Opinion ID: 47625
Heading Depth: 2
Heading Rank: 4

Heading: FSI’s Motion for a New Trial

Text: Accompanying FSI’s post-verdict motion for judgment as a matter of law, the company moved in the alternative for a new trial. In this appeal, FSI challenges the district court’s denial of a new trial, alleging that the jury verdict contained inconsistent answers to the special interrogatories and that the jury finding on defamation was improperly influenced by the of the documents were intended to encompass all defendants. However, the question is not whether the speaker intended to identify a person, but rather whether the words would be understood in such a way by those who know the person. 32 spillover prejudice of inadmissible evidence. “We review a district court’s ruling on a motion for new trial for abuse of discretion.” Int’l Ins. Co. v. RSR Corp., 426 F.3d 281, 300 (5th Cir. 2005). This court also gives “great deference to the district court ruling when it has denied the new trial motion and upheld the jury’s verdict.” Id.
“If the jury gives inconsistent answers to special interrogatories, the case must be remanded for a new trial.” Willard v. The John Hayward, 577 F.2d 1009, 1011 (5th Cir. 1978). In determining whether answers are inconsistent, we look to “whether the answers may fairly be said to represent a logical and probable decision on the relevant issues as submitted.” FDIC v. Fid. & Deposit Co., 45 F.3d 969, 977 (5th Cir. 1995) (citation omitted). A jury’s answers “should be considered inconsistent, however, only if there is no way to reconcile them.” Willard, 577 F.2d at 1011. This court makes “a concerted effort to reconcile apparent inconsistencies in answers to special verdicts if at all possible.” Ellis v. Weasler Eng’g Inc., 258 F.3d 326, 343 (5th Cir. 2001). FSI argues that two different jury findings contradict the jury determination that FSI falsely and maliciously accused defendants of being thieves. First, FSI contends that the jury finding that three of the defendants violated 18 U.S.C. 33 § 1030(a)(4) is equivalent to a finding that those defendants were thieves. Second, FSI argues that the jury’s determination that FSI filed the police report of computer theft without malice establishes that FSI’s accusations that defendants stole the intellectual property on those computers were made without malice as well. However, each of these findings can be reconciled. First, the finding that three defendants violated § 1030(a)(4) did not necessarily establish that the defendants were thieves. Section 1030(a)(4) deals with unlawful access of computer systems to further fraud. 18 U.S.C. § 1030(a)(4). Although the jury found that three defendants violated this section, and that their unlawful access caused a loss to FSI totaling $36,000, the determination did not require a finding that the defendants stole trade secrets or anything else. Section 1030(a)(4) does require a finding that the violator obtained something of value by means of the unlawful access, but the value need not be a trade secret or even something that was stolen. The jury could have found that the value obtained by defendants inhered in the temporary use or possession of computer hardware,15 as FSI suggested in its 15 Section 1030(a)(4) provides an exception where there is no liability if “the object of the fraud and the thing obtained consists only of the use of the computer and the value of such use is not more than $5,000 in any 1-year period.” Here, the jury could have found an object of fraud beyond the use of the computer. 34 closing arguments,16 or some other value that was obtained without theft. Additionally, the finding that FSI did not act with actual malice in filing the police report of computer theft does not establish, as FSI claims, that the report of theft was true or that later statements were made without malice as well. As the jury was instructed, “actual malice means that the party making the publication acted with actual knowledge that it was false or with reckless disregard of whether it was false or not.” Accordingly, the jury finding on the police report does not mean that the jury believed that the allegations of theft were actually true, but merely that FSI believed it was true to the extent necessary to avoid liability. Further, the jury could have determined that FSI sincerely believed when the police report was filed that the defendants stole computer equipment, but recklessly disregarded the truth when FSI accused defendants of stealing the company’s intellectual property in statements made two months later. The statements are therefore easily reconcilable.
16 On the element that the defendants “intended to obtain something of value,” FSI’s counsel argued in part that defendants “took hardware worth more than $5,000.” Although FSI was suggesting that defendants stole the hardware, the jury could have believed the three defendants’ testimony that any hardware in their possession was intended to be, and was in fact, returned to FSI. 35 In United States v. Edwards, 303 F.3d 606, 639 (5th Cir. 2002), this court considered whether evidentiary “spillover from invalid claims can be a basis for granting a new trial.” We stated that to make such a claim, a party must “[a]t a minimum . . . show that [it has] experienced some prejudice as a result of the joinder of invalid . . . claims, i.e., that otherwise inadmissible evidence was admitted to prove the invalid claims.”17 Id. at 640. FSI argues in this appeal that the jury’s defamation findings were improperly prejudiced by other allegedly defamatory statements that were admitted by the district court and submitted to the jury even though the court held that they were nondefamatory as a matter of law. Defendants, in addition to arguing that the evidence was not prejudicial, contend that FSI did not properly preserve a spillover prejudice argument, only raising relevance objections to the evidence when introduced at trial. Unlike Edwards and similar spillover prejudice cases from other circuits, this is not a situation where one of several claims was held invalid and the reviewing court must determine whether evidence properly admitted for the invalid claim had a prejudicial effect on the jury’s determination of the other 17 Noting that such an argument had never been addressed by this court, the Edwards court acknowledged only “that perhaps a grant of a new trial might be appropriate in some cases of ‘retroactive misjoinder’” before rejecting the spillover argument. 36 claims.18 Rather, this appeal involves evidence that was admitted by the district court, over FSI’s objections, for the valid defamation claims discussed in the previous section, and there is no need to discuss cases that apply a standard prejudice inquiry to unique procedural circumstances.19 The relatively straightforward question here--preserved for appeal by FSI’s relevance objections--is whether the district court abused its discretion in admitting the evidence as relevant.20 See United 18 Cases in other circuits discussing “spillover prejudice” have involved evidence that was properly admitted for a claim that was later held to be invalid. See, e.g., United States v. Cross, 308 F.3d 308, 317 (3d Cir. 2002) (“[P]rejudicial spillover may occur . . . [w]hen a defendant is convicted on two counts involving different offenses at a single trial and an appellate court reverses his conviction on one of them . . . .”); United States v. Rooney, 37 F.3d 847, 855 (2d Cir. 1994) (“When an appellate court reverses some but not all counts of a multicount conviction, the court must determine if prejudicial spillover from evidence introduced in support of the reversed count requires the remaining convictions to be upset.”). This court in Edwards similarly acknowledged that “spillover from invalid claims” might be a viable basis for granting a new trial when that spillover would be inadmissible to establish the remaining claims and where prejudice exists. Edwards, 303 F.3d at 641. 19 It is irrelevant whether, as FSI contends, the evidence was also intended by defendants to serve as substantive evidence of independent acts of defamation. The record does not reflect that the district court ever limited the jury’s consideration of the evidence to these independent acts, and the district court confirmed in its denial of FSI’s motion for a new trial that the evidence was admitted as relevant to show malice for the three allegedly defamatory statements submitted to the jury. 20 Under Federal Rule of Evidence 403, “evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice.” The district court has “broad discretion to weigh the relevance, probative value, and prejudice of the evidence in determining its admissibility under Rule 403,” which will not be disturbed without abuse of discretion. United 37 States v. Hicks, 389 F.3d 514, 522 (5th Cir. 2004). Even if the district court improperly admitted the evidence, we will not reverse if the error was harmless.21 Id. The evidence at issue here consists of the same documents involved in defendants’ cross-appeal. The district court determined in its order on the motion for a new trial that the statements in the e-mails and letters, “while perhaps not defamatory on their face, were relevant to the question of whether FSI defamed the defendants,” specifically on the question of malice because “much of this evidence illustrated the States v. Allard, 464 F.3d 529, 534 (5th Cir. 2006). The only document that FSI objected to on this ground, as opposed to relevance, is Exhibit 34, the e-mail in which Michael Roehrs stated that Daniel Roehrs or his mother were “supporting child molesters.” However, we find no reason to believe that the prejudice of this or any of the documents outweighed their probative nature with regard to actual malice. 21 This inquiry involves considerations similar to those that courts have undertaken in spillover prejudice cases. In Cross, for example, the Third Circuit first looked to “whether any of the evidence used to prove the reversed count would have been inadmissible to prove the remaining count.” 308 F.3d at 317. If the evidence would have been admissible, there was no prejudice, and a new trial was not warranted. Id. at 318. If the evidence would not have been admissible, the court then determined whether the error was harmless or highly prejudicial. Id.; see also Edwards, 303 F.3d at 640 (recognizing that at a minimum, such a claim must establish that the evidence was inadmissible and prejudicial). In Rooney, the Second Circuit looked to several factors bearing on prejudice, including whether the evidence would tend to have affected the jury’s decision, whether the evidence was admissible on the remaining count, whether the two counts were so dissimilar as to permit the inference that the jurors kept the evidence separate in their minds, and whether the admissible evidence on the remaining count was strong enough that the chance of spillover prejudice was minimized. 37 F.3d at 855-56. 38 circumstances surrounding the parties’ dispute, as well as FSI’s recklessness about the truth of its allegations.” FSI’s sole argument against this holding is to suggest the unsupported proposition that nondefamatory statements cannot be probative of actual malice in a defamation per se case. However, this court has established that “a court or jury may infer actual malice from objective circumstantial evidence.” Brown v. Petrolite Corp., 965 F.2d 38, 47 (5th Cir. 1992); see also HarteHanks Commc’ns, Inc. v. Connaughton, 491 U.S 657, 668 (1989); Zerangue v. TSP Newspapers, Inc., 814 F.2d 1066, 1070 (5th Cir. 1987). The evidence can show “negligence, motive, and intent such that an accumulation of the evidence and appropriate inferences supports the existence of actual malice.” Brown, 965 F.2d at 47 (quoting Bose Corp. v. Consumers Union of United States, Inc., 692 F.3d 189, 196 (1st Cir. 1982)). Accordingly, the district court did not abuse its discretion in admitting the statements at issue as evidence relevant to the malice inquiry.22 All of the statements were consistent with defendants’ malice argument that the defamation claims were part of “an unbelievable smear campaign” involving “a calculated and relentless attempt by [FSI] that will go to any lengths to 22 This holding is unaffected by our determination for defendants’ cross-appeal that the documents did not defame the individual defendants, as the documents remain relevant to determining FSI’s motive and intent underlying the statements submitted for jury evaluation. 39 destroy [defendants] completely.” Although not admitted as substantive evidence of defamation, the documents illustrated the circumstances in which the defamatory statements were made and the state of mind of the FSI employees who made them, and were thus relevant evidence from which actual malice could be inferred. Finally, the jury instructions limited the jury’s purview to three specific statements, and there is little likelihood that the jury was confused by the additional evidence.