327 F. Supp. 3d 125
D.C. Cir.2018Background
- The United States Conference of Mayors (USCM) and its subsidiary USME contracted with Great‑West in 2012 for a 10‑year retirement program (a License Agreement and a Joint Marketing & Training Agreement).
- The Mayors sued Great‑West in April 2016 for breach of contract and breach of the implied covenant of good faith and fair dealing, alleging Great‑West failed to perform promised marketing/sales duties and undermined the program.
- After a nine‑day jury trial in January 2018, the jury found Great‑West breached both the contract and the implied covenant and awarded $8 million in damages to the Mayors.
- Great‑West moved for judgment as a matter of law (Rule 50), arguing Plaintiffs failed to prove causation and presented speculative lost‑profits damages without a coherent damages theory.
- The court evaluated only evidence presented to the jury (testimony, internal emails, contract attachments labeled as “hypothetical examples,” and prior payments/offers from Nationwide) and reviewed jury instructions emphasizing causation and damage certainty.
- The court denied Great‑West’s renewed Rule 50 motion, finding sufficient evidence of breach, causation, and a reasonable basis for the jury’s damages award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Causation: Did Plaintiffs prove Great‑West’s breach caused damages? | Mayors presented testimony, internal emails, and program evidence showing Great‑West failed to perform, diverted resources, and interfered with program success. | Great‑West argued Plaintiffs did not disprove alternative causes and failed to show a causal link to lost sales/profits. | Court: Evidence was sufficient; jury properly instructed on causation and could find breach causally linked to damages. |
| Damages certainty: Were lost‑profits damages proved with reasonable certainty? | Mayors relied on prior Nationwide payments/offers, contract attachments (as examples of expectations), and internal forecasts to provide a reasonable basis for lost‑profit estimates. | Great‑West contended Plaintiffs offered shifting theories, no single damages methodology, and speculative estimates for a new or unproven program. | Court: Jury had adequate documentary and testimonial support and instructions; exact mathematical precision not required—$8M verdict had record support. |
| Use of contract attachments: Could jury rely on attachments for damages/expectations? | Attachments, though labeled hypothetical, showed parties’ shared expectations and Great‑West’s recoupment math and were probative of anticipated enrollment/value. | Great‑West argued attachments were mere projections and not contractual commitments; should not form basis for damages. | Court: Attachments were admissible as hypothetical examples and evidence of expectations; court limited their use but they could inform damages. |
| Implied covenant breach: Could damages be awarded for breach of good faith? | Mayors argued Great‑West acted in bad faith (evasion, slacking off, conflicted priorities), reducing program value; damages flow from that breach. | Great‑West disputed causal and valuation link for such damages and urged nominal damages if at all. | Court: Jury reasonably found breach of implied covenant and awarded damages; measuring damages for bad‑faith contract breach may be difficult but recoverable if reasonably supported. |
Key Cases Cited
- Radtke v. Lifecare Mgmt. Partners, 795 F.3d 159 (D.C. Cir.) (appellate standard: review jury‑evidence in light most favorable to non‑moving party)
- Estate of Muldrow v. Re‑Direct, Inc., 493 F.3d 160 (D.C. Cir.) (judgment as a matter of law appropriate only when evidence is one‑sided)
- Mercer Mgmt. Consulting, Inc. v. Wilde, 920 F.Supp. 219 (D.D.C.) (lost profits recoverable where reasonably proved; methods for proof)
- NCRIC, Inc. v. Columbia Hosp. for Women Med. Ctr., Inc., 957 A.2d 890 (D.C. Ct. App.) (damages may be estimated reasonably; doubt resolved against breaching party)
- Bloor v. Falstaff Brewing Corp., 601 F.2d 609 (2d Cir.) (when a party fails to use required efforts, courts may reasonably estimate lost royalties/profits)