Court Opinion

ID: 767618
Source: CourtListenerOpinion
Date Created: 2012-04-18 08:37:50+00
Date Added: 2024-06-11T09:52:26.627663
License: Public Domain

203 F.3d 477 (7th Cir. 2000)
BANKCARD AMERICA, INC.,    Plaintiff-Appellee/Cross-Appellant,v.UNIVERSAL BANCARD SYSTEMS, INC.,    Defendant-Appellant/Cross-Appellee,andSAMUEL BUCHBINDER and PAUL ALPERSTEIN, Counter-Defendants/Appellees.
Nos. 98-2528, 98-2529, and 98-2530
In the  United States Court of Appeals  For the Seventh Circuit
ARGUED September 29, 1999DECIDED February 1, 2000

Appeal from the United States District Court  for the Northern District of Illinois, Eastern  Division.  No. 93 C 1969--Richard A. Posner,  Chief Circuit Judge Sitting by Special  Designation. [Copyrighted Material Omitted]
Before HARLINGTON WOOD, JR., MANION, and  EVANS, Circuit Judges.
EVANS, Circuit Judge.

1
Football fans  know the sickening feeling:  your team  scores a big touchdown but then a penalty  flag is tossed, wiping out the play.  Universal Bancard Systems, Inc. knows  that feeling firsthand after seeing not  one, but two big touchdowns called back.  The referee who waved off the first--a  $7.8 million verdict--and then the  second--a $4.1 million jury verdict after  a second trial--was the Honorable Richard  A. Posner, the circuit's chief judge who  in this case was wearing, by designation,  the robe of a district judge.1 Like  the instant replay official, we now  review the decisions of our colleague--  using the voluminous record rather than a  television monitor and recognizing that  our review in 1999 of a case that began  in 1993 is a far cry from instant.

2
It's obvious that Universal Bancard  Systems, Inc. fared wonderfully in this  litigation with juries, but terribly with  Judge Posner. At the first trial, in  1996, a jury found that Bankcard America,  Inc. breached its contract with Universal  and that Bankcard founders Samuel  Buchbinder and Paul Alperstein violated  RICO, the Racketeering Influenced and  Corrupt Organizations Act. The jury  awarded Universal $1,115,000 for the  breach of contract and $1,115,000 for  each of the two RICO claims. The RICO  damages were trebled, bringing  Universal's total award to $7.8 million.  When District Judge Brian Barnett Duff,  who presided over the first trial, moved  to senior status, the case was reassigned  to Judge Posner under Local Rule 2.30(e).  Citing errors at the first trial, Judge  Posner threw out the verdict and ordered  a new trial, at which he presided.

3
At the second trial, in 1998, the jury found in  favor of Buchbinder and Alperstein on the RICO  claims, but again concluded that Bankcard  breached the contract, this time awarding  Universal $4.1 million on that claim. But Judge  Posner got rid of that verdict, too, entering  judgment for Bankcard because the evidence of  damages was insufficient. That left Universal,  after nearly a decade of litigation, with nary a  penny, an outcome they appeal.

4
Though the average consumer is oblivious to  such arrangements, a customer who slaps down her  credit card to make a purchase triggers a chain  of financial transactions. The merchant usually  keeps about 98 percent of the total, with the  remaining 2 percent divided between the credit  card company (such as MasterCard ), the  cardholder's bank (the friendly folks who fill  your mailbox every day with credit card offers),  and the merchant's bank that processes credit  card transactions. Credit card processing banks  generally contract with independent sales  organizations (ISOs), who sign up merchants on  behalf of the bank and provide the merchant with  the necessary equipment (such as the nifty little  machine through which credit cards are swiped).  Big ISOs, in turn, often contract with sub-ISOs  to do some of this same work of signing up  merchants and servicing the accounts. Once the  merchant's credit card processing bank gets its  share, it pays the ISO its cut, and the ISO then  pays the sub-ISO its portion (the "residuals").

5
At least that's the way it's supposed to work.  Things never are quite so tidy in real life, of  course, and in this case a contract signed in  late 1991 by ISO Bankcard and sub-ISO Universal  already had come asunder by early 1993. Bankcard  went to court first, suing Universal for breach  of contract. Bankcard accused Universal of  providing inadequate customer service to the  merchants and of converting accounts Universal  originally had signed up with Bankcard to United  Jersey Bank, another ISO with whom Universal  signed a more favorable deal shortly after  Universal had entered into the contract with  Bankcard. (As a sub-ISO to Bankcard, Universal  was not forbidden from signing up merchants with  other ISOs, but Universal was not supposed to  steer away accounts it already had placed with  Bankcard.)

6
Universal counterclaimed against Bankcard for  breach of contract and RICO violations. Universal  said Bankcard held up merchant applications and  delayed and shortchanged Universal on the  residuals it was due. In Universal's view,  Bankcard drove Universal out of business by  cutting off the flow of money and then turned a  profit by selling the accounts Universal  originally had harvested. The RICO claims were  based on the allegation that Bankcard had crushed  other sub-ISOs through the same calculated  tactics.

7
To be sure, the first trial was not an example  of the American judicial system at its finest.  The lawyers' questions to witnesses often were  lengthy, incoherent, leading, and sounded more  like testimony than inquiry. The presentation of  the facts was jumbled. Objections and sidebars  almost constantly interrupted the proceedings,  leaving the jury cooling its heels on the  sidelines while the attorneys and Judge Duff  quibbled, usually about issues that should have  been resolved long before. The admission of  exhibits was handled carelessly. Despite all the  rough edges, however, having a jury of ordinary  folk listen and watch while lawyers question  witnesses, introduce documents, and present  arguments is, for better or worse, how this  country resolves business disputes like this one  that the parties cannot solve themselves. In the  end, the jury slogged through it all and returned  a favorable verdict for Universal. The trial was  far from perfect, but imperfection is not what  triggers a new trial. A new trial is granted if  the verdict is against the manifest weight of the  evidence or if a prejudicial error occurred. Even  if errorsoccurred, no new trial is required if  the errors were harmless. Romero v. Cincinnati  Inc., 171 F.3d 1091, 1096 (7th Cir. 1999).

8
Usually we review a district court's grant of a  motion for a new trial for abuse of discretion.  McClain v. Owens-Corning Fiberglas Corp., 139 F.3d 1124, 1126 (7th Cir. 1998).2  Customarily, however, this issue arises  when the same judge who presided over a  trial orders a new trial after  determining that the evidence was  insufficient to support the jury's  verdict. In this case, by contrast, the  district judge who presided over the  trial was replaced by an appellate judge,  sitting by special designation in the  district court, who reviewed the cold  record and ordered a new trial because he  thought the original trial judge erred in  admitting evidence and instructing the  jury.

9
On appeal, we give plenary review to a  district court's interpretations of law,  but we generally give deference to a  district court's assessment of facts. But  that neat capsulization of the standard  of review is not a good fit in this case.  Because Judge Posner did not preside over  the first trial, he enjoyed no special  advantage in determining credibility and  gauging the evidence--he read the record,  just as we have now done. "The problem of  the successor judge . . . is that one  person hears the testimony and another  person makes the factual findings without  having seen or heard the witnesses . . .  .  Deference to such findings, by a  district court or an appellate court,  would be misplaced in such a case." Henry  A. Knott Co. v. Chesapeake and Potomac  Tel. Co., 772 F.2d 78, 85 (4th Cir.  1985). See also Youakim v. McDonald, 71 F.3d 1274, 1282 (7th Cir. 1995); Schering  Corp. v. Illinois Antibiotics Co., 62 F.3d 903, 908 (7th Cir. 1995). But see  United States v. Soto, 48 F.3d 1415,  1420-21 (7th Cir. 1995); Langevine v.  District of Columbia, 106 F.3d 1018, 1023  (D.C. Cir. 1997); Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir. 1996). As we  see it, to the extent Judge Posner's  order of a new trial was based on the  law, we review it de novo; to the extent  the order was based on the facts,  deference is not warranted because of the  unique circumstances of this case.

10
Though Judge Posner said there were  additional errors at the first trial, he  identified three in ordering a new trial:  transmitting to the jury exhibits that  had not been admitted into evidence;  improper receipt of testimony about  settlement talks; and faulty instructions  to the jury on the RICO claim. Universal  challenges all of these reasons on  appeal.

11
Of the 43 exhibits that went to the jury  room at the close of the trial, 24 had  not been admitted into evidence during  the trial. At the time Judge Duff decided  which exhibits to send to the jury,  however, Bankcard objected to only four  exhibits. Judge Duff overruled Bankcard's  objections after being told by  Universal's counsel that the four  exhibits were admitted. Actually, one of  the exhibits to which Bankcard objected  had been admitted into evidence, but the  other three had not.

12
Bankcard waived its objection to 21 of  the 24 exhibits by failing to object at  the time Judge Duff was making his  decision--the time when the problem could  have been avoided. Bankcard wails that  the trial transcript was not available at  the time and that Universal's counsel  erroneously assured and reassured  Bankcard andJudge Duff that all 43 of  the exhibits had been admitted at trial.  The inaccurate statements by Universal's  counsel, however, although typical of the  slipshod work in this case, do not excuse  Bankcard's sleeping at the switch. Judge  Duff conferred with the lawyers about  what exhibits should be transmitted to  the jury on the morning after testimony  in the 2-week trial concluded. Trial  transcripts generally are not instantly  available and their absence does not  excuse Bankcard's failure to keep track  of what was going on at the trial.  Bankcard was silent when it mattered and  now says, "Gee, we finally got around to  checking the trial transcripts and it  turns out the jury received some stuff it  shouldn't have, so let's have a whole new  trial and negate the 2 weeks of time that  the judge, clerk, court reporter,  bailiffs, jurors, witnesses, attorneys,  and parties spent on the first trial."  The point of the waiver rule is to raise  objections and provide the trial judge  with information before a mistake has  occurred. Without this rule, litigants  would sit on their hands, wait to see the  result of the litigation, and then if the  outcome is unfavorable come back and  complain about a problem that could have  been avoided.

13
Our review of the exhibits that passed  to the jury without objection is confined  to a glance for plain error, a review of  only limited expanse. Wilson v. Williams,  161 F.3d 1078, 1090 (7th Cir. 1998);  Karazanos v. Madison Two Assoc., 147 F.3d 624, 629 (7th Cir. 1998); Stringel v.  Methodist Hosp. of Indiana, Inc., 89 F.3d 415, 421 (7th Cir. 1996); Maul v.  Constan, 928 F.2d 784, 787 (7th Cir.  1991); Kendra Oil & Gas, Inc. v. Homco,  Ltd., 879 F.2d 240, 243 (7th Cir. 1989);  Deppe v. Tripp, 863 F.2d 1356, 1360-61  (7th Cir. 1988). To prevail under the  plain error doctrine, the party that  waived the issue in the trial court must  show that exceptional circumstances  exist, substantial rights will be  affected, and a miscarriage of justice  will result. Wilson, 161 F.3d at 1090. In  this case there was no demonstration of  exceptional circumstances or of a  miscarriage of justice. The 21 exhibits  that should not have gone to the jury,  but to which Bankcard failed to make a  timely objection, consisted mostly of  innocuous letters, boilerplate contract  language, meaningless fax cover sheets,  and pages of cryptic business records.

14
The only documents that might have  placed Bankcard in a bad light were a  letter accusing Bankcard's personnel of  being rude and sometimes threatening and  letters haggling over whether Bankcard  was paying Universal the proper amount of  residuals, whether Bankcard was  wrongfully charging merchants an annual  $25 fee, and whether Universal was  supposed to be providing service to  certain merchants. All of these documents  were cumulative of testimony given during  the trial and of other documents that  were properly admitted into evidence and  transmitted to the jury. In addition,  though none of these 21 documents  actually were admitted into evidence,  none of them ever were ruled inadmissible  either, and all of them probably would  have been admitted upon request. Cf.  Carson v. Polley, 689 F.2d 562, 571 (5th  Cir. 1982) (trial court properly ordered  new trial after jury received exhibits  that had been ruled inadmissible). Though  submitting these exhibits to the jury was  a mistake, it was not plain or  prejudicial error that warranted a new  trial.

15
Bankcard preserved its objection to  three documents that were not admitted  into evidence but were provided to the  jury. One letter, from Universal senior  vice-president Paul E. Albert to  Bankcard's Buchbinder, said the two  parties had agreed merchants should not  have to pay Bankcard an annual $25 fee.  Another letter from Albert to Buchbinder  complained that Bankcard was failing to  deposit certain merchant funds quickly  enough and demanded that Bankcard retract  a "warning" to Universal. The third  letter, from Bankcard's Alperstein to  Universal's Albert, apologized for a  delay inpaying residuals and blamed the  delay on the processing bank's tardiness  in providing that month's information to  Bankcard. All of these documents would  have been admissible upon request and  duplicated extensive trial testimony in  which various witnesses complained about  how Universal was treated by Bankcard.  Bankcard protests that it never had a  chance to explain these exhibits, but its  side of the story on these issues was  thoroughly presented at trial. When  unapproved material reaches the jury, the  trial court must decide whether there is  a reasonable possibility the material  altered the jury's verdict. Artis v.  Hitachi Zosen Clearing, Inc., 967 F.2d 1132, 1143 (7th Cir. 1992). Though  turning these documents over to the jury  was sloppy, the mistake was harmless and  did not, in our view, merit the ordering  of a new trial.

16
The next issue involves Rule 408 of the  Federal Rules of Evidence, which forbids  the admission of statements made during  settlement negotiations to prove  liability or the lack of liability. The  rule does not require exclusion when the  evidence is offered for another purpose,  such as proving the bias or prejudice of  a witness. Because settlement talks might  be chilled if such discussions could  later be used as admissions of liability  at trial, the rule's purpose is to  encourage settlements. See Winchester  Packaging, Inc. v. Mobil Chem. Co., 14 F.3d 316, 320 (7th Cir. 1994); Central  Soya Co. v. Epstein Fisheries, Inc., 676 F.2d 939, 944 (7th Cir. 1982).

17
Under the Bankcard-Universal contract,  for one year after the termination of the  contract Universal was forbidden to steer  merchants it had signed up to Bankcard  competitors. Bankcard terminated the  contract in March 1993. In the next few  months Universal rolled over a number of  accounts to United Jersey Bank, one of  Bankcard's competitors with whom  Universal also had a contract. Bankcard  claimed that Universal thereby breached  the contract and that Universal should  not be allowed to recover on its breach  of contract counterclaim because it had  failed to comply with all material terms  of the contract. Universal, however, said  that it rolled over the accounts at a  time when it thought it had reached a  settlement with Bankcard that allowed the  rollovers. Of course, no settlement was  ever made final or this case would not be  before us. Judge Duff initially thought  Rule 408 should bar evidence that  Universal thought it had reached a  settlement that allowed it to convert the  accounts before the one-year ban expired.  Upon further consideration, however,  Judge Duff allowed in the evidence to ex  plain why Universal had rolled over the  accounts. Judge Duff warned Universal not  to go into the terms of the purported  settlement and not to use the terms  "negotiation" or "settlement."

18
Richard Rothberg, Universal's president,  testified that he thought it was "okay"  to convert certain merchant accounts from  Bankcard to United Jersey Bank during the  one-year period because he "was led to  believe that based upon the discussions  that had ensued with Mr. Hamman  [Bankcard's attorney] and Mr. Jacobs  [Universal's attorney at the time] that  these accounts were ours to move over,  that there was an understanding. When I  was told that the arrangements between  the two of them had changed, that there  was a change of heart on the side of ABC  [Bankcard], we ceased to do this anymore  because it was going back into a  litigation situation." Bankcard filed  suit in April 1993, was granted its  motion to dismiss the case in May 1993  while settlement talks were underway, and  was granted its motion to reinstate the  case in June 1993 after the settlement  talks broke down. Rothberg testified that  Bankcard "dropped the lawsuit" and then  later "decided to go forward with the  lawsuit and there was no agreement  reached in the final stages."

19
In closing argument, Bankcard's counsel  said there never was any "agreement" and  that it was a "blatant breach of  contract" for Universal to go "out ahead  early" and convert the merchant accounts.  During rebuttal, Universal's counsel  said:  "You heard in the testimony that  there was a suit that was filed. This  suit was filed, and this suit was  dismissed voluntarily by BAI [Bankcard],  and later it was refiled. It was after  the--after the conversations going on  among the attorneys in which this suit  was dismissed voluntarily that Mr.  Rothberg, as he had testified, came to  the understanding that it was okay for  him to take those accounts and roll them  over or convert them, which he did at  that time. And he also testified that  when he was informed by his attorney that  no, that was a misunderstanding, now they  were going to refile the suit and they  were going to go on with the litigation,  he stopped."

20
Rule 408 is not an absolute ban on all  evidence regarding settlement  negotiations. The rule permits evidence  that is otherwise discoverable or that is  offered for a purpose other than  establishing liability. Courts have  admitted evidence of offers or agreements  to compromise for purposes of rebuttal,  see, e.g., Freidus v. First Nat'l Bank,  928 F.2d 793 (8th Cir. 1991); for  purposes of impeachment, see, e.g.,  County of Hennepin v. AFG Indus., Inc.,  726 F.2d 149, 153 (8th Cir. 1984); to  show the defendant's knowledge and  intent, see United States v. Hauert, 40 F.3d 197, 199-200 (7th Cir. 1994); to  show a continuing course of reckless  conduct and negate the defense of  mistake, see Bradbury v. Phillips  Petroleum Co., 815 F.2d 1356, 1362-66  (10th Cir. 1987); and to prove estoppel,  see Starter Corp. v. Converse, Inc., 170 F.3d 286, 294 (2d Cir. 1999).

21
It would be an abuse of Rule 408 to  allow one party during compromise  negotiations to lead his opponent to  believe that he will not enforce  applicable time limitations and then  object when the opponent attempts to  prove the waiver of time limitations. See  Charles Alan Wright & Kenneth W. Graham,  Jr., Federal Practice and Procedure:  Evidence sec. 5312, at 273 n.5 (1980).  Similarly, it would be an abuse of Rule  408 to let Bankcard lull Universal into  breaching the contract and then prevent  Universal from explaining its actions  because the lulling took place around the  settlement table. Rothberg's testimony  was admitted to show his state of mind  and to explain why Universal converted  accounts. In hindsight, Universal could  have avoided this evidentiary quandary by  waiting until a settlement was final  before relying on Bankcard's word that  converting certain accounts would be OK.  Nonetheless, to counter Bankcard's  argument that Universal had violated the  contract, Judge Duff correctly allowed  Universal to explain that it  convertedaccounts because it thought a  settlement had been reached.

22
Rule 408's spirit and purpose must be  considered in its application. Central  Soya, 676 F.2d at 944. See also  Winchester Packaging, 14 F.3d at 320. The  purpose of Rule 408 is to encourage  settlements. Settlements will not be  encouraged if one party during settlement  talks seduces the other party into  violating the contract and then, when a  settlement ultimately is not reached,  accuses the other party at trial of  violating the contract. To use Rule 408  to block evidence that the violation of  the contract was invited would be unfair.  The need for Universal to explain it  thought a settlement had been reached  allowing it to roll over accounts--  without allowing any details about the  settlement talks or even use of the word  "settlement"--outweighed any potential  for discouraging future settlements and  did nothing to undermine the purpose and  spirit of Rule 408. The admission of  Rothberg's testimony that touched on  settlement negotiations was not, in our  view, grounds for ordering a new trial.

23
The third reason Judge Posner gave for  ordering a new trial involved the jury  instructions on the RICO claims. Over  Bankcard's objection, Judge Duff's RICO  jury instructions included a list of 37  alleged predicate acts; the jury had to  find that Bankcard committed at least 2  of these acts for a RICO violation. Jury  instructions, of course, must have  evidentiarysupport. See Quercia v.  United States, 289 U.S. 466, 470 (1933);  United States v. James, 819 F.2d 674, 675  (7th Cir. 1987). And predicate acts must  be indictable activities. See Midwest  Grinding Co. v. Spitz, 976 F.2d 1016,  1019 (7th Cir. 1992). For a mail and wire  fraud RICO violation to exist there must  have been intent to defraud. See R.E.  Davis Chem. Corp. v. Nalco Chem. Co., 757 F. Supp. 1499, 1512 (N.D. Ill. 1990);  Robinson v. City Colleges of Chicago, 656 F. Supp. 555, 558 (N.D. Ill. 1987). Some  of the 37 predicate acts lacked any  evidentiary support. Other predicate  acts, such as placing a telephone call to  solicit business or filing a lawsuit, did  not charge an action that is indictable  under RICO. On only the first of the 37  predicate acts did Judge Duff instruct  the jury that the particular act had to  have been done with an intent to defraud  to qualify as a predicate act. These were  serious errors that, in light of the  shaky RICO evidence to begin with, cannot  be deemed harmless. See Stutzman v. CRST,  Inc., 997 F.2d 291, 294 (7th Cir. 1993).  Judge Posner certainly made the right  call when he ordered the RICO claims to  be retried.

24
Because the RICO instruction error at  the first trial affected only the RICO  claims, however, the new trial should  have been limited to that part of the  case. Partial trials are proper if the  issue to be retried is so distinct and  separable from the others that a trial of  it alone may be had without injustice.  McClain, 139 F.3d at 1128, citing  Gasoline Prods. Co. v. Champlin Refining  Co., 283 U.S. 494, 500 (1931). The danger  of spillover prejudice from the erroneous  RICO instruction onto the breach of  contract claim was minimal. The RICO  evidence at the first trial consisted  mostly of testimony from other business  people who experienced problems with  Bankcard, while the breach of contract  evidence involved business records and  testimony from Universal's officials.

25
Whether Bankcard breached the contract by  bollixing up application approvals and  shafting Universal on residuals is a very  different question from whether Bankcard  engaged in a pattern of racketeering. The  fact that a jury could hear evidence on  both issues and still keep the issues  separate was borne out at the second  trial, where the jury found again that  Bankcard breached the contract but had  not violated RICO.

26
After the jury at the second trial  determined that Bankcard had breached the  contract to the tune of $4.1 million,  Judge Posner nullified the verdict and  entered judgment for Bankcard, concluding  that the evidence of damages was  insufficient. Because the sufficiency of  the evidence on the amount of contract  damages at the first trial was not one of  the reasons given for ordering the second  trial, we deal with this issue only  briefly.

27
Craig Millington, a former MasterCard   International executive who later became  one of Universal's top managers,  testified at the first trial that  Universal placed at least 1,100 new  merchant accounts with Bankcard for which  Universal received no residuals.  Millington estimated that each account  would have generated about $250 in  revenue for Universal per year, which  means that Universal should have received  $275,000 in residuals for those accounts  in the first year alone. Millington  testified that Universal's sales force  peaked at 110 individuals, that each of  those sales personnel could be expected  to drum up 75 new accounts per year, and  that it cost Universal $4,000 per year to  keep each salesperson in the field.  Millington also testified that each new  account would generate a one-time $500  equipment installation profit for  Universal. Finally, Millington testified  that Universal had plans to add 50 new  sales people per year, who would generate  more new accounts and more profits on top  of the residuals being produced by  accounts signed up in previous years. At  closing, Universal's counsel urged the  jury to multiply 110salespeople times 75  new accounts per year times $250 in  residuals per year ($2,062,500), minus  110 salespeople times $4,000 in annual  costs ($440,000), for a total annual lost  profit of $1,622,500 in the first year.  By factoring in the $500 one-time profit  for each new account and the optimistic  growth projections for later years,  Universal's counsel threw out breach of  contract totals as high as $13.8 million  and $25.6 million.

28
It is true that Universal's evidence of  its costs was sketchy. Certainly, the  cost of running this operation had to  amount to more than $4,000 per  salesperson. That estimate does not  appear to account for the costs incurred  by Universal's central office, such as  Millington's $75,000 salary. On the other  hand, Bankcard was not Universal's only  business partner, and it is difficult for  any business to prorate general overhead  costs between different lines of  business. Under Illinois law, which  governs the breach of contract question,  complete speculation regarding lost  profits is unacceptable. Oakleaf of  Illinois v. Oakleaf & Assoc., Inc., 527 N.E.2d 926, 933 (Ill. App. 1988). Damage  awards cannot be based on conjecture or  speculation, but absolute certainty or  mathematical precision about lost profits  is not required. Id. Plus, Illinois  courts are reluctant to interfere with  the discretion of the jury in its finding  of fact regarding damages. SK Hand Tool  Corp. v. Dresser Indus., Inc., 672 N.E.2d 341, 348 (Ill. App. 1996). Universal's  suggestion that it lost $13 million to  $25 million seems to have been based on  conjecture and speculation, but the jury  did not buy those rosy projections.  Though there was not mathematical  precision, there was evidence on which  the jury could be reasonably certain  about a more modest damages award.  Universal's evidence of $1,115,000 in  damages was scant, although we believe  sufficient, at the first trial.

29
Universal goes on to allege that it was  prejudiced when Judge Posner committed  errors during the second trial on the  RICO count. In particular, Universal says  the judge erred when he compressed the 37  alleged RICO predicate acts into 3  general categories and when he instructed  the jury. We have examined these claims,  and not only do we find them meritless,  we believe Judge Posner was absolutely  right in whittling Universal's  blunderbuss approach down to something  that was much more understandable for the  jury. Also, we believe the challenge to  his instructions to the jury is  meritless. In short, after reviewing the  record, we conclude that Judge Posner  conducted an error-free second trial and  that Universal's bag of alleged errors is  without substance.

30
So we come to the final score. Although  Universal does not leave with either of  its touchdowns after our replay, it at  least gets the equivalent of a field  goal. We affirm Judge Posner's grant of a  new trial on the RICO claim but reverse  his grant of a new trial on the breach of  contract claim following the first trial.  We affirm the jury's verdict rejecting  Universal's RICO claim at the second  trial. We hold that the second trial on  the breach of contract claim, considering  our reinstatement of the verdict the  first time around, was a nullity.  Finally, the contract between Universal  and Bankcard provides that in the event  of disputes, the prevailing party is  entitled to attorneys fees. As we see it,  there is no true prevailing party in this  case. Universal clearly overreached, and  we do not view it as the prevailing party  based on the unusual circumstances of  this protracted litigation. Though  Universal is now getting something rather  than nothing, what it is netting is only  a pittance of the $25.6 million it asked  the first jury to award on the breach of  contract claim. Accordingly, we believe  no attorneys fees or costs should be  awarded to either side as a result of the  two trials or from the prosecution or  defense of this appeal. See Perlman v.  Zell, 185 F.3d 850, 858-59 (7th Cir.  1999).

31
To summarize our findings, Universal is  entitled to $1.115 million, all from the  first judgment on the state breach of  contract claim. The $6.69 million that  Judge Posner rejected from the first  trial's federal RICO judgment remains  stricken. The second trial was a nullity  on the breach of contract claim and a  loss for Universal on the RICO claim.  That result is affirmed. No costs or  attorneys fees at the district court  level or in this court are awarded. The  case is remanded to the district court  for the entry of an amended judgment.

So ORDERED

Notes:

1
  It is a testament to the dedication of Chief  Judge Posner that he volunteered to sit in the  district court and hear this case which, at the  time, needed the guiding hand of a new judge.  Judge Posner, of course, carries a full load of  cases on this court. He also discharges a  multitude of administrative duties as the  circuit's chief judge. But that's only part of  what he does. He has written more books than many  people read in a lifetime. On top of all this, in  his spare time he is working as a court-appointed  special mediator in the government's blockbuster  antitrust suit against Microsoft. Obviously,  Judge Posner has more on his plate than a long-  haul trucker working an "all you can eat" buffet  line. It is a tribute to Judge Posner's talent  that he handles his many roles with such vigor,  brilliance, and panache.

2
  When the decision on whether to grant or deny a  new trial depends on the evidence, appellate  courts sometimes grant less deference to the  trial court when a new trial has been ordered  than when a new trial has been denied. See, e.g.,  Brady v. Fort Bend County, 145 F.3d 691, 713 (5th  Cir. 1998), cert. denied, 119 S. Ct. 873 (1999);  Wilburn v. Maritrans GP Inc., 139 F.3d 350, 363  (3d Cir. 1998); Hutchinson v. Stuckey, 952 F.2d 1418, 1420-21 (D.C. Cir. 1992). Here, however,  there was no such second-guessing. In ordering a  new trial Judge Posner was not disagreeing with  the first jury's verdict, but determined that  there were prejudicial flaws in the evidence  allowed to reach the jury and in the instructions.