Neely v. Martin K. Eby Construction Company/Opinion of the Court

Petitioner brought this diversity action in the United States District Court for the District of Colorado alleging that respondent's negligent construction, maintenance, and supervision of a scaffold platform used in the construction of a missile silo near Elizabeth, Colorado, had proximately caused her father's fatal plunge from the platform during the course of his employment as Night Silo Captain for Sverdrup & Parcel, an engineering firm engaged in the construction of a missile launcher system in the silo. At the close of the petitioner's evidence and again at the close of all the evidence, respondent moved for a directed verdict. The trial judge denied both motions and submitted the case to a jury, which returned a verdict for petitioner for $25,000.

Respondent then moved for judgment notwithstanding the jury's verdict or, in the alternative, for a new trial, in accordance with Rule 50(b), Federal Rules of Civil Procedure. The trial court denied the motions and entered judgment for petitioner on the jury's verdict. Respondent appealed, claiming that its motion for judgment n.o.v. should have been granted. Petitioner, as appellee, urged only that the jury's verdict should be upheld.

The Court of Appeals held that the evidence at trial was insufficient to establish either negligence by respondent or proximate cause and reversed the judgment of the District Court 'with instructions to dismiss the action.' Without filing a petition for rehearing in the Court of Appeals, petitioner then sought a writ of certiorari, presenting the question whether the Court of Appeals could, consistent with the 1963 amendments to Rule 50 of the Federal Rules and with the Seventh Amendment's guarantee of a right to jury trial, direct the trial court to dismiss the action. Our order allowing certiorari directed the parties' attention to whether Rule 50(d) and our decisions in Cone v. West Virginia Pulp & Paper Co., 330 U.S. 212, 67 S.Ct. 752, 91 L.Ed. 849; Globe Liquor Co. v. San Roman, 332 U.S. 571, 68 S.Ct. 246, 92 L.Ed. 177; and Weade v. Dichmann, Wright & Pugh, Inc., 337 U.S. 801, 69 S.Ct. 1326, 93 L.Ed. 1704, permit this disposition by a court of appeals despite Rule 50(c)(2), which gives a party whose jury verdict is set aside by a trial court 10 days in which to invoke the trial court's discretion to order a new trial. We affirm.

Under Rule 50(b), if a party moves for a directed verdict at the close of the evidence and if the trial judge elects to send the case to the jury, the judge is 'deemed' to have reserved decision on the motion. If the jury returns a contrary verdict, the party may within 10 days move to have judgment entered in accordance with his motion for directed verdict. This procedure is consistent with decisions of this Court rendered prior to the adoption of the Federal Rules in 1938. Compare Baltimore & Carolina Line, Inc. v. Redman, 295 U.S. 654, 55 S.Ct. 890, 79 L.Ed. 1636, with Slocum v. New York Life Ins. Co., 228 U.S. 364, 33 S.Ct. 523, 57 L.Ed. 879, and Aetna Ins. Co. v. Kennedy, 301 U.S. 389, 57 S.Ct. 809, 81 L.Ed. 1177. And it is settled that Rule 50(b) does not violate the Seventh Amendment's guarantee of a jury trial. Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 61 S.Ct. 189, 85 L.Ed. 147.

The question here is whether the Court of Appeals, after reversing the denial of a defendant's Rule 50(b) motion for judgment notwithstanding the verdict, may itself order dismissal or direct entry of judgment for defendant. As far as the Seventh Amendment's right to jury trial is concerned, there is no greater restriction on the province of the jury when an appellate court enters judgment n.o.v. than when a trial court does; consequently, there is no constitutional bar to an appellate court granting judgment n.o.v. See Baltimore & Carolina Line, Inc. v. Redman, supra. Likewise, the statutory grant of appellate jurisdiction to the courts of appeals is certainly broad enough to include the power to direct entry of judgment n.o.v. on appeal. Section 2106 of Title 28 provides that,

'The Supreme Court or any other court of appellate     jurisdiction may affirm, modify, vacate, set aside or reverse      any judgment, decree, or order of a court lawfully brought      before it for review, and may remand the cause and direct the      entry of such appropriate judgment, decree, or order, or      require such further proceedings to be had as may be just      under the circumstances.'

See Bryan v. United States, 338 U.S. 552, 70 S.Ct. 317, 94 L.Ed. 335.

This brings us to Federal Rules 50(c) and 50(d), which were added to Rule 50 in 1963 to clarify the proper practice under this Rule. Though Rule 50(d) is more pertinent to the facts of this case, it is useful to examine these interrelated provisions together. Rule 50(c) governs the case where a trial court has granted a motion for judgment n.o.v. Rule 50(c)(1) explains that, if the verdict loser has joined a motion for new trial with his motion for judgment n.o.v., the trial judge should rule conditionally on the new trial motion when he grants judgment n.o.v. If he conditionally grants a new trial, and if the court of appeals reverses his grant of judgment n.o.v., Rule 50(c) (1) provides that 'the new trial shall proceed unless the appellate court has otherwise ordered.' On the other hand, if the trial judge conditionally denies the motion for new trial, and if his grant of judgment n.o.v. is reversed on appeal, 'subsequent proceedings shall be in accordance with the order of the appellate court.' As the Advisory Committee's Note to Rule 50(c) makes clear, Rule 50(c)(1) contemplates that the appellate court will review on appeal both the grant of judgment n.o.v. and, if necesary, the trial court's conditional disposition of the motion for new trial. This review necessarily includes the power to grant or to deny a new trial in appropriate cases.

Rule 50(d) is applicable to cases such as this one where the trial court has denied a motion for judgment n.o.v. Rule 50(d) expressly preserves to the party who prevailed in the district court the right to urge that the court of appeals grant a new trial should the jury's verdict be set aside on appeal. Rule 50(d) also emphasizes that 'nothing in this rule precludes' the court of appeals 'from determining that the appellee is entitled to a new trial, or from directing the trial court to determine whether a new trial shall be granted.' Quite properly, this Rule recognizes that the appellate court may prefer that the trial judge pass first upon the appellee's new trial suggestion. Nevertheless, consideration of the new trial question 'in the first instance' is lodged with the court of appeals. And Rule 50(d) is permissive in the nature of its direction to the court of appeals: as in Rule 50(c)(1), there is nothing in Rule 50(d) indicating that the court of appeals may not direct entry of judgment n.o.v. in appropriate cases.

Rule 50(c)(2), n. 2, supra, is on its face inapplicable to the situation presented here. That Rule regulates the verdict winner's opportunity to move for a new trial if the trial court has granted a Rule 50(b) motion for judgment n.o.v. In this case, the trial court denied judgment n.o.v. and respondent appealed. Jurisdiction over the case then passed to the Court of Appeals, and petitioner's right to seek a new trial in the trial court after her jury verdict was set aside became dependent upon the disposition by the Court of Appeals under Rule 50(d).

As the Advisory Committee explained, these 1963 amendments were not intended to 'alter the effects of a jury verdict or the scope of appellate review,' as articulated in the prior decisions of this Court. 31 F.R.D. 645. In Cone v. West Virginia Pulp & Paper Co., supra, the defendant moved for a directed verdict, but the trial judge sent the case to the jury. After a jury verdict for the plaintiff, the trial court denied defendant's motion for a new trial. On appeal, the Court of Appeals reversed and ordered the entry of judgment n.o.v. This Court reversed the Court of Appeals on the ground that the defendant had not moved for judgment n.o.v. in the trial court, but only for a new trial, and consequently the Court of Appeals was precluded from directing any disposition other than a new trial. See also Globe Liquor Co. v. San Roman, supra. In Johnson v. New York, N.H. & H.R. Co., 344 U.S. 48, 73 S.Ct. 125, 97 L.Ed. 77, this Court held that a verdict loser's motion to 'set aside' the jury's verdict did not comply with Rule 50(b)'s requirement of a timely motion for judgment n.o.v. and therefore that the Court of Appeals could not direct entry of judgment n.o.v. And in Weade v. Dichmann, Wright & Pugh, Inc., supra, where a proper motion for judgment n.o.v. was made and denied in the trial court, we modified a Court of Appeals decision directing entry of judgment n.o.v. because there were 'suggestions in the complaint and evidence' of an alternative theory of liability which had not been passed upon by the jury and therefore which might justify the grant of a new trial. 337 U.S., at 808-809, 69 S.Ct., at 1330.

The opinions in the above cases make it clear that an appellate court may not order judgment n.o.v. where the verdict loser has failed strictly to comply with the procedural requirements of Rule 5(b), or where the record reveals a new trial issue which has not been resolved. Part of the Court's concern has been to protect the rights of the party whose jury verdict has been set aside on appeal and who may have valid grounds for a new trial, some or all of which should be passed upon by the district court, rather than the court of appeals, because of the trial judge's firsthand knowledge of witnesses, testimony, and issues because of his 'feel' for the overall case. These are very valid concerns to which the court of appeals should be constantly alert. Where a defendant moves for n.o.v. in the trial court, the plaintiff may present, in connection with the motion or with a separate motion after n.o.v. is granted, his grounds for a new trial or voluntary nonsuit. Clearly, where he retains his verdict in the trial court and the defendant appeals, plaintiff should have the opportunity which 50(d) affords him to press those same or different grounds in the court of appeals. And obviously judgment for defendant-appellant should not be ordered where the plaintiff-appellee urges grounds for a nonsuit or new trial which should more appropriately be addressed to the trial court.

But these considerations do not justify an ironclad rule that the court of appeals should never order dismissal or judgment for defendant when the plaintiff's verdict has been set aside on appeal. Such a rule would not serve the purpose of Rule 50 to speed litigation and to avoid unnecessary retrials. Nor do any of our cases mandate such a rule. Indeed, in Pence v. United States, 316 U.S. 332, 62 S.Ct. 1080, 86 L.Ed. 1510, we affirmed a Court of Appeals decision reversing the trial court's failure to grant judgment n.o.v. And in New York, N.H. & H.R. Co. v. Henagan, 364 U.S. 441, 81 S.Ct. 198, 5 L.Ed.2d 183, this Court itself directed entry of judgment for a verdict loser whose proper request for judgment n.o.v. had been wrongly denied by the District Court and by the Court of Appeals. In view of these cases, the language of Rule 50(d), and the statutory grant of broad appellate jurisdiction, we think a more discriminating approach is preferable to the inflexible rule for which the petitioner contends.

There are, on the one hand, situations where the defendant's grounds for setting aside the jury's verdict raise questions of subject matter jurisdiction or dispositive issues of law which, if resolved in defendant's favor, must necessarily terminate the litigation. The court of appeals may hold in an employer's suit against a union, for example, that the case is within the exclusive jurisdiction of the National Labor Relations Board, or in a libel suit, that the defendant was absolutely privileged to publish the disputed statement. In such situations, and others like them, there can be no reason whatsoever to prevent the court of appeals from ordering dismissal of the action or the entry of judgment for the defendant.

On the other hand, where the court of appeals sets aside the jury's verdict because the evidence was insufficient to send the case to the jury, it is not so clear that the litigation should be terminated. Although many of the plaintiff-appellee's possible grounds for a new trial, such as inadequacy of the verdict, will not survive a decision that the case should not have gone to the jury in the first place, there remain important considerations which may entitle him to a new trial. The erroneous exclusion of evidence which would have strengthened his case is an important possibility. Another is that the trial court itself caused the insufficiency in plaintiff-appellee's case by erroneously placing too high a burden of proof on him at trial. But issues like these are issues of law with which the courts of appeals regularly and characteristically must deal. The district court in all likelihood has already ruled on these questions in the course of the trial and, in any event, has no special advantage or competence in dealing with them. They are precisely the kind of issues that the losing defendant below may bring to the court of appeals without ever moving for a new trial in the district court. Cf. Globe Liquor Co. v. San Roman, 332 U.S. 571, 574, 68 S.Ct. 246, 247, 92 L.Ed. 177. Likewise, if the plaintiff's verdict is set aside by the trial court on defendant's motion for judgment n.o.v., plaintiff may bring these very grounds directly to the court of appeals without moving for a new trial in the district court. Final action on these issues normally rests with the court of appeals.

A plaintiff whose jury verdict is set aside by the trial court on defendant's motion for judgment n.o.v. may ask the trial judge to grant a voluntary nonsuit to give plaintiff another chance to fill a gap in his proof. Cone v. West Virginia Pulp & Paper Co., 330 U.S., at 217, 67 S.Ct., at 755. The plaintiff-appellee should have this same opportunity when his verdict is set aside on appeal. Undoubtedly, in many cases this question will call for an exercise of the trial court's discretion. However, there is no substantial reason why the appellee should not present the matter to the court of appeals, which can if necessary remand the case to permit initial consideration by the district court.

In these cases where the challenge of the defendant-appellant is to the sufficiency of the evidence, the record in the court of appeals will very likely be a full one. Thus, the appellee will not be required to designate and print additional parts of the record to substantiate his grounds for a nonsuit (or a new trial), and it should not be an undue burden in the course of arguing for his verdict to indicate in his brief why he is entitled to a new trial should his judgment be set aside. Moreover, the appellee can choose for his own convenience when to make his case for a new trial: he may bring his grounds for new trial to the trial judge's attention when defendant first makes an n.o.v. motion, he may argue this question in his brief to the court of appeals, or he may in suitable situations seek rehearing from the court of appeals after his judgment has been reversed.

In our view, therefore, Rule 50(d) makes express and adequate provision for the opportunity-which the plaintiff-appellee had without this rule-to present his grounds for a new trial in the event his verdict is set aside by the court of appeals. If he does so in his brief-or in a petition for rehearing if the court of appeals has directed entry of judgment for appellant-the court of appeals may make final disposition of the issues presented, except those which in its informed discretion should be reserved for the trial court. If appellee presents no new trial issues in his brief or in a petition for rehearing, the court of appeals may, in any event, order a new trial on its own motion or refer the question to the district court, based on factors encountered in its own review of the case. Compare Weade v. Dichmann, Wright & Pugh, Inc., supra.

In the case before us, petitioner won a verdict in the District Court which survived respondent's motion for judgment n.o.v. In the Court of Appeals the issue was the sufficiency of the evidence and that court set aside the verdict. Petitioner, as appellee, suggested no grounds for a new trial in the event her judgment was reversed, nor did she petition for rehearing in the Court of Appeals, even though that court had directed a dismissal of her case. Neither was it suggested that the record was insufficient to present any new trial issues or that any other reason required a remand to the District Court. Indeed, in her brief in the Court of Appeals, petitioner stated, 'This law suit was fairly tried and the jury was properly instructed.' It was, of course, incumbent on the Court of Appeals to consider the new trial question in the light of its own experience with the case. But we will not assume that the court ignored its duty in this respect, although it would have been better had its opinion expressly dealt with the new trial question.

In a short passage at the end of her brief to this Court, petitioner suggested that she has a valid ground for a new trial in the District Court's exclusion of opinion testimony by her witnesses concerning whether respondent's scaffold platform was adequate for the job it was intended to perform. This matter was not raised in the Court of Appeals or in the petition for a writ of certiorari, even though the relevant portions of the transcript were made a part of the record on appeal. Under these circumstances, we see no cause for deviating from our normal policy of not considering issues which have not been presented to the Court of Appeals and which are not properly presented for review here. Supreme Court Rule 40(1)(d)(2). See J. I. Case Co. v. Borak, 377 U.S. 426, 428-429, 84 S.Ct. 1555, 1557-1558, 12 L.Ed.2d 423; State of California v. Taylor, 353 U.S. 553, 556-557, n. 2, 77 S.Ct. 1037, 1039-1040, 1 L.Ed.2d 1034.

Petitioner's case in this Court is pitched on the total lack of power in the Court of Appeals to direct entry of judgment for respondent. We have rejected that argument and therefore affirm. It is so ordered.

Affirmed.

Mr. Justice DOUGLAS and Mr. Justice FORTAS, while agreeing with the Court's construction of Rule 50, would reverse the judgment because in their view the evidence of negligence and proximate case was sufficient to go to the jury.

Mr. Justice BLACK, dissenting.