Court Opinion

ID: 4707133
Source: CourtListenerOpinion
Date Created: 2021-07-28 15:02:34.770284+00
Date Added: 2024-06-11T08:06:42.126641
License: Public Domain

United States Court of Appeals
                          For the Eighth Circuit
                      ___________________________

                              No. 20-1783
                      ___________________________

 Mahaska Bottling Company, Inc.; Pepsi-Cola Bottling Company of Salina, Inc.;
                Pepsi-Cola Bottling Company of Norfolk, Inc.

                     lllllllllllllllllllllPlaintiffs - Appellees

                                         v.

                              Bottling Group, LLC

                           lllllllllllllllllllllDefendant

                                  Pepsico, Inc.

                     lllllllllllllllllllllDefendant - Appellant
                                     ____________

                  Appeal from United States District Court
                  for the Southern District of Iowa - Central
                                ____________

                           Submitted: April 15, 2021
                             Filed: July 28, 2021
                                ____________

Before SMITH, Chief Judge, COLLOTON and ERICKSON, Circuit Judges.
                              ____________

ERICKSON, Circuit Judge.
       Bottling Group, LLC and PepsiCo, Inc. (collectively, “Pepsi”) had a long-
standing business relationship with independent bottling companies Mahaska
Bottling Company, Inc.; Pepsi-Cola Bottling Company of Salina, Inc.; and
Pepsi-Cola Bottling Company of Norfolk, Inc. (collectively, “Mahaska”). Decades
ago, Pepsi granted Mahaska exclusive rights to distribute bottles and cans of certain
Pepsi products in identified territories. Pepsi also granted Mahaska limited rights to
distribute fountain syrup products in identified territories. Disputes arose out of the
agreements, giving rise to the claims and counterclaims in this case.

       After a 12-day trial, the jury returned a split verdict. It awarded Mahaska a
total of $2,956,540.10 in damages and Pepsi a total of $24,000 in damages. Pepsi
filed a motion for a new trial asserting a number of claims, including that Mahaska’s
closing arguments were improper and prejudicial. The district court1 denied Pepsi’s
motion. Pepsi appeals only the closing argument issue, and we affirm.

        Each jury trial has a unique character that is heavily impacted by the
personalities and style of the major actors in the trial: the lawyers, the parties, and the
judge. Sometimes the trial reflects an aggressiveness and hurly-burly that walks right
up to the line of impropriety but does not cross it. This is such a case. The case was
tried by both parties in a contentious manner. Neither party was receptive to the
efforts of an experienced, competent, and capable trial judge to lower the heat. The
jury awarded damages to both sides, reflecting a likelihood that the jurors considered
all of the evidence and were not moved by prejudice to punish either party based on
the conduct during the trial. Other than this general overview, a detailed analysis of
the specific background of this case is unnecessary to understand the closing
argument issue presented on appeal, so we begin with the legal analysis.

       1
      The Honorable James E. Gritzner, United States District Judge for the
Southern District of Iowa.

                                           -2-
       We review a district court’s denial of a new trial motion for an abuse of
discretion. Keller Farms, Inc. v. McGarity Flying Serv., LLC, 944 F.3d 975, 984 (8th
Cir. 2019). To be entitled to a new trial based on an improper closing argument, a
party must show that the closing argument was “plainly unwarranted and clearly
injurious.” Id. at 984–85 (citation omitted). If the allegedly improper statements
were not objected to, our review of those statements is for plain error. Lawrey v.
Good Samaritan Hosp., 751 F.3d 947, 954 (8th Cir. 2014). To find plain error, we
must find, at a minimum, an error that affected a party’s substantial rights and
seriously affected the fairness and integrity of the trial. See Diesel Mach., Inc. v. B.R.
Lee Indus., Inc., 418 F.3d 820, 835 (8th Cir. 2005) (citing Wiser v. Wayne Farms,
411 F. 3d 923, 927 (8th Cir. 2005)).

       Pepsi challenges a number of statements made by Mahaska’s counsel during
closing argument. Prior to the commencement of closing arguments, Pepsi objected
to portions of a PowerPoint that Mahaska had prepared for closing argument. These
objections may encompass a few of the more than 80 improper statements Pepsi
alleges occurred during closing argument. Despite Pepsi’s belief of pervasive
impropriety, Pepsi took a “wait and see” approach. Pepsi neither objected or
requested a sidebar during any portion of Mahaska’s closing argument, nor did it
object after argument and before the final charge to the jury, depriving the court of
an opportunity to give any appropriate curative instructions. The first time the district
court learned of Pepsi’s claim was weeks after the trial ended in its motion for a new
trial.

       For ease of discussion, we will group Pepsi’s claimed improper statements into
a five categories: (1) statements regarding Mahaska’s survival; (2) statements
referencing Pepsi’s size; (3) statements allegedly encouraging local bias;
(4) statements denigrating Pepsi’s defenses and counterclaims and its witnesses’
credibility; and (5) statements related to punishment, sending signals, or malice.

                                           -3-
Because of the failure to object during trial, most claims are subject to plain error
review.

       As to the statements having to do with Mahaska’s survival, we assume Pepsi’s
objection to certain slides in Mahaska’s PowerPoint have preserved review of this
issue. After closely reviewing the comments in context, we find no plainly
unwarranted and clearly injurious statements. Mahaska brought a claim for tortious
interference, which required it to show that Pepsi’s interference was done with the
predominant purpose of financially harming or destroying Mahaska’s business.
Because one of the issues before the jury was whether Pepsi acted with the intent to
destroy or harm Mahaska’s business, argument about Mahaska’s survival was neither
irrelevant nor “plainly unwarranted.”

       In addition, Mahaska defended one of its contract claims by arguing that
Pepsi’s competing interpretation of the contract made no sense in light of the “price
squeeze” it would create (leaving Mahaska extremely vulnerable and with no control
over either the price of its most expensive input or the price at which it sold its
products). Calling attention to a problem with a competing interpretation of a
contract is permissible argument when a jury is called to interpret the contract as part
of its fact-finding process. While the evidence supporting Mahaska’s survival
argument may not have been strong, the evidence was before the jury and it went to
an element of a claim or defense. On this trial record, allowing Mahaska to argue
about its survival was not improper, unsupported, or unwarranted.

       As to the second category of statements regarding Pepsi’s size and revenue, we
again assume that Pepsi preserved review of these statements by objecting to one of
Mahaska’s PowerPoint slides, which referred to Dollar General as Pepsi’s billion-
dollar customer. Nonetheless, we do not find the slide or commentary about the slide
plainly unwarranted and clearly injurious. The language in Mahaska’s slide was
taken directly from evidence that Pepsi offered and was admitted during the trial.

                                          -4-
When commenting on the slide during closing argument, Mahaska’s counsel noted
that Pepsi believed Dollar General was worth a billion dollars per year. Counsel
pointed out that, during trial, Pepsi’s witness had tried to minimize the billion-dollar
figure when the witness claimed that, while Dollar General sold a billion dollars
worth of Pepsi products, that was not the revenue or profit that Pepsi itself realized.
Regardless of whether this was permissible argument about how to interpret Pepsi’s
slide, Mahaska’s counsel did not improperly characterize Pepsi’s witness’s testimony
about the slide. Importantly, Pepsi had an opportunity to respond (and it did,
reminding the jury that the billion-dollar figure referenced Dollar General’s revenue,
not Pepsi’s profits). In light of the entirety of the parties’ arguments to the jury, there
was nothing plainly unwarranted and clearly injurious about Mahaska’s counsel’s
argument. Keller Farms, Inc., 944 F.3d at 985 (opposing counsel’s opportunity to
respond to improper closing argument was a factor that remedied potential prejudice
from a closing argument).2

      We turn to the third category of statements, which are those purportedly
encouraging local bias. Pepsi alleges that Mahaska’s reference to Pepsi’s New York

       2
        Mahaska’s counsel also referred to Pepsi as “one of the largest corporations
in the world” and a “10,000 pound gorilla.” These statements were never objected
to and thus only warrant a new trial if they affected Pepsi’s substantial rights and
seriously affected the fairness and integrity of the trial. This is a difficult burden to
meet when the jurors likely already knew Pepsi was one of the largest corporations
in the world. See, e.g., Kehm v. Procter & Gamble Mfg. Co., 724 F.2d 613, 623 (8th
Cir. 1983) (admission of financial information not prejudicial when it was “highly
probable that the members of the jury were already aware of the disparities in wealth
between the parties”). And although the “10,000 pound gorilla” comment is not a
favored practice, the jury was instructed that statements by counsel during closing
arguments are not evidence and that they should return a verdict free of sympathy or
preferences. See Keller Farms, Inc., 944 F.3d at 985 (admonition to jury that it must
not be affected by sympathy remedied any prejudice incurred); Billingsley v. City of
Omaha, 277 F.3d 990, 997 (8th Cir. 2002) (admonition to jury that statements made
by the attorneys are not evidence remedied any prejudice).

                                           -5-
office improperly appealed to local biases. Specifically, Mahaska’s counsel stated
that Pepsi’s claims “may have sounded good in [its] New York office.” This
statement was not objected to and does not rise to plain error. Indeed, this fleeting
reference was innocuous in the context of this trial, where Pepsi’s own witnesses had
repeatedly referenced decisions being made in the New York office, and witnesses
identified locations all over the country when asked where they previously lived, were
living, or where they currently worked. Notably, Pepsi’s counsel questioned
Mahaska’s CEO about the significant time the CEO spent in New York before taking
a job with Mahaska in Texas. Given Pepsi’s own repeated references throughout the
trial to its New York headquarters, and the emphasis Pepsi placed on Mahaska’s
CEO’s out-of-state connections, Mahaska’s single passing reference in closing
argument to Pepsi’s New York office was not improper or prejudicial.3

      With regard to the fourth category of statements, pertaining to allegedly
denigrating statements about Pepsi’s defenses, counterclaims, and its witnesses’
credibility, Pepsi asserts that Mahaska attacked Pepsi’s right to defend itself and
vouched for the credibility of witnesses. Pepsi never objected to any of these
statements, and we find no plain error.4 Mahaska did not attack Pepsi’s right to
defend itself, but rather pointed out reasons to disbelieve Pepsi’s theories. For

      3
       Although Pepsi also argues that Mahaska’s counsel gestured to Mahaska
employees and their families who were assembled at the back of the courtroom during
closing argument, Pepsi made no record of this alleged gesture or courtroom packing
before the district court. This issue has not been preserved for our review.
      4
       Assuming Pepsi preserved an objection to Mahaska’s arguments about Pepsi’s
expert witness’s pay ($950/hour) and her purported ineffective testimony related to
what an average is and how it is calculated, Pepsi’s expert’s pay was relevant
evidence. See Balsley v. LFP, Inc., 691 F.3d 747, 763 (6th Cir. 2012) (fact that the
defense paid an expert was relevant to the expert’s credibility). In addition,
Mahaska’s characterization of the expert’s testimony was permissible argument based
on her testimony.

                                         -6-
example, Mahaska’s counsel asked the jury to consider that, for 13 years, Pepsi acted
mostly consistently with Mahaska’s interpretation of the contracts. Even so, Pepsi
filed counterclaims against Mahaska alleging that Mahaska’s interpretation of the
contracts was incorrect. Mahaska’s counsel noted the change in interpretation,
coming as it did hard on the heels of Mahaska’s suit against Pepsi, was worthy of
consideration. Such a comment, which draws an inference from evidence admitted
at trial, is not improper. See Lawrey, 751 F.3d at 954 (“It is not improper . . . for an
attorney to tell the jury his opponent’s argument is false or disingenuous if such
statements are consistent with the facts developed at trial.”).

       Finally, as to the last category of the statements that allegedly encouraged the
jury to “punish” or “send a signal” to Pepsi for behaving “maliciously,” Pepsi never
objected to these statements and never requested a curative instruction. Under these
circumstances, the statements can only warrant a new trial if they seriously affected
the fairness and integrity of the trial. That high burden is not met here. While Pepsi
has cherry-picked phrases from Mahaska’s closing argument to allege that Mahaska
encouraged the jury to send a signal with its verdict and punish Pepsi for acting with
malice, a closer reading in context reveals something different. Mahaska’s statements
were much more closely tied to the circumstances and evidence in this case than Pepsi
acknowledges. For example, Mahaska’s counsel did not broadly ask the jury to send
a signal to Pepsi. Counsel instead argued the jury’s decision will send a signal in the
sense that it will either (a) be the start of fair treatment for Mahaska and require Pepsi
to abide by the contractual terms, or (b) probably be the beginning of the end of
Mahaska. In context, Mahaska was not seeking broad punishment but arguing about
Mahaska’s treatment under the very contracts at issue in the litigation. The same is
true with Mahaska’s single offhand mention of “malice.” Mahaska’s attorney
proclaimed that Pepsi’s conduct “shows malice . . . shows tortious interference . . .
shows breach of contract.” We agree that using the term “malice” was inadvisable
given its legal relevance to punitive damages, which were not at issue at trial. Even
so, Mahaska was required to show that Pepsi’s tortious interference was done with

                                           -7-
the predominant purpose of financially harming or destroying Mahaska’s business.
Use of “malice,” as understood by a reasonable juror in the ordinary sense of the
word as embracing concepts of ill will or hostility, was arguably directed at the
tortious interference claim that was before the jury.

       While Mahaska apparently wanted to send a message to Pepsi, counsel directed
this argument to the damages Mahaska sustained because of Pepsi’s conduct. No
argument was advanced for non-compensatory damages. On this record, we find
Pepsi’s substantial rights were not affected in a manner that seriously affected the
fairness and integrity of the trial. See Lawrey, 751 F.3d at 954 (argument that the
“medical community is going to be listening to your verdict” did not result in a
miscarriage of justice where (1) “the comment was made in the context of asking the
jury to determine the appropriate community standard of care,” (2) it “comprised a
very small portion of a lengthy closing argument,” and (3) “[t]he district court
instructed the jury that statements by the attorneys were not evidence and the case
should be decided based upon the facts presented at trial”).

       Portions of Mahaska’s closing argument were hyperbolic. Other portions
perhaps approached the line for permissible argument. But, Pepsi’s failure to object
during or after the closing argument is some indication that the multitude of
statements deemed improper weeks after the jury returned its verdict were not viewed
by Pepsi’s counsel as prejudicial or improper when they were made in context before
the jury. In addition, upon our review of the record, the statements raised by Pepsi
on appeal were based on evidence presented during trial or reasonable inferences that
could be drawn from the evidence. We conclude that the comments Pepsi now
challenges, either alone or together, did not so infect the trial with the type of
impropriety that would make a new trial appropriate.

      For the foregoing reasons, we affirm the judgment of the district court.
                      ______________________________

                                         -8-