UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

CONSOLIDATED RAIL CORPORATION

and NORFOLK SOUTHERN RAILROAD

COMPANY,

Plaintiffs/Counter-Defendants,

v.

GRAND TRUNK WESTERN RAILROAD

COMPANY,

Defendant/Counter-Plaintiff/ThirdParty Plaintiff,

v.

CSX TRANSPORTATION, INC.,

Third-Party Defendant.

 /

Case No. 09-cv-10179

Honorable Nancy G. Edmunds

ORDER DENYING GRAND TRUNK'S RENEWED MOTION FOR JUDGMENT AS A

MATTER OF LAW OR, IN THE ALTERNATIVE, FOR NEW TRIAL OR REMITTITUR [229]

This case's central issue has been whether Plaintiffs Consolidated Rail Corporation

and Norfolk Southern Railroad Company ("Plaintiffs" or "Conrail") had the right to use

Defendant Grand Trunk's tracks to cross a property either called "Trenton Steel

Warehouse" or on which "Trenton Steel Warehouse," a building, was located, to serve nonparty E.C. Korneffel Company, not located on the property at issue. From March 6 to

March 16, 2012, the Court held a jury trial on whether Conrail or Grand Trunk breached the

contract establishing the traverse rights, the 1996 Trackage Rights Agreement (1996 TRA). 

On March 16, 2012, the jury returned a verdict in Conrail's favor. The jury determined that

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Conrail (as agent for Norfolk Southern (NS) and CSX Transportation (CSX)) had the right

to use Grand Trunk's tracks to serve Korneffel. (Dkt. 206.) The jury found that NS and

CSX suffered damages as a result of Grand Trunk's preventing Conrail from delivering

freight to Korneffel. (Id.) The jury awarded NS $39,816.80 and CSX $189,351.76. (Id.) 

Before the Court is Grand Trunk's motion for judgment as a matter of law, or

alternatively, for a new trial or remittitur. (Dkt. 229, Grand Trunk's Mot.) Grand Trunk first

argues that it is entitled to judgment as a matter of law because the 1996 TRA only grants

Contrail the right to serve Huron Valley Steel (HVS) (a steel company on the property) or

its successor and the Court and the jury impermissibly rewrote the 1996 TRA. (Id. at ii.) 

Grand Trunk then argues that it is entitled to a new trial because the verdict was against

the great weight of the evidence and because the Court improperly admitted Plaintiffs'

damages evidence. (Id.) Grand Trunk lastly argues that is should at least be entitled to

a new trial on damages or remittitur. (Id.) 

 The Court does not find Grand Trunk's arguments persuasive. The Court recognized

and recognizes again that the issues presented in this case were close and contested, but

the Court found that the 1996 TRA was ambiguous and submitted the case's central issue

to the jury. After a ten-day trial, with both sides presenting testimony and submitting

evidence to support their positions, the jury found Plaintiffs' arguments more persuasive. 

Evidence exists that supports Plaintiffs' position. The Court therefore will not disturb the

jury's verdict. Nor will the Court grant Grand Trunk a new trial, much for the same reasons. 

And the Court finds that Grand Trunk is not entitled to a new trial on damages or

remittitur—the Court properly admitted Plaintiffs' damages witnesses and Grand Trunk had

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the opportunity, through cross-examination, to challenge the damages calculations. Grand

Trunk did not sway the jury with its argument.

For those reasons, and the reasons more fully addressed below, the Court DENIES

Grand Trunk's renewed motion for judgment as a matter of law or, in the alternative, for

new trial or remittitur.

I. Standards

A. Rule 50 standard

“Rule 50 limits renewed motions for judgment as a matter of law to issues that were

previously raised.” Hillside Productions, Inc. v. County of Macomb, 06-11566, 2008 WL 

4058512, at *3 (E.D.Mich. Aug. 28, 2008) (citing Fed.R.Civ.P. 50(b) and American and

Foreign Ins. Co. v. Bolt, 106 F.3d 155, 159-60 (6th Cir. 1997)). A judgment as a matter of

law in a jury trial, “is not available at anyone’s request on an issue not brought before the

court prior to submission of the case to the jury.” Id. (citations omitted). “A post-trial motion

for judgment can be granted only on grounds advanced in the pre-verdict motion.” Id.

(citation omitted). 

“Judgment as a matter of law may be granted if, when viewing the evidence in a light

most favorable to the non-moving party, giving that party the benefit of all reasonable

inferences, there is no genuine issue of material fact for the jury, and reasonable minds

could come to but one conclusion in favor of the moving party.” Balsley v. LFP, Inc., 691

F.3d 747, 757 (6th Cir. 2012) (quoting Barnes v. City of Cincinnati, 401 F.3d 729, 736 (6th

Cir. 2005)). Where a party raises a Rule 50(b) motion on the basis that the jury’s decision

was against the weight of the evidence, “[t]he evidence should not be weighed, and the

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credibility of the witnesses should not be questioned. The judgment of [a] court should not

be substituted for that of the jury[.]” Id. (Citation omitted). 

B. Rule 59 standard

Rule 59 permits a court to “grant a new trial on all or some of the issues–and to any

party–“after a jury trial, for any reason for which a new trial has . . . been granted in [federal

court,] and in a “non jury trial, for any reason for which a rehearing has . . .been granted .

. . in federal court.” Fed.R.Civ.P. 59. “Generally courts have interpreted this language to

mean that a new trial is warranted when a jury has reached a ‘seriously erroneous result

as evidenced by (1) the verdict being against the weight of the evidence; (2) the damages

being excessive; or (3) the trial being unfair to the moving party in some fashion; i.e., the

proceedings being influenced by prejudice or bias.” Holmes v. City of Massillon, Ohio, 78

F.3d 1041, 1045-46 (6th Cir. 1999) (citations omitted). 

C. Remittitur

Generally, a court will not set aside or reduce a jury verdict or find it excessive “unless

it is beyond the maximum damages that the jury could find to be compensatory for a party’s

loss.” Sykes v. Anderson, 625 F.3d 294 at 322 (6th Cir. 2010) (citations omitted). A district

court has discretion to remit a compensatory damages “verdict only when, after reviewing

all the evidence in the light most favorable to the prevailing party, it is convinced that the

verdict is clearly excessive; resulted from passion, bias, or prejudice; or is so excessive or

inadequate as to shock the conscience of the court.” Id. (citation omitted). “If there is any

credible evidence to support a verdict, it should not be set aside.” (citation omitted). 

II. Analysis

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A. Defendant is not entitled to judgment as a matter of law or a new trial

because Plaintiffs presented evidence at trial that supported their case

Grand Trunk argues that it is entitled to judgment as a matter of law because the

1996 TRA only grants Conrail the right to serve HVS or HVS's successor. (Dkt. 149, Grand

Trunk's Mot. at 3.) Grand Trunk first explains that the TRA's plain terms solely grant

Conrail the right to serve one specific customer. (Id.) Grand Trunk then goes through an

exhaustive recitation of Michigan contract interpretation law. Grand Trunk does so to argue

that the TRA is unambiguous and reads the way Grand Trunk has allegedly argued

throughout the entire case.

Plaintiffs argue that evidence supports the jury's finding at trial, that Grand Trunk is

impermissibly offering a new interpretation of the 1996 TRA, and that, even if the Court

entertained the new interpretation, the Court has already considered and rejected this

alleged new interpretation. 

The Court rejects Grand Trunk's argument, again. On January 6, 2012, the Court

addressed the parties' arguments as to the central issue in this case: whether the 1996

TRA gives Conrail the right to access the entire property owned by Huron Valley Steel on

Grand Trunk's sidetrack, as Plaintiffs contend, or just the specific warehouse facility, as

Grand Trunk maintains. (Dkt. 149, January 6, 2012 Order at 7.) The Court held that the

TRA was ambiguous. The Court described the parties' TRA background:

On May 1, 1996, Plaintiffs and Defendant entered into the “Trackage Rights

Agreement Between [Defendant] & [Plaintiffs] to Service Trenton Steel Warehouse” (“1996

TRA”). The 1996 TRA states, “[Plaintiffs] wish to effectuate the Arbitration award by

reaching agreement on terms to use the certain portions of the aforesaid line of railway of

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[Defendant] and [Defendant] is willing to grant such use on the following terms and

conditions . . . .” Section 1 of the 1996 TRA explicitly states that Plaintiffs have the right to

use certain segments of Defendant’s railroad “for the sole purpose of serving Trenton Steel

Warehouse [(TSW)] or its successor.” Section 6 of the 1996 Agreement delineates

restrictions on use. This section states: 

The Trackage Rights herein granted are subject to the following restrictions:

(a) [Plaintiffs] shall use the Trackage for the sole purpose of delivering or

picking up rail cars to and from (including the switching of such cars) [TSW]

located adjacent to “FN.” . . . 

(c) Except as provided in above subparagraph (a) [Plaintiffs] shall not move

any rail cars of any kind, other than those cars moving to or from [TSW] or

perform any local freight or switching service of any kind whatsoever, and

shall not serve any other rail customers along the Trackage.

Additionally, the 1996 TRA provided that Plaintiffs must pay Defendant a monthly retainer

fee as well as certain rates “for each rail car loaded or empty delivered to or spotted” at

TSW. (Dkt. 149, January 6, 2012 Order at 4-5.)

The Court then discussed:

Looking at the contract itself, “Trenton Steel Warehouse” appears four times

in the TRA. It first appears twice in titles of the TRA itself, which read

“Trackage Rights Agreement Between [Defendant] & [Plaintiffs] to Service

Trenton Steel Warehouse” and "General Conditions to Trackage Rights

Agreement Dated as of May 1, 1996, Between [Defendant] and [Plaintiffs]

Relating to Trackage Rights for [Plaintiffs] to Service Trenton Steel

Warehouse at Trenton, Michigan.” Third, in Section 1, the TRA states:

[Defendant] hereby grants to [Plaintiffs] the right to operate . .

. in either direction over the following segments of

[Defendant]’s railroad for the sole purpose of serving Trenton

Steel Warehouse or its successor (hereinafter referred to as

‘Industry’), shown on the plan attached hereto, made a part

hereof and marked ‘Exhibit A’ (hereinafter referred to as the

‘Trackage’).

The reference to a successor seems to suggest that “Trenton Steel

Warehouse” may be a company or entity doing business.

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The final place “Trenton Steel Warehouse” appears in the TRA is in

the map attached as Exhibit A. This map shows a simplified depiction of the

Trackage, over which Defendant would grant Plaintiffs access pursuant to the

TRA. On the map, the words “Trenton Steel Warehouse” are boxed in, and

beyond Defendant’s property line, to the East. The fact that “Trenton Steel

Warehouse” is boxed in on Exhibit A indicates that in the TRA, Trenton Steel

Warehouse is meant to describe the actual physical warehouse on that

property.

The map itself, however, is not a completely accurate depiction of the

area. The TRA indicates that the Trackage includes the tracks “up to but not

extending bey+ond . . . [Defendant] property line.” The line that extends from

Defendant’s property line to the boxed in “Trenton Steel Warehouse” is not

part of the Trackage. On the map, however, that line is depicted in the same

thick, solid black line that the key indicates shows the Trackage. Additionally,

if the boxed in “Trenton Steel Warehouse” is the building on that property, the

map incorrectly depicts that the railroad tracks run east-west, running directly

into the east side of the building. In fact, the tracks curve around and enter

the warehouse building on the south side. 

The TRA as a whole, then, does not appear to give a clear,

unambiguous meaning to Trenton Steel Warehouse. The two most plausible

meanings that the TRA suggests for Trenton Steel Warehouse are the actual

warehouse building and the company doing business on that property.

(Dkt. 149, January 6, 2012 at 19-25.) Because the Court held that the 1996 TRA was

ambiguous, it permitted the parties to submit depositions and outside evidence to show the

parties' intent in the1996 TRA. (Id. at 21.) The Court held that the outside evidence did not

shed light on the issue and denied the motion, stating that there were "genuine issues of

fact as to whether Plaintiffs violated the TRA when it delivered steel to Korneffel, via HVS's

property." (Id. at 23, 25.)

Grand Trunk now argues that the evidence at trial established that the customer

"Trenton Steel Warehouse" was intended to denote HVS. (Grand Trunk's Mot. at 5.) The

Court rejects Grand Trunk's argument, again. The Court's January 6, 2012 order

addressed this issue. The Court discussed how the 1996 TRA's reference to a successor

could have suggested that “Trenton Steel Warehouse” may be a company or entity doing

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business, such as HVS, as Grand Truck now proposes. Despite that discussion, the Court

found that the reference to the map rendered the "successor" language ambiguous. That

ambiguity was one issue that the jury had to resolve at trial to come to its determination that

Plaintiffs could service Korneffel.

The 1996 TRA is as it was from the outset of this case—ambiguous. The Court

sees no reason to alter its holding in that respect. Given the ambiguity, the Court, at trial,

allowed the parties to present evidence as to the parties' true intent in drafting the 1996

TRA. While the parties presented conflicting evidence at trial, whether "Trenton Steel

Warehouse" referenced a building, or, as Grand Trunk now argues, a business, or the

entire 85-acre property, Plaintiffs swayed the jury with their evidence that the intent of both

parties entering into the 1996 TRA was to give Plaintiffs access to the entire 85-acre

property. 

During trial, three main witnesses testified as to the parties' history leading up to the

1996 TRA and the intent of the 1996 TRA: David Wilson, Grand Trunk's Vice President of

Operations and Paul Carey, Conrail's General Manager of Contracts, testified on Plaintiffs'

behalf; Paul Ladue, who was Wilson's subordinate at Grand Trunk during the relevant

period, and whom Wilson instructed to prepare the 1996 TRA, testified on Grand Trunk's

behalf. John Cornue also played a role in drafting the 1996 TRA on Plaintiffs' behalf, but

he was unavailable at trial, so his deposition was read into the record.

The testimony presented at trial mirrored the evidence presented at the summary

judgment stage. The testimony and exhibits also showed the background of the parties'

dispute, a background that was integral in determining the parties' intent in drafting the

1996 TRA.

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In 1897, Grand Trunk and Conrail entered into an agreement. (Testimony of Paul

Carey, Tr. Vol. 2 at 62.) The 1897 agreement allowed Grand Trunk to cross Conrail's lines

and also gave Conrail the right to cross Grand Trunk's new line, preventing Conrail's lines

from being walled in. (Id.) 

Four years shy of a century later, in 1993, Conrail notified Grand Trunk that it

intended to exercise its rights to cross Grand Trunk's lines under the 1897 Agreement. 

(February 26, 2012 Order at 4; Pls.' Ex. 3.) On Grand Truck's side, Wilson testified that he

was directly involved in the dispute between the parties, although he delegated research

and other responsibilities to his subordinates William Litfin and Paul Ladue. (Testimony of

David Wilson, Tr. Vol. 3 at 34, 38-40.) 

Grand Trunk disputed Conrail's alleged right. (Testimony of David Wilson, Tr. Vol.

3 at 40.) Grand Trunk, through Wilson, and Conrail, through Paul Carey, Conrail's General

Manager of Contracts, exchanged letters disputing the parties' rights. (Testimony of Paul

Carey, Tr. Vol. 2 at 64.) 

Notwithstanding the correspondence, the parties could not resolve the dispute, and

decided to submit it to binding arbitration. (Testimony of David Wilson, Tr. Vol. 3, at 43-44;

Testimony of Paul Carey, Tr. Vol. 2, at 63.) David Wilson made the decision on Grand

Trunk's behalf. (Testimony of David Wilson, Tr. Vol. 3, at 43-44; Testimony of Paul Ladue,

Tr. Vol. 6, at 91.) 

On June 23, 1994, Conrail and Grand Trunk signed an agreement that provided that,

if Conrail prevailed at arbitration, Grand Trunk would grant immediate access to Trenton

Steel Warehouse. David Wilson signed the agreement on Grand Trunk's behalf and Paul

Carey signed the agreement on Conrail's behalf. Paul Ladue played no role in the 1994

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agreement. (Testimony of Paul Laude, Tr. Vol. 6, at 123.) 

The 1994 agreement's purpose was to provide Conrail access to the Trenton Steel

Warehouse property. (Testimony of Paul Carey, Tr. Vol. 2 at 73; Testimony of David

Wilson, Tr. Vol. 3, at 53.) The parties intended to provide Conrail the same access to the

site that Conrail would have had had it built its own connection to the private industry track. 

(Testimony of Paul Carey, Tr. Vol. 2, at 71; Testimony of David Wilson, Tr. Vol. 3, at 53.) 

 Carey and Wilson stated that the arbitration was not limited to access to a specific

customer or to a single building on the property. (Testimony of Paul Carey, Tr. Vol. 2, at

79; Testimony of David Wilson, Tr. Vol. 3, at 60-61; Testimony of Paul Ladue, Tr. Vol. 6,

at 110-112, 133.) 

On January 21, 1996, the arbitration panel issued a decision in Conrail's favor. (Pls.'

Ex. 25.) 

After the arbitration panel issued its decision, David Wilson instructed Paul Ladue

to prepare what would become the 1996 TRA. (Testimony of David Wilson, Tr. Vol. 3, at

62.) Wilson testified that he did not instruct Ladue to narrow the rights agreed upon in the

June 23, 1994 agreement. (Id.) Grand Trunk relieved Wilson of his responsibilities at

Grand Trunk in February, 1996; he did not participate in the negotiations or drafting the

1996 TRA. (Id. at 61, 95-96.) Wilson testified that he had the intent personally that Trenton

Steel Warehouse meant the entire 85-acre property, but he also testified that he may not

have conveyed his intent to anyone. (Id. at 92-93.) 

Paul Ladue testified that he understood that he was supposed to base the 1996 TRA

on the June 23, 1994 agreement. (Testimony of Paul Ladue, Tr. Vol. 6, at 29.) He also

testified that he understood that, through the June 23, 1994 agreement, Conrail and Grand

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Trunk agreed to effectuate the arbitration award through a grant of trackage rights, rather

than through Conrail constructing a connecting track. (Id.)

Ladue testified that he drafted the 1996 TRA and then sent a copy of it to John

Cornue, who worked for Paul Carey, of Conrail. (Testimony of Paul Ladue, Tr. Vol. 6, at

30-31.) Carey testified that he did not participate in drafting the 1996 TRA, instead, he left

the task to Cornue. (Testimony of Paul Carey, Tr. Vol. 3, at 4-6.) Carey added that he had

no recollection of contributing any comments to Cornue during Cornue's negotiations with

and drafting of the TRA with Ladue. 

Ladue testified that he never received written comments from Conrail, and he

testified that he did not remember speaking with anyone from Contrail save Cornue. 

(Testimony of Paul Ladue, Tr. Vol. 6, at 30-31.) Cornue stated that he did not recall

reviewing, receiving, or having drafts of the 1996 TRA. (John Cornue Testimony, Dep. at

322-23.).

On May 1, 1996, Conrail and Grand Trunk entered into the 1996 TRA. (Pls.' Ex. 26.) 

Paul Carey signed the 1996 TRA on Conrail's behalf; Paul Ladue signed on Grand Trunk's

behalf. (Pls.' Exs. 26, 8.) 

The recitals at the beginning of the 1996 TRA recognize that the parties entered into

the 1996 TRA to effectuate the 1996 arbitration award. (Pls.' Ex. 26, at 1.) 

Carey testified that Conrail's Dearborn Division and marketing department referred

to the entire property at issue as the "Trenton Steel Warehouse." (Testimony of Paul

Carey, Tr. Vol. 2, at 75.) He also testified that Grand Trunk never described the access

that it was going to convey to Conrail as limited to a structure, building, or warehouse. (Id.) 

As Conrail's signatory, Carey testified that the 1996 TRA gave Conrail access to the

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entire 85-acre property. (Testimony of Paul Carey, Tr. Vol. 2 at 87-88.) Carey added that

he would not have signed the 1996 TRA had it limited Conrail's access rights to a single

building. (Id.) 

As Grand Trunk's signatory, Paul Ladue testified that he understood the 1996 TRA 

conferred access only to "Trenton Steel Processing and Storage doing business as Huron

Valley Steel and its building and warehouse." (Testimony of Paul Ladue, Tr. Vol. 6, at 37.) 

 Given the above testimony, Grand Trunk cannot prevail on its motion for judgment

as a matter of law/for new trial. Evidence at trial supports Plaintiffs' position. Grand Trunk

had its chance at trial to put forth competing evidence as to the intent of the parties' in

drafting the 1996 TRA. Grand Trunk failed in persuading the jury that the parties intended

the 1996 TRA to limit Plaintiffs' access rights to a building or a business. Testimony from

both parties exists that the mutual intent of the 1996 TRA was to give Plaintiffs the right to

the subject property, not just the warehouse on that property.

Grand Trunk also argues that it is entitled to judgment or a new trial because the

Court impermissibly admitted testimony. (Grand Trunk's Mot. at 11-12.) Conrail argues

that the Court may not grant a motion for judgment as a matter of law on the basis that it

improperly admitted evidence at trial. (Conrail's Resp. at 10.) Conrail is correct. See

Douglass v. Eaton Corp., 956 F.2d 1339, 1343 (6th Cir. 1992) (citing cases and authority

for the proposition that a "judge cannot grant a judgment notwithstanding the verdict by

ignoring evidence he has admitted on the ground that the admission was error.") overruled

on other grounds by Weisgram v. Marley Co., 528 U.S. 440 (2000). The Douglass court

found that "it is wholly improper for a district judge to ignore evidence admitted at trial from

its consideration in granting a judgment notwithstanding the verdict." Id. The Sixth Circuit

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quoted that, "[a] motion for judgment notwithstanding the verdict, like a motion for directed

verdict, does not raise questions relating to the competency or admissibility of evidence." 

Id. at 1343-44 (citation omitted). The Court therefore rejects Grand Trunk's arguments that

the Court should grant its motion due to allegedly improperly admitted evidence. See also

Sykes v. Anderson, 625 F.3d 294 (6th Cir. 2010) (stating that, on a Rule 50(b) motion, a

court does not reweigh the evidence or assess witnesses' credibility. And stating that the

review is limited to the evidence that was admitted at trial.) (citations omitted). The Court

therefore does not entertain Grand Trunk's admissibility argument. 

B. Grand Trunk is not entitled to a new trial as to damages or remittitur

Grand Trunk requests a new trial as to damages. (GT's Mot. at 16.) Grand Trunk

asserts that the Court "improperly admitted" NS and CSX's damages evidence "because

that evidence was not the best available evidence of the damages alleged." (Id. at 16-17.) 

Grand Trunk alternatively argues that, if the Court does not grant a new trial as to

damages, it should remit both damages awards. (Id. at 20.)

At trial, John Koch, Director of Sales at CSX, testified as to lost profits. (Testimony

of John Koch, Tr. Vol. 5 at 15.) Koch testified that CSX suffered damages of approximately

$189,000.00. (Id. at 20.) He stated that he calculated an "operating ratio" that "identifie[d]

what [CSX's] cost was for operating for each dollar of revenue, and [CSX's] operating ratio

at that particular time . . . was approximately 75 percent [of operating costs.]" (Id. at 22.) 

To come up with the lost profit, Koch multiplied the ratio by the "revenue numbers

describing . . . the volume that moved via the Canadian National Grand Trunk to Korneffel

in each of [the contested] years." (Id.) John Koch testified that CSX had been handling

100% of the Nucor steel delivery business to Korneffel prior to the lockout. (Tr. Vol. 5 at

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30.) Koch testified that he took the same assumption for the lost profit damages he

calculated. (Id.) But he also admitted that he could not be sure that CSX would have

received 100% of Korneffel's business. (Id. at 33.) 

He testified that others prepared the documents that he explained at trial. 

(Testimony of John Koch, Tr. Vol. 5 at 35-36.) 

Grand Trunk extensively cross-examined John Koch regarding CSX's methodology. 

(Tr. Vol. 5 at 27-41.) Grand Trunk elicited testimony trying to discredit Koch's calculation

of damages. (Id. at 40.) 

On re-direct, Koch explained why he used his operating ratio calculation. 

(Testimony of John Koch, Tr. Vol. 5 at 41.) He stated that the operating ratio calculation

took into consideration "all of the moves that may be very profitable [and those that may

not be] as profitable. (Id.) 

 James Schaaf testified as to NS's damages. Schaaf testified that he was Group

Vice President, Metals and Construction, of NS. (Testimony of James Schaff, Tr. Vol. 5 at

43.) Schaaf stated that his job was to "maximize Norfolk Southern's participation from a

unit revenue and contribution perspective in the metals and construction arena." (Id. at 44.) 

Schaaf stated that he "worked in conjunction with Meghan Achimasi," one of his

employees, to create the damages calculation. (Testimony of James Scaaf, Tr. Vol. 5 at

46.) He stated that NS was claiming damages of $71,399.20. (Id. at 47.) He explained

how he created the damages calculation. (Id.) On cross, he stated that his calculations

assumed that NS would have had 100% of the SDI shipments because, before the lockout,

NS had had 100% of that business. (Id. at 69-70.) 

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Grand Trunk also extensively cross-examined Schaaf and attacked his calculations. 

(Tr. Vol. 5 at 56-73.) 

Gordon Gustafson, Grand Trunk's expert, testified that, as a part of his career, he

evaluated revenue and costs associated with railroad track. (Testimony of Gordon

Gustafson, Tr. Vol. 7 at 89.) He testified about the problems he had with Plaintiffs'

damages methodology and calculations. (Id. at 94-95, 98-99, 106-07, etc.) He explained

how he went about doing his own research. (Id. at 95.) 

1. The Court properly admitted Koch and Scaaf's testimony under

Federal Rule of Evidence 701 and the parties established the

testimony with enough certainty for admissibility 

Grand Trunk explains that neither NS's damages witness, James Schaaf, nor CSX's

damages expert, John Koch, had the personal knowledge to testify as to how much steel

either SDI or Nucor would have shipped to Korneffel through NS and CSX if not for Grand

Trunk's refusal to allow Conrail to deliver freight to Korneffel. (Grand Trunk's Mot. at 17.) 

Grand Trunk maintains that NS and CSX offered hearsay to support their damages

requests, including spreadsheets of damage calculations, which improperly included 100%

lost traffic volume assumptions. (Id.) 

Grand Trunk maintains that the offered evidence could have been proper, if Schaaf

and Koch were expert witnesses. (Grand Trunk's Mot. at 17.) But Grand Trunk asserts

that, because they were not expert witnesses, the Court should have limited their testimony

to include only Schaaf and Koch's own perceptions and the reasonable inferences from

those perceptions. (Id.) 

Grand Trunk proffers that CSX, in particular, did not present any "significant

historical data or other evidence" "to suggest that CSX would have won 100% of the traffic

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from Nucor to Korneffel, which CSX's damages calculation . . . assumed it would." (Grand

Trunk's Mot. at 18.) Grand Trunk maintains that "CSX had only ever moved 14 cars from

Nucor to Korneffel in the year and a half preceding the [l]ockout, none of which were the

type of cars that moved after the [l]ockout[.]" (Id.) Grand Trunk further maintains that CSX

"would have had to compete with both [Norfolk Southern] and [Conrail/Grand Trunk] for

future traffic and that, in three of the four years for which CSX sought damages,

[Conrail/Grand Trunk] would have beat CSX/Conrail on price." (Id.) 

Grand Trunk also stated that the evidence at trial established that NS would also

have had to compete for Korneffel's future business from SDI with a number of other

railroads. (Grand Trunk's Mot. at 19.) 

Grand Trunk finds further fault with offered evidence of damages. (Grand Trunk's

Mot. at 19.) Grand Trunk argues that Plaintiffs did not put forth the best available evidence

of their costs, "the other half of the equation necessary to determine their lost profits with

any reasonable degree of certainty." (Id.) Grand Trunk concedes that NS used the

Uniform Rail Costing System, which is a recognized methodology in the railroad industry. 

(Id.) But Grand Trunk maintains that CSX "intentionally avoided using any recognized

methodology at all for determining its costs." (Id.) Grand Trunk asserts that CSX

"improperly used its system-wide operating ratio . . . of roughly 75% as a proxy for its costs,

when the record was clear . . . that its costs vary per move throughout the system

depending on the route and the commodity moved." (Id.) 

Grand Truck argues that its qualified expert witness, Gordon Gustafson, determined

that NS would have lost money carrying the traffic from SDI to Korneffel. (Grand Trunk's

Mot. at 19.) Grand Truck further argues that, while Gustafson had no opportunity to make

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his own CSX damage calculation, Gustafson did demonstrate that CSX did not support its

calculations with fact and were based on faulty assumptions. (Id. at 19-20.) 

Plaintiffs argue that Grand Trunk's argument that Schaaf and Koch presented

opinion testimony is flawed. (Pls.' Resp. at 15.) Plaintiffs maintain that Schaaf and Koch

provided fact testimony "on matters on which they were competent to testify." (Id. at 16.) 

Plaintiffs state that Schaaf and Koch's testimony established that each was familiar with the

departments they ran, and each had personal knowledge of their railroads's prior

relationships with the shippers for the delivery of steel to Korneffel. (Id.) (See Testimony

of James Scaaf, Tr. Vol. 5 at 43-45; Testimony of John Koch, Tr. Vol. 5 at 17-20.) 

Plaintiffs state that Schaaf testified that, prior to lockout, NS "delivered one hundred

percent of the steel from SDI to Kornell. (Pls.' Resp. at 16.) (Testimony of James Scaaf,

Tr. Vol. 5 at 52.) Plaintiffs also offer that Koch testified that CSX "delivered one hundred

percent of the steel from Nucor-Yamato to Korneffel." (Id.) (Testimony of John Koch, Tr.

Vol. 5 at 21, 30.)

Plaintiffs then state that Schaaf and Koch each testified that, "if their respective

railroads[] delivered at the same rate, their railroads would have received a certain amount

of revenue, which, when reduced to profit, would yield the amount set forth in their

respective damages exhibits." (Pls.' Resp. at 16.) (Testimony of James Schaaf, Tr. Vol.

5 at 55, Tr. Vol. at 20.) 

Plaintiffs also argue that, even if Schaaf and Koch's testimony was opinion, the

opinions would still be admissible under Federal Rule of Evidence 701. (Pls.' Resp. at 16.) 

The Court agrees with Plaintiffs, the Court properly admitted Koch and Schaaf's

testimony pursuant to Federal Rule of Evidence 701 and established case law.

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Rule 701 provides that:

If a witness is not testifying as an expert, testimony in the form of an opinion

is limited to one that is: 

(a) rationally based on the witness's perception;

(b) helpful to clearly understanding the witness's testimony or to determining

a fact in issue; and

(c) not based on scientific, technical, or other specialized knowledge with the

scope of Rule 702.

The commentary to Rule 701 envisions testimony of damages by officers of businesses:

For example, most courts have permitted the owner or officer of a business

to testify to the value or projected profits of the business, without the

necessity of qualifying the witness as an accountant, appraiser, or similar

expert. Such opinion testimony is admitted not because of experience,

training or specialized knowledge within the realm of an expert, but because

of the particularized knowledge that the witness has by virtue of his or her

position in the business.

Case law has applied and supports Rule 701's applicability to business owners or officers

and their testimony as to their business's damages. See Station Enter., Inc. v. Ganz, Inc.,

07-14294, 2009 WL 3059148 (E.D.Mich. Sept. 24, 2009) (allowing the owners of a

business who ran the day-to-day business dealings to testify as to projected profits and/or

resulting damages, basing the decision on FRE 701 and the Advisory Committee Notes.)

(and citing authority for the proposition that an author, when preparing a damages report,

"may incorporate documents that were prepared by others, while still possessing the

requisite personal knowledge or foundation to render his lay opinion admissible under

[Rule] 701.") (citations omitted). 

Grand Trunk addresses Conrail's argument that courts have allowed business

owners to testify as to the lost profits of that business.(Grand Trunk's Mot. at 17-18, n. 13.) 

Grand Trunk accepts that courts have permitted business owners to testify as to their

businesses's lost profits caused by a breach of contract. (Id.) But Grand Trunk states that

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it is "unaware of any case in which the owner of a business has been permitted to testify

as to the quantity of goods that another business would have shipped to a third business

using [a] plaintiff's services if not for the defendant's breach of contract." (Id.) Grand Trunk

argues that this type of quantity calculation requires "either direct testimony from the buyer

and the seller or some type of expert witness employing an acceptable methodology." (Id.)

Plaintiffs argue that Schaaf testified that he has worked for NS as a group vice

president for metals and construction since 2008. (Pls.' Resp. at 17.) (Tr. Vol. 5 at 43.) 

Plaintiffs point out that Schaaf testified that he manages a staff of 30 sales and marketing

professionals and that he worked with Meghan Achimasi to prepare NS's damages

calculations. (Id.) (Tr. Vol. 5 at 44-45, 46.) Plaintiffs state that Schaaf relied on his 25

years of experience in the railroad industry working for Conrail and NS, to describe for the

jury "a calculation of damages based upon his personal knowledge." (Id.)

As for Koch, Plaintiffs state that he has worked for CSX since 1996 and that one of

the sales people who prepared the CSX damages calculation works directly for him. (Pls.'

Resp. at 17.) Plaintiffs argue that Koch testified with personal knowledge about the

damages. (Id.) 

Plaintiffs also argue that Grand Trunk had the opportunity to cross-examine Schaaf

and Koch and that Grand Trunk presented an expert witness, Gustafson, to analyze the

damage calculations and present a competing calculation. (Pls.' Resp. at 17.) Plaintiffs

maintain that Grand Trunk had its chance to persuade the jury and failed. (Id.) See Paul

v. Henri-Line Mach. Tools, Inc., 10-10832, 2012 WL 6642494, at *5 (E.D.Mich. Dec. 20,

2012) (Cook, J.) ("Vigorous cross-examination, presentation of contrary evidence, and

careful instruction on the burden of proof are the traditional and appropriate means of

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attacking shaky but admissible evidence.") (quoting Daubert v. Merrell Down Pharm., Inc.,

509 U.S 579, 596.).

Again, the Court agrees with Plaintiffs. The Court finds that Plaintiffs established

that Koch and Schaaf had the threshold knowledge and ability to testify as to the damages

their companies suffered. The Court also finds that Grand Trunk had the opportunity to

expose any deficiency in Koch or Schaaf's testimony. Grand Trunk failed to persuade the

jury that there was such a deficiency. The Court will not grant Grand Trunk a new trial as

to damages when the jury awarded Plaintiffs the amounts they requested when they

showed with a formula how they calculated the amounts and Grand Trunk had an

opportunity to expose any problems with that formula. 

Grand Trunk also argues that Plaintiffs did not prove the amount of damages with

certainty.1

 Plaintiffs object to Grand Trunk's certainty argument. (Pls.' Mot. at 18.) 

 1"Lost profits, if properly proven, are an appropriate element of damages." Body

Rustproofing, Inc. v. Mich. Bell Tel. Co., 385 N.W.2d 797, 800 (Mich.Ct.App. 1986) (citation

omitted). "Before lost profits are recoverable, they must be proven with a reasonable

degree of certainty as opposed to being based on mere conjecture or speculation." Id.

(citation omitted). But a "reasonable degree of certainty" is not an inflexible standard, for

the "law does not require impossibilities" and "does not require a higher degree of certainty

than the nature of the case permits." Id. (citation omitted). Where a case "permits only an

estimation of damages or a part of the damages with certainty, it is proper to place before

the jury all the facts and circumstances which have a tendency to show their probable

amount." Id. (citation omitted). "In order for past profits to be safely taken as a measure

of future profits, all the various contingencies by which such profits would probably be

affected should be taken into account by the jury and allowed such weight ast he jury, in

the exercise of good sense and sound discretion, believes they are entitled to." Id. (citation

omitted). "Damages are not speculative simply because they cannot be ascertained with

mathematical precision. Further, the certainty requirement is relaxed when damages have

been established but the amount of damages remains an open question. Although the

result may only be an approximation, it is sufficient if a reasonable basis for computation

exists. Questions regarding what damages may be reasonably anticipated is an issue

better left to the trier of fact." VIP Customs Brokerage Serv., Inc. v. ADESA Importation

Serv., Inc., 259386, 2006 WL 2482904, at *8 (Mich.Ct.App. Aug. 29, 2006) (citations

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Plaintiffs argue that the jury resolved the disputed fact issues and that the Court should not

substitute whatever it may feel for the jury's damages resolution. (Id.) 

Plaintiffs alternatively argue that they did prove damages with certainty. (Pls.' Mot.

at 18.) They maintain that NS and CSX each established that they had established

business of shipping to Korneffel and that they held all of the business of shipping to

Korneffel until the business was taken away. (Id.) (Testimony of Koch, Tr. Vol. 5 at 30;

Testimony of Scaaf, Tr. Vol. 5 at 52-53.) Plaintiffs addressed Grand Trunk's argument that

NS and CSX would have had to compete with Grand Trunk for service to Korneffel. (Id.) 

Plaintiffs argue that they presented testimony that Grand Trunk "never once made a sales

pitch or undertook any efforts to compete in the marketplace for this business." (Id.) 

(Testimony of Richard Long, Tr. Vol. 5 at 75, Long Dep. at 49.) Plaintiffs recommend that

the Court should not disturb the jury's determination that NS and CSX would have retained

100% of Korneffel's business. (Id.) 

As to CSX's method of calculating damages, Plaintiffs argue that the jury, again, was

presented with two methods of calculating profits, and that the jury found that CSX's

calculation was persuasive. (Pls.' Resp. at 19.) 

The Court again agrees with Plaintiffs. They presented a method and calculation

of their damages. Neither the method nor the calculation was unreasonable. Grand Trunk

had the opportunity to challenge both method and calculation. Grand Trunk did not

persuade the jury. The Court therefore does not disturb the award. See Amway Global v.

Woodward, 744 F.Supp.2d 657, 678-79 (E.D.Mich. 2010) (Rosen, C.J.) ("As the courts

omitted). 

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have confirmed, an expert's failure to account for all possible causes or factors goes only

to the weight, and not the admissibility, of his testimony . . . and once this threshold of

admissibility is met, it is up to the trier of fact to determine the weight to be given to the

expert's testimony.") (citations omitted). 

The jury awarded those damages that Plaintiffs presented. The award was therefore

directly related to the testimony. A new damages trial is not warranted. See Tezak v.

Montgomery Ward & Co., Inc., 33 F.App'x 172, 178 (6th Cir. 2002) ("[G]ranting a Motion

for New Trial is appropriate where the jury's award bears no relation to the evidence of

damages." And quoting, "[a] trial court may not grant a new trial on the ground of

insufficient damages unless the jury verdict is one that could not reasonably have been

reached.") (citations omitted). 

Because the jury awarded those amounts Plaintiffs requested and Plaintiffs

presented the means by which they calculated their damages, the Court finds that remittitur

is not appropriate. The award is not clearly excessive and there is nothing in the verdict

that is clearly excessive, resulted form passion, bias or prejudice, or is so excessive that

it shocks the Court's conscience. 

IV. Conclusion

For the above-stated reasons, the Court DENIES Grand Trunk's renewed motion for

judgment as a matter of law or, in the alternative, for new trial or remittitur. 

s/Nancy G. Edmunds 

Nancy G. Edmunds

United States District Judge

Dated: August 12, 2013

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I hereby certify that a copy of the foregoing document was served upon counsel of record

on August 12, 2013, by electronic and/or ordinary mail.

s/Johnetta M. Curry-Williams 

Case Manager

Acting in the Absence of Carol A. Hemeyer

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