Roberts Technology Group, Inc. v. Curwood, Inc.
695 F. App'x 48
| 3rd Cir. | 2017Background
- RTG (Roberts Technology Group) partnered with Curwood to distribute Curwood food trays; Curwood required RTG to provide Distributor Lead Forms and promised exclusivity for approved leads. Curwood approved 60+ protected accounts.
- Curwood breached by selling directly to Aramark (a protected account) and by contracting with Oliver Packaging to service other protected accounts.
- RTG sued for breach of contract and related claims; RTG’s damages expert, John Maloney, estimated lost net profits of about $3.4 million by projecting lost tray and film sales and applying conservative profit margins.
- A jury awarded RTG $3 million (and awarded Curwood a counterclaim amount). Curwood moved under Fed. R. Civ. P. 50(b) arguing RTG had not proven net lost profits (only gross profits) and sought judgment as a matter of law.
- The District Court granted Curwood’s Rule 50(b) motion and ordered a new trial on damages, finding the record lacked sufficient evidence of costs avoided (net profits). After a second trial, RTG recovered $971,429; RTG appealed.
- The Third Circuit reviewed de novo and concluded the record contained sufficient evidence for a reasonable jury to find approximately $3 million in net lost profits, vacating the District Court’s Rule 50(b) grant and ordering reinstatement of the original verdict.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RTG proved net lost profits with sufficient evidence | Maloney’s analysis established net lost profits equal to his gross-profit-based estimate because many costs were sunk or reflected in conservative profit margins | Maloney measured gross profits only and failed to subtract avoidable costs (salaries, travel, marketing), so no legally sufficient proof of net profits | The record permitted a reasonable jury to find RTG’s net lost profits as presented; Rule 50(b) judgment for Curwood was improper and original verdict reinstated |
| Proper standard for reviewing Rule 50(b) motion here | N/A (procedural) | N/A | Review is plenary; must view evidence most favorably to the verdict-winner and affirm only if verdict lacks legally sufficient evidence |
| Allocation of burden on post-verdict JMOL about damages precision | RTG: damages need only reasonable certainty; Maloney’s testimony satisfied that standard | Curwood: absence of itemized avoided costs defeats net-profit proof | Under Pennsylvania law, damages may be shown by probabilities/inferences; once plaintiff meets burden, defendant must show reductions; Curwood failed to prove avoidable costs reduced damages |
| Whether Deaktor controls to affirm judgment for defendant | N/A | Curwood: Deaktor required distinguishing gross vs net and affirmed judgment for plaintiff’s failure | Court distinguished Deaktor on facts and held it did not mandate judgment here because record contained sufficient evidence to support jury’s inference about net profits |
Key Cases Cited
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (establishes federal courts apply state substantive law)
- Delahanty v. First Pa. Bank, N.A., 464 A.2d 1243 (Pa. Super. Ct. 1983) (damages need only reasonable, not mathematical, certainty)
- Kutner Buick, Inc. v. Am. Motors Corp., 868 F.2d 614 (3d Cir. 1989) (under Pennsylvania law damages equal revenue lost minus costs avoided)
- Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3d Cir. 1993) (standard of review for JMOL; view evidence for nonmovant)
- Deaktor v. Fox Grocery Co., 475 F.2d 1112 (3d Cir. 1973) (affirming judgment where record lacked evidence distinguishing gross and net profits)