Antrim Pharm. LLC v. Bio-Pharm, Inc.

950 F.3d 423

ANTRIM PHARMACEUTICALS LLC, Plaintiff-Appellant,

v.BIO-PHARM, INC., Defendant-Appellee.

No. 18-3434

United States Court of Appeals, Seventh Circuit.

Argued September 16, 2019

Decided February 14, 2020

W. Gordon Dobie, Attorney, Thomas G. Weber, Attorney, Winston & Strawn LLP, Chicago, IL, for Plaintiff-Appellant.

John C. Gekas, Attorney, Hal R. Morris, Attorney, Saul Ewing Arnstein & Lehr LLP, Chicago, IL, for Defendant-Appellee.

Before Bauer, Brennan, and St. Eve, Circuit Judges.

Brennan, Circuit Judge.

Antrim Pharmaceuticals LLC and Bio-Pharm, Inc. arranged to manufacture and sell a generic anti-depressant. When their plan fell apart, litigation followed. Antrim sued Bio-Pharm for breach of contract, and Bio-Pharm counterclaimed based on promissory estoppel or, in the alternative, breach of contract. Following a five-day trial, a jury found for Bio-Pharm on Antrim’s breach of contract claim and for Antrim on Bio-Pharm’s counterclaim. Neither party was awarded damages. Antrim appealed.

Antrim challenges the district court’s jury instructions, evidentiary rulings, and decision to allow Bio-Pharm to request lost profits as a remedy on its counterclaim. Bio-Pharm argues Antrim waived these arguments on appeal because Antrim agreed to a general verdict form and did not file a post-trial motion under Federal Rule of Civil Procedure 50(b). We conclude that Bio-Pharm’s waiver argument has no merit but affirm because the district court committed no reversible error.

I.

As 2011 gave way to the new year, some in the pharmaceutical industry believed easy money was to be made. The patent for Lexapro, an anti-depressant with billions of dollars in yearly sales, was set to expire in March 2012. See Gary Robbins, Consumers to Save Big as Lexapro Patent Expires , SAN DIEGO UNION-TRIBUNE , Mar. 5, 2012, https://www.sandiegouniontribune.com/business/biotech/sdut-consumes-save-big-lexapro-patent-expires-2012mar05-htmlstory.html. The expiration of Lexapro’s patent presented a potentially lucrative business opportunity for pharmaceutical companies looking to sell the generic version of Lexapro, known as escitalopram.

Enter the startup company Antrim and the drug manufacturer Bio-Pharm. These companies appeared to be a perfect match to profit from Lexapro’s loss of patent protection. Brian Tambi, the head of Antrim, had extensive experience in growing pharmaceutical companies from the ground up. Bio-Pharm was a well-known contract manufacturer for the generic drug industry. And Antrim and Bio-Pharm had already established a business relationship—BrianT Laboratories (Antrim’s corporate predecessor), Bio-Pharm, and a third company had signed a non-binding term sheet in December 2009 to develop, manufacture, market, and sell unspecified pharmaceutical products. The parties to the term sheet planned to share equity in that joint pharmaceutical arrangement. But the business deal never materialized, and the term sheet lapsed in early 2010. Although Antrim and Bio-Pharm originally intended to sign an updated version of the term sheet for their escitalopram venture, the two companies never signed a written contract to replace the term sheet after its expiration.

The two companies forged ahead without a signed agreement. In May 2015, the Food and Drug Administration approved Antrim’s Abbreviated New Drug Application ("ANDA") for escitalopram, which permitted Antrim to sell escitalopram and contract out its manufacturing to Bio-Pharm. Later that year, Bio-Pharm manufactured the first batch.

Bio-Pharm, however, never shipped the escitalopram to Antrim. Bio-Pharm insists it was not obligated to supply Antrim with the escitalopram because the companies never signed a new agreement after the term sheet expired. Although the companies lacked a written contract, Bio-Pharm claims Antrim had promised they would share equity in the new venture according to the now-expired term sheet. But when Antrim told Bio-Pharm that equity was off the table, Bio-Pharm contends it decided to leave the business venture.

Antrim tells a different story. According to Antrim, the two parties committed to an oral contract in early 2012, under which Bio-Pharm received a share of net profits instead of equity, but Bio-Pharm backed out of that agreement when Antrim refused to renegotiate the terms of the deal.

Antrim sued Bio-Pharm for allegedly breaching the oral contract. Bio-Pharm counterclaimed on the theory of promissory estoppel, asserting it relied on Antrim’s false promises of shared equity in the venture. In the alternative, Bio-Pharm counterclaimed against Antrim for breaching the oral contract Antrim claimed existed.

Both parties filed motions in limine relevant to this appeal. Antrim argued the district court should preclude expert testimony by one of Bio-Pharm’s expert witnesses, Mark Schwartz, on how the FDA regulates ANDA holders. Bio-Pharm argued the district court should preclude expert testimony by Sean Brynjelsen, one of Antrim’s expert witnesses, on industry practices and to what degree Bio-Pharm’s alleged breach impaired the value of Antrim’s business under a lost enterprise value theory. The district court denied Antrim’s motion in limine to exclude Schwartz’s testimony on FDA practices, but it granted Bio-Pharm’s motions in limine to exclude those portions of Brynjelsen’s testimony on industry practices and Antrim’s losses under a lost enterprise value theory.

Several other motions are pertinent to this appeal. In the final pretrial order and later at the jury instruction conference, Antrim proposed Jury Instruction No. 8. That instruction stated that under FDA policy the holder of an ANDA is also the owner of the product underlying that ANDA. The district court rejected Jury Instruction No. 8 after finding the instruction on "what an ANDA means" was irrelevant to the case. DE 169 at 39. Antrim also filed a motion to bar Bio-Pharm from requesting lost profits as a remedy for its counterclaim because Bio-Pharm missed the disclosure deadline imposed by Federal Rule of Civil Procedure 26(a)(1). The district court ruled that Bio-Pharm violated Rule 26(a)(1) but denied Antrim’s motion on the grounds that the violation was harmless.

The case went to trial, and the district court used a general verdict form after neither party objected.¹ Following the jury’s verdict in favor of Bio-Pharm on Antrim’s claim and in favor of Antrim on Bio-Pharm’s counterclaim, Antrim timely appealed.

II.

On appeal, Antrim alleges the district court erred by: (1) rejecting Jury Instruction No. 8, (2) denying its motion to preclude Schwartz’s testimony on FDA practices, (3) granting Bio-Pharm’s motion to preclude Brynjelsen’s testimony on industry practices, (4) granting Bio-Pharm’s motion to preclude Brynjelsen’s testimony on Antrim’s lost enterprise value, and (5) allowing Bio-Pharm to request lost profits as a remedy for its counterclaim.²

Before addressing the substance of Antrim’s arguments, we consider whether Antrim has waived any of its arguments on appeal. Bio-Pharm asserts "every issue appealed by Antrim" is rendered "moot" because the district court used a general verdict form and Antrim did not file a motion for a renewed judgment as a matter of law under Rule 50(b). We disagree.

Bio-Pharm incorrectly assumes that on appeal Antrim challenges the sufficiency of the evidence. For example, Bio-Pharm contends that "[a] general verdict, without more, will ... give rise to the presumption that material fact issues have been resolved in favor of the prevailing party." Freeman v. Chicago Park Dist. , 189 F.3d 613, 616 (7th Cir. 1999) (quoting Dual Mfg. & Eng’g, Inc. v. Burris Indus., Inc. , 619 F.2d 660, 667 (7th Cir. 1980) ). Although a true statement of the law, it is irrelevant to this appeal because Antrim challenges pretrial rulings, not the jury’s factual findings. Therefore, Antrim has not waived any of the issues it raises on appeal by failing to file for a renewed judgment as a matter of law. Bio-Pharm is also correct that "[a] party’s failure to comply with Rule 50(b) forecloses any challenge to the sufficiency of the evidence on appeal." Consumer Products Research & Design, Inc. v. Jensen , 572 F.3d 436, 437–38 (7th Cir. 2009) (citing Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc. , 546 U.S. 394, 404–07, 126 S.Ct. 980, 163 L.Ed.2d 974 (2006) ). But again, Antrim does not challenge the sufficiency of the evidence on appeal. Here too, Antrim has not waived any arguments.

Turning to the merits, we group Antrim’s arguments into challenges related to the jury instructions, to the motion in limine rulings, and to Bio-Pharm’s counterclaim.

A. Jury Instructions

"We review the legal accuracy of [ ] jury instruction[s] de novo, but we evaluate the particular phrasing for abuse of discretion." United States v. Beavers , 756 F.3d 1044, 1056 (7th Cir. 2014) (citing United States v. Dickerson , 705 F.3d 683, 688 (7th Cir. 2013) ). If a court’s instructions were legally accurate, "[r]eversal is warranted ‘only if it appears both that the jury was misled and that the instructions prejudiced the defendant.’ " United States v. McKnight , 665 F.3d 786, 791 (7th Cir. 2011) (quoting United States v. Curry , 538 F.3d 718, 731 (7th Cir. 2008) ); see also Jimenez v. City of City of Chicago , 732 F.3d 710, 717 (7th Cir. 2013) (citing Gile v. United Airlines, Inc. , 213 F.3d 365 374–75 (7th Cir. 2000) ) ("If the instructions were deficient, we ask whether the jury was confused or misled by the instructions. Even if we believe that the jury was confused or misled, we would need to find that the defendants were prejudiced before ordering a new trial.").

According to Antrim, the district court erred by failing to instruct the jury on the legal significance of Antrim holding an escitalopram ANDA. Before trial, Antrim proposed Jury Instruction No. 8, which directed the jury to "conclude that Antrim owns [e]scitalopram according to FDA regulation and policy" if it found "that Antrim is the...