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William F. Shea, LLC v. Bonutti Research, Inc.

United States District Court, Sixth Circuit

May 31, 2013

WILLIAM F. SHEA, LLC, et al., Plaintiffs,


GREGORY L. FROST, District Judge.

This matter is before the Court on the following filings:

(1) Defendant Bonutti Research, Inc.'s ("BRI") Motion in Limine to Preclude Shea from Accusing BRI's Counsel of Manufacturing Evidence (ECF No. 172);

(2) Plaintiff William F. Shea, LLC's ("Shea") Memorandum Motion in Opposition to Defendant's Motion in Limine (ECF No. 185); and

(3) BRI's Motion for Leave to Reply (ECF No. 201).

As set forth in more detail below, the Court DENIES BRI's motions (ECF Nos. 172 and 201).

I. Background

Plaintiff William F. Shea, LLC ("Shea") and Avon Equity Holdings, LLC (an affiliate of Shea) brought this action in the Franklin County (Ohio) Court of Common Pleas alleging various causes of action, including breach of contract. (Opinion and Order, ECF No. 135, at PAGEID # 6269.) The case was removed to this Court based on diversity of citizenship in 2010. ( Id. ) All parties aside from BRI and Shea have been dismissed. ( Id. )

The dispute in this case arises from a business relationship between BRI and Shea that eventually turned sour. Dr. Peter Bonutti, an owner of BRI, is an orthopedic surgeon and inventor of medical products. Shea entered into an agreement with BRI in August 2003 to memorialize an ongoing business relationship in which Shea promoted the inventions and products of BRI and Dr. Bonutti. ( Id. at PAGEID #6266.) Under this agreement, Shea was to receive certain fees and commissions. ( Id. ) BRI terminated the agreement on October 26, 2007 and ceased payments to Shea in June 2009. ( Id. at PAGEID #6268.)

BRI and Acacia Research Group ("Acacia") entered a transaction to purchase several Bonutti patent rights and licensing agreements in 2012. (Pl.'s Opp'n, ECF No. 185, at PAGEID #8804.) Two more agreements were subsequently entered between BRI, Acacia, and Stryker Corporation ("Stryker"). ( Id. at PAGEID #8805.) The parties appear to agree that at least some of the patent rights and licensing agreements involved in these transactions include some rights for which Shea previously received fees and commissions. BRI was represented by Baker & Hostetler LLP ("Baker") in the negotiations of all the Acacia and Stryker transactions. ( Id. at PAGEID #8803-14.) At the same time, Baker also represented, and continues to represent, BRI in this case. ( Id. ); (Def's Mot. In Limine, ECF No. 172, at PAGEID #7539.)

This Court granted summary judgment to Shea on the cause of action for breach of contract. (ECF No. 135.) Thus, this case is proceeding to trial on June 24, 2013, only on the issue of damages to be awarded Shea for BRI's breach of contract, as well as on Shea's request for injunctive relief. As Shea observes in its opposition to BRI's motion in limine, proof of Shea's damages will entail a detailed look into a $38.6 million transaction between Acacia and BRI and another set of multi-million dollar transactions involving BRI, Acacia, and Stryker. Shea intends to introduce evidence of a purported "purchase price allocation" between BRI and Acacia that Baker was allegedly the driving force behind; Shea further characterizes the allocation as "highly suspicious" and an attempt to artificially reduce Shea's damages. Shea further contends that Baker played a key role in structuring a December 2012 transaction between Stryker, Acacia, and BRI in such a way as would "benefit BRI and limit Shea's damages." (ECF No. 185 at PAGEID #8813.) In light of the evidence that Shea intends to offer at trial, Defendant BRI brings this motion in limine to preclude Shea from accusing it of manufacturing and manipulating evidence.

II. Standard

Although neither the Federal Rules of Evidence nor the Federal Rules of Civil Procedure explicitly authorize a court to rule on an evidentiary motion in limine, the United States Supreme Court has noted that the practice of ruling on such motions "has developed pursuant to the district court's inherent authority to manage the course of trials." Luce v. United States, 469 U.S. 38, 41 n.4 (1984). The purpose of a motion in limine is to allow a court to rule on issues pertaining to evidence in advance of trial in order to avoid delay and ensure an even-handed and expeditious trial. See Ind. Ins. Co. v. Gen. Elec. Co., 326 F.Supp.2d 844, 846 (N.D. Ohio 2004) (citing Jonasson v. Lutheran Child & Family Servs., 115 F.3d 436, 440 (7th Cir. 1997)). Courts, however, are generally reluctant to grant broad exclusions of evidence in limine, because "a court is almost always better situated during the actual trial to assess the value and utility of evidence." Koch v. Koch Indus., Inc., 2 F.Supp.2d 1385, 1388 (D. Kan.1998); accord Sperberg v. Goodyear Tire & Rubber Co., 519 F.2d 708, 712 (6th Cir. 1975). To obtain the exclusion of evidence under such a motion, a party must prove that the evidence is clearly inadmissible on all potential grounds. See Ind. Ins. Co., 326 F.Supp.2d at 846; Koch, 2 F.Supp.2d at 1388; cf. Luce, 469 U.S. at 41. "Unless evidence meets this high standard, evidentiary rulings should be deferred until trial so that questions of foundation, relevancy and potential prejudice may be resolved in proper context." Ind. Ins. Co., 326 F.Supp.2d at 846. Denial of a motion in limine does not necessarily mean that all evidence contemplated by the ...

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