Court Opinion

ID: 3002086
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:24:47.874942+00
Date Added: 2024-06-11T12:52:36.857598
License: Public Domain

In the

United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 07-2758

JOHN W ASSON,
                                               Plaintiff-Appellant,
                                v.

P EABODY C OAL C OMPANY,
                                              Defendant-Appellee.
                         ____________
            Appeal from the United States District Court
     for the Southern District of Indiana, New Albany Division.
           No. 4:02-CV-0090—Sarah Evans Barker, Judge.
                         ____________

     A RGUED M AY 16, 2008—D ECIDED S EPTEMBER 8, 2008
                         ____________

 Before B AUER, P OSNER, and W OOD , Circuit Judges.
  W OOD , Circuit Judge. John Wasson sued Peabody Coal
Company for breach of contract, claiming that it underpaid
the royalties to which he was entitled for coal mined from
his property. After a bifurcated jury trial resulting in a
$350,000 verdict in Wasson’s favor, the district court
granted Peabody’s renewed motion for judgment as a
matter of law. Wasson appeals, and we affirm.
2                                               No. 07-2758

                             I
   Wasson leased coal-mining rights to Peabody (or one
of its predecessors-in-interest) in exchange for royalty
payments calculated in accordance with a lease agree-
ment. Believing that Peabody had underpaid the
royalties due for coal mined from 1996 through January
2000, Wasson filed suit in federal court against Peabody
and Indianapolis Power and Light (“IP&L”), alleging
antitrust violations. In a more direct effort to collect the
additional royalties he claimed, he also raised a breach-of-
contract claim against Peabody. In August 2006, the
district court granted summary judgment in favor of
Peabody and IP&L on the antitrust claims, causing IP&L to
be dismissed from the suit. At the same time, it denied
Peabody’s motion for summary judgment on the breach
of contract claim. The court decided to bifurcate the
liability and damages stages of the trial, and so it first
submitted to the jury the question whether Peabody had
breached the agreement. The jury answered yes, and then
went on in the second phase to award Wasson damages of
$350,000. While this was a substantial sum, it paled in
comparison to the nearly $10 million he had requested.
Peabody, in the meantime, had asked the court at every
available opportunity for judgment as a matter of law. See
F ED . R. C IV. P. 50. On Peabody’s fourth try, the district
court granted the motion and reduced the jury’s award
to $965.62, the amount Peabody acknowledged owing
based on its own expert’s review of the data.
  Distressed to see his victory snatched away from him,
Wasson has appealed. He argues that the district court
erred in denying his motion for a continuance just prior
No. 07-2758                                              3

to trial (and denying his motion to reconsider that rul-
ing), because, he said, he needed additional time to
review recently produced discovery materials. He also
asserts that the court erred in barring his expert witness
from testifying. Finally, he contends that the court should
not have set aside the jury’s award of damages, because
there was sufficient evidence for a reasonable jury to
find in his favor. We address each argument in turn.

                            II
  Wasson faces long odds on his first point, given the
fact that we review a trial court’s denial of a motion for
continuance for an abuse of discretion. Research Sys. Corp.
v. IPSOS Publicite, 276 F.3d 914, 919 (7th Cir. 2002). The
parties in this relatively straightforward case have been
battling over discovery for years. The supervising magis-
trate judge actually granted part of Wasson’s motion to
compel; unable to resist the obvious metaphors, the
judge observed that “each side has thrown a little coal
sludge into the discovery dispute processing hopper.”
Wasson complains nevertheless that when making
boxes filled with papers available to him in which he could
find the data he needed, Peabody did not furnish enough
detail about the precise location of the requested records.
Wasson was partly to blame for this, however, because
his interrogatories were very broad in scope. In an effort
to home in on the central issues, the magistrate judge
asked Wasson what he was really looking for; Wasson
responded that he was trying to substantiate the “Mancil
Robinson Report,” a summary of royalties that he had
4                                              No. 07-2758

received from Peabody years earlier when he first dis-
puted its payments. Consequently, the magistrate judge
ordered Peabody to “file supplemental answers to Inter-
rogatory Nos. 8 and 28 based upon The Mancel-Robinson
[sic] Report and all underlying documentation used in
producing that report.”
  As Peabody points out, this order may have expanded
the original interrogatories. For example, Interrogatory
No. 28 requested production of “all data and information
used to calculate any and all royalty payments.” The
question did not mention or allude to the Mancil Robinson
Report at all. In fact, Peabody asserts, it did not use the
Mancil Robinson Report to calculate royalty payments.
Thus, while there was substantial (perhaps overwhelm-
ing) overlap among the documents responsive to the
interrogatory as originally framed and as recast in the
magistrate judge’s order, it was foreseeable—in fact,
likely—that the documents that were responsive to the
two questions would not be identical. This explains the
presence of “new” documents produced shortly before
trial in response to the motion to compel. (Although
Peabody did not cross-appeal based on the magistrate
judge’s arguable expansion of the scope of the interroga-
tory, the difference between the original demand and the
order is relevant to the question whether Peabody was
playing foul with Wasson by producing new documents
shortly before trial.) In any event, Wasson had ample
time to review the documents in the original production
to determine whether additional discovery was necessary
before the expiration of the discovery deadline, but he
chose to sit on the matter.
No. 07-2758                                                   5

  Wasson cannot meet the standard for reversal on this
ground because he cannot show that he suffered “changed
circumstances to which a party cannot reasonably be
expected to adjust without an extension of time.” N. Ind.
Pub. Serv. Co. v. Carbon County Coal Co., 799 F.2d 265, 269
(7th Cir. 1986). Moreover, we agree with the district court’s
description of Wasson’s strategy in disputing and
redisputing this discovery issue:
    We find it telling that in Wasson’s responsive brief
    to Peabody’s post-trial motion [for judgment as a
    matter of law] he does not identify any specific evi-
    dence introduced at trial which would support the
    jury’s verdicts. Rather, his largely non-responsive
    rehash of long-ago-resolved discovery disputes dem-
    onstrates Wasson’s continued preoccupation with
    finding a “smoking gun” in hopes of substantiating
    his theories about the alleged but unproven wrongs
    Peabody visited upon him.
This court has emphasized that “district judges must be
allowed considerable leeway in scheduling civil cases, and
therefore in denying continuances that would disrupt
their schedules . . . .” Research Sys. Corp. v. IPSOS Publicite,
276 F.3d at 920. In this case, which was filed over five
years ago, the denial of a continuance was not an abuse
of discretion.

                              III
  We also review the district court’s evidentiary rulings
only for abuse of discretion, and we “will not reverse
unless the record contains no evidence upon which the
6                                                No. 07-2758

trial judge rationally could have based his decision.”
United States v. Savage, 505 F.3d 754, 760 (7th Cir. 2007). To
support his breach of contract claim, Wasson attempted
to introduce the expert testimony of Robert Swan, his
accountant, although the theory underlying Swan’s expert
witness report was actually Wasson’s. The report asserted
that the coal price Peabody was using to calculate
Wasson’s royalties was too low. This conclusion was
based on the difference between the “average gross
invoice sales price” used by Peabody when calculating
royalties for August 1999 and the fuel cost data reported
for that same month by IP&L, one of Peabody’s customers,
to the Federal Energy Regulatory Commission (“FERC”).
   The district court based its decision to exclude this
testimony on several critical shortcomings. First, the
analysis included only a single Peabody customer. (Even
if it had included all the FERC reports filed, non-utility
customers are not required to file FERC reports, and so the
data would still have been incomplete.) Moreover, the
figures for a month from this one customer were extrapo-
lated to arrive at a number supposedly representing
twenty years of alleged underpayment. (Even before
sending the case to the jury, the district court reduced the
claim period to five years, in keeping with the statute of
limitations.) Peabody’s expert witness, an economist,
testified that Swan’s extrapolation did “not meet scientific
standards for use of mathematical statistics.” Finally, Swan
admitted that he had never previously seen or worked
with a FERC report, did not know what items were in-
cluded or excluded in the fuel cost data found in such
reports, and was unaware of any occasion where some-
No. 07-2758                                               7

one else had used FERC data to test the accuracy of a
royalty payment.
  We have no trouble endorsing the district court’s deci-
sion to exclude Swan’s testimony—indeed, had the court
admitted it, we would probably have reversed that deci-
sion for an abuse of discretion. Swan’s opinion was not
“based upon sufficient facts or data,” nor was it “the
product of reliable principles and methods,” as required
by F ED. R. E VID. 702.

                            IV
  Finally, we give de novo review to a district court’s
grant of judgment as a matter of law. Castellano v. Wal-Mart
Stores, Inc., 373 F.3d 817, 819 (7th Cir. 2004). We agree
with the district court that the jury’s damages award
must be set aside because it was based on nothing but
speculation. Wasson says that this is not so, because his
trial exhibit 100 thoroughly summarized his evidence
on damages. But a review of this exhibit only reveals all
the problems that so concerned the district court. The
exhibit is nothing more than Wasson’s scratch-paper work-
up of his guess at determining his damages. For ex-
ample, when Wasson could not find the number of “barge”
tons mined during the relevant periods, he simply copied
the number of “rail” tons mined into his “barge” tally.
Absolutely nothing suggests that the two numbers were
necessarily the same.
  It seems that there were no barge tons accounted for
in the Mancil Robinson Report because the barge tons
and the rail tons were erroneously lumped together to
8                                               No. 07-2758

produce the number shown for rail tons. The difference
matters: royalties for barge tons are slightly higher
than those for rail tons. This lumping of both kinds of
shipment into the rail category resulted in the $965.62
underpayment that Peabody’s expert witness discovered
and that Peabody thereafter conceded owing. In addition,
Wasson also used an absurdly high coal price for all his
calculations, $107.26 per ton, simply because he found one
entry for one month among Peabody’s documents
showing that price. The prevailing price for all the periods
in question was almost an order of magnitude lower,
hovering around $18 or $19 per ton. The $107 per ton
price turned out to be an accounting artifact arising
from a “quality adjustment” for a particular buyer on a
particular occasion.
  The district court held that it could “identify no reason-
able basis in the evidence for the jury’s $350,000 damage
award to Mr. Wasson.” Neither can we. The judgment
of the district court is A FFIRMED.

                           9-8-08