Court Opinion

ID: 195305
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:37:14+00
Date Added: 2024-06-11T15:11:23.882354
License: Public Domain

April 11, 1994    UNITED STATES COURT OF APPEALS
                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                       

No. 93-1431

                    NEWELL PUERTO RICO, LTD.,
                       Plaintiff-Appellee,

                                v.

                     RUBBERMAID INCORPORATED,
                       Defendant-Appellant.

                                       

No. 93-1451
    93-1516

                    NEWELL PUERTO RICO, LTD.,
                       Plaintiff-Appellant,

                                v.

                     RUBBERMAID INCORPORATED,
                       Defendant-Appellee.

                                       

                           ERRATA SHEET

     The  opinion  of this  Court issued  on  March 31,  1994, is
amended as follows:

     Page 7, line  8, it should  read "Mr. Villamil's  testimony"
instead of "Mr. Newell's testimony."

     Page 11,  first line,  insert after  "1991)" and before  the
period "(quoting Freeman v. Package Machinery Co., 865 F.2d 1331,
                                                 
1340 (1st Cir. 1988))." 

                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 93-1431

                    NEWELL PUERTO RICO, LTD.,

                       Plaintiff-Appellee,

                                v.

                     RUBBERMAID INCORPORATED,

                       Defendant-Appellant.

                                           

Nos. 93-1451
     93-1516

                    NEWELL PUERTO RICO, LTD.,

                       Plaintiff-Appellant,

                                v.

                     RUBBERMAID INCORPORATED,

                       Defendant-Appellee.

                                           

          APPEALS FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF PUERTO RICO

          [Hon. Jos  Antonio Fust , U.S. District Judge]
                                                       

                                           

                              Before

                    Torruella, Circuit Judge,
                                            

                  Coffin, Senior Circuit Judge,
                                              

                    and Boudin, Circuit Judge.
                                             

                                           

     Miguel  E. Bonilla-Sierra,  with  whom  Carlos T.  Gonz lez-
                                                                 
Contreras,  Maricarmen  Almod var-D az  and Gonz lez,  Bonilla  &
                                                                 
Qui ones-Tridas, were on brief for Rubbermaid Incorporated.
               
     Adri n Mercado, with whom  Mercado & Soto, was on  brief for
                                              
Newell Puerto Rico, Ltd.

                                           

                          March 31, 1994
                                           

                               -2-

          TORRUELLA, Circuit Judge.   Plaintiff-appellee,  Newell
                                  

Puerto  Rico,  Ltd. ("Newell"),  brought  an  action for  damages

against  Rubbermaid  Incorporated  ("Rubbermaid"), alleging  that

Rubbermaid,  without  just  cause,  terminated  and impaired  the

exclusive  distribution  agreement  between  the  two  parties in

violation of the Puerto Rico Dealers' Act, commonly known as "Law

75."  P.R. Laws  Ann. tit. X,    278 et seq.  (1989 Supp.).   The
                                            

action was tried  before a jury.  The jury  found that Rubbermaid

terminated  the distribution  agreement  without  just cause  and

awarded Newell $1,400,000  in damages.   Rubbermaid then filed  a

motion for a new  trial.  The district court  denied Rubbermaid's

motion and  entered judgment against Rubbermaid.   Rubbermaid now

appeals  the  court's  denial of  its  motion  for  a new  trial.

Specifically,  Rubbermaid argues  that  (1)  the  district  court

abused its  discretion in admitting  certain testimony by  one of

Newell's  expert  witnesses, and  (2) the  jury's finding  on the

issue of just cause was against the clear weight of the evidence.

          Newell  also filed  a motion  requesting pre  and post-

judgment  interest  and  attorneys'  fees.    The  court  granted

Newell's motion for post-judgment  interest but denied its motion

for pre-judgment  interest and  attorneys' fees.   Newell appeals

the court's denial of pre-judgment interest and attorneys' fees. 

                            BACKGROUND

          We review the evidence and draw inferences therefrom in

                               -3-

the  light most  favorable to  the verdict  winner in  this case,

Newell.   International  Adhesive Coating  Co. v.  Bolton Emerson
                                                                 

Int'l, Inc., 851 F.2d 540, 542 (1st Cir. 1988).
           

          A.  The Distribution Agreement

          On May  31, 1968, Rubbermaid entered  into an agreement

with  Anchor  Hocking  Interamericana,  Ltd.  for  the  exclusive

distribution of  the Rubbermaid Houseware Product  Line in Puerto

Rico  and   the  United  States  Virgin   Islands  ("Distribution

Agreement").   On March 28, 1972,  Anchor Hocking Interamericana,

Ltd.  assigned and  transferred  its rights  in the  Distribution

Agreement to  Anchor Hocking Puerto Rico,  Ltd. ("Anchor P.R.").1

From July  2,  1972 to  July  1, 1987,  Anchor  P.R., became  the

exclusive  distributor of Rubbermaid Houseware Products in Puerto

Rico  and the Virgin  Islands.  On  July 2,  1987, Newell Company

acquired  Anchor   Hocking  Corporation  and   its  subsidiaries,

including Anchor  P.R. and thereafter continued  the distribution

of Rubbermaid products in Puerto Rico and the Virgin Islands.

          On October 31, 1991, Rubbermaid notified Newell that it

was terminating  the Distribution Agreement,  effective in ninety

days, because  Anchor P.R.  had been  unable to  achieve assigned

sales objectives  and because Newell manufactured and distributed

similar  products which  created a  conflict of  interest  in its

distribution of Rubbermaid products.   Rubbermaid then terminated

                    

1  Anchor Hocking Puerto Rico, Ltd. was a wholly owned subsidiary
of Anchor Hocking Corporation  which was incorporated in Delaware
on  March  27, 1972,  for the  purpose  of acquiring  and selling
products in Puerto Rico.

                               -4-

the Distribution  Agreement.   The effective date  of termination

was February 3,  1992.   Anchor P.R. changed  its name to  Newell

Puerto  Rico, Ltd.  In February 1992, Newell brought suit against

Rubbermaid,  claiming  that   Rubbermaid's  termination  of   the

Distribution Agreement was unjustified.

          B.  Expert Witness Testimony

          During the course of  discovery, in June 1992, Newell's

expert witness on damages, Mr. Jos  Villamil, submitted a written

report estimating Newell's damages  under Law 75.  In  July 1992,

Rubbermaid's expert,  Dr. El as R. Guti rrez,  submitted a report

challenging the  accuracy of the valuation  estimate presented by

Mr. Villamil, and  questioning whether the  estimate was prepared

according to acceptable professional standards.  Doctor Guti rrez

concluded  that major flaws were  present in the  methods used by

Mr. Villamil to  estimate damages, and these flaws had the effect

of producing an upward bias in the estimated value of damages for

the Rubbermaid line of products.2

          During  his  first  deposition  on  August   11,  1992,

Mr. Villamil  acknowledged that  he  inadvertently  included  the

value of the Rubbermaid Commercial Products Line, which is not at

issue in this case,  in his valuation of damages.3   Accordingly,

Mr. Villamil agreed to  adjust his estimate and submit an amended

                    

2    Doctor Guti rrez  estimated  damages,  including a  goodwill
component, to be between $247,686 and $269,431.

3   The  Distribution  Agreement which  is  the subject  of  this
lawsuit  concerns the  Rubbermaid Houseware  Products Line.   The
Rubbermaid Commercial  Products Line  is a separate  and distinct
line of products not relevant to this case.

                               -5-

report reflecting his new  evaluation.  On August 13,  1992, four

days prior to  trial, Mr. Villamil submitted  an amended report.4

According  to  Rubbermaid,  this  amended   report  included  new

calculations   using  a   methodology  and   valuation  procedure

different from that used  in Mr. Villamil's previous report.   On

August  13, the court ordered  that both experts  be deposed anew

and that transcripts of  the depositions be filed not  later than

August  27, 1992.   The  Court further  determined that  it would

appoint  an economist to render  a neutral expert  report.  Trial

was rescheduled for December 21, 1992.

          Mr.  Villamil was  deposed  again on  August 20,  1992.

During  this deposition,  Mr.  Villamil again  acknowledged  that

corrections  should be made to  his calculations.   On August 27,

1992, Rubbermaid filed a "Motion to Disqualify Plaintiff's Expert

Witness, Exclude  Plaintiff's Expert Witness Reports  and Request

for Sanctions."  The court denied this motion.

          On December 8, 1992,  the court appointed expert, Ernst

&  Young,  rendered  a report  which  included  a  review of  the

different reports  filed by the expert witnesses  for the parties

and an independent calculation of a value or a range of values of

damages  for the distribution agreement under Law 75.  On January

19,  1993, due to additional  information provided by counsel for

Newell, Ernst &  Young supplemented  the December 8  report.   On

                    

4  In  his amended  report, Mr. Villamil  estimated damages,  not
including goodwill, to be between $1,620,000  and $2,941,000.  He
estimated goodwill  at $1,013,749 and therefore,  the total value
of the distribution of the Rubbermaid product line in Puerto Rico
at between $2,633,749 and $3,954,749.

                               -6-

February 2, 1993, Ernst & Young submitted a final report.5

          During trial,  the court  heard testimony from  Ernst &

Young  regarding its report.   Mr. Villamil then  testified as an

expert for Newell.   At trial, Rubbermaid expressly conceded that

Mr.  Villamil was qualified as an expert.  Mr. Villamil testified

that he believed his role was to evaluate Ernst & Young's report.

Rubbermaid objected to Mr. Villamil's testimony on the grounds of

surprise, arguing  that his  expressed views were  different from

and  inconsistent with the opinions rendered in his reports.  The

court  overruled  the objection  and  permitted  Mr. Villamil  to

testify.

                  ADMISSION OF EXPERT TESTIMONY

          Rubbermaid  challenges  the   admission  at  trial   of

Mr. Villamil's testimony on grounds of surprise.  Federal Rule of

Civil Procedure 60(b)(1); P rez-P rez  v. Popular Leasing Rental,
                                                                 

Inc., 993 F.2d 281, 283 (1st Cir. 1993).
    

          At the time  of Mr. Villamil's testimony,  Rubbermaid's

counsel objected on  the ground that Mr.  Villamil was presenting

new computations to the jury not contained in his first or second

report.  The  court overruled Rubbermaid's  objection, indicating

that Mr. Villamil was  entitled to criticize constructively Ernst

& Young's  report.   When ruling  on Rubbermaid's objection,  the

district  court stated  that Rubbermaid  was entitled  to "cross-

examine him in light of not  only this analysis he is making here

                    

5  The court appointed expert estimated the present value of lost
pre-tax profits at $585,951.

                               -7-

today but in  relation to the analysis he  has made previously of

the reports you have rendered and which you have a copy and which

were the object of the deposition."

          Rubbermaid knew that  Mr. Villamil was  going to be  an

expert witness at trial.  Moreover, Rubbermaid  was very familiar

with the subject matter upon which he would render his testimony.

Rubbermaid had ample opportunity  to cross-examine Mr.  Villamil.

Even  if   Rubbermaid  had  been  surprised   by  Mr.  Villamil's

testimony,  the appropriate remedy would  have been to  ask for a

continuance to  allow Rubbermaid to prepare  for the presentation

of rebuttal testimony.  Szeliga v. General Motors Corp., 728 F.2d
                                                       

566  (1st Cir. 1984) (the remedy for surprise in the introduction

of evidence is  not to  seek reversal after  an unfavorable  jury

verdict, but  a  request for  continuance  at the  time  surprise

occurs).   Rubbermaid did not request a continuance, a sidebar or

even a limiting  jury instruction.   See  Smith v.  Massachusetts
                                                                 

Institute of  Technology, 877  F.2d 1106 (1st  Cir. 1989),  cert.
                                                                 

denied, 493 U.S. 965 (1989) (courts look with disfavor on parties
      

who claim  surprise but who do  not ask for a recess  so they may

attempt to counter the opponent testimony).

          Rubbermaid  also claims  that Mr.  Villamil's testimony

was inadmissible pursuant to Fed. R. Evid.  702, 703, 705 and 403

and  Fed. R. Civ.  P. 26(e).   We find Rubbermaid's  claims to be

without merit.

          The admissibility  of opinion evidence by  experts is a

matter   within  the  discretion  of  the  trial  court  and  its

                               -8-

determination of admissibility should be sustained unless clearly

erroneous.   International Adhesive Coating Company,  851 F.2d at
                                                   

544.   Federal Rules  of Evidence 7026 and  7037 "allow an expert

to  present  scientific or  technical  testimony in  the  form of

opinion based  on facts or  data perceived  or made known  to the

expert  before or at trial."   Da Silva v. American Brands, Inc.,
                                                                

845 F.2d 356, 360 (1st Cir. 1988).  Once admitted,  Rules 703 and

7058 then "place the full burden  of exploration of the facts and

assumptions  underlying  the  testimony   of  an  expert  witness

                    

6  Federal Rule of Evidence 702 provides:

            If   scientific,   technical,  or   other
            specialized  knowledge  will  assist  the
            trier of fact to understand  the evidence
            or  to  determine  a  fact  in  issue,  a
            witness   qualified   as  an   expert  by
            knowledge,  skill, experience,  training,
            or  education, may testify thereto in the
            form of an opinion or otherwise.

7  Federal Rule of Evidence 703 provides:

            The facts or data in  the particular case
            upon which  an expert bases an opinion or
            inference  may be  those perceived  by or
            made known to the expert at or before the
            hearing.  If of a type reasonably  relied
            upon by  experts in the  particular field
            in  forming  opinions or  inferences upon
            the subject, the  facts or data need  not
            be admissible in evidence.

8  Federal Rule of Evidence 705 provides:

            The  expert  may  testify  in   terms  of
            opinion  or  inference  and give  reasons
            therefor without prior disclosure  of the
            underlying  facts  or  data,  unless  the
            court requires otherwise.  The expert may
            in any event be  required to disclose the
            underlying  facts  or   data  on   cross-
            examination.

                               -9-

squarely   on  the   shoulders  of   opposing  counsel's   cross-

examination."   International Adhesive Coating Company,  851 F.2d
                                                      

at  544-45 (quoting Smith  v. Ford Motor Co.,  626 F.2d 784 (10th
                                            

Cir. 1980)).

            [I]f  in  arriving  at  his  opinion  the
            expert  has reasonably relied on facts or
            data  before  trial,  the basis  for  the
            opinion  need  not  be  disclosed   as  a
            condition  to  admitting testimony.   The
            burden  is  on  opposing counsel  through
            cross-examination  to explore  and expose
            any  weaknesses  in the  underpinnings of
            the expert's  opinion. .  . .   Moreover,
            the  fact that an  expert's testimony may
            be tentative or even speculative does not
            mean that the  testimony must be excluded
            so  long  as  opposing  counsel   has  an
            opportunity   to   attack  the   expert's
            credibility.        When   the    factual
            underpinning  of  an  expert  opinion  is
            weak, it is a matter affecting the weight
            and  credibility of  the  testimony --  a
            question to be resolved by the jury.

International  Adhesive   Coating  Company,   851  F.2d   at  544
                                          

(citations omitted).

          The  district  court  has  broad discretion  to  decide

whether evidence  should be  excluded under  Rule 403.9   "[O]nly

rarely -- and in extraordinarily compelling circumstances -- will

we, from the vista of a cold appellate record, reverse a district

                    

9  Federal Rule of Evidence 403 provides:

            Although   relevant,   evidence  may   be
            excluded  if  its   probative  value   is
            substantially outweighed by the danger of
            unfair   prejudice,   confusion  of   the
            issues,  or  misleading the  jury,  or by
            considerations of undue  delay, waste  of
            time,   or   needless   presentation   of
            cumulative evidence.

                               -10-

court's  . .  .  judgment  concerning  the relative  weighing  of

probative value and unfair effect."  Pinkham v. Burgess, 933 F.2d
                                                       

1066, 1071 (1st Cir. 1991) (quoting Freeman v.  Package Machinery
                                                                 

Co., 865 F. 2d 1331, 1340 (1st Cir. 1988)).  The district court's
   

refusal to exclude Mr. Villamil's  testimony under Rule 403  does

not present  such  an  extraordinary  circumstance.    Rubbermaid

suggests  that  Mr.  Villamil's   testimony  had  the  effect  of

confusing and misleading  the jury and should have  been excluded

under Rule 403.   We disagree.   Mr. Villamil  was Newell's  only

expert as to damages.   Newell was entitled to  present witnesses

on  the  issue of  damages.   At  trial, Rubbermaid  conceded Mr.

Villamil's  qualifications as an expert in this area.  Juries are

often  asked to determine complex  issues of fact after listening

to expert testimony.  Rubbermaid  was able to cross-examine  both

Mr. Villamil and the Ernst  & Young expert as to  their testimony

and to present  testimony by its own expert witness  on the issue

of  damages.  In  light of these  factors, we do  not believe the

district  court abused  its  discretion in  determining that  Mr.

Villamil's testimony had substantial probative value that was not

outweighed by unfair  prejudice and should not  be excluded under

Rule 403.

          Rubbermaid's argument that Mr. Villamil's testimony was

inadmissible pursuant  to  Fed. R.  Civ.  P. 26(e)10  is  equally

                    

10  Federal Rule of Civil Procedure 26(e) states:

            Supplementation  of  Responses.   A party
                                          
            who  has  responded  to  a   request  for
            discovery  with  a   response  that   was

                               -11-

without merit.  In essence, Rubbermaid argues that Mr. Villamil's

opinion testimony  proffered during trial was  different from the

opinions  he rendered  during  the pretrial  litigation and  that

Newell failed to  supplement and amend its discovery responses as

required by Rule 26(e) to reflect those differences.

          "[I]n  reviewing  a contention  that  answers were  not

properly  supplemented within  the  strictures of  Rule 26(e),  a

court should look to the conduct  of the trial, the importance of

the evidence to its  proponent, and the ability of  the [opposing

                    

            complete when  made is  under no duty  to
            supplement   the   response  to   include
            information  thereafter  acquired, except
            as follows:

            (1)   A party is under  a duty seasonably
            to supplement the  response with  respect
            to any question directly addressed to (A)
            the  identity  and  location  of  persons
            having knowledge of discoverable matters,
            and  (B)  the  identity  of  each  person
            expected   to  be  called  as  an  expert
            witness at  trial, the subject  matter on
            which the person is expected  to testify,
            and   the   substance  of   the  person's
            testimony.

            (2)   A party is under  a duty seasonably
            to amend  a prior  response if  the party
            obtains  information  upon  the basis  of
            which   (A)  the  party  knows  that  the
            response was incorrect  when made, or (B)
            the party knows that the  response though
            correct when  made is no longer  true and
            the circumstances are such that a failure
            to amend  the response is in  substance a
            knowing concealment.

            (3)  A duty  to supplement responses  may
            be  imposed  by   order  of  the   court,
            agreement of the parties,  or at any time
            prior  to trial through  new requests for
            supplementation of prior responses.

                               -12-

party] to formulate a response."  Thibeault v. Square D Co.,  960
                                                           

F.2d 239, 244  (1st Cir. 1992) (internal  citation and quotations

omitted).  It is not unusual for experts to make changes in their

opinions  and revise  their  analyses and  reports frequently  in

preparation  for, and  sometimes even  during, a  trial.   In the

present  case, the  parties  did not  stipulate  that they  would

accept  without question the findings of Ernst & Young, the court

appointed  expert.   Newell was  therefore  entitled to  have its

expert,  Mr. Villamil,  criticize the  Ernst &  Young report  and

testimony in  an attempt to discredit that  report and testimony.

Mr.  Villamil was  Newell's only  expert on  damages, hence,  Mr.

Villamil's testimony was a very important part of  Newell's case.

If counsel for Rubbermaid  felt ill-prepared to cross-examine Mr.

Villamil  when  faced  with  his testimony  at  trial,  counsel's

solution was to request  a continuance.  Rubbermaid's failure  to

do so will not now result in a new trial.

                   JURY'S FINDING OF JUST CAUSE

          A  federal judge may grant a new trial where the jury's

verdict is against  the clear weight of the evidence.   Kearns v.
                                                              

Keystone  Shipping Co., 863 F.2d 177, 181 (1st Cir. 1988) (citing
                      

11 C. Wright & A. Miller,  Federal Practice and Procedure    2806
                                                         

(1973)).   A trial court should set  aside a jury verdict only to

prevent a miscarriage of justice.   Kearns, 863 F.2d at 181.   We
                                          

review the district court's  refusal to grant Rubbermaid's motion

for a new trial for an abuse of discretion.   Id. at 179; Fed. R.
                                                 

Civ. P.  59(a).  So  long as  a reasonable basis  exists for  the

                               -13-

jury's verdict,  we will not disturb the  district court's ruling

on appeal.  Grenada Steel Industries, Inc. v. Alabama Oxygen Co.,
                                                                

695 F.2d 883 (5th Cir. 1983).  Mere disagreement with the verdict

will not justify the granting of a new trial.   Keeler v. Hewitt,
                                                                

697 F.2d  8, 11 (1st Cir.  1982).  After carefully  reviewing the

record  below, we  find no  abuse of  discretion in  the district

court's  decision   not  to  disturb  the   jury's  finding  that

Rubbermaid  failed to  establish just  cause for  terminating its

contract with Newell.

          In  its complaint,  Newell  alleged  that  Rubbermaid's

termination of the Distribution Agreement was without just cause.

Newell  further  alleged  that  actions taken  by  Rubbermaid  in

violation  of  the Distribution  Agreement  caused  a decline  in

Newell's  annual  sales of  Rubbermaid  products.   According  to

Newell,  Rubbermaid took  actions which  were detrimental  to the

established  relationship and  which  violated  the  Distribution

Agreement by:

          1.  making direct sales to retailers;

          2.  imposing unreasonable sales quotas on Newell;

          3.   reclassifying some  of its housewares  products to

take          them out of the Distribution Agreement; and

          4.   delaying and refusing  to service orders placed by

              Newell.

          The Puerto  Rico Dealer's Contract Act,  P.R. Laws Ann.

tit.  10,     278-278d  (1976), known  as  "Law 75,"  prohibits a

supplier  from unilaterally terminating  a distribution agreement

                               -14-

with a dealer or  refusing to renew  it on its normal  expiration

except for "just cause."   10 L.P.R.A. 278a.  Law 75  was enacted

to prevent suppliers from terminating dealers in Puerto Rico once

these  dealers had invested in the business to create and build a

profitable  market for  the suppliers'  products.   L neas A reas
                                                                 

Costarricenses, S.A. v. Caribbean General, Inc., 682 F. Supp. 117
                                               

(D. P.R. 1988) (citing  Warner Lambert v. Tribunal  Superior, 101
                                                            

D.P.R. 378, 101 P.R.R. 527 (1973)).

          As  noted, Law  75 permits  a supplier  to terminate  a

distribution agreement for just cause.  Section 278(d) of the Act

defines "just cause" as follows:

            nonperformance  of  any of  the essential
            obligations of the  dealer's contract  on
            the part of the  dealer, or any action or
            omission on  his part that  adversely and
            substantially affects the interest of the
            principal  or  grantor  in promoting  the
            marketing   or    distribution   of   the
            merchandise or service.

          By   its  terms,  Law  75  sets   forth  a  variety  of

circumstances  under  which, once  a  dealer has  shown  that the

supplier terminated  its contract, the supplier  bears the burden

of showing just cause for the termination.  Section 278a-1 of the

Act,  which  bears  the  heading,  Just  cause  for  termination;
                                                                 

exceptions;  presumptions, sheds  light on  the mechanics  of the
                         

just cause exception.   Section 278a-1(a) of  the Act establishes

that certain  violations or  nonperformance  by a  dealer of  any

provision  included  in  the  dealer's  contract  "shall  not  be

considered as  being just cause  unless the principal  or grantor
                                                                 

shows  that  such nonperformance  may  affect, or  has  truly and
     

                               -15-

effectively affected  the interests of such  principal or grantor

in an adverse  or substantial  manner in the  development of  the

market, distribution of the merchandise or rendering of services"

(emphasis  added).  Hence, under  this section, in  order to show

just cause, the  supplier bears  the burden of  showing that  the

dealer's violations or  nonperformance of the  contract adversely

affected the suppliers interests.

          It   is   uncontested   that  Rubbermaid   unilaterally

terminated the Distribution Agreement.  Rubbermaid sought to show

just cause under Law 75 by arguing that termination was justified

because Newell  failed to  achieve assigned sales  objectives and

experienced  a decline in sales of  Rubbermaid products, and that

Newell's sale of  other product lines, not related to Rubbermaid,

created a  conflict of  interest detrimental to  the Distribution

Agreement between Newell and  Rubbermaid and therefore, adversely

affected Rubbermaid's  interests.   Newell presented  evidence to

counter these  allegations from  which the jury  could reasonably

conclude that Rubbermaid did not have just cause to terminate the

Distribution Agreement.  Newell's evidence included testimony  to

the effect that  any decline  in Rubbermaid sales  by Newell  was

caused  by   Rubbermaid's  own   actions  in  violation   of  the

Distribution Agreement.  In particular, Newell presented evidence

indicating  that  Rubbermaid  was selling  products  directly  to

Pitusa (a retail store in Puerto  Rico) at the same price it sold

to Newell, undercutting the  ability of Newell to compete  on the

Puerto Rican  market for  sales of Rubbermaid  products.   Newell

                               -16-

also  presented  evidence   indicating  that  plastic   houseware

products manufactured  by Newell which, according  to Rubbermaid,

created a conflict of interest with Rubbermaid products, had been

manufactured  by  Anchor  P.R.   since  1968  and  competed  with

Rubbermaid  products  for  the   entire  span  of  the  contract.

Newell's  evidence indicated  that there  was no  new competition

introduced  by the Newell acquisition of Anchor P.R. or any other

conflict  in  interest  that  would justify  termination  of  the

Distribution Agreement.

          Newell also  presented evidence to the  effect that its

assigned  sales objectives did not adjust to the realities of the

Puerto Rican  market.  This  evidence included  testimony to  the

effect that the  sales objectives were unreasonable.  Newell also

presented evidence  to the jury in the form of an analysis of its

sales  activities from 1986 to  1990.  The  analysis purported to

show  that  Newell's sales  were  adversely  affected by  several

factors, including Hurricane Hugo and direct sales by Rubbermaid,

but that overall, the company was successfully selling Rubbermaid

products.

          Section  278a-1(c)  establishes  that  where  a  dealer

violates  a provision in the agreement fixing rules of conduct or

setting  distribution quotas or goals  because it does not adjust

to the  realities of  the Puerto Rican  market at  the time,  the

violation  will not  be deemed  just cause  and "[t]he  burden of

proof to show the reasonableness of the rule of conduct or of the

quota  or goal  fixed shall  rest on  the principal  or grantor."

                               -17-

Under this  section, once Newell presented  evidence showing that

the  assigned sales objectives did not adjust to the realities of

the Puerto Rican market,  it was Rubbermaid's burden to  show the

reasonableness  of  the sales  objectives.    In finding  against

Rubbermaid, the jury concluded that  Rubbermaid did not meet  its

burden.   Judging the credibility  of the witnesses  and weighing

the  evidence  are within  the  exclusive province  of  the jury.

United  States  v. Garc a,  995 F.2d  556,  561 (5th  Cir. 1993);
                         

Lessee  of Ewing  v. Burnet,  36  U.S. 41  (1837).   We will  not
                           

substitute our judgment for  that of the jury in  its evidentiary

findings.   After  reviewing  the record,  we  conclude that  the

jury's verdict is not against the clear weight of the evidence.

             ATTORNEYS' FEES & PRE-JUDGMENT INTEREST

          Newell  appeals the  district  court's  denial  of  its

motion  for attorneys'  fees and  pre-judgment interest.   Puerto

Rico Rule 44.1(d) on attorneys' fees  and 44.3(b) on pre-judgment

interest  are rules  of decision  that should  be applied  by the

Federal Court sitting in diversity.  De Le n L pez v. Corporaci n
                                                                 

Insular  de Seguros,  931 F.2d  116, 126  (1st Cir.  1991);   Pan
                                                                 

American World Airways,  Inc. v.  Ramos, 357 F.2d  341, 342  (1st
                                       

Cir.  1966) (Puerto  Rico  Rules of  Civil Procedure  44.1(d) and

44.3(b) are a  matter of  substantive law  to be  applied by  the

federal  court sitting in diversity).  The decision to award such

fees  is within the discretion of the  district court and we will

only  disturb its ruling  where there has  been an  abuse of that

discretion.  De Le n L pez, 931 F.2d at 126-27.
                          

                               -18-

          Under Rule 44.3(b) and 44.1(d) of the Puerto Rico Rules

of  Civil  Procedure,  imposition of  pre-judgment  interest  and

attorney's fees  on the  non-prevailing party is  mandatory where

the  party was obstinate and  stubbornly litigious.  Rule 44.3(b)

on pre-judgment interest provides:

            (b)   Except when  the  defendant is  the
            Commonwealth   of    Puerto   Rico,   its
            municipalities,                 agencies,
            instrumentalities  or officers  acting in
            their official capacity,  the court  will
            also impose  on the party  that has acted
            rashly  the payment  of  interest at  the
            rate fixed by the  Board by virtue of the
            previous subsection which is in effect at
            the  moment  the judgment  is pronounced,
            from the time the cause of  action arises
            in every case of  collection of money and
            from  the  time  the  claim  is  filed in
            actions  for  damages   until  the   date
            judgment is pronounced, to be computed on
            the amount of the judgment.  The interest
            rate shall be stated in the judgment.

P.R. Laws Ann. tit. 32, App. III, Rule 44.3(b) (1989 Supp.).

          Rule 44.1(d) on attorney's fees states:

            In the event any  party or its lawyer has
            acted  obstinately  or  frivolously,  the
            court shall,  in its judgment,  impose on
            such  person the  payment  of  a sum  for
            attorney's fees which  the court  decides
            corresponds to such conduct.

P.R. Laws Ann. tit. 32, App. III, Rule 44.1(d) (1989 Supp.).

          A party is  obstinate under Rule 44.1(d) if  it engages

in actions which  (a) make necessary litigation  which could have

been avoided,  (b) prolongs the litigation  unnecessarily, or (c)

requires  the other  party to  incur expenses  in the  pursuit of

avoidable tasks.  Fern ndez  Mari o v. San Juan Cement  Co. Inc.,
                                                                

118 D.P.R. 713, 718-19 (1987); De Le n L pez, 931 F.2d at 126.
                                            

                               -19-

          In ruling  on Rubbermaid's  motion for  attorneys' fees

and pre-judgment interest the district court stated:

            We are not  convinced that the defendant,
            Rubbermaid,   Inc.,   acted   rashly   or
            contumaciously in defending from this Law
            75  Dealer's  Act  suit.    A  reasonable
            reviewer of this record may conclude that
            the defendant's  case presented plausible
            positions    that     merited    contract
            termination.    The  fact  that  the jury
            elected  otherwise  is not  indicative of
            contumacious conduct  on the part  of the
            defendant.

           After reviewing the record, we agree with the district

court in its  conclusion that  Rubbermaid did not  act rashly  or

contumaciously in  defending  this suit.    Rubbermaid  presented

evidence  in  support  of  its defense,  indicating  that  Newell

experienced a decline  in sales of Rubbermaid products and failed

to  meet assigned  sales objectives.   Rubbermaid  also presented

evidence to the effect  that Newell's policies as to  the pricing

of Rubbermaid  products and  Newell's sale of  houseware plastics

that  were  not  manufactured  by Rubbermaid  adversely  affected

Rubbermaid's interests.     The district court did not  abuse its

discretion  in denying  Newell's motion  for attorneys'  fees and

pre-judgment interest.

          Affirmed.
                  

                               -20-