The Sixth Circuit held that failure to file a Rule 50(a) motion for judgment as a matter of law forfeits the right to renew that motion via Rule 50(b).
September 15, 2020
In Hanover American Insurance Co. v. Tattooed Millionaire Entertainment, LLC, the Sixth Circuit held that failure to file a pre-verdict Rule 50(a) motion for judgment as a matter of law forfeits the right to renew that motion via Rule 50(b). At the close of evidence, the plaintiff in Hanover Insurance moved for judgment as a matter of law on claims involving only two of the three defendants. The third defendant prevailed at trial. The plaintiff then sought—and obtained—judgment as a matter of law on the claims involving that third defendant.
The Sixth Circuit reversed. It initially held that the district court’s decision was final and appealable despite an outstanding issue of costs. The court went on to hold that there could be no Rule 50(b) motion without a Rule 50(a) motion. So failure to file a Rule 50(a) motion on the claims involving the prevailing defendant forfeited any right to file a Rule 50(b) motion. Further, the district court’s ambiguous statements on the need to file a Rule 50(a) motion did not excuse the plaintiff’s failure to file. Nor did those statements permit treating the plaintiff as if it had actually moved under Rule 50(a).
The Memphis House of Blues Litigation
Hanover American involved insurance-fraud claims against singer Chris Brown and other defendants who operated the three music studios at Memphis’s House of Blues. After a fire and burglary at the studios, the defendants sought to collect under insurance policies. The insurance company eventually determined that the receipts Brown had submitted in support of his insurance claim were fake. So the insurance company refused to pay any of the three defendants. The company also filed a lawsuit seeking a declaratory judgment that it owed nothing under the policies. The defendants filed counterclaims, and the case proceeded to trial.
At the close of evidence, the insurance company moved for judgment as a matter of law under Rule 50(a) on the claims involving Brown and another defendant. The district court denied that motion. The jury then found for the insurance company on the claims involving those two defendants.
But as to the third defendant—Johns Falls of the band Egypt Central—the jury found no material misrepresentations and determined that the insurance company owed Falls under his policy. The insurance company then sought judgment as a matter of law under Rule 50(b) on the claims involving Falls. Despite the insurance company’s having not moved for judgment as a matter of law on the claims involving Falls before the jury deliberated, the district court granted the Rule 50(b) motion and entered judgment for the insurance company.
Outstanding Cost Issues and “Renewed” 50(b) Motions
The defendants appealed, and their appeals raised a couple of appellate-procedure issues.
Outstanding Cost Issues
The Sixth Circuit first held that it had jurisdiction over the appeals. The insurance company had moved to dismiss the appeals, arguing that outstanding issues of fees, costs, and other expenses prevented the district court’s decision from being final. It has long been the law that resolution of a case’s merits is final and appealable despite outstanding fees issues. But the insurance company sought more than just fees; it also wanted costs incurred in dealing with the fraudulent insurance claims. The company accordingly contended that the district court’s decision was not yet final.
The Sixth Circuit disagreed. It noted that the Supreme Court’s holdings on finality and fees—specifically, its most recent decision in Ray Haluch Gravel Co. v. Cent. Pension Fund—treated “fees and costs” as separate from the merits for finality purposes. The costs that the insurance company sought were precisely what the Supreme Court had in mind. That those costs were authorized by statute also made no difference; Ray Haluch had rejected any distinction between the sources of fees or costs. And any decision on fees and costs would not alter or moot the appealed issues. The court of appeals accordingly had jurisdiction.
Forfeiting Rule 50(b)
The second procedural issue concerned the district court’s entry of judgment as a matter of law against Falls. On that issue, the Sixth Circuit ultimately held that the insurance company’s failure to file a pre-verdict Rule 50(a) motion forfeited its right to file a post-verdict Rule 50(b) motion.
Federal Rule of Civil Procedure 50(a) provides that once a party has been fully heard on an issue, an opposing party may move for judgment as a matter of law on that issue. If the district court denies that motion, the issue is conditionally submitted to the jury. Should the jury find against the party that filed the Rule 50(a) motion, that party may file a renewed motion for judgment as a matter of law under Rule 50(b). With either motion, the district court asks whether the evidence is such that a reasonable jury could find for the non-moving party on an issue or claim. If a reasonable jury could not so find, the court can enter judgment as a matter of law for the moving party.
The Sixth Circuit saw several reasons for requiring a Rule 50(a) motion before a party can file a Rule 50(b) motion.
Let’s start with the text. Rule 50(b) states that “[i]f the court does not grant a motion for judgment as a matter of law made under Rule 50(a), the court is considered to have submitted the action to the jury subject to the court’s later deciding the legal questions raised by the motion.” After entry of judgment, a party may then “file a renewed motion for judgment as a matter of law.” So Rule 50(b) itself indicates that a party must file a Rule 50(a) motion. And it calls the Rule 50(b) motion a “renewed” motion for judgment as a matter of law, which necessarily implies that a Rule 50(a) motion must precede it. Otherwise there’s nothing to renew.
There are also practical reasons for requiring a Rule 50(a) motion. The motion notifies the court and the opposing party of a potential deficiency in the evidence before the case goes to the jury. That gives the opposing party the chance to correct any deficiencies.
Finally, the conditional submission to the jury that comes after a denied Rule 50(a) motion is part of what makes the Rule 50(b) motion constitutional.
So a Rule 50(a) motion was required for the insurance company to file a valid Rule 50(b) motion. And when the insurance company actually made a Rule 50(a) motion at the close of evidence, it addressed only the claims involving Brown and another defendant—not Falls. The insurance company had accordingly forfeited its Rule 50(b) motion for the claims involving Falls.
The Sixth Circuit also held that the district court’s mixed signals on the need to file a Rule 50(a) motion did not excuse the insurance company’s failure to file. At times the district court seemed to say that Rule 50 motions would be considered filed and denied, regardless of whether the parties actually did so. But the district court also recognized the necessity of filing a Rule 50(a) motion. The Sixth Circuit held that the district court’s ambiguous statements were insufficient to treat the parties as having actually moved under Rule 50(a).
Finally, the Sixth Circuit held that the purely legal nature of the insurance company’s Rule 50(b) motion did not excuse the company’s failure to file a Rule 50(a) motion. The Sixth Circuit has excused the failure to file a Rule 50(b) motion when the appealed issue was a purely legal one; the issue had been raised in a Rule 50(a) motion, and the court saw no reason to require raising that same issue a second time. But failure to file a Rule 50(a) motion means the issue was never raised before the jury deliberated, and that’s a problem:
The point of presenting it the first time is not only to present the argument underlying the Rule 50(a) motion to the judge, but also to opposing counsel, and so give them time to remedy any defects in their case before it goes to the jury.
Hanover American illustrated why this pre-verdict presentation is so important. Before the case went to the jury, the insurance company agreed that each defendant’s behavior would be addressed separately. Its post-verdict motion took the opposite tack. The insurance company had thus sandbagged this argument, springing it on the defendant after the company had lost at trial.
Hanover American Insurance Co. v. Tattooed Millionaire Entertainment, LLC, 2020 WL 5494569 (6th Cir. Sep. 11, 2020), available at the Sixth Circuit and Westlaw.