CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

tee |

75-494 ' {s

APPENDIX I

APPENDIX II

OVERSEAS MOTORS, INC., a Michigan corpora-

tion,

Pet itioner-

Plaintiff,

-VS-

IMPORT MOTORS LIMITED, INC., a Michigan

corporation; AUDI NSU AUTO UNION AK-

TIENGESELLSCHAFT (former NSU MOTO-

RENWERKE AKTIENGESELLSCHAFT), a

foreign corporation; VOLKSWAGENWERK

AKTIENGESELLSCHAFT, a/k/a VOLKS-

WAGENWERK GinbH, a corporation of the

German Federated Republic; and VOLKSWA-

GEN OF AMERICA, INC. (Porsche-Audi Divi-

sion), a New Jersey corporation, jointly and sev-

erally,

tC

75-494

Respondent s-

Defendants.

we nNnoe=—

INDEX TO APPENDIX I

Judgment on Directed Verdict, August 13, 1973 ..... la

Order Denying Motion for New Trial, April 2, 1974 .. 3a

Decision of United States Court of Appeals for Sixth

oe MP A AA Peri Perea Tere Sa

Appellant's Petition for Rehearing, June 14, 1975 .... tSa

Order Denying Petition for Rehearing, July 10, 1975 . 22a

la 2a °

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

that the Plaintiff take nothing; that the action be dismissed on the

merits and with prejudice, and that the Defendants recover of the

Plaintiff their taxable costs.

JOHN FEIKENS

OVERSEAS MOTORS, INC., a Michigan corpora- District Judge

—_ ins Dated: August 13, 1973

Plaintiff, Detroit, Michigan

-VS-

IMPORT MOTORS LIMITED, INC., a Michigan A ene re

corporation; AUDI NSU AUTO UNION AK- HENRY R. HANSSEN, Clerk

TIENGESELLSCHAFT (former NSU MOTO- BY A. T. DAVID

RENWERKE AKTIENGESELLSCHAFT), a.| ¢y; DEPUTY CLERK

foreign corporation; VOLKSWAGENWERK Action

AKTIENGESELLSCHAFT, a/k/a VOLKS- | No. 38155 APPROVED AS TO FORM:

WAGENWERK GmbH, a corporation of the Burke & Wilson

German Federated Republic; and VOLKSWA- Attorneys for Plaintiff

GEN OF AMERICA, INC. (Porsche-Audi Divi-

sion), a New Jersey corporation, jointly and sev- By WILFRED L. BURKE

erally, Wilfred L. Burke

Defendants.

JUDGMENT ON DIRECTED VERDICT

The above-entitled action having come on for trial before the

Court; Plaintiff having presented all of its proofs on the issue of ‘

liability and having concluded its case; the Defendants’ joint

Motion for Directed Verdict having been made; argument having |

been heard and briefs in support of the respective positions of

Defendants and Piainiiff having been considered; and the Court

having been fully advised in the premises, ;

IT 1S ORDERED and ADJUDGED that the Defendants’

Motion for Directed Verdict as to all counts of Plaintiff's Com-

plaint be and the same is hereby granted as to each and every

defendant on each and every count and/or cause of action, and

=>

3a

FILED APRIL 2, 1974

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN®

SOUTHERN DIVISION

OVERSEAS MOTORS, INC., a Michigan Corpo-

ration,

Plair. iff,

-VS-

IMPORT MOTORS LIMITED, INC., a Michigan

corporation, AUDI NSU AUTO UNION AK-

TIENGESELLSCHAFT (formerly NSU MO-

TORENWERKE AKTIENGESELLSCHAFT),

a foreign corporation, VOLKSWAGENWERK | “ivi!

AKTIENGESELLSCHAFT aka VOLKSWA- | No: 38155

GENWERK GmbH, a corporation of the Ger-

man Federated Republic, and VOLKSWAGEN

OF AMERICA, INC. (Porsche-Audi Division), a

New Jersey corporation, jointly and severally,

Defendants.

ORDER

At a session of said Court held in the Federal Building, in the

City of Detroit, County of Wayne, State of Michigan, on

APRIL 2, 1974.

PRESENT: HON. JOHN FEIKENS

District Court Judge

This Court having previously granted Defendants’ Motion

for a Directed Verdict and an Order having been entered, but the

Court having reserved the right to issue a written opinion, the

Plaintiff's Motion for a New Trial having been considered, and

4a

the Court having issued its ‘‘Memorandum Opinion Granting

Motion for a Directed Verdict and Denying Motion for Reconsid-

eration and for a New Trial" on March 18, 1974.

NOW, THEREFORE,

IT IS HEREBY ORDERED, ADJUDGED AND DE-

CREED that Plaintiff's Motion for a New Trial be and hereby is

denied.

JOHN FEIKENS (s)

District Court Judge

Approved as to form only:

ByWILFRID L. BURKE (s)

Wilfred L. Burke

Attorney for Plaintiff

Miller, Canfield, Paddock and Stone

By Gregory L. Curtner (s)

Gregory L. Curtner

Attorneys for

Volkswagenwerk Aktiengesellschaft

and Volkswagen of America, Inc.

Travis, Warren, Hammond, Ziegelman & Burgoyne

By BERT BURGOYNE per GLC (s)

Bert Burgoyne

Attorneys for

Audi NSU Auto Union

Aktiengesellschaft

Miller, Johnson, Snell & Cummiskey

By GORDON J. QUIST per GLC (s)

Gordon J. Quist

Attorneys for

Import Motors Limited, Inc.

Sa

Nos. 72-2198 and 74-1651

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

OVERSEAS MOTORS, INC., a Michigan corpora-

tion,

Plaintiff-Appellant,

-VS-

IMPORT MOTORS LIMITED, INC., a Michigan

corporation, AUDI NSU AUTO UNION AK-

TIENGESELLSCHAFT (formerly NSU Moto-

renwerke Aktiengesellschaft), a foreign corpora-

tion, Volkswagenwerk Aktiengesellschaft a/k/a

Volkswagenwerk Gmbh, a corporation of the

German Federated Republic, and Volkswagen of

America, Inc. (Porsche-Audi Division), a New

Jersey corporation, Jointly and Severally,

(72-2198) Defendants-Appellees,

OVERSEAS MOTORS, INC., a Michigan corpora-

tion,

Plaintiff-Appellant,

-VS-

IMPORT MOTORS LIMITED, INC., a Michigan

corporation, AUDI NSU AUTO UNION AK-

TIENGESELLSCHAFT (formerly NSU

Motorenwerke Aktiengesellschaft), a foreign

corporation, Volkswagenwerk Ak-

tiengesellschaft, of the German Federated Re-

public and Volkswagen of America, Inc.,

(Porsche-Audi Division), a New Jersey corpora-

tion, Jointly and Severally,

(74-1651) Defendants-Appellees.

ON APPEAL from

the United States

District Court

for the

Eastern District

of Michigan.

6a

Decided and Filed June 2, 1975.

BEFORE: LIVELY and ENGEL, Circuit Judges and

O’SULLIVAN, Senior Circuit Judge.

ENGEL, Circuit Judge. This is an action by Overseas

Motors, Inc. (Overseas) against Audi NSU Auto Union Ak-

tiengesellschaft (ANAU), Volkswagenwerk Aktiengesellschaft

(Volkswagen), Volkswagen of America (VOA), and Import

Motors Limited, Inc. (Import), alleging violations of Sections |

and 2 of the Sherman Act, 15 U.S.C. §§1 and 2 (Count 1), Section7

of the Clayton Act, 15 U.S.C. §18 (Count II), and the Automobile

Dealers Day in Court Act, 15 U.S.C. §1221 et seq (Count III). The

district judge, after five weeks of trial, granted defendants’ mo-

tion for a directed verdict on all counts. We affirm.

Overseas is a Michigan corporation which was the dis-

tributor of NSU automobiles in an eleven state area. ANAU, a

German corporation, is the successor to NSU Motorenwerke

Aktiengesellschaft which manufactured NSU automobiles, and

Auto Union Gmbh, manufacturer of Audi automobiles. The cor-

porations merged in 1969.

Volkswagen, aGerman corporation, is the manufacturer of

Volkswagen and Porsche automobiles. It also controls 99% of the

outstanding stock of ANAU. VOA is a wholly owned subsidiary

of Volkswagen whose sole function is the importation and dis- _

tribution of Volkswagen, Porsche and Audi cars in the United

States. Import distributes Volkswagen, Porsche and Audi cars in

several midwestern states, but unlike VOA, is independently

owned and operated.

In 1968 Overseas entered into an importer contract with the

predecessor of ANAU for exclusive rights to sell NSU cars in ten

(later eleven) states. The significant provisions of the importer

contract included an arbitration agreement calling for all disputes

arising under the contract to be decided by an arbitration court in

Zurich, Switzerland, a provision making the contract terminable

by either party at the end of any calendar year upon giving three

months’ advance notice, and an exclusivity provision requiring

that Overseas deal only in NSU products.

7a

Overseas obtained numerous dealers throughout the franch-

ise area in anticipation of the car sales to be generated by the

enterprise. It also carried out training programs, advertised ex-

tensively, and cooperated with ANAU in helping it qualify NSU

autos under American safety and emissions standards. In late

1970, deliveries of NSU autos to Overseas which had previously

been insufficient to meet Overseas’ orders, ceased entirely.

On July 15, 1970, approximately a year after the merger of

NSU and Audi, ANAU notified Overseas by letter that it wished

to take up negotiations with its American importers concerning

termination of the importer contracts. Its expressed intent was to

find a **.. .viable and fair solution in all cases... ANAU proposed

that the importers be compensated either through inclusion in the

Volkswagen distribution network, or by payment of a remunera-

tion for the giving up of import rights.

In April 1971 ANAU sent a second letter to Overseas inform-

ing the company that while it was voluntarily extending Overseas’

importer contract until December 31, 1973, the franchise would

be terminated on that date. Pointing out that the American market

for NSU automobiles had not developed **. . .anywhere nearly as

well as both you and we had hoped when we made our agreement

of July 1, i978..." ANAU claimed that American safety and

exhaust standards had made it increasingly difficult to supply

NSU cars at reasonable cost, in consequence of which it had cut

its American line back to one model only, the NSU 1200C. In the

letter ANAU, which had previously released Overseas from the

exclusivity provisions of the franchise agreement, also consented

to Overseas’ termination of the contract at any time upon giving

three months’ notice.

ANAU and Overseas entered into negotiations concerning

termination of the importer contract in which the possibility of

Overseas obtaining a Porsche-Audi dealer's franchise was dis-

cussed. Overseas applied through Import to VOA for such a

franchise, but final approval of the application was refused. The

settlement negotiations failed to produce any other agreement

between the parties.

Overseas commenced this suit in April, 1972 and shortly

thereafter ANAU gave notice that it intended to submit the termi-

8a

nation grievance to arbitration as provided by the importer con-

tract. A motion to stay reference of the grievance to arbitration

was denied by Judge Feikens, and on November 24, 1972 ANAU

submitted the matter to the Swiss arbitration court. Overseas’

separate appeal from the denial of its motion for stay has been

consolidated with its appeal from the judgment on the merits.

The principal issue is whether the evidence, with permissible

inferences to be drawn therefrom, was sufficient to require sub-

mission of any of Overseas’ claims to the jury on any of the

theories of recovery embodied in the complaint. Sub-issues are

whether the district judge erred in his determination of the extent

to which certain findings of the Swiss court were binding upon the

plaintiff in the district court action under the doctrine of collateral

estoppel, and whether the judge erred in excluding evidence of

the negotiations conducted for settlement of the dispute.

The comprehensive opinion of District Judge John Feikens

is set forth at 375 F. Supp. 499 (E.D. Mich. 1974).

Appellate review of the action of a district court in granting a

motion for directed verdict demands the most painstaking review

of the evidence to make certain that what is claimed not to be

there, in fact, isn’t.

‘To determine whether a directed verdict is appropriate the

governing principle is that a verdict may properly be directed

only when, without weighing the credibility of the witnesses,

there can be but one reasonable conclusion as to the verdict

...An appellate court too is bound to view the evidence in

the light most favorable to the party against whom the mo-

tion for a directed verdict is made and give him the advantage

of every fair and reasonable inference that the evidence may

justify." Forner Enterprises, Inc. v. United States Steel

Corp., 452 F.2d 1095 (6th Cir. 1971).””

Overseas’ principal antitrust claim was that the defendants

conspired to restrain trade in violation of Section 1 of the Sher-

man Act, 15 U.S.C. §1' by ‘‘pinching off” its supply of cars, thus

' 15 U.S.C. §1 provides in part:

Every contract, combination in the form of trust or otherwise, or

conspiracy, in restraint of trade or commerce among the several States, or

with foreign nations, is declared to be illegal:

9a

forcing Overseas out of business as an importer and distributor of

NSU automobiles. The district court held that Overseas had

failed to prove either element of the Sherman Act offense, namely

(1) a contract, combination or conspiracy which resulted in (2) an

unreasonable restraint of trade.

Overseas attempted to establish the conspiracy by use of

circumstantial evidence which it claimed created a permissible

inference of collusion among the defendants. The district judge

analyzed this evidence in ierms of three categories of acceptable

ways to prove conspiracy by circumstantial evidence: motive,

opportunity and consistency of overt acts. He determined that the

evidence was insufficient to establish an inference of conspiracy

and survive the motion for directed verdict. Similarly, Judge

Feikens analyzed Overseas’ claim of restraint of trade in terms of

conduct which would be per se illegal under the Act and conduct

which would be unreasonable under the “‘rule of reason’’, Stan-

dard Oil Co. v. United States, 221 U.S. 1 (1911). The court found

that the proofs offered totally failed to establish the requisite

restraint of trade under either of these theories. Count I also

alleged a violation of §2 of the Sherman Act, 15 U.S.C. §2.? Judge

Feikens ruled that the claims of monopoly and of attempt to

monopolize failed for lack of proof of relevant market and proof of

specific intent to monopolize.

Overseas alleged in Count II that **the merger of Audi and

VW in July, 1970, . . . .resulted in substantially lessening competi-

tion and tended to create a monopoly ™’ in violation of Section 7 of

the Clayton Act, 1S U.S.C. §18.4 The trial judge held that this

> 15 U.S.C. §2 provides:

Every person who shall monopolize, or attempt to monopolize, or

combine or conspire with any other person or persons, to monopolize any

part of the trade or commerce among the several States, or with foreign

nations, shall be deemed guilty of a misdemeanor, and, on conviction

thereof, shall be punished by fine not exceeding fifty thousand dollars, or

by imprisonment not exceeding one year, or by both said punishments, in

the discretion of the court.

* Overseas does not appear to have seriou<'v pressed its claim of a Section

2 violation at trial. The case was tried essentially on a conspiracy theory, and

Judge Feikens limited his discussion of Overseas’ Section 2 claims to a footnote

in his opinion. Overseas’ complaint, for example, does not even state which of

the defendants it claims was a monopolist or attempted to monopolize.

* In actuality, the merger was between NSU and Porsche-Audi. Volkswa-

gen ultimately acquired 99% of the outstanding stock of the new corporation,

ANAU.

i0a

claim failed altogether for want of any proof as to relevant market.

Overseas has not contested this finding on appeal.

A careful review of the record demonstrates that Overseas’

antitrust issues were never clearly articulated and we have little to

add to the extensive discussion of the evidence made by the

district judge in his memorandum opinion. Our examination of the

evidence compels us to conclude, as did Judge Feikens, that

plaintiff has totally failed in its proofs on the key elements of its

antitrust claims:

The overwhelming reality which emerges from the

many weeks of testimony and the hundreds of exhibits in this

case is the total failure of the plaintiff to even address many

of the central questions raised by the law it has invoked, and

its complete lack of concrete evidence as to those elements

with which it has concerned itseif. 375 F. Supp. at 544

Plaintiff claims it was precluded from effectively presenting

evidence in support of his antitrust claims becuase of the applica-

tion of the doctrine of collateral estoppel by the district judge to

make binding certain findings of the Swiss arbitration court. In

addition, it claims the district judge improperly excluded certain

evidence of the settlement negotiations between Overseas and

ANAU which purportedly linked VOA and Import to the conspi-

racy to drive Overseas out of business. :;

The narrow application of collateral estoppel principles to

the findings of the Swiss court could not in any event be said to

have affected the outcome since the facts so found were largely

undisputed and were apparent on the face of the record. For

purposes of ruling upon the motion for directed verdict, the

district judge considered the proffered settlement evidence even

though he was convinced it was inadmissible. We have also

considered this evidence and conclude that its admission would

not change the result here.

Overseas’ third claim, embodied in Count III of the com-

plaint, is that ANAU violated the Automobile Dealers Day in

Court Act, 15 U.S.C. §1221 et seq. by attempting to coerce

Overseas into terminating its franchise agreement earlier than the

December 31, 1973 date which it had voluntarily set in its letter of

April 15, 1971.

lla

15 U.S.C. §12225 allows an automobile dealer a cause of

action against a manufacturer where the manufacturer has failed

to act in “*good faith”’ in performing any of the terms or provisions

of the franchise, or in terminating or not renewing the franchise

with such dealer. “Good faith” is given a quite restrictive defini-

tionin ISU.S.C. §1221(e),° however. In order to fail to act in good

faith, a manufacturer must act in such a way as to coerce, intimi-

date, or threaten to coerce the dealer. Several types of coercion

are alleged. First, Overseas claims that ANAU attempted to

coerce termination by increasing prices on the vehicles to such an

extent that they were commercially noncompetitive. While there

was evidence to support the claim that prices were increased,

there was no evidence to support the claim that the prices were

increased for any other reason than that given by ANAU: increas-

ing difficulty in producing NSU in small volume while at the same

time complying with American safety and exhaust requirements.

There was no evidence at all to support any claim of price dis-

crimination among American distributors.

Overseas’ theory that ANAU “‘pinched off’ deliveries of

NSU autos to induce an early termination of the franchise must be

understood in the framework of the contractual relations of the

parties. Section 12(1) of the importer contract provides in part:

“This contract comes into force on the first day of July,

1968. Either party to this contract may terminate this con-

a

*15 U.S.C. $1222 provides:

An automobile dealer may bring suit against any automobile man-

ufacturer engaged in commerce, in any district court of the United States

in the district in which said manufacturer resides, or is found, or has an

agent, without respect to the amount in controversy, and shall recover the

damages by him sustained and the cost of suit by reason of the failure of

said automobile manufacturer from and after August 8, 1956 to act in good

faith in performing or complying with any of the terms or provisions of the

franchise, or in terminating, canceling, or not renewing the franchise with

said dealer: Provided, That in any such suit the manufacturer shall not be

barred from asserting in defense of any such action the failure of the dealer

to act in good faith.

° 1S U.S.C. §1221(e) provides:

(e) The term **good faith” shall mean the duty of each party to any

franchise, and all officers, employees, or agents thereof to act in a fair and

equitable manner toward each other so as to guarantee the one party

freedom from coercion, intimidation, or threats of coercion or intimida-

tion from the other party: Provided , That recommendation, endorsement.

exposition, persuasion, urging or argument shall not be deemed to consti-

tute a lack of good faith.

12a

tract with three months’ notice as of the end of any calendar

year, initially as of December 31, 1969."

Thus, when ANAU wrote its April 15, 1971 letter to Over-

seas it was fully empowered to terminate the agreement effective

December 31, 1971 under §12(1) of the agreement. No coercion

was needed to achieve this end if termination was desired. Instead

a two-year extension of the contract was granted and the re-

quirements of §12(1) were waived to permit Overseas to terminate

at any time simply upon giving three months’ notice. The April 15,

1971 letter then looked to the termination of the relationship of the

parties and the two year extension of the agreement appears

primarily to have been an accommodation to Overseas to permit it

adequate time to acquire a new distributorship.

In applying the definition of *‘good faith’’ contained in 15

U.S.C. §1221(e), it is necessary to consider 1. xt only whether the

manufacturer brought pressure on the dealer, but also his reason

for doing so. Rea v. Ford Motor Co., 497 F.2d 577 Grd Cir. 1974).

Here there was no evidence to suggest any reason why ANAU

would have wanted or needed to use coercion to force Overseas

to terminate the importer contract. As stated by the district judge:

ANAU was not obligated to deliver cars to plaintiff even

while the contract was in force, and in any event the contract

was terminable at will on relatively short notice. No elabo-

rate conspiracy such as plaintiff alleges was necessary to

secure termination of the contract or effect a withdrawal of

NSU products from the American market.

...The defendants were free to make whatever arrange-

ments they wished for its importation and distribution in this

country, and whatever rights plaintiff may have had in the

NSU product line were irrelevant. The only conceivable

motive for forcing plaintiff to abandon its exclusive dis-

tributorship would have been a desire to transfer the right to

import and distribute NSU cars within its territory of some-

one else (presumably VWOA and Import). However, in

view of the undisputed fact that the NSU product line has

been withdrawn from the American market, the right to

l3a

distribute it has become totally meaningless.’ 375 F. Supp. at

533

Overseas also introduced extensive evidence concerning the

Ro-80 automobile which was to be produced as part of the NSU

line. The Ro-80, powered by a Wankel motor, was described by

ANAU as a revolutionary automobile with tremendous sales

potential in the United States market. There was evidence that

Overseas had been led to believe that it would be involved in the

distribution of the Ro-80 in this country and it is undisputed that

the automobile has never been marketed in the United States.

Overseas claims that the Ro-80 was withheld in bad faith from the

American market, although the district court found no eviden-

tiary basis for such a conclusion.

Even assuming that Overseas is correct and that there was

evidence to support a jury finding that ANAU had withheld the

Ro-80 from the United States market in ‘bad faith”’ as that term is

normally understood, Overseas would still not be entitled to

recover under the Act because of the specialized definition which

the Act accords to *‘good faith’’.

Overseas’ contentions that the termination violated the Act

has at least some support in the legislative history of the Act. It is

true that Congress was cgncerned with the arbitrary terminations

of dealer franchises which had occurred under old franchise con-

tracts:

This bill assures the dealer an opportunity to secure a

judicial determination, irrespective of the contract terms, as

to whether the automobile manufacturer has failed to act in

good faith in performing or complying with any of the provi-

sions of his franchise or in terminating, canceling, or not

renewing his franchise.

H.R. Rep. No. 2580, 85th Cong. 2d sess. (1956), 3 U.S. Code

Cong. and Admin. News, 1956, p. 4600.

A similar concern can be found in the expressed disapproval

of earlier cases which refused to read into dealer franchises a

’ Judge Feikens was commenting upon the lack of any motive for the

alleged conspiracy between ANAU and the other defendants. However, we

think this evidence also shows lack of motive for the type of coercion which

Overseas claims was used. .

= Ee

l4a

requirement of good faith as a condition to termination of the

agreement by the automobile manufacturer. See 3 U.S. Code

Cong. and Admin. News (1956), supra, at 4599, citing particularly

Bushwick-Decatur Motors, Inc. v. Ford Motor Co., 116 F. 24 675

(2nd Cir. 1940) and Buggs v. Ford Motor Co., 113 F. 2d 618 (7th

Cir. 1940).

The broader intention expressed in the House Report is at

odds, however, with the express language finally incorporated in

the Act, und the rather specialized definition of good faith in the

Statute must control, notwithstanding the conflicting language in

the House Report. The cases have uniformly held that evidence of

coercion or intimidation is necessary to a showing of lack of good

faith under the statute, and a mere showing of arbitrary or other

bad faith conduct absent coercion is not a sufficient ground for

recovery under the Act. Berry Bros. Buick, Inc. v. General

Motors Corp., 257 F. Supp. 542 (E.D. Penn. 1966), aff-d. 377 F.

2d 552 (3rd Cir. 1967); R.A.C. Motors, Inc. v. World-Wide Volks-

wagen Corp., 314 F. Supp. 681 (D. N.J. 1970); Unionvale Sales

Limited v. World-Wide, Volkswagen Corp., 299 F. Supp. 1365

(S.D. N.Y. 1969). This circuit has ruled that under Section 1222

the absence of good faith as defined in Section 1221(e) is literally

construed. Evidence of coercive conduct is an essential element

of any cause of action under the Act. Frank Chevrolet Co. v.

General Motors Corp., 304 F. Supp. 307 (N.D. Ohio 1968), aff'd.

419 F. 2d 1054 (6th Cir. 1969).

We are not here concerned about ANAU’s liability for

breach of contract. That cause of action was not pleaded here, nor

could it in view of the arbitration provision. Our concern, there-

fore, is solely with any statutory liability imposed by 15 U.S.C.

$1221 et seq.

Here Overseas has failed to introduce any evidence of coer-

cion or intimidation in connection with ANAU’s conduct con-

cerning the Ro-80. While Overseas’ evidence may have created

an inference of bad faith not involving coercion, this was insuffi-

cient to send the statutory claim to the jury.

The order of the district court in 72-2198 and the judgment of

the district court in 74-1651 are affirmed.

Costs to appellees.

lSa

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

OVERSEAS MOTORS, INC., a Michigan corpora-

tion;

IMPORT MOTORS LIMITED, INC., a Michigan

corporation, AUDI NSU AUTO UNION AK-

TIENGESELLSCHAFT (formerly NSU MO-

TORENWERKE AKTIENGESELLSCHAFT) a

Plaintiff (Appellant)

-VS-

No. 74-1651

foreign corporation, VOLKSWAGENWERK and

AK -TIENGESELLSCHAFT aka VOLKSWA. No. 72-2198

GENWERK GMBH, a corporation of the Ger- | (Consolidated)

man Federated Republic and VOLKSWAGEN

OF AMERICA, INC. (PORSCHE-AUDI DIVI-

SION) a New Jersey Corporation, jointly and

severally,

Defendants (Appellees)

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN,

SOUTHERN DIVISION

APPELLANT’S PETITION FOR REHEARING IN BANC

ERRATA: Page | of Original Brief. note 2, figure (1665) is

reference to Transcript, should be Vol. 7, p-1385 Appendix.

Page 21, Reply Brief, 2nd par 2 (figure 1164 incorrect, should

be Vol 6, page 1161 Page 16 Reply Brief, bottom of page,

figure 166SA is Transcript page, should be Vol 7. page 1385

Appendix)

ee Se

~ fe ——- — —~4-

16a

INTRODUCTION

Now comes Overseas Motors, Inc., a Michigan corporation,

Plaintiff-Appellant, and respectfully petitions for rehearing in

banc of the Court's decision of June 2, 1975, which affirmed the

District Court’s ruling of directed verdict for appellees.

1. We respectfully submit that the record does not support

the following findings of the Court:

On Page 6 of the Decision the Court has alleged that it is our

allegation in Count II that the merger of Audi and VW in July,

1970 resulted in substantially lessening competition and tended to

create a monopoly, in violation of 15 USC #18, was not contested

on this appeal. This question was answered by Plaintiff-Appellant

on page 5 of its Reply Brief.

2. TheCourt found (page 4 of Decision) that the application

for franchise from VWOA thru Import was refused. The tes-

timony was that the application was being held in abeyance and

that it had not been rejected, and was not a dead issue. Vol. 7, p.

1300-1. The testimony further was that the submission of

plaintiff-appellant’s application by Import was Import’s en-

dorsement of the franchise application (Vol 6. p. 1294) The failure

of appellees to reject the application and their behavior in still

holding the application in abeyance is but one of several indicia of

coercion to force an early termination of the Importer contract,

and in this sense the Court did not view the testimony in the light

most favorable to plaintiff-appellant.

3. On page 4 of the Court's decision the Court stated

ANAU gave notice it intended to submit the termination griev-

ance to arbitration. There was no such claimed grievance by

plaintiff-appellant as more fully appears from its original Brief,

(pages 14-29) The submission to the Court of Arbitration was in

form a request for Declaratory Judgment by ANAU. (Vol 2, page

333 et seq. Appendix)

We reserve our argued position as to each of the points of

appeal but in this petition address ourselves to two positions:

Because of the mass of exhibits, all of which were admitted

for the purpose of passing on the motion for directed verdict (Vol

17a

7, p 1385) where the court may have over looked or misap-

prehended the pattern indicative of violations of the Anti trust

Statutes claimed unless the Court's attention is called to and

further references to Exhibits and Appendix in that sense the

court was not able to view the evidence in the light most favorable

to the plaintiff-appellant, nor to give it the advantage of every fair

and reasonable inference that the evidence might justify.

. By reason of the above, the court may have overlooked or

misapprehended evidence of coercion or intimidation showing a

lack of **good faith’’ by appellees under 15 USC #1221 (e)

Therefore, this petition is devoted to convincing this court

that it has erred in its determination affirming directed verdict

herein.

ARGUMENT

1. As indicated by this court (p-9) plaintiff-appellant must

establish that appellees brought pressure on plaintiff-appellant

but also their reason for doing so under /5 U.S.C. 122] (e). The

Court overlooked or misapprehended evidence to “suggest why

ANAU would have wanted or needed to use coercion to force

Overseas to terminate the importer contract. Pressure or coer-

cion, we submit, may be wrought by an “‘Iron fist ina silk glove.’

The following evidence taken in the light most ‘favorable to

plaintiff-appellant, and the inferences therefrom, demonstrably

establish such pressure and need but were not considered by the

Court in the light most favorable to Plaintiff and Appellant.

2. Under the Importer Contract (#72-2/98 Appendix at

page 2/ (4) the manufacturer expressly agreed in connection with

licensing to ‘‘duly consider the interests of the Importer.”

The manufacturer, induced plaintiff-appellant to believe it

would be getting the Ro-80 Wankel car, (as indicated by numer-

ous exhibits as late as April 22, 1971, when it was finally informed

the Ro-80 was not to be imported to the United States) on May 20,

1970, Exhibit 91, appellees were still advising plaintiff-appellant

that they had developed U.S. equipment for Ro-80 but couldn't

tell when it would be available.

18a

Plaintiff-appellant was required to use its facilities and

helped in running tests with the U.S. Dep't of HEW to procure a

U.S. Certificate of Conformity (See Exhibits, P. 12 Appellant's

Reply Brief. The testimony of Dr. Hans Sassor, engineer in

charge of testing, etc. (Vol 5, Appendix paze 1099), was that

plaintiff-appellant was of great help to him in the test procedure;

(Vol. 5 Appendix page 1099). (This was confirmed by Dr. Henn in

his deposition (Vel. 6, pages 1163-4). Dr. Sassor further stated

that the manufact irer would try to find a solution for the loyalty

and technical help from plaintiff-appellant.

Mr. Gilliam Clark of Ethyl Corp. deposition was to the same

effect (Vol. 7 Appendix 1438-42 (Vol. 6 Appendix 1104)Dr. Sassor

became a part of the promotion and was interested in the promo-

tion of Ro-80 in the U.S. (Vol. 6, Appendix page 1101-3.)

3. Appellees required a man from plaintiff-appellants to be

sent to Germany for specialized training in the Ro-80 motor,

which was done (Vol. 4, ppendix, p. 1124, 1166-7) (Mechanic's

diploma Exhibit 1087)

It later developed (from deposition of Dr.Gunter Henn, Vice

President of ANAU) that the manufacturer had no intention of

exporting the Ro-80 to the U.S. The promotion and fraud perpet-

rated on plaintiff-appellznt by the manufacturer, was ‘primarily

for the purpose of building (the) licensing of the wankel motor,"’

in the U.S. (Vol. 6 p. Appendix 1163-71). Postponement of termi-

nation date was essential and for the sole benefit of Appellees,

until such time as plaintiff-appellant would no longer be useful in

‘*promoting’’ appellees’ licensing operation in the U.S.

Court said (P-9 of its Decision that when ANAU wrote its

letter of April 15, 1971 (Ex-46) it was fully empowered to termi-

nate the agreement under #12(1) of the agreement and no coer-

cion was needed to achieve this end if termination was desired.

Instead a two year extension was granted and requirements of

#12(1) were waived to permit Overseas to terminate at anytime

upon giving three months notice, and asserted here was no evi-

dence to suggest why ANAU wanted or needed to use in above.

We respectfully suggest that the Court did not apply applicable

law and failed to consider factual matters in the light most favora-

ble to Plaintiff-Appellant.

19a

The need for the extension of termination, while appearing

generous, was an obvious ploy, resulting in no benefits to

Plaintiff-Appellant, since no NSU cars were produced for the

American market after 1971. (2a (4) 1972-2198 Appendix) For

practical purposes the importer contract was terminated as at Jan.

1, 1971.

While the right to terminate was given, the Court overlooked

the fact that continued existence of the Importer Contract was

essential to the success of Plaintiff's business. The right of

Plaintiff-Appellant to cancel a profitable and desirable importer-

ship is of no value in that it is essentially the right to destroy its

own business: Alles Corporation v. Senco Products Inc. 329 F?

567 (6th PA 1964) 510-1

The Court did not consider Exhibit 47, Plaintiff-Appellant’s

reply, nor the explanation of that letter contained in the deposi-

tion of Dr. Henn. (Vol. 6, Appendix 6, p. 1155-1163) This Court,

like the district court, adopted this evidence in the light most

favorable to Appellees and not in the light most favorable to

Plaintiff-Appellant. Other exhibits clearly indicate that the

“pinching off”’ of cars was not due toa lack of production of NSU

cars (see Vol. 6 Appendix 1162) (Exhibit 883 ) which indicates that

NSU cars during year came off the line at 150,000 a year and

“. . . .covering a sizeable slice of the auto market in Germany

and also the importing nations.) (Also see Dr. Henn’s deposition

Vol. 6-Appendix) Neither was it due for lack of orders made by

Overseas. Plaintiff-Appellant was required by ANAU to make a

forecast of cars which it would buy in 1971 and Plaintiff-Appellant

submitted a commitment (Ex. 1053) for a substantial number of

cars Plaintiff-Appellant would purchase but received none. Also

see Exhibit 530, Sept. 9, 1970 a request by Plaintiff-Appellant to

examine back orders.

What was happening was that after the merger, some of the

NSU cars were being phased out; the production of NSU cars

decreased, while the production of Audi (NSU) cars increased.

(Vol. 6 Appendix p. 1162) Old NSU cars were being re-labeled,

and were and are being distributed thru Volkswagen channels.

For example the NSU K-70 was designed by NSU engineers and

is now produced by Volkswagen. (Vol. 6, page 1106- 1124) This

car was promised to Appellants and is now being distributed by

20a

Volkswagen, and bears Volkswagen emblems. (Also see Exhibits

884-888 , showing name plates of NSU cars after merger.) The

Court overlooked the interchangeability of NSU and Audi cars

was recognized by Appellees in their service contracts, (PX 44,

par 3, a part of Importer Contract dated Feb. 1, 1971) (/7 Appen-

dix, 1972, 2198) which defines *‘Contract goods shall mean Audi

NSU motor vehicles, as well as original Audi NSU. Obviously as

long as the licensing of the wankel motor was open for sale it was

to the advantage of the manufacturer to string Plaintiff-Appellant

along like the proverbial *‘carrot-on-the-stick,’’ encouraging it to

waste money on what the manufacturer knew was a futility. It is

significant that seven days after the termination letter of April 15,

1971, (Exhibit 46) referred to by the Court on page 3 and 4 of the

Decision, ANAU sent Exhibit 117, dated April 22, 1971, stating

that Ro-80 would not be imported to the United States. Note in

this connection, Plaintiff-Appellant’s reply. (Exhibit 47)

The Court overlooked the cryptic letter of March 19, 1970,

Exhibit 89, wherein ANAU claims it was not ready to deliver

Ro-80 to U.S. for reasons too hard to explain; a personal visit was

promised, which followed in September, 1970 (Vol. 3, p. 547, 548,

Appendix), which appears in detail at page 38-40 of the original

brief of Appellant.

Indicative of the concern of Appellees for a quick termina-

tion of the Importer Contract, is demonstrated by Exhibit 53,

dated June 15, 1972, demanding immediate termination of the

Importer Contract. Their further concern is demonstrated by

filing of requests for Declaratory Judgment before the Court of

Arbitrators, asking for a determination pursuant to Exhibit 53

(Vol 2 Appendix 332-368). There is no basis in the evidence to

establish any costs increase resulting from increased standards.

From the testimony of the Engineer of ANAU handling (ests at

U.S. Dept. of HEW for ANAU it appears that no applications for

certificates of conformity for any of the NSU cars had been made

after the year 1969 (see general discussion thereon (Vol. 6. p.

115-1119) The number and dates of certificate of conformity is-

sued by U.S. Dept. of HEW on ANAU cars appear in Exhibit

1101. In connection with the ploy relating to increase costs result-

ing from U.S. Dep't of HEW standards, the Court overlooked the

evidence that certificates of conformity had already been issued

2la

for the model year 1970 on the Ko-80 Vol. 6 Appendix (Ex. 279)

Nor was the 1971, 1972 1200 C redesigned to conform to U.S.

standards, after issuance of the earlier certificate of conformity.

(Vol 6. p. 1118-1119) No applications for certificates of confor-

mity on !200C or Ro-80 could have been made by ANAU without

testing by the U.S. Department of HEW, and no tests, appear to

have been made after December 1969 (Vol. 6 p. 1115-6) Con-

sequently, ANAU was in no position to export the Ro-80 or the

1200C in 1972 as it proposed in Exhibit 176. dated February 16,

1972, wherein the normal prices for said cars was doubled. Since

it had made no plans to apply for certificates of conformity for

1972 on these two models, it could not have exported the cars to

Overseas, even though Overseas might have ordered them. In

this connection, the Court did not consider contra and supporting

Exhibit 49 dated February 25, 1972 in reply to Exhibit 176, Exhibit

48 dated May 9, 1972, preceding letters in this connection, viz:

Exhibits 170, 171 and 172.1n light of these Exhibits, the Court did

not view the testimony in the light most favorable to Plaintiff-

Appellant. In concluding that prices were increased on said cars

on the basis of small volume and increase in American safety

Standards, etc.; rather the reasonable inference would be that

ANAU were deliberately overcharging to coerce plaintiff into a

voluntary cancellation of the import contract.

CONCLUSION

For the foregoing reasons, Plaintiff-Appellant requests an

opporiunity for a rehearing on these points. Because of the fun-

damental nature of the question presented, it is requested that the

rehearing be before the entire Court, sitting in banc.

Respectfully submitted,

BURKE AND WILSON

By /s/ WILFRED L. BURKE

Attorneys for Plaintiff-

Appellant

Dated: June 14, 1975

22a

No. 74-1651

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

OVERSEAS MOTORS, INC., a Michigan corpora-

tion,

ORDER

Plaintiff-Appellant

-VS-

IMPORT MOTORS LIMITED, INC., a Michigan

corporation, AUDI NSU AUTO UNION AK-

TIENGESELLSCHAFT (formerly NSU MO-

TORENWERKE AKTIENGESELLSCHAFT) a

foreign corporation, xVOLKSWAGENWERK

AKTIENGESELLSCHAFT, aka VOLKSWA-

GENWERK GMBH, a corporation of the Ger-

man Federated Republic and VOLKSWAGEN

OF AMERICA, INC., (PORSCHE-AUDI DIVI-

SION) a New Jersey corporation, jointly and sev-

erally,

Defendants-Appellees

Before: LIVELY and ENGEL, Circuit Judges, and O’SULLI-

VAN, Senior Circuit Judge

No judge in regular active service of the court having re-

quested a vote on the suggestion for a rehearing en banc, the

petition for rehearing filed herein by the plaintiff-appellant has

been referred to the panel which heard the original appeal. Upon

consideration of said petition, the court concludes that it is with-

out merit.

Accordingly, the petition for rehearing is hereby denied.

ENTERED BY ORDER OF

THE COURT

John P. Hehman, Clerk

By /sAGRACE KELLER

Grace Keller

Deputy Clerk

23a

INDEX

APPENDIX II

EXCERPT FROM DISTRICT COURT DECISION.

OVERSEAS MOTORS INC. v. IMPORT MOTORS LTD.

INC. et al 375 F.Supp. 499 (525) (On Standards of suffi-

ciency used by District Judge) ......................

STATE OF OHIO CASE STANDARDS ON WHICH DIS-

TRICT JUDGE BASED DIRECTED VERDICT DECI-

SION IN OVERSEAS, supra ..................000..

STANDARD OF SUFFICIENCY FORTNER (6CA case on

which Appellate Court based its Standard of Sufficiency)

STANDARD OF SUFFICIENCY FORTNER (with portion

deleted by Appellate Court in OVERSEAS, supra

F2d WS WEES dk iuciecundadsladothueite «ci...

STANDARDS OF SUFFICIENCY AS DELINEATED

SPEED POIUUENT BD oo nc ccncccccccccccccesces

STANDARDS OF SUFFICIENCY AS DELINEATED IN

SIXTH CIRCUIT IN STATES OTHER THAN MICHI-

SET 4k65064 sun beiedhsnetabameninddenbasecascedtie

STANDARD OF SUFFICIENCY BOEING RULE (WITH

JUDGE RIVES’ DISSENT) .......... cc ccc cccccee

(opting for Constitutional Standard)

Excerpt from Robertson, Rives J. still adheres to dissent

EE ClU bcuadunakued coctcreketh kcdecddeadcn.

Parallel Constitutional Standard in Pogue, Rives J. CAS

Parallel Constitutional Standard in Trivett 6CA, Pope J.,

dissent opting for Pogue Standard .................

STANDARD OF SUFFICIENCY, BRADY RULE AS

APPLIED IN SIXTH CIRCUIT .............0cccceee

STANDARD OF SUFFICIENCY, BYRD RULE AS

APPLIED IN SIXTH CIRCUIT.....................

STANDARD OF SUFFICIENCY, CONTINENTAL

RULE AS APPLIED IN SIXTH CIRCUIT...........

STANDARD OF SUFFICIENCY, ERIE RULE AS

APPLIED IN SIXTH CIRCUIT..............¢......

STANDARD OF SUFFICIENCY, GALLOWAY RULE AS

APPLIED IN SIXTH CIRCUIT.....................

29a

30a

32a

24a

STANDARD OF SUFFICIENCY, LAVENDER RULE AS

APPLIED IN SIXTH CIRCUIT..................... Sla

STANDARD OF SUFFICIENCY, AS DELINEATED IN

PE BAGbnbdnbd Cnnsenuncencasescecanevesesdnusé S2a

STANDARD OF SUFFICIENCY, TENNANT RULE AS

APPLIED IN SIXTH CIRCUIT..................... 54a

STANDARD OF SUFFICIENCY, WILKERSON RULE

AS APPLIED IN SIXTH CIRCUIT ................. SSa

INDEX OF CASES LISTED IN

APPENDIX II

Amerco Marketing Co. of Memphis, Inc. v. Myers, 494 F2d

See, FES CA 6, TIPO GOOD ovo conic dcccccccdcdccces 49a

Atlantic & Gulf Stevedores Inc. v. Ellerman Ltd 369 U.S.

a a 53a

Baker v. Baltimore & Ohio Railroad Co. 502 F2d 638, 643,

a 49a

Baltimore & C Line v. Redman 1935 295 U.S. 654, 657 .. 53a

Boeing Company v. Shipman 411 F2d 365 (374-5) (Dissent,

Pe, PPD TD cn co wadbcaunddiddvaedcdka< 40a,55a

Brunswick-Balk Coll. v. Foster Boat Co. 141 F2d 881, CA6,

i in eid ons Mn alii xe 33a

Brady v. Southern Ry Co. 320 U.S. 476, 479-80, 1943 . 46a,47a

Byrd v. Blue Ridge Cooperative 356 U.S. 525, 537,8,9 . 47a,48a

Campbell v. Oliva 424 F2d 1244, 1245 CA6, 1970 Diversity

WEE S0n6b cbs dcabbcceewhencusebuseasueee ins 48a,49a

Champion Oil Service Co. v. Sinclair Refining Co. 502 F2d |

SP EL Shab deducadevadedoebberséudeusis 49a

Connors v. American Casualty Co. 330 F2d 505, 506, CA6,

EI NS ee cen Oe Np em 33a

Continental Ore Co. v. Union Carbide & Carbon Corp. 370

OF. GD, GGG, FOR, FOG, BOGE occ ccccccccccccecs 48a,55a

Crown Cork & Seal v. Morton 417 F2d 931, 926, CA6, 1969

TES .. cuadddbatcsctuecldencuaecedtbencas 38a

25a

Dean y. Southern Railway Company 327 F2d 757, 765, CA6,

SC DE. ic coco cauada veaueekoentos ence 38a

Dice v. Akron C & Y R Co. 342 U.S. 359, 363, 1953 FELA 54a

Dixon v. Penn Central Company 481 F2d 833, 839-840, CA6,

PINE 60501 000dbebisnenbadbuueteusdanieeeete 52a

Domany v. Otis Elevator Co. 369 F2d 604, CA6, 1966 cert

den 387 U.S. 942, Diversity Ohio ................. 31a,38a

Dowdell v. U.S. Industries Inc. 495 F2d 641, 642-643, CA6,

nS a a bela id cake 49a

Erie R. Co. v. Tomkins 304 U.S., 64, 78-9, 1937......... 49a

Farmers-Peoples Bank v. United States 477 F2d 752, 756

3 ere Na MORAG xbeas benkewes beeee S4a

Fortner Enterprises, Inc. v. United States Steel Corp. 452

F2d, 1095, 1097, CA6, 1971 antitrust .............. 32a,49a

Galloway v. United States 319 U.S. 372, 395, 1942 ...... S4a

Gilreath v. Southern Railway Company 323 F2d 158, 162,

Goes GY WEN aaa ek waces cece de bveeuct< 38a

Greer v. United States 408 F2d 631, 635 CA6, 1969 Fed. Tax

Pee ee Gest evkeebbersedu tw conteucases 47a

Highfill v. Lousiville & Nashville R. Co. 154 F2d 874, 876,

ey WEEE can <ndeus cue rous sce vesnuceceeeuer 52a

Hinton v. Dixie Ohio Exp. 188 F2d 121, 124, CA6, 1951

PNG Nive due da davacueeduesduauneunclesees ox 38a

Holt v. Continental Insurance Co. 440 F2d 652, 653, CA6,

Sere SY Ws 6 nds eee dk ualwedes ein bvatosutes 38a

Hull v. Holiday Inns of America, Inc. 478 F2d 224 CA6,

Se, I SED, so vob oyncbbacbeweedueuns sede 34a

Hutchins v. Akron, Canton & Youngstown Rr. Co. 162 F2d

Sek PE cobb nckhand dncanwedutueeuesceus S2a

Jacobs v. New York 315 U.S. 752, 753, 1942 ............ S4a

Jenkins & Reynolds v. Alpena Portland Cement Co. 147 F2d

641, 642, 643, 644 CA6 Diversity, Mich. .............. 34a

Kravat etal v. Indemnity Co. of North America 152 F2d 336,

338 CA6, 1945, Diversity, Mich. ..................06. 35a

26a

Kresge Co. v. Holland 158 F2d 495, 498 CA6, Diversity,

DN time tee k dala daceded en tudsdied bens ecee os 38a

Lavender v. Kurn 327 U.S, 645, 1945 ..............05.. Sla

Local 783 Allied Ind. Wkrs. of Am. v. General Electric Co.

Fe re Fs HE IE, BEE 0 C0 Rb base cdasodcuescses. 54a

Lones v. Detroit Toledo & Ironton RR. Co. 398 F2d 914, 919,

CA6, 1968 Diversity, Ohio ..............c cece eeeee 38a

Lovas v. Gen. Mo. Corp. 212 F2d 805, 807 CA6, 1954 Diver-

EIR ee ee ne 38a

McDowell v. Bratcher 265 F2d 261, 263 CA6, 1959, Diversity

Ss SEh Seiad waldo eWew int whel 66048 kb 0usd absense cues 38a

Miller v. Cincinnati & Texas Pac. Ry. 317 F2d 693, 700,

EEE, Saad id ens dha s 6SbNRSCKSS ei vece 38a

Miller v. Davis 507 F2d 308, 313,6CA 1974 Diversity Ky.48a,55a

Minton v. Southern Ry. 368 F2d 719, 720, CA6, 1966 Diver-

REE EG FE ES en mae a ee ee 38a

O’ Donnell v. Geneva Metal Wheel Co. 190 F2d 59, 60, CA6,

EE sd Bind 666 bue dee euesansneecees 38a

Overseas Motors, Inc. v. Import Motors Ltd. Inc. et al 375

F. Supp. 499, 1974 F2d CA6, 1975 . 29a,32a

Pergola v. Penn. Ry. Co. 311 F2d 837, 838 CA6, 1963 Diver-

SE Sack oduwt aus kwed kes Chew aeeekbaeeenduseres 38a

Planters Mfg. Co. v. Protection Mut. Ins. Co. 380 F2d 869,

870-1-2-3-4 SCA, 1967, Cert Den., 389 U.S. 930, Diversi-

DL arekheeee ces Cb aeekeE es +-6460e duchess cance dda

Pogue v. Great Atlantic & Pacific Tea Company 242 F2d

Se Ss ey SE Keke cede eb ti ebideccciccdase 4la

Price v. Firestone Tire and Rubber Co. 321 F2d 725, 726,

CP Ce MUU, WUE: os ccccccescectcccescocees 39a

Reeves v. Power Tools 474 F2d 375, 380 CA6, 1973 Diversi-

ih Mi vine Cnet eeenens okaad Henkes 64 640600nKs 47a

Robertson v. Douglas SS Co. 510 F2d 829, 837 CAS, 1975

Jones Act, (Rives still adheres to constitutional standard) 43a

Rodriquez v. Del Ray Connecting Ry. 473 F2d 819, 820,

ee ED caeudbds saceukéeseedubesectdens 49a,55Sa

27a

Scott v. Sove 161 F2d 1009, 1012 CA 1947, Diversity Tenn. . 39a

Serratoni v. Chesapeake & Ohio Ry. 333 F2d 621, 626 CA6,

Re errr TTT rer eee 35a

Simler v. Conner 372 U.S. 221, 222, 1963............... 44a

Smith v. Peters 482 F2d 799, 801, CA6, 1973 Diversity,

DE, sedouwd 6664064005550 00646 pe nceueseuearens 36a,48a

Solomon v. United States 276 F2d 669, 672, CA6, 1960,

(Surplus Property Act. Mich) cert den. 365 U.S. 869 .. 37a

Sove v. Smith 355 F2d 264 CA6, 1966, Diversity, Mich. .. 37a

Steele v. Louisville & Nashville R. Co. 506 F2d 315, 317

ee Sa Os oe Ie vada thee kadaae cen 5Sa

Stoner v. New York Life Ins. Co. 311 U.S. 464, 467, 1940

Sweeney v. American SS Co. 491 F2d 1085, 1089 CA6, 1974

SD dc bbs sac busie ven caakeeesess sdebesneneshs 52a

Taylor v. Cirino 321 F2d 279, 281 CA6, 1963, Diversity, Ky. 39a

Tennant v. Peoria & P.U.R. Ry. 321 U.S. 29, 1943 ...... 54a

Teti v. Firestone Tire & Rubber Co. 392 F2d CA6, 1968

I I Co da dae <kekseeeddaechaed saeweees 31a,39a

Trice v. Commercial Union Assurance Co. 397 F2d 294, 297

es CE, x oe oncceaccesésventasweves 39a

Trivett v. New York Life Ins. Co. 283 F2d 441 CA6, 1960

I, SE occvivkeeentscetasanscaneunt 39a ,42a,50a

Wilkerson v. McCarthy 336 U.S. 53, 57 FELA, 1949..... 55a

TREATISES ON DIRECTED VERDICT GENERALLY

Harvard Law Review, Vol. 66, 1516 et seq. (State Trial

Procedure and the Federal Courts; Evidence, Juries and

Directed Verdicts under the Erie Doctrine) ...........

Michigan Law Review, Vol. 47 (Federal Courts; Directed

Py BP ee PID nc co ccderececcccersccacesas

Michigan Law Review, Vol. 48, page 570 et seq. ........

28a

TREATISES CITED

Michigan Law Review, Vol. 60, page 1031, 1059, 1962 (Con-

gressional Repair of Erie Doctrine in Diversity Cases) . 50a

Minnesota Law Review, Vol. 55, page 903 et seq. DIREC-

TION OF VERDICT: COMPASS FOR FEDERAL

Rs EE 66 0 tac mak canes oe an 48a,50a,53a,55a

Moore's Federal Practice 5a (Supplement) 19, 20, 21..... 46a

Moore's Federal Practice Sa 50.02 (1) .................. 46a

Texas Law Review, Vol. 42, page 1053, 1060 et seq. 1964

(Bagalay, Directed Verdicts and the right to Trial by Jury

i ID 6 on Cotes cca npidcd GackhenKiewenhede 55a

Utah Law Review, 1970, page 155 (Multiple Sufficiency

Tests in Federal Courts: The Scope of Lavender) ..48a,52a

Virginia Law Review, Vol. 51, page 884 (1965).......... 50a

Wayne Law Review, Vol. 13, 317, 1967 (Wright, Federal

Courts and the nature and Quality of State Law) ...... 50a

Wright and Miller Federal Practice #2525, pages 551-2 (opt-

ee Ge EE IED odes cen tcestekseusteusecs 50a,52a,55a

#2529, pages 571-2-3 (as to Wilkerson); inferences gener-

es Gers NG Fe bees Fob oeicb ecb cedies 55a

Yale Law Journal, Vol. 67, pages 188-204, 1957 ......... 50a

2 B W Barron & A. Holtzoff, Federal Practice & Procedure

Ss I a St 5Sa

29a

EXCERPT FROM DISTRICT COURT DECISION, OVERSEAS

RELATING TO STANDARD USED THEREIN

CASES RELIED ON BY DISTRICT JUDGE IN OVERSEAS,

BASED ON STATE OF OHIO STANDARD

(EXCERPT FROM DISTRICT COURT DECISION ON

OVERSEAS RELATING TO STANDARDS USED)

OVERSEAS MOTORS, INC. v. IMPORT MOTORS LIMTIED,

INC.

Cite as 375 F.Supp. 499 (1974)

Directed Verdict

Procedure—After approximately five weeks of trial, it ap-

peared that the plaintiff's remaining proof consisted of some

fifteen depositions and several hundred exhibits. Colloquy in

chambers at that time developed the certainty that defendants’

counsel would present and argue a motion for a directed verdict at

the close of plaintiff's proofs. The court then suggested and

counsel agreed that the jury should read the remaining deposi-

tions and studied the exhibits not yet offered by plaintiff. Counsel

agreed to an arrangement by which these materials could be

considered along with the evidence already presented to the jury

in determining defendants’ motion. It should be noted that while

counsel for defendants agreed to the procedure, they did not

necessarily agree to the ultimate admissibility of either the depos-

ition testimony or the exhibits. Equally important, while the court

notified counsel for the defendants that for the purpose of the

motion it would consider all of the testimony offered by the

plaintiff, including testimony concerning settlement discussions

(a portion of which had been excluded by the court during trial), it

did so without prejudice to the defendants’ right to continue their

objections to any evidence they considered inadmissible in the

event the motion for directed verdict was denied.

[40] Standards for Directing a Verdict®*—A directed verdict

is appropriate where there is a complete absence of proof on an

82 See generally SA Moore, supra note 2, §50.02{1).

30a

essential element of a party's cause of action or defense,*’ or

where the proofs adduced in support of that element are so

insignificant as to be the equivalent of no proof.** The precise

level of non-persuasion required has been variously described,

bul in essence is reached whenever the facts, and any inferences

which may reasonably be drawn from them, point so strongly

toward the non-existnece of an essential element that no reasona-

ble man could find for its existence.**

[41-43] Of course it is a well-established ruic that the court

must view the evidence in the light most favorable to the party

against whom the motion is made.** Thus, no rational inference

favoring the plaintiff may be rejected because of conflicting evi-

dence or inferences or questions as to a source's credibility.*’

Even so, once aconclusive deficiency of proof is shown, the court

is obligated to direct a verdict. Justice and the integrity of the law

itself permit nothing less.

“*A directed verdict is a device to save time and trouble

involved in lengthy jury determination. It is [also] something

more. It is a method for protecting neutral principles of law

from powerful forces outside the scope of law—compassion

and prejudice.*’**

STATE OF OHIO CASES RELIED ON BY DISTRICT JUDGE IN

OVERSEAS AS BASIS OF STANDARD OF SUFFICIENCY

CASES RELIED ON BY JUDGE FEIKENS, DISTRICT

JUDGE IN OVERSEAS MOTORS Inc. v. IMPORT MOTORS

*3 See, e.g., Louisville &N.R.R. v. Chatters, 279U.S. 320, 331-32, 49S.Ct. 329,

73 L.Ed. 711 (1929); Riddle v. Datko, 448 F.2d 408, 409 (3rd Cir. 1971).

84 See Boeing Co. v. Shipman, 411 F.2d 365, 372-76 (Sth Cir. 1969).

85 See, e.g., Brady v. Southern R.R., 320 U.S. 476, 479-80, 64 S.Ct. 232, 88

L.Ed. 239 (1943); Fortunato v! Ford Motor Co. , 464 F.2d 962, 965 (2d Cir. 1972).

86 See, e.g., Teti v. Firestone Tire & Rubber Co., 392 F.2d 294, 297 (6th Cir.

1968).

8? See, e.g., Domany v. Otis Elevator Co., 369 F.2d 604, 608 (6th Cir. 1966),

cert. denied, 387 U.S. 942, 87 S.Ct. 2073, 18 L.Ed.2d 1327.

88 Rutherford v. Central Ill. R.R., 278 F.2d 310, 312 (Sth Cir. 1960), cert. denied,

364 U.S. 922, 81 S.Ct. 288, 5 L.Ed.2d 261.

3la

LTD. 375 F Supp 4°9 (1974) Pertinent Page thereon on following

page)

DOMANY v. OTIS ELEVATOR CO. 369 F2d 604, 608, 6CA

1966 cert den 387 U.S. 942

‘*It is a fundamental rule of our jury system that where there

is a question as to the existence of certain alleged facts, the

function of determining such facts rests with the jury and not the

court. '

‘(W)e note the established rule that in the face of a motion to

direct the jury to return a verdict for one of the parties to an

action, * * * the court must construe the evidence most

strongly in favor of the party against whom the motion is

made, and, where there is substantial competent evidence to

support his side of the case, upon which reasonable minds

may reach different conclusions, the motion must be denied.

Neither the weight of the evidence nor the credibility of the

witnesses is for the court’s determination in disposing of

such a motion.’ Durham v. Warner Elevator Mfg. Co., 166

Ohio St. 31, 36, 139 N.E.2d 10, 14. See also Hilleary v.

Bromley, 146 Ohio St. 212, 64 N.E.2d 832; Botto v. Fisches-

ser, 174 Ohio St. 322, 189 N.E.2d 127.

In considering the case most favorably to the party against whom

the motion is made, the court is required to take into account any

reasonable inferences that may be drawn from the facts in evi-

dence. Purdy v. Kerentoff, 152 Ohio St. 391, 89 N.E.2d 565;

Wilkeson v. Erskine & Son, 145 Ohio St. 218, 61 N.E.2d 201.”

TETI v. FIRESTONE TIRE AND RUBBER COMPANY

Cite as 392 F.2d 294 (1968)

[2] The first question raised on this appeal is whether the

trial judge erred in ordering a directed verdict in favor of defen-

dant. In considering a motion of this nature, the trial judge must

view the evidence in the light most favorable to the plaintiff and

must make all permissible inferences in favor of the plaintiff.

Domany v. Otis Elevator Company, 369 F.2d 604 (C.A.6), cert.

den. 387 U.S. 942, 87 S.Ct. 2073, 18 L.Ed.2d 1327; Durham v.

Warner Elevator Mfg. Co., 166 Ohio St. 31, 139 N.E.2d 10.

32a

STANDARD OF SUFFICIENCY AS CITED BY SIXTH CIRCUIT

IN FORTNER ENTERPRISES V. UNITED STATES STEEL (Re-

lied on as standard by Sixth Circuit)

Portion of Fortner, supra cited in OVERSEAS (complete quota-

tion of Standard used in Decision in Sixth Circuit)

STANDARD OF SUFFICIENCY TO WITHSTAND DI-

RECTED VERDICT AS CITED BY SIXTH CIRCUIT COURT

OF APPEALS AND ACTUAL QUOTATION FROM DECI-

SION OF SIXTH CIRCUIT COURT OF APPEALS AND AC-

TUAL QUOTATION FROM DECISION OF SIXTH CIRCUIT

IN OVERSEAS MOTORS, INC, v. IMPORT MOTORS LTD,

INC.

FORTNER ENTERPRISES v. UNITED STATES STEEL, 452

F2d 1095, 1097 6CA 1971 Antitrust

“To determine whether a d.v is appropriate, the governing

principle is that a verdict may properly be directed only when,

without weighing credibility of the witnesses, there can be but one

reasonable conclusion as to the verdict. Where there is conflicting

evidence or insufficient evidence to make a ‘one way’ verdict

possible, a directed verdict is improper. Brady v Southern Ry Co.

320 U.S. 476, 479-480 (1943) SA Moore’s Federal Practice #50.02

(1) pp 2321,2. An appellate court too is bound to view the evi-

dence in the light most favorable to the party against whom the

motion for a directed verdict is made and give him the advantage

of every fair and reasonable inference that the evidence may

justify. Continental Ore Co. v. Union Carbide & Carbon Corp 370

U.S. 690, etc. (1962) 5 A Moore's Federal Practice 50.02 (1) pp

2326,7

OVERSEAS MOTORS, INC. v. Import Motors, Ltd., Inc. et al

F2d 1975, 6CA

(Appendix I attached, p 9) (PORTION OF FORTNER supra,

cited in Overseas, supra, relating to Standard of Sufficiency used

by Court of Appeals 6CA)

‘Appellate review of the action of a district court in granting

a motion for directed verdict demands the most painstaking re-

view of the evidence to make certain that what is claimed not to be

there, in fact isn't.

33a

‘To determine whether a directed verdict is appropriate the

governing principle is that a verdict may properly be directed only

when, without weighing the credibility of the witnesses, there can

be but one reasonable conclusion as to the verdict. ...An appel-

late court too is bound to view the evidence in the light most

favorable to the party against whom the motion for a directed

verdict is made and give him the advantage of every fair and

reasonable inference that the evidence may justify’ ‘Fortner

Enterprises Inc. v. United States Steel Corp. 452 F2d 1095 (6th

Cir. 1971)

NOTE: IN QUOTED EXCERPT FROM OVERSEAS, supra,

THE SIXTH CIRCUIT DELETED FROM FORTNER STAN-

DARD, THE FOLLOWING SENTENCE: **WHERE THERE

IS CONFLICTING EVIDENCE OR INSUFFICIENT EVI-

DENCE TO MAKE A ‘ONE-WAY’ VERDICT POSSIBLE, A

DIRECTED VERDICT IS IMPROPER.”

STANDARDS OF SUFFICIENCY IN SIXTH CIRCUIT,

FOLLOWING STANDARDS DELINEATED UNDER THE LAW

OF MICHIGAN

STANDARDS OF SUFFICIENCY TO WITHSTAND DI-

RECTED VERDICT AS FORMULATED IN SIXTH CIRCUIT

FOLLOWING STANDARD AS DELINEATED UNDER THE

LAW OF THE STATE OF MICHIGAN

Brunswick Balke Collender v. Foster Boat Co., 88 CA6 Mich,

1944 diversity

141 FEDERAL REPORTER, 2d SERIES

‘‘Upon the question whether Brunswick first breached its

contract being raised by a motion for directed verdict and a

motion for judgment notwithstanding the verdict, the evidence

must be considered in the light most favorable to the plaintiff, and

all conflicts resolved in its favor. Michigan law ts, in this respect,

consonant with general law. Thurkow v. City of Detroit, Michi-

gan, 292 Mich. 617, 291 N.W. 29, and cases there cited. So

viewed, there was evidence to sustain the verdict.”

Connors v. American Casualty Co. 330 F2d 505 6CA, 1964 Mich.

diversity

eg -—

34a

[506] "In considering such a motion, the District Judge was re-

quired to consider the evidence, as well as inferences deducible

therefrom, in the most favorable light to plaintiff.’

[507}**In our judgment, the court would not have been justified in

withdrawing this issue from the jury. Cf. Rogers v. Great North-

ern Life Insurance Co., 284 Mich. 660, 279 N.W. 906; Phillips v.

United States Benevolent Society, 120 Mich. 142, 147, 79 N.W.

1

Hull v. Hoiiday Inns of America, Inc., 478 F2d 224 CA6, 1973

Mich. diversity

[225] [1] In considering a motion for a directed verdict the

judge must consider all of the testimony in the light most favora-

ble to the plaintiff. Lones v. Detroit, T. & 1. R. Co., 398 F.2d 914

(C.A. 6) cert. den. 393 U.S. 1063, 89 S.Ct. 714, 21 L.Ed.2d 705:

Serratoni v. Chesapeake and Ohio Ry. Co., 333 F.2d 621, 626

(C.A.6) cert. den. 379 U.S. 960, 85 S.Ct. 648, 13 L.Ed.2d 555:

Kravat v. Indemnity Insurance Company of North America 152

F.2d 336 (C.A. 6); Hinton v. Dixie Ohio Exp. Co., 188 F.2d 121.

124 (C.A. 6).

Jenkins & Reynolds Co. v. Alpena Portland Cement Co. 147 F2

641, (642, 643, 644) 6th Cir, 1906, Mich. diversity.

[643] ‘The motion (for directed verdict) should be overruled

if among the evidence that has been introduced there is substan-

tial evidence favoring such such facts of the plaintiff's case, and

this though among it also there is evidence opposing such sub-

stantial evidence and conflicting therewith, no matter how strong

such opposing evidence is. In passing on such motion it is not the

province of the court to compare with that which opposes or

conflicts therewith. The latter should be completely ignored, as

much so as if it were out of the case, and the attention of the court

should be confined to the evidence favoring such facts of the

plaintiff's case, and to a determination of its positive character,

i.e whether it is substantial or not. It is the jury’s province to make

such a comparison. It is never the court's province to do so except

after verdict on a motion to set it aside and grant a new :rial.

(644]"° 7 .-The question presented by the assignment of the grant-

ing of said motion as error, therefore, is whether, taking the most

35a

favorable view of the evidence so introduced and all inferences

reasonably drawn therefrom, there was among it any substantial

evidence favoring the ultimate or constitutive facts of plaintiff's

case, all of which were put in issue: or, in other words, taking such

view, is it to be said that reasonable men may fairly differ as to

whether the evidence among it favoring such facts established

them, or that all reasonable men would conclude that it did not.”

KRAVAT ET AL V. INDEMNITY CO OF NORTH AMERICA

152 F2d 336,1945 (cited with approval in HULL V. HOLIDAY

INN 478 F2d 225 (1973)

**In McGrath v. Hargraves, 310 Mich. 510, 512, 17 N.W.2d

733, 734, this statement was made: *‘Itis the unvarying rule in this

State that, in passing on a motion for a directed verdict at any

stage of a case, the court must consider the evidence in the light

most favorable to the party against whom the direction is sought

and assume the same to be true."’ Again, the highest court in

Michigan said that, on the motion of a defendant for a directed

verdict, the testimony of the plaintiff ‘‘and the legitimate infer-

ences to be drawn from established facts must be viewed most

favorably to plaintiff."’ McDuffie v. Root, 300 Mich. 286, 292, |

N.W.2d 544, 546. See also Fisher v. Grand Trunk Western Raii-

road Co., 306 Mich. 95, 98, 10 N.W.2d 321.”

SERRATONI V. CHESAPEAK & OHIO RY. 333 F2d,621,

626,CA6,1964,cert den. 379 U.S. 960 Mich. diversity

‘Further, Michigan law does not favor directed verdicts or

judgments entered by the trial judge notwithstanding the verdict

of a jury. Justice Cooley enunciated this principle in Detroit &

Milwaukee Railroad Co. v. Van Steinburg, 17 Mich. 99, 120:

‘The case, however, must be a very clear one which would justify

the court in taking upon itself this responsibility."" This view has

been reiterated and followed many times: Carver v. Detroit &

Saline Plank Road Co., 61 Mich. 584, 28 N.W. 721 (1886); Stowell

v. Standard Oil Co., 139 Mich. 18, 102 N.W. 227 (1905); Bur-

ghardt v. Detroit United Railway, 206 Mich. 545, 173 N.W. 360, 5

A.L.R. 1333 (1919), and reemphasized in recent years: Kaminski

v.Grand Trunk Western Railroad Co., 347 Mich. 417, 79 N.W.2d

899 (1956); Ware v. Nelson, 351 Mich. 390, 88 N.W.2d 524 (1958);

Patterson v. Pennsylvania Railroad Co., 238 F.2d 645 (C.A.6,

1956).

eee = a eg

36a

In this last case reversing a directed verdict in a Michigan

grade crossing accident, Judge Martin quoted Justice Cooley

further, and added a comment:

“(T]he great legal authority said:

‘When the question arises upon a state of facts on which reasona-

ble men may fairly arrive at different conclusions, the fact of

negligence cannot be determined until one or the other of those

conclusions has been drawn by the jury. The inferences to be

drawn from the evidence must either be certain and incontrover-

tible, or they cannot be decided upon by the court. Negligence

cannot be conclusively established by a state of facts upon which

fair minded men may well differ.’

“Some of us have noted a modern tendency—perhaps a

growing one— to give mere lip service to these sound principles.

Trial by jury is our established constitutional safeguard against

assumption of unwarranted judicial authority and should be hon-

ored by steadfast observance * * *."’ Patterson v. Pennsylvania

Railroad Co., supra, 238 F.2d at 650.

[6] Finally, in terms of general legal principle, Michigan

law requires us, when reviewing the grant of judgment for defen-

dant notwithstanding a jury verdict for the plaintiff, to view the

conflicting facts and inferences from the point of view favorable

to plaintiff—this being the point of view which was accepted by

the jury. Ware v. Nelson, supra; Cabana v. City of Hart, 327

Mich. 287, 42 N.W.2d 97, 19 A.L.R.2d 1333 (1950).””

Smith v. Peters 482 F2d799,801 CA6,1973 Diversity Mich.

‘‘In our opinion, the District Court erred in holding that the

manner of commencement of an action in the federal courts is an

‘outcome determinative question’’ which a federal court, under

Erie R. R. v. Tompkins, supra, is required to determine under

state, rather than federal, law. In our view the decision as to when

the action was commenced determines only whether the action is

to continue; it is purely procedural, and does not relate to the

substantive issues of the case.

This question, however, was set to rest by the Supreme

Court in Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14

L.Ed.2d 8 (1965), which case was not considered by the District

Judge in his Memorandum Opinion.”

37a

SOLOMON vv. United States 276 F2d 669,672, 6CA,1960

(Surplus Property Act, Mich. Cert Den. 364 U.S. 890

‘Although the Government's evidence was contradicted in some

respects, it is well settled that upon a motion of a defendant for a

directed verdict, the trial judge should overrule the motion un-

less, viewing the evidence in the light most favorable to the

plaintiff there would be no substantial evidence to support a jury

verdict if returned for him. Hinton v. Dixie Ohio Exp. Co. 6 cir.,

188 F2d, 121,124; Scott v. United States 6 cir, 161 F2d

1009,1012."°

Sove v. Smith 355 F2d 264,268 CA6,1966, Diversity Mich.

ee Ne , and it is familiar Michigan and general law that

factual issues will not be withdrawn from a jury unless they are

such “that all reasonable men must draw the same conclusion

from them.** Grand Trunk R. Co. of Canada v. Ives, 144U.S. 408,

417, 12 S.Ct. 679, 683, 36 L.Ed. 485 (1891). See also Beach v. City

of St. Joseph, 192 Mich. 296, 301, 158 N.W. 1045 and earlier and

later Michigan cases.”

A ee gg A A nee

38a

STANDARDS OF SUFFICIENCY AS FORMULATED IN SIXTH

CIRCUIT UNDER STATE STANDARDS OTHER THAN STATE

OF MICHIGAN

STANDARDS OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT AS FORMULATED IN SIXTH CIRCUIT UNDER

STATE STANDARDS OTHER THAN THE STATE OF MICHI-

GAN

Crown Cork & Seal v. Morton 417 F2d,921,926 Ca6, 1969, di-

te He ko Geis Si vc tn scab atedhedendctedss «0:

Domany v. Otis Elevator Co. 369 F2d 604,608, 6CA,1966

cert den 387 U.S. 942, Ohio diversity ................

Dean v. Southern Railway Co 327 F2d 757,765, 6CA,1964

EE vcbetccbknn ned odkcedtnkideddduneaeees

Gilreath v. Southern Rw Co 323 F2d 158,162, Ca6,1963 Tenn

SE habs adedencbendned cadébadauethsdcsntened<a

Hinton v. Continental Ins. Co.188 F2d 121,124, 6CA,1951

Ss EE Wruie 0 Wb 0405 eeeGs bee encceweyases ceeds

Holt v. Continental Ins. Co. 440 F2d 652, 6CA,1971 Tenn.

EE 4 ch Unde bs ceba keds becekdl tr hekendaseneans ss

Kresge Co. v. Holland 158 F2d 495,498 6CA Diversity Ohio

Lones v. Detroit, Toledo & Ironton Rr Co. 398 F2d 914,919,

I s,s caducGe vissoubs edbieeucs

Lovas v. Gen. Mo. Corp 212 F2d 805,807, 6CA,1954,Ohio

SE i dck6he de cha eedawes ines aheneeesbeukeuun

‘ McDowell v. Bratcher 265 F2d 261, 263, 6Ca,1959, Ken-

ee ee ee TT ee

Miller v. Cincinnati & Texas Pac. Rv. Co. 317 F2d 693,700,

I a ee a

Minton v. Southern Ry 368 F2d 719, 720, 6CA,1966 Tenn.

PR icpckearéacekwievbed iddudesdaens ons Raiding were

O’ Donnell v. Geneva Metal Wheel Co. 190 F2d 59,60,

es CIEE oc ncccctebedeksvessedsess

Pergola v. Penn Ry Co. 311 F2d 837,838 CA6 1963, Ohio

SE ou Gb vk Uren 05004605 6sbsnearedekdeeer twee

39a

Price v. Firestone Tire and Rubber Co. 321 F2d 725,726,

Ce GU SNE 60d Vee cuedewd deduweos ade

Scott v. Sove 161 F2d 1009,1012 CA 1947 Tenn. diversity

Taylor v. Cirino 321 F2d 279,281, CA6,1963 Diversity Ky.

Teti v. Firestone Tire and Rubber Co. 392 F2d 294,297,

Se Sa IEEE i dive 6 dub 0 Peed db bedevesers

Trice v. Commercial Union Assurance Co. 397 F2d 889,891

Sah Cs DU EE ba 0 be de deiwdcd codecs dades

Trivett v. New York Life Ins. Co. 283 F2d 441, 443-444,

Ss GEE oun du cca cdacceeubWescssteseaues

— ee ee ee

40a

STANDARDS OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT UNDER ‘‘Boeing’’; RIVES J. DISSENT AND RE-

LATED CASES

STANDARD OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT AS FORMULATED IN

BOEING COMPANY V. SHIPMAN 411 F2d 365 (1969),374-5,

AS OPPOSED TO DISSENT BY JUDGE RIVES OPTING FOR

LAVENDER RULE)

“On motions for directed verdict and for judgment not-

withstanding the verdict the Court should consider all of the

evidence—not just that evidence which supports the non-mover's

case—but in the light and withrall reasonable inferences most

favorable to the party opposed to the motion. If the facts and

inferences point so strongly and overwhelmingly in favor of one

party that the C ourt believes that reasonable men could not arrive

at a contrary verdict, granting of the motions is proper. On the

other hand, if there is substantial evidence opposed to the mo-

tions, that is, evidence of such quality and weight that reasonable

and fair-minded men in the exercise of impartial judgment might

reach differenc reach different conclusions, the motions should

be denied. and the case submitted to the jury. A mere scintilla of

evidence is insufficient to present a question for the jury. The

motions for directed verdict and judgment n. o. v. should not be

decided by which side has the better of the case, nor should they

be granted only when there is a complete absence of probative

facts to support a jury verdict. There must be a conflict in substan-

tial evidence to create a jury question. However, itis the function

of the jury as the traditional finder of the facts, and not the Court,

to weigh conflicting evidence and inferences, and determine the

credibility of witnesses.'§™

(citations under note 16,page 375 omitted)

EXCERPTS OF DISSENT OF JUDGE RIVES IN BOE-

ING, supra (pp 392-3-4)

“First, the majority expressly overrules the Supreme Court's

own sufficiency test set our in Lavender v. Kurn, supra, 327

U.S.at 653. . .,and rejects Planters Mfg Co. v. Protection Mut.

Ins. Co 5 Cir 1967, 380 F2d 862,874* The majority in so doing

4la

commits constitutional error, for the Lavender test represents but

one articulation of several constitutional formulas used by the

Supreme Court.

(*cert den. 289 U.S. 930, emphasis supplied)

‘Second, the majority simply has no authority to ‘promulgate’

any one standard when the Supreme Court itself has prescribed a

number of them (27) (citations omitted) and has left the door open

for further formulas to be developed. ...............

Third, I disagree with the new standard ‘established’ by the

majority because it is at least misleading in its use of the term

‘substantial’ if it is not erroneous. The word ‘substantial’ used in

its legal sence, can equally connote either a qualitative or a

quantitative meaning. ... . I note that notwithstanding all the

variations which the Supreme Court has played on its sufficiency

theme, I have been unable to find a single instance in which the

Supreme Court has used *‘substantial’* (29) in any of its articula-

tions of the constitutional standards. (citations in footnote ,29

omitted)

‘*While some may consider a single formula for the standard to be

laudable in the name of uniformity, I think it is unnecessary. I

seek to achieve the purpose of the Seventh Amendment-

preservation of the resolution of factual disputes to the jury alone-

not to establish one or more preferable formulas for the standard.

And this purpose is perhaps best amplified in the language of

Lavender and Planters. If | had to choose a single formula, my

choice would lie among three: (a) the language of Lavender; (b)

the **Brady rule’’ quoted heretofore on pages 389-390 and again

referred to on page 393; (c) the same formula as that for granting a

summary judgment quoted in footnote 23, supra."

Judge Rives was hopeful that the case might go up on cer-

tiorari (378 footnote2) but since judgment was in appellee's favor

he did not see it. However, Judge Rives still adheres to his

position. (See Robertson v. Douglas SS Co 510 F2d 829, 837

Sca, 1975)

RELATED CASES

POGUE v. GREAT ATLANTIC & PACIFIC TEA COMPANY

242 F2d 575, 5 CA 1957 (576,582)

42a

RIVES, Circuit Judge.[576]

“In reviewing the summary judgment, we need consider

only that evidence most favorable ta the party against whom the

judgment was rendered, giving that party the benefit of all favora-

ble inferences that may reasonably be drawn from the evi-

dence.'”

[582}°‘The kind of jury trial to which the parties are entitled in

Federal Courts under Rules 38 and 39 of the Federal Rules of Civil

Procedure, 28 U.S.C.A., is that preserved by the Seventh

Amendment to the Constitution, to which the doctrine of Erie

Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed.

1188, is of course subservient. Wright v. Paramount-Richards

Theatres, 5 Cir., 198 F.2d 303, 305; Reuter v. Eastern Air Lines, 5

Cir., 226 F. 2d 443, 445; Reynolds v. Pegler, 2 Cir., 223 F.2d 429,

433, 434." /

(cited in Trivett below)

TRIVETT v. NEW YORK LIFE INS. CO. 283 F2d 441, 443, 4,

6CA, 1960 Ky diversity

P , Circuit Judge (dissenting)

‘*The sufficiency of certain evidence to raise a question of fact for

the jury * * * should not be controlled by state law.’*?

As times goes on it becomes increasingly clear that, as often

stated by the Fifth Circuit, *‘[t}he kind of jury trial to which the

parties are entitled in Federal Courts under Rules 38 and 39 of the

Federal Rules of Civil Procedure, 28 U.S.C.A., is that preserved

by the Seventh Amendment to the Constitution, to which the

doctrine of Erie Railroad Co. v. Tompkins, * * * is of

course subservient."’ Pogue v. Great Atlantic & Pacific Tea

Company, 5 Cir., 242 F.2d 575, 582.4

This is exactly the same principle applied by the Supreme

Court in Byrd v. Blue Ridge Cooperative, 356 U.S. 525, 537, 78

S.Ct. 893, 901, 2 L.Ed.2d 953, where the Court said: *‘An essen-

tial characteristic of that system is the manner in which, in civil

common-law actions, it distributes trial functions between judge

and jury and, under the influence— if not the command—of the

Seventh Amendment, assigns the decisions of disputed questions

43a

of fact to the jury. * * * The policy of uniform enforcement -

of state-created rights and obligations, * * * cannot in

every case exact compliance with a state rule—not bound up with

rights and obligations—which disrupts the federal system of al-

locating functions between judge and jury.

I am not suggesting that the Byrd case dealt with the precise

question presented in the case now before us. It is plain that the

Supreme Court has not thus far directly expressed itself upon the

question which I here discuss.* But the clarity with which the

Court there declares the principle which underlies the decision of

the Fifth Circuit in the Pogue case, to my mind furnishes clear

evidence that when it does find occasion to speak, the Supreme

Court will agree with what was said in the Pogue case.

In my opinion there are compelling reasons for regarding the

position of the Fifth Circuit as the only tenable one. Such is also

the view of the Courts of Appeals for the Fourth, Ninth and Tenth

Circuits. Davis Frozen Foods v. Norfolk Southern Ry. Co., 4

Cir., 1953, 204 F.2d 839, 842; State of Washington v. United

States, 9 Cir., 1954, 214 F.2d 33, 40, Smith v. Buck, 9Cir., 1957,

245 F.2d 342, 349; Allen v. Matson Navigation Company, 9 Cir.,

1958, 255 F.2d 273, 281, 282.° Diederich v. American News Co. 10

Cir., 1942, 128 F.2d 144; Bashman v. City Bus Co., 10 Cir., 1955,

219 F.2d 517, 52 A.L.R.2d 582; Miller v. Irby, 10 Cir., 1955, 227

F.2d 942.

As noted in Dick v. New York Life Ins. Co., 359 U.S. 437,

445,79S.Ct. 921, not all of the courts of appeals have agreed upon

this proposition. An examination of those cases which have pur-

portedly followed state decisions as to what constitutes a suffi-

cient case for the jury convinces me that in the main they are

distinguishable either on the ground that the court found it un-

necessary in the particular case to pass upon this point, or be-

cause the case really involved a problem of state substantive law

such as the existence of presumptions and the location of burden

of proof.’

ROBERTSON v. DOUGLAS SS. CO 510 F2d 829,837,

CA5,1975,Jones Act (RIVES J. still adhering to his dissent in

Boeing ,opting for Constitutional Standard)

i i a a a ae lam i i

44a

Ya Pees 1 adhere to the view expressed in my dissent-

ing opinion in Boeing Company v. Shipman, 5 Cir. 1969, 411 F.2d

365, and therefore think that the standard for judging the suffi-

ciency of the evidence to require submission of a case to a jury in

F.E.L.A. cases, Jones Act cases, and all other jury cases is the

same-constitutional standard. I think that the evidence in this case

as recited in the majority opinion met the constitutional standard.

I therefore specially concur.”

PLANTERS MFG. Co. v. Protection Mut Ins. Co. 380 F2d

869,870-1-2-3-4 SCA, 1967, Diversity, Miss. claim under insur-

ance policy Cert.Den. 389 U.S.930

{870}°‘The first point urged by appellant is that in determin-

ing the sufficiency of the evidence to raise a question of fact for

the jury in diversity cases, federal courts must apply a federal

test. The Supreme Court has yet to settle the conflict which exists

among the courts of appeals on this issue.”’

(footnotes omitted)

[871]**However, the Court's decisions in Byrd v. Blue Ridge

Rural Electric Cooperative, 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d

953 (1958), and Simler v. Conner, 372 U.S. 221, 83 S.Ct. 609, 9

L.Ed.2d 691 (1963), strongly suggest that the question will even-

tually be resolved in favor of the federal test. In Byrd, the issue

was whether a federal court sitting in diversity was bound under

the rule of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82

L.Ed. 1188, 114 A.L.R. 1487 (1938), to follow a decision by the

Supreme Court of South Carolina which, in state court, would

have made the trial judge the trier of fact on the question whether

Byrd was covered by workmen's compensation. The Court re-

fused to permit state law to divest a federal jury of its normal

function. in the course of the opinion, it said:

“Thus the inquiry here is whether the federal policy

favoring jury decisions of disputed fact questions should

yield to the state rule in the interest of furthering the objec-

tive that the litigation should not come out one way in the

federal court and another way in the state court.

We think that in the circumstances of this case the

federal court should not follow the state rule. /t cannot be

45a

gainsaid that there is a strong federal policy against allow-

ing state rules to disrupt the judge-jury relationship in the

federal courts.’’ Byrd, supra, 365 U.S. at 538, 78 S.Ct. at

901. (Emphasis added.)

To permit state law to dictate when a federal trial judge must

take questions of fact from a jury by means of a directed verdict or

a judgment n. o. v. seems hardly less disruptive of the federal

judge—jury reiationship than assigning the task of resolving fac-

tual disputes to the trial judge initially.

The question posed in Simler, another diversity case, was

whether federal or state law would determine if a controversy was

equitable in nature and triable to the court, or legal and triable to a

jury. The Court said:

[T]he right to a jury trial in the federal courts is to be

determined as a matter of federal law in diversity as well as

other actions. * * * Only through a holding that the

jury-trial right is to be determined according to federal law

can the uniformity in its exercise which is demanded by the

Seventh Amendment be achieved.”* Id, 372 U.S. at 222, 83

S.Ct. at 610.

If the seventh amendment requires uniformity in the exercise of

the jury trial right in the federal courts, surely that sumes

uniformity in the exercise of the power to direct a verdict or grant

a judgment n. o. v.”

(Court opts for Lavender Rule 873)

(874]*‘It is the seventh amendment which governs the role of the

jury in the courts of the United States, and we perceive no rational

basis for the proposition that it means one thing in FELA cases

quite another in other actions. That the Supreme Court shares this

view is indicated, we think, in the following excerpt from Atlantic

& Gulf Stevedores v. Ellerman Lines, 369 U.S. 355 (1962):

“This suit being in the federal courts by reason o diyersity

of citizenship carried with it, of course, the right to by jury.

As in cases under the Jones Act * * * and under the Fed-

eral Employers’ Liability Act * * * trial by jury is part.of

the remedy. Thus the provisions of the Seventh Amendment,

noted above, are brought into play. * * * As we recently

46a

stated in another diversity case, it is the Seventh Amendment that

fashions ‘the federal policy favoring jury decisions of disputed

fact questions.’ ’’ 1d. at 360, 82 S.Ct. at 784. (Emphasis added).

STANDARDS OF SUFFICIENCY AS APPLIED IN SIXTH CIR-

CUIT UNDER BRADY, BYRD, CONTINENTAL, ERIE, GALLO-

WAY, LAVENDER, SIMLER, TENNANT AND WILKERSON

RULES

STANDARD OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT AS APPLIED IN SIXTH CIRCUIT UNDER BRADY

RULE (BRADY vy. SOUTHER RY CO. 1943 320 U.S. 476, 479-480.

**When the evidence is such that without weighing the credi-

bility of the witnesses there can be but one reasonable conclusion

as to the verdict, the court should determine the proceeding by

non-suit, directed verdict or otherwise in accordance with the

applicable practice without submission to the jury, or by judg-

ment notwithstanding the verdict. By such disrection of the trial

the result is saved from the mischance of speculation over legally

unfounded claims." (citations omitted)

EXCERPTS FROM 5 A MOORE’S FEDERAL PRACTICE

ON BRADY RULE #50.02 (1),pp 2321-2

‘Since that time (date of Brady Rule) although they have

used many different formulations, the federal courts have been

reasonably consistent in the application of the Brady rule, that a

verdict may properly be directed when, without weighing the

credibility of the witnesses, there can be but one reasonable

conclusion as to the verdict./'’ But where there is conflicting

evidence, or there is insufficient evidence to make only a ‘one-

way’ verdict possible, a directed verdict is improper. '* (citations

under 17 and 18, pp2321,2,3,4, omitted)

(later case citations appear in 5A. MOORE’S FEDERAL PRAC-

TICE Supplement,(for pp 23,2322) at pp19-20-21) and include

Crown Cork & Seal Co. v. Morton Pharmaceuticals, Inc. (CA

6th 1969, 417 F2d 921 and Fortner Enterprises, Inc. v. United

States Steel Corp (Ca6th 1971) 452 F2d 1095, cert den. 406 U.S.

919. (both cases citing Treatise)

47a

CASES FOLLOWING BRADY RULE IN

THE SIXTH CIRCUIT COURT OF APPEALS

GREER v. UNITED STATES 408 F2d 631,635 (CA6,1969 (Fed.

tax claim)

REEVES v. POWER TOOLS 474 F2d 375,380 (CA6, 1973 (Tenn.)

diversity (but see Scott v. Sove 161 F2d 1009,1012,CA6,1947

(Tenn.) diversity following *‘substantial evidence rule) and 6CA

cases cited at 1012 therein)

DOWDELL v. U.S. INDUSTRIES,INC. 495 F2d 641 CA6, 1974,

642 (also citing Continental Ore Co. v. Union Carbide & Carbon

370 U.S. 690; and Fortner Ent. Inc. v. United States Steel Corp

Ca6,1971 452 F2d 1095,cert. den. 406 U.S. 919)

Rodriquez v. Del Ray Connecting Ry. 473 F2d 818,820 6Ca, 1973

FELA

STANDARD OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT AS APPLIED IN THE SIXTH CIRCUIT UNDER

STANDARD OF BYRD (BYRD v. BLUE RIDGE COOPERATIVE

356 U.S. 525, 537-8-9

re Pe The federal system is an independent

system for administering justice to litigants who properly invoke

its jurisdiction. An essential characteristic of that system is the

manner in which, in civil common-law actions, it distributes trial

functions between judge and jury and, under the influence—if not

the command —of the Seven** Amendment, assigns the deci-

sions of disputed questions of fact to the jury. Jacob v. New York,

315 U.S. 752. The policy of uniform enforcement of state-created

rights and obligations, see, e. g., Guaranty Trust Co. v. York,

supra, Cannot in every case exact compliance with a state rule —

not bound up with rights and obligations— which disrupts the

federal system of allocating functions between judge and jury.

Herron v. Southern Pacific Co., 283U.S.91...... ’ (footnotes

omitted)

[539]**. . . . Perhaps even more clearly in light of the influence of

the Seventh Amendment, the function assigned to the jury ‘is an

essential factor in the process for which the Federal Constitution

provides.’ /d., at 95. Concededly the Herron case was decided

before Erie R. Co. v. Tompkins, but even when Swift v. Tyson, 16

48a

Pet. 1, was governing law and allowed federal courts sitting in

diversity cases to disregard state decisional law, it was never

thought that state statutes or constitutions were similarly to be

disregarded. Green v. Neal's Lessee, 6 Pet. 291. Yet Herron held

that state statutes and constitutional provisions could not disrupt

or alter the esvential character or function of a federal court.”’

(footnotes omitted.)

Campbell v. Oliva 424 F2d 1244, 1245,CA6,1970 Tenn. diversity

Trivett v. New York Life Ins.Co 283 F2d 441, 444, CA6,1960.di-

versity Ky.

Comment: MULTIPLE SUFFICIENCY TESTS IN FEDERAL

COURTS: THE SCOPE OF LAVENDER UTAH LAW RE-

VIEW 1970 p 158 n 34

Comment: DIRECTION FOR DIRECTED VERDICT: A

COMPASS FOR FEDERAL COURTS,Cooper, 55 Minn. .w

Rev. 903,981-2

Miller v. Davis 507 F2d 308,313 6CA 1974, Diversity ky

Smith v. Peters 482 F2d 799 (801) 6CA 1973 Mich. diversity

BYRD v. BLUE RIDGE COOPERATIVE 356 U.S.

525, 1957 536,537,539

STANDARD OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT AS APPLIED IN SIXTH CIRCUIT UNDER CONTI-

NENTAL ORE CO CONTINENTAL ORE CO.V.STANDARD

UNION CARBIDE & CARBON CORP, 370 U.S.

690,696,700, 1,1961

“The Court of Appeals was, of course, bound to view the

evidence in the light most favorable to Continental and to give it

the benefit of all inferences which the evidence fairly supports,

49a

even though contrary inferences might reasonably be drawn.°”

Amerco Marketing Co. of Memphis, Inc. v. Myers, 494 F2d

904,911 Diversity-Ky 6ca

Baker v. Baltimore & Ohio RR Co 502 F2d 638,1974 6CA FE-

LA ,643,6CA

Campbell v. Oliva 424 F2d 1244 (1970)Tenn. Diversity,1245 6ca

Champion Oil Service Co. v. Sinclair Ref. Co. 502 F2d 709,713,

1974, antitrust.6ca

Dowdell v. U.S. Industries, Inc. 495 F2d 641, 642-3,Diversity,

6ca,1974

Fortner Enterprises, Inc. v. United States Steel Corp 452 F2d

1095,1097,1971 antitrust, Ohio

Rodriques v. Del Ray Connecting Ry 473 F2d 819 6ca,1973

FLLA,820

STANDARD OF SUFFICIENCY TO WITHSTAND DiRECTED

VERDICT AS APPLIED IN SIXTH CIRCUIT UNDER ERIE

RULE (ERIE R. CO. V. TOMKINS 304 U.S.64,78-9,1937, as

supplemented by STONER V.NEW YORK LIFE INS. CO. 311 U.S.

464,467, 1940

“Except in matters governed by the Federal Constitution or

by Acts of Congress, the law to be applied in any case is the law of

the State. And whether the law of the State shall be declared by its

* As Professor Moore has indicated, ‘In ruling on the motion [for directed

verdict] the trial court views the evidence in the light most favorable to the party

against whom the motion is made. On appeal, likewise, the appellate court must

consider the evidence in its strongest light in favor of the party against whom the

motion for directed verdict was made, and must give him the advantage of every

fair and reasonable intendment that the evidence can justify.'’ 5 Moore's Fed-

eral Practice 2316 (2d ed., 1951). See Pawling v. United States, 4 Cranch 219;

Gunning v. Cooley, 281 U.S. 90; Tennant v. Peoria & P.U.R. Co., 321 U.S. 29.

Cf. Smith v. Reinauer Oil Transport, 256 F.2d 646, 649 (C.A. Ist Cir.).

The same rule governs in ruling upon motions for directed verdict in treble

damage suits under the antitrust laws Schad v. Twentieth Century-Fox Film

Corp., 136 F.2d 991, 993 (C.A. 3d Cir.); Wisconsin Liquor Co. v. Park & Tilford

Distillers Corp., 267 F. 2d 928, 930 (C.A. 7th Cir.). Cf. United States v. Diebold,

Inc., 369U.S. 654, 655; Poller v. Columbia Broadcasting System, Inc., 368 U.S.

464, 473.

< ere a

50a

Legislature in a statute or by its highest court ina decision is not 4

matter of federal concern. There is no federal general common

law. Congress has no power to declare substantive rules of com-

mon law applicable in a State whether they be local in their nature

or *‘general,’’ be they commercial law or a part of the law of torts.

And no clause in the Constitution purports to confer such a power

upon the federal courts.

ge ee Supervision over either the legislative or

the judicial action of the States is in no case permissible except as

to matters by the Constitution specifically authorized or dele-

gated to the United States. Any interference with either, except

as thus permitted, is an invation of the authority of the State and,

to that extent, a denial of its independence.” *

Trivett v. New York Life Ins. Co. 283 F2d,441,442. CA6,1960,di-

versity Ky.

For Treatise analysis of Erie see DIRECTIONS FOR DIRECTED

VERDICTS: ACOMPASS FOR FEDERAL COURTS.Edward

F. Cooper, 55 MINNESOTA LAW REVIEW 903. 978- 981

Kurland, MR JUSTICE FRANKFURTER, THE SUPREME

COURT AND THE ERIE DOCTRINE IN DIVERSITY CASES

67 Yale L.J. 187,188-204,1957

QUIGLEY, Congressional Repair of the Erie Derailment 60

Mich. Law Review 1031,1059 (1962)

J.S.Wright THE FEDERAL COURTS AND THE NATURE

AND QUALITY OF STATE LAW 13 Wayne L.Rev.(Mich.)

317,1967

McCoid, Hanna v. Plumer: THE ERIE DOCTRINE CHANGES

SHAPE 51 VA L. Rev. 884 (1965)

Wright and Miller Federal Practice #2525,p 551-2 opting for

federal test, that ‘‘there is a strong federal policy allowing state

rules to disrupt the judge-jury relationship in the federal courts”’

under pronouncement in Byrd v. Blue Ridge Rural Electric

Cooperative Inc. 356 U.S. 525,537,8,9 and that this policy out-

weighs the policy of the Erie doctrine

Smith v. Peters, 482F2d 799,801 CA6,1973 Mich. diversity

Sla

STANDARD OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT AS APPLIED IN THE SIXTH CIRCUIT UNDER GAL-

LOWAY V.UNITED STATES,319 U.S. 372,395,1942

‘Finally, the objection appears to be directed generally at

the standards of proof judges have required for submission of

evidence to the jury. But standards, contrary to the objection’s

assumption, cannot be framed wholesale for the great variety of

situations in respect to which the question arises. Nor is the

matter greatly aided by substituting one general formula for

another. It hardly affords help to insist upon ‘‘substantial evi-

dence”’ rather than “some evidence”’ or ‘‘any evidence,”’ or vice

versa. The matter is essentially one to be worked out in particular

situations and for particular types of cases. Whatever may be the

general formulation, the essential requirement is that mere specu-

lation be not allowed to do duty for probative facts, after making

due allowance for all reasonably possible inferences favoring the

party whose case is attacked. The mere difference in labels used

to a standard, whether it is applied under the demurrer

to the evfMlence or on motion for a directed verdict, cannot

amount to a departure from ‘‘the rules of the common law”’ which

the Amendment requires to be followed. If there is abuse in this

respect, the obvious remedy is by correction on appellate re-

view.

As for myself, I believe that a verdict should be directed, if at all,

only when, without weighing the credibility of the witnesses,

there is in the evidence no room whatever for honest difference of

opinion over the factual issue in controversy. I shall continue to

believe that in all other cases a judge should, in obedience to the

command of the Seventh Amendment, not interfere with the

jury's function. Since this is a matter of high constitutional impor-

tance, appellate courts should be alert to insure the preservation

of this constitutional right even though each case necessarily

turns on its peculiar circumstances."

STANDARD OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT AS DELINEATED IN THE SIXTH CIRCUIT UNDER

THE LAVENDER RULE

LAVENDER v. KURN U.S. 327 U.S. 645,654,1945

ee ee

52a

It is no answer to say that the jury's verdict involved specu-

lation and conjecture. Whenever facts are in dispute or the evi-

dence is such that fair-minded men may draw different infer-

ences, a measure of speculation and conjecture is required on the

part of those whose duty it is to settle the dispute by choos-

ing what seems to them to be the most reasonable inference.

Only when there is a complete absence of probative facts to

support the conclusion reached does a reversible error appear.

But where, as here, there is an evidentiary basis for the jury's

verdict, the jury is free to discard or disbelieve whatever facts are

inconsistent with its conclusion. And the appellate court's func-

tion is exhausted when that evidentiary basis becomes apparent,

it being immaterial that the court might draw a contrary inference

or feel that another conclusion is more reasonable.

Dixon v. Penn Cent. 481 F2d 833,839 6CA,1973 Ohio FELA

Highfill v. Louisville & Nashville R.Co 154 F2d 874 6Ca,1946

FELA, 876

Hutchins v. Akron, Canton & Youngstown R.Co. 162 F2d 189,

192 6CA, FELA

Sweeney v. American SS Co. 491 F2d 1085,1089, 6CA,1974,

Jones Act

SEE: MULTIPLE SUFFICIENCY TESTS IN FEDERAL

COURTS. THE SCOPE OF LAVENDER UTAH LAW REVIEW,

1970 p 155-161

p 156,n. 10, **state test controls in Second and Sixth circuits.”’

Discussion of Lavender in relation to Boeing (Boeing Co v. Ship-

man 411 F2d 365 (373-7) SCA,1969 is at pp 155,157, 158,159 in

UTAH, supra

Comment: Wright & Miller Federal Practice #2525,p 555.

Boeing rule, dissent and related matters follow:

STANDARDS OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT AS DELINEATED IN: SIMLER V. CONNER 372 U.S.

221 (1963) 222, Per Curiam)

“We agree with respondent that the right to a jury trial in the

53a

federal courts is to be determined as a matter of federal law in

diversity as well as other actions. The federal policy favoring jury

trials is of historic and continuing strength. Parsons v. Bedford, 3

Pet. 433, 446—449; Scott v. Neely, 140 U.S. 106; Byrd v. Blue

Ridge Rural Electric Cooperative, Inc., 356 U.S. 525, 537—539;

Beacon Theatres, Inc., v. Westover, 359 U.S. 500; Dairy Queen,

Inc., v. Wood, 369 U.S. 469. Only through a holding that the

jury-trial right is to be determined according to federal law can the

uniformity in its exercise which is demanded by the Seventh

Amendment* be achieved. In diversity cases, of course, the

substantive dimension of the claim asserted finds its source in

state law, Erie R. Co. v. Tompkins, 304 U.S. 64; see Cities Service

Oil Co. v. Dunlap, 308 U.S. 208; Palmer v. Hoffman, 318 U.S.

109, but the characterization of that state-created claim as legal or

equitable for purposes of whether a right to jury trial is indicated

must be made by recourse to federal law."’

*“In Suits at common law, where the value in controversy

shall exceed twenty dollars, the right of trial by jury shall be

preserved, and no fact tried by a jury, shall be otherwise re-

examined in any Court of the United States, than according to the

rules of the common law.”’ U.S. Const., Amend. VII.

RELATED MATERIAL

ATLANTIC & GULF STEVEDORES, INC. v. Ellerman Lines

Ltd 369 U.S. 355 (1962); cf HERON v. SOUTHERN PAC. CO.

283 U.S. 91 (1931) (HERON cited with apparent approval by

Supreme Court in Byrd v. Blue Ridge Rural Elec Co-op. 356 U.S.

525, 538,540 n 15 (1958)

DIRECTIONS FOR DIRECTED VERDICT, A Compass for

Federal Courts 55 Minnesota Law Review, 903, 907-8)

BALTIMORE & C LINE v. REDMAN, 1935, 295 U.S. 654,657:

‘*The aim of the amendment (Seventh), as this Court has held is to

preserve the substance of the common-law right of trial by jury, as

distinguished from mere matters of form or procedure, and par-

ticularly to retain the common Jaw distinction between the pro-

vince of the Court and that of the jury, whereby in the absence of

express or implied consent to the contrary, issues of law are to be

reached by the court and issues of fact are to be determined by the

en a es

Re. eo OR

S4a

jury under appropriate instructions by the court.’’ citations omit-

ted.

cf. Dice v. Akron, C. & Y.R. Co. 342 U.S. 359,363, 1953 FELA

and Bailey v. Central Vermont R. Co. 319 U.S. 350,354, (that trial

by jury is ‘basic and fundamental feature of our system of federal

jurisprudence.”

JACOBS v. NEW YORK 315 U.S. 752, 753,1942 (right to jury trial

under Seventh Amendment “‘should be jealously guarded by the

courts.”

Cited in:

Farmers-Peoples Bank vy. United States 477 F2d,752,556

6Ca,1973 re; seventh amendment trial by jury

Quoted in Local 783 Allied Ind. Wkrs of Am. v. Gen. Electric, 471

F2d 751,756, CA6,1973 (.on Union Contract, re right to trial by

jury)

STANDARD OF SUFFICIENCY TO WITHSTAND DIRECTED

VERDICT AS APPLIED IN SIXTH CIRCUIT UNDER TENNANT

v. PEORIA & P.U.RY CO 321 U.S. 29 (FELA),1943, (supplement-

ing GALLOWAY vy. United States 319 U.S. 372,395)

[32}'*The essential requirement is that mere speculation be not

allowed to do duty for probative facts, after making due allow-

ance for all reasonably possible inferences favoring the party

whose case is attacked.”’

Galloway v. United States, 319, U.S. 372,395; Atchison, T.& S.

F. Ry Co. v. Toops 281 U.S. 351....No court is then justified in

substituting its conclusions for those of the twelve jurors."’ (Ten-

ant, at 35)

“It is not the function of a court to search the record for conflict-

ing circumstantial evidence in order to take the case away from

the jury ona theory that proof gives equal support to inconsistent

and uncertain inferences. The focal point of judicial review is the

reasonableness of the particular inference or conclusion drawn by

the jury. It is the jury, and not the court, which is the fact-finding

body. it weighs the contradictory evidence and inferences, judges

the credibility of witnesses, receives expert instructions, and

draws the ultimate conclusion as to the facts. The very essence of

5Sa

its function is to select from among conflicting inferences and

conclusions that which it considers most reasonable. (citations

omitted) That conclusion, whether it relates to negligence, causa-

tion or any other factual matter cannot be ignored. Courts are not

free to reweigh the evidence and set aside the jury verdict merely

because the jury could have drawn different inferences or conclu-

sions or because judges feel that other results are more reason-

able.””

Rodriques v. Del Ray Connecting Ry. 473 F2d 819-820 CA6, 1973,

Fela

Wilkerson v. McCarthy, 336 U.S. 53,57, 1949 FELA CASE

‘It is the established rule that in passing upon whether there

is sufficient evidence to submit an issue to the jury we need look

only to the evidence and reasonable inferences which tend to

support the case of a litigant against whom a peremptory instruc-

tion has been given.”

Supreme Court may have approved the above standard in Conti-

nental Ore Co. v. Union Carbide and Carbon 370 U.S.

690,696,700-01;see DIRECTIONS FOR DIRECTED VER-

DICTS,a Compass for Federal Courts, Cooper, 55 Minn. Law

Review 903 ,pp948-53 (note 145,p949) A similar analysis of Wil-

kerson is forcefully presented by Judge Rives’ dissent in Boeing

Co. v. Shipman 411 F2d 365, 381-2 5Ca,1969.

STEELE v. Louisville & Nashville R Co 506 F2d 315,317,

CA6,1974 FELA Ohio

MILLER v. Cincinnati, New Orleans & Texas Pac. Ry 317 F2d

693, 700 CA6,1963 FELA

Comment: Wright and Miller and Federal Practice and Proce-

dure #2529, 571-2-3 (as to Wilkerson) inferenceces generally,

#2528 pp563-571

2B W Barron & A Holtzoff, Federal Practice & Procedure #1075,

at 399-400

Bagalay, Directed Verdicts and the right to Trial by Jury in

Federal Courts, 42 Tex. L. Rev. 1053,1061 (1964