Opinion ID: 212115
Heading Depth: 2
Heading Rank: 1

Heading: Jazz's Burden of Persuasion

Text: 14 Not surprisingly, Jazz and Fuji take opposing views regarding the adequacy of Jazz's evidence concerning its repair affirmative defense. Jazz contends that its evidence is sufficient to support the inference that all, or 100%, of the LFFPs are repaired. Fuji, in its cross appeal, argues that Jazz's evidence does not support the district court's finding that 10% of the LFFPs are repaired. Aside from its contentions regarding the adequacy of the evidence, Jazz further argues that its pretrial stipulation did not give the judge the final word on its defense. 15 Jazz bears the burden of preponderant proof on its affirmative defense of repair. Jazz, 264 F.3d at 1102 (The burden of establishing an affirmative defense is on the party raising the defense.). Moreover, Jazz's burden includes the burden of coming forward with evidence to show that the activities performed in processing the used cameras constituted permissible repair. Id. In essence, the parties' dispute boils down to whether Jazz met its burden of persuasion. 16 At trial, Jazz relied on two sources of evidence for its affirmative defense. First, Jazz presented a videotape depicting the refurbishment in one of the eight Chinese factories. Second, Jazz relied on the testimony of its current Chairman, Mr. Lorenzini. Mr. Lorenzini generally testified that some or all of the nineteen refurbishment steps were performed at all eight factories. Mr. Lorenzini, however, had only visited three of these factories. 17 In support of the adequacy of its evidence, Jazz points to the testimony of Mr. Lorenzini and the questions on the special jury verdict form. Jazz stresses that the jury question was general in nature as opposed to a factory-by-factory analysis and that Mr. Lorenzini presented his testimony in accordance with that format. As such, Jazz complains that the district court clearly erred in refusing to draw the inference, based on the Lorenzini testimony, that all eight factories used the same refurbishment steps. Fuji responds that Mr. Lorenzini's testimony could not speak to the process at all eight factories because he lacked personal knowledge of the remaining five. 18 This court cannot find that the district court clearly erred in refusing to draw an inference about the five factories of which no Jazz representative had personal knowledge. This court recognizes that [i]t is hornbook law that direct evidence of a fact is not necessary. `Circumstantial evidence is not only sufficient, but may also be more certain, satisfying and persuasive than direct evidence.' Moleculon Research Corp. v. CBS. Inc., 793 F.2d 1261, 1272 (Fed.Cir.1986) (citing Michalic v. Cleveland Tankers, Inc., 364 U.S. 325, 330, 81 S.Ct. 6, 5 L.Ed.2d 20 (1960)). Nevertheless, the trial court has the responsibility to weigh the evidence and credibility of the witnesses in deciding the inferential reach of such circumstantial evidence. State Indus., Inc. v. Mor-Flo Indus., Inc., 948 F.2d 1573, 1577 (Fed.Cir.1991) (The weighing of conflicting evidence is a task within the special province of the trial judge who, having heard the evidence, is in a better position than [this court] to evaluate it.). 19 Indeed, in the earlier Jazz opinion reversing the ITC judgment, this court emphasized the burden of proof in satisfying the affirmative defense: 20 We cannot exculpate unknown processes from the charge of infringing reconstruction. Thus our reversal of the Commission's decision does not apply to LFFPs from those remanufacturing facilities for which discovery was refused or where the evidence offered was found incomplete or not credible by the ALJ. 21 Jazz, 264 F.3d at 1109. The trial judge took seriously this court's admonition to examine the evidence for completeness and credibility. Here, where no Jazz representative had personal knowledge of the refurbishing acts performed at five Chinese factories, this court cannot form a definite and firm conviction that a mistake has been committed in the district court's holding that Jazz did not meet its burden of proving the repair defense. United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948). 22 This court notes that the record shows that Mr. Lorenzini admitted that processes at the eight factories differed. For instance, Mr. Lorenzini testified that one of the three plants he visited did not remove the back covers. Moreover, Mr. Lorenzini's testimony only discussed one of the numerous types of camera shells reloaded for Jazz. Thus, as the district court found, Jazz provided only incomplete evidence. This court detects no clear error in the district court's assessment of the insufficiency of Jazz's proof. 23 Jazz next contends that the district court clearly erred in failing to credit the jury's affirmative answer to special verdict question number five. In response to this question the jury found that all of the nineteen steps were known for all eight Chinese Factories. Jazz argues the district court was bound by this finding. Jazz seems to contend this means the jury found all nineteen steps were generally performed at each factory, compelling a finding that Jazz permissibly repaired each refurbished LFFP. 24 To the contrary, the parties' stipulation rendered the jury's determination of repaired LFFPs advisory. Thus, the district court retained the right to make its own determination. In relevant part, the district court interpreted the parties' stipulation as follows: 25 All parties have agreed that, pursuant to paragraph 5 of the stipulation, the Court will first render a legal determination as to whether the refurbishment processes employed by Jazz and/or its suppliers constitute repair or reconstruction. Applying this legal analysis, the Court will then determine the factual issue of the number of cameras reconstructed (or, conversely, the number of cameras for which insufficient evidence of repair has been presented). The Court understands that the parties agree that the jury will render an advisory opinion as to the number of repaired and/or reconstructed cameras, which the Court will consider, but not be bound by, in rendering its ruling on the issue. 26 Order (October 17, 2002) (emphasis added). The district court's interpretation does not reflect the constraints that Jazz would place on the stipulation. Specifically, Jazz seeks to narrow the advisory jury ruling to question six of the special verdict form, while maintaining the answers to question five as binding. Had Jazz intended to place these constraints on the district court, it was obligated to clarify them upon receipt of the district court's October 17, 2002 Order setting the process for determining the number of repaired LFFPs. This court detects no error in the district court's determination to honor the parties' stipulation. 27 In its cross-appeal, Fuji contends that the district court clearly erred in finding that 10% of the refurbished LFFPs were permissibly repaired where Jazz's evidence was not verifiable, complete or credible. 4 Fuji primarily disputes that Jazz's evidence, namely the video and Mr. Lorenzini's testimony, are not verifiable because Fuji was not permitted discovery in the Chinese factories. Fuji, however, stipulated during trial that it did not seek to compel discovery from the eight Chinese factories. Fuji cannot now complain that Jazz's evidence is not verifiable in the absence of any effort on its own part to seek verifying discovery. Again this court finds no clear error in the district court's finding that 10% of Jazz's LFFPs were permissibly repaired. 28 In sum, the district court walked an evidentiary tight rope. On one side, the trial court refused to credit Jazz's evidence as representative of all eight factories. On the other, it found that evidence credible for the three factories for which Jazz presented some direct testimony. Further, the district court faced the difficulty of determining the number of LFFPs both first sold in the United States and permissibly repaired in one of the three factories. In the absence of any direct evidence on the number of United States sales, the district court permissibly used circumstantial evidence to calculate the total repaired LFFPs. Moleculon Research Corp., 793 F.2d at 1272. Upon review of the entire record, this court finds no clear error in any of the district court's findings.