Stryker Spine v. Spine Grp. of Wis., LLC

320 F.Supp.3d 985

STRYKER SPINE, A DIVISION OF HOWMEDICA OSTEONICS CORP., Plaintiff/Counter–Defendant,

v.SPINE GROUP OF WISCONSIN, LLC, Paul Breitenbach, and Todd Potokar, Defendants/Counter–Plaintiffs.

Case No. 14–cv–93–pp

United States District Court, E.D. Wisconsin.

Signed June 11, 2018

Matthew W. Kurlinski, Laura A. Lindner, Littler Mendelson PC, Milwaukee, WI, Michael D. Wexler, Justin K. Beyer, Marcus L. Mintz, Robyn E. Marsh, Seyfarth Shaw LLP, Chicago, IL, for Plaintiff.

Ann M. Maher, Eric J. Meier, Patrick M. Harvey, Husch Blackwell LLP, Milwaukee, WI, for Defendants.

ORDER GRANTING JOINT MOTION FOR VACATUR UNDER RULE 60(b) (DKT. NO. 357)

HON. PAMELA PEPPER, United States District Judge

I. Background

This case began with a complaint filed in Ozaukee County Circuit Court on January 15, 2014, dkt. no. 1–1, and culminated in a five-day jury trial in federal court, with the jury returning a $2 million dollar verdict for the plaintiff on September 28, 2017, dkt. no. 337. The defendants timely filed a Rule 50(b) motion for a judgment as a matter of law or, in the alternative, a Rule 59 motion for new trial. Dkt. No. 344. After the plaintiff filed a brief opposing that motion, dkt. no. 354, the parties filed a stipulation, notifying the court that they had reached a settlement in principle and asking the court not to enter judgment on the jury's verdict, dkt. no. 355.

On February 19, 2018, the parties filed a "Stipulated Order of Dismissal With Prejudice," dkt. no. 357; the stipulation provided that the court would vacate "A. all prior rulings of the Court; B. all prior findings regarding damages, costs and fees; C. all prior rulings regarding summary judgment, motions in limine and evidentiary matters; and D. the September 15, 2017 jury verdict." Id. The stipulation also provided that the court "shall retain jurisdiction of this matter and the Parties to enforce the Confidential Settlement Agreement." Id. at 2.

A week later, on February 26, 2018, the court issued an order construing the stipulation as a motion for vacatur under Rule 60(b). Dkt. No. 358. The court's order recounted the case law regarding motions for vacatur, and concluded that

if, as the court believes, the parties require the court to grant their Rule 60(b)(6) motion in order to effectuate the settlement, it would be helpful to the court if they would provide it with information regarding the balance of equities in relation to the vacatur provision of the settlement.

Dkt. No. 358 at 7. The court also noted that, under Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994), "the parties may wish to make clear in any supplement they file whether they wish the court to incorporate into any dismissal order either the terms of the settlement agreement or any specific term of the settlement agreement." Dkt. No. 358 at 8.

Six weeks after the court entered that order, the parties filed a brief in support of the motion for vacatur. Dkt. No. 359. In reviewing that brief, the court noted that the parties had asked the court to vacate "all prior rulings of the court"—apparently a request that the court vacate not only any substantive rulings, but any rulings on motions to seal and other procedural rulings. In an April 13, 2018 order, the court identified this issue and asked the parties to provide an additional submission detailing the specific court orders they wanted the court to vacate. Dkt. No. 360. The parties responded on April 24, 2018, asking that the court constrain the motion for vacatur to the following docket entries: Dkt. Nos. 39 (order denying motion to dismiss); 81 (order granting in part and denying in part motion to dismiss); 215 (order granting in part and denying in part motion for summary judgment); 242 (order granting in part and denying in part motion to reconsider summary judgment); 255 (order denying motion to compel); 274 (order denying sanction and granting motion to preclude expert); 324 (text-only order dismissing Great Lakes Spine Group, LLC as a defendant); 337 (jury verdict); 340 (minute order from final pretrial conference); 341 (order resolving motions in limine ); and 342 (minute entry denying defendants' post-trial motion), as well as three text-only orders entered on March 4, 2017.

II. DISCUSSION

A. Parties' Motion to Vacate

Federal Rule of Civil Procedure 60(b)(6) allows the court to relieve a party from a final judgment, order or proceeding "on motion and just terms," for "any other reason [than those identified in Rule 60(b)(1)–(5) ] that justifies relief." Now that the court has construed the parties' stipulation as a motion for vacatur, dkt. no. 358, the court must consider whether the parties have satisfied the "just terms" requirement of Rule 60(b).

As the court previously noted,

Rule 60(b)(6)"vests power in courts adequate to enable them to vacate judgments whenever such action is appropriate to accomplish justice." Klapprott v. U.S., 335 U.S. 601, 614–15[ 69 S.Ct. 384, 93 L.Ed. 1099] (1949). District courts have "great latitude" in deciding whether to vacate orders or judgments under Rule 60(b)(6). Bakery Machinery & Fabrication, Inc. v. Traditional Baking, Inc., 570 F.3d 845, 848 (7th Cir. 2009) (citing Swaim v. Moltan Co., 73 F.3d 711, 722 (7th Cir. 1996) ).

But Rule 60(b)(6)"is fundamentally equitable in nature." Ramirez v. United States, 799 F.3d 845, 851 (7th Cir. 2015) (citations omitted). In considering requests to vacate jury verdicts, or judgments, district courts have been "guided by the array of equitable factors of justice and hardship traditionally balanced by district courts in considering requests for Rule 60(b) relief," such as "the public interests in precedent, preclusion, and judicial economy and the circumstances, hardships, and interests of private parties." Mayes v. City of Hammond, Ind., 631 F.Supp.2d 1082, 1088 (N.D. Ind. 2008).

Dkt. No. 358 at 5.¹

1. Public Interests—Precedent

The parties argue that a vacatur in this case will not destroy important precedent.

Dkt. No. 359 at 6. They observe that the jury's verdict itself has no precedential value, given that it was based on the unique facts of the case. Id. at 6. They also emphasize that the court's other rulings—on summary judgment, motions in limine and various discovery issues—hinged on fact-specific issues and would have limited application in other cases. Id. (citing Gould v. Bowyer, 11 F.3d 82, 84 (7th Cir. 1993) ("A district court decision binds no judge in any other case, save to the extent that doctrines of preclusion (not stare decisis) apply.") ). The parties claim that federal courts should be less concerned about vacating orders that address matters of state law, id. at 6–7 (citing Hartford Ca. Ins. Co. v. Crum & Forster Specialty Ins. Co., 828 F.3d 1331, 1336 (11th Cir. 2016) ), and that two cases in the past two years have addressed issues resolved by the court in this case, id. at 7 (citing C.G. Schmidt, Inc. v. Permasteelisa N. Am., 825 F.3d 801, 807 (7th Cir. 2016) ; The Manitowoc Company v. Lanning, 379 Wis.2d 189, 906 N.W.2d 130 (2018) ).

In the parties' April 24, 2018 supplement specifying which orders they wanted the court to vacate, they listed two orders on motions to dismiss (dkt. nos. 39 and 81); an order denying summary judgment (dkt. no. 215); an order reconsidering the summary judgment order (dkt. no. 242); various orders on discovery and trial issues, and the jury verdict (dkt. no. 337). This is a far more extensive request than the one made in Mayes, where "the parties [sought] vacatur only of the jury verdict and final judgment but not, critically, of any prior opinions or orders of the Court, including its summary judgment decision." Mayes, 631 F.Supp.2d at 1089.

Nonetheless, the court recognizes that its opinions do not bind other judges in other cases. This court's pre-trial decisions would have only persuasive authority in future cases, and given the unique implosion of a business relationship that sparked (and fueled) this litigation, the court agrees that its decisions might have only limited persuasive authority, at that. While the court admits some frustration with the fact that it spent hours of resources writing the decisions that the parties now seek to vacate—hours that would have been saved had the parties reached agreement before trial—it would be nothing but hubris for the court to conclude that these decisions constituted important precedent on Wisconsin law.

2. Public Interests—Preclusion

With regard to preclusion, the parties argue that a vacatur will have no impact on issue or claim preclusion, because the court has not entered a final judgment in the case. Dkt. No. 359 at 7 (citing Kruckenberg v. Harvey, 279 Wis.2d 520, 694 N.W.2d 879, 884, 892 (2005) (noting that existence of a final judgment is a prerequisite for claim and issue preclusion) ).

The only reason the court has not entered a judgment on the jury's verdict is because the parties asked the court to stay the issuance of a judgment pending their settlement. Dkt. No. 355. For the parties to ask the court to forestall entering judgment on the jury verdict, and then argue that there can be no preclusion because there is no judgment, appears somewhat disingenuous. That being said, the court has an obligation to analyze the parties' argument.

Had the parties not asked the court to withhold entering judgment so that they could finalize a settlement—a settlement that the court now knows is conditioned on vacatur—the court would have entered judgment in favor of the plaintiff on the jury's verdict. In order to analyze this factor, the court will imagine for the sake of argument that it had entered a judgment consistent with the jury's verdict, and will analyze the impact that vacating that judgment would have on the future application of preclusion doctrines.

If the court grants the parties' motion for vacatur of that imaginary judgment, it would deprive any subsequent court of the ability to dismiss any...