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Bayer Cropscience LP v. Albemarle Corp.

United States District Court, E.D. North Carolina, Western Division

July 25, 2018




         This cause comes before the Court on several post-judgment motions. The appropriate responses and replies have been filed and the matters are ripe for ruling.


         The Court dispenses with a full recitation of the procedural and factual background of this matter, and incorporates by reference its discussion found in its order entered April 14, 2016. [DE 81]. Following remand from the Court of appeals, the matter proceeded to jury trial at Elizabeth City, North Carolina on March 26, 2018. On March 28, 2018, the jury returned a verdict finding by a preponderance of the evidence that Albemarle acted in bad faith when raising the price of methyl bromide to $8.49 beginning July 1, 2014, and that Albemarle acted in bad faith when raising the price of methyl bromide to $11.04 beginning April 1, 2015. [DE 140]. The jury further found that Albemarle's bad faith conduct damaged Bayer in the amount of $17, 628, 323.00. Id. Judgment was thereafter entered in favor of Bayer and the case was closed.

         Bayer has filed a motion for attorney fees and a motion to alter or amend the judgment to include pre-and-post-judgment interest. Albemarle has filed a renewed motion under Fed.R.Civ.P. 50 for judgment as a matter of law, or in the alternative for a new trial. Fed.R.Civ.P. 59.


         I. Albemarle's motion for judgment as a matter of law and for new trial

         Rule 50(b) of the Federal Rules of Civil Procedure provides that where, as here, a party makes a renewed motion for judgment as a matter of law under after the denial of such a motion during trial, a court may (1) allow judgment on the verdict; (2) order a new trial; or (3) direct the entry of judgment as a matter of law. Fed.R.Civ.P. 50(b). A court may grant a motion for judgment as a matter of law if it finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the non-moving party. Fed.R.Civ.P. 50(a)(1). "[W]hen a jury has returned its verdict, a court may grant judgment as a matter of law only if, viewing the evidence in a light most favorable to the non-moving party and drawing every legitimate inference in that party's favor, the court determines that the only conclusion a reasonable jury could have reached is one in favor of the moving party." Saunders v. Branch Banking And Tr. Co. OfVA, 526 F.3d 142, 147 (4th Cir. 2008) (emphasis added). A court is not permitted to weigh the evidence or evaluate the credibility of the witnesses when deciding a Rule 50(b) motion. Bresler v. Wilmington Tr. Co., 855 F.3d 178, 196 (4th Cir. 2017).

         "At its core, Bayer's complaint alleges that Albemarle used its contractual leverage-under the open-price provision-to artificially inflate the price of methyl bromide in violation of the good faith and fair dealing requirements of the UCC." Bayer Cropscience LP v. Albemarle Corp., 696 Fed.Appx. 617, 620 (4th Cir. 2017). As the court of appeals has held in this case, whether or not Albemarle's conduct in question was commercially unreasonable is a fact-specific inquiry. Id. at 621. In support of Bayer's claim that it was commercially unreasonable to raise the price from $4.09 per pound to $8.49 per pound in July 2014 and then from $8.49 per pound to $11.04 per pound in April 2015, Bayer offered the testimony of its purchasing manager Hemant Kandlur, who testified that he had never seen such a dramatic price increase while working the last twenty-three years for Bayer, especially when, as was the case here, the price of the raw ingredient was stable or declining. [DE 162] Trial Tr. 27 March 2018 at 68-69. Mr. Kandlur testified that while Albemarle was charging $11.04 per pound for methyl bromide, Chemtura was charging Bayer $2.49 per pound, for the same product from the same place. Id. at 72.

         Albemarle's witness Mr. Ware testified that he always had a very good reason for raising the price charged to Bayer, and that the $8.49 price increase was based on his value-in-use model prepared as part of a "fresh look at the product" Id. at 133; 136. Ware testified that the $8.49 price increase also reflected his concern about Bayer's honoring its commitment to purchase 80% of its methyl bromide needs from Albemarle. Id. at 143. Mr. Ware testified that he started working on his value-in-use analysis in February 2014, and worked on it through May, June, and July, but he could not explain why the computer file he used indicated that it was created in July 2014. Id. at 204. Absent other evidence to support the price increase to $8.49 just months after the increase to $4.09 per pound, a reasonable jury could conclude that Mr. Ware's justification was pretext for a commercially unreasonable act. The same analysis may be applied to the $11.04 price increase, which Mr. Ware testified was based on a workers' strike in Israel, but he conceded that the price of methyl bromide to Albemarle had not gone up when it increased the price to Bayer. Id. at 148; 201. Albemarle's argument that its value-in-use pricing model was necessarily commercially reasonable because it was based on calculations is unpersuasive. This Court and the court of appeals have held that the $4.09 price increase was reasonable as it was based on Mr. Ware's value-in-use analysis and reflected a pass through of Chemtura's increased tolling fee. That the subsequent price increases were based on the same or similar multiple of 2.21 does not require a finding that they were reasonable.

         Also in evidence are internal Albemarle emails, which appear to reflect Albemarle's position that Bayer's cancellation of its contract with Albemarle was "awesome" and "excellent," and that because methyl bromide sales would not continue for much longer, Albemarle would treat it like a cash out business and get everything it could out of it as soon as possible. [DE 161] Trial Tr. 26 March 2018 at 130. Viewing the facts in the light most favorable to Bayer, and disregarding all evidence in Albemarle's favor that the jury is not required to believe - meaning that it is uncontradicted and unimpeached, Reeves v. Sanderson Plumbing Prod, Inc., 530 U.S. 133, 151 (2000) - the Court finds that there was sufficient evidence for the jury to conclude that Albemarle acted in a commercially unreasonable manner when it adopted its $8.49 and $11.04 price increases.

         Albemarle's additional arguments in support of its challenge to the jury's verdict are without merit. As to mitigation, the jury heard testimony and argument about Bayer's alleged failure to mitigate its damages by agreeing to lock in a price with Albemarle in exchange for agreeing to purchase 100% of its methyl bromide from Albemarle. See, e.g., [DE 163] Trial Tr. 28 March 2018 at 35. Albemarle has not demonstrated that the Court's failure to instruct the jury on mitigation was error, as it has failed to show that such failure seriously impaired its ability to make its case. See Noel v. Artson, 641 F.3d 580, 586 (4th Cir. 2011) (failure to give a requested instruction is error if the requested instruction was (1) correct, (2) not substantially covered by the charge given, and (3) dealt with some point so important that the failure to give the instruction seriously impaired the moving party's ability to make its case) (citation omitted). Here, the Court left Albemarle "ample room to argue its case," and Albemarle has not met its heavy burden to show that the Court erred in failing to instruct the jury on mitigation. Id. at 587.

         As Bayer has correctly argued, the parties to this matter stipulated that they were the proper parties, correctly designated, and that there was no question of mis-or-non-joinder of parties. See [DE 113]. Albemarle cannot now argue that Bayer was not the proper party-plaintiff to be awarded damages in this action. Finally, Albemarle argues that the remaining jury instructions and the verdict form were erroneous for the same reasons that it has argued that it is entitled to judgment as a matter of law. Albemarle contends that the instructions placed an undue emphasis on the amount of the price increases rather than the manner in which they were increased, and failed to pay adequate attention to the express contract between the parties. Considering the instructions given to the jury as a whole, see United States v. Lighty, 616 F.3d 321, 366 (4th Cir. 2010) (citation omitted), the Court finds that the instructions given provided accurate statements of the law and that Albemarle was "permitted more than enough room to argue the facts in light of that standard." Noel, 641 F.3d at 587. For these reasons, Albemarle's motion for judgment as a matter of law is denied.

         A motion for new trial should be granted where "(1) the verdict is against the clear weight of the evidence, or (2) is based upon evidence which is false, or (3) will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict." Atlas Food Sys. & Servs., Inc. v. Crane Nat'l Vendors, Inc.,99 F.3d 587, 594 (4th Cir.1996); see also Cline v. Wal-Mart Stores, Inc.,144 F.3d 294, 301 (4th Cir. 1998). A court is permitted to weigh the ...

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