Court Opinion

ID: 8455877
Source: CourtListenerOpinion
Date Created: 2022-11-05 03:46:47.925275+00
Date Added: 2024-06-11T16:49:03.815830
License: Public Domain

BEA, J.,
concurring in part and dissenting in part.
I concur in most of the panel’s determinations in the accompanying memorandum disposition. However, I do not think it was an abuse of discretion for the district court to ratify the jury’s use of the plaintiff’s proposed zero percent “discount rate” for future stock-based awards. Thus, I would affirm that determination rather than remand for reconsideration.
I agree with the panel and the district court that the zero percent discount rate *48proffered by the plaintiffs expert is puzzling because it “seems to ignore the time value of money.” But when Harden-brook’s expert offered this testimony, UPS did not object nor move to strike the evidence as irrelevant because it was absurd. Instead, UPS put on the stand an opposing expert who disagreed with the zero percent rate and offered an alternative rate of 10.5%. The problem with UPS’s alternative, though, was that, according to the district court, there was “no testimony or evidence as to the basis for the ‘UPS discount rate’ figure.”
Thus the jury was offered two choices. Hardenbrook’s zero percent rate seems implausible but was at least supported by some evidence, however unconvincing that evidence seems to all judges to have now considered the matter. By contrast, UPS’s 10.5% rate was supported by “no testimony or evidence.” The jury chose zero percent. Keeping in mind that “a jury’s award of damages is entitled to great deference, and should be upheld unless it is clearly not supported by the evidence or only based on speculation or guesswork,” In re First Alliance Mortgage Co., 471 F.3d 977, 1001 (9th Cir.2006), I do not see grounds to disturb the jury’s award.
The panel remands for reconsideration in light of the intervening Idaho case of Watkins Co. v. Storms, 152 Idaho 531, 272 P.3d 503 (2012). That case held that a plaintiff has the burden to prove present value of damages, including the proper discount rate. I agree that the burden is on the plaintiff under Idaho law. But that is not a new principle of law such as is required on a motion for reconsideration, and in fact the plaintiff has carried that burden here.
In Watkins, which dealt with what damages could be recovered from a lessor’s breach of a lease, the plaintiff had “presented evidence that nearly $1,750,000 would be due in rent through the end of the term of the lease.” 272 P.3d at 510. The state trial court had found the lease’s provisions for acceleration of rent so disproportionate to actual damages as to be unconscionable.
The Idaho Supreme Court did not grapple with whether the district court had been correct in its “unconscionability” analysis in denying plaintiff an award for future rent lost. Rather, the Idaho Supreme Court affirmed denial of damages on a totally different ground: “We find that this analysis [i.e., unconscionability vel non] was unnecessary as [the plaintiff] failed to produce evidence of the present value of its loss in unpaid rent; without such, there could be no foundation upon which the court could base an award of damages.” Id. The Idaho Supreme Court did not state what kind of evidence is necessary for a plaintiff to carry his burden to prove the future discount rate. Rather, the Idaho Supreme Court’s decision to affirm the district court’s denial of future damages was based on the fact that there was “no evidence in the record ... regarding the present value amount of the unpaid rent.” Id. (emphasis added).
Here, by contrast, Hardenbrook presented some evidence in support of his claim to a zero percent discount rate. The plaintiffs expert testified as to how UPS’s stock compensation program operates and then testified to the excellent performance of UPS’s stock in the year before the trial. The stock had increased 18% in one year, and the expert estimated that the stock would continue to perform well in the near and medium term. While it may seem implausible that Hardenbrook would continue to be granted stock at the rate used by the expert, and that UPS stock would deliver to Hardenbrook and other stockholders such a high rate of return for the *49entire period at issue — 27 years — that was still some evidence of Hardenbrook’s future damages.
The jury accepted this rate, perhaps because zero percent was the better of the two imperfect alternatives proffered by the parties. Yet that is the nature of litigation in our adversary system: sometimes, a party wins because its weak evidence is stronger than the other party’s even weaker evidence. Because the jury verdict shows that Hardenbrook carried his burden to prove damages, I would affirm the award of damages using his discount rate rather than remanding for reconsideration.