United States District Court, S.D. Ohio, Eastern Division
EXEL, INC. F/U/B/O SANDOZ, INC., Plaintiff,
SOUTHERN REFRIGERATED TRANSPORT, INC., Defendant.
OPINION & ORDER
L. GRAHAM UNITED STATES DISTRICT JUDGE.
Southern Refrigerated Transport, Inc. (“SRT”)
moves for reconsideration of this Court's May 8, 2017
summary judgment order. (Op. & Order, Doc. 184). The
parties also filed cross-motions in limine regarding the
burden of proof on the issue of damages. (Docs. 198, 199).
this case has a lengthy and tortuous history is an
understatement. With almost seven years of litigation, the
Court recites only the relevant parts of the history
of this case. First, the Court lays out some basic background
facts. Second, the Court revisits its Opinion and Order on
the parties' cross-motions for summary judgment, which is
the subject of SRT's Motion for Reconsideration. Third,
the Court describes the facts pertinent to the damages issues
analyzed in this order.
A truck filled with millions of dollars' worth of
pharmaceuticals was stolen. The trucking company-Southern
Refrigerated Transport, Inc. (“SRT”)-is at fault.
The shipper-Sandoz, Inc. (“Sandoz”)-claims that
the pharmaceuticals were worth $8.6 million. A federal
statute-the Carmack Amendment, 49 U.S.C. § 14706 et
seq.-imposes strict liability on motor carriers for
“actual loss or injury to property, ” but a
narrow exception applies if the shipper agrees to a
limitation of liability.
(Op. & Order at 1). The three entities involved in this
case each had a distinct role in the shipping process:
A “shipper” is “[s]omeone who ships goods
to another.” Shipper, Black's Law
Dictionary (10th ed. 2014). Here, Sandoz is the shipper.
A “carrier” is “[a]n individual or
organization (such as a shipowner, a railroad, or an airline)
that contracts to transport passengers or goods for a
fee.” Carrier, Black's Law
Dictionary (10th ed. 2014). Here, SRT is the carrier.
A “broker” is “[a]n agent who acts as an
intermediary or negotiator, esp. between prospective buyers
and sellers; a person employed to make bargains and contracts
between other persons in matters of trade, commerce, or
navigation.” Broker, Black's Law
Dictionary (10th ed. 2014). . . . Here, Exel is the
(Op. & Order at 2, Doc. 184).
is a pharmaceutical company. Sandoz was shipping the
truckload of pharmaceuticals to its customer, McKesson, Inc.
Sandoz assigned its claim for loss to Exel.
parties in this case presented cross-motions for summary
judgment. (Docs. 153, 155). The Court denied SRT's Motion
for Summary Judgment and denied in part and granted in part
Exel's Motion for Summary Judgment. Specifically, the
Court found that SRT was liable to Exel for the stolen
truckload of pharmaceuticals without any limitation of
liability. The Court left open the question of the proper
measure of damages, whether market value or replacement cost,
citing a lack of evidence on the issue. SRT asks the Court to
reconsider two parts of its order regarding damages.
SRT asks the Court to reconsider its denial of summary
judgment on the issue of the proper measure of damages.
Specifically, SRT points to the freshly filed, and complete,
deposition transcript of Martin Gargiule to support its
argument that Sandoz should only be compensated for the
replacement value of the stolen pharmaceuticals. Second, SRT
asks the Court to reconsider granting summary judgment on the
amount of damages if replacement value were to be the proper
measure. The Court found that the evidence supported a
replacement value of approximately $5.9 million, but SRT
argues that the replacement value should be approximately
Factual Background Regarding Damages
central issue before the Court is what measure of damages to
apply, and if replacement cost is the proper measure of
damages, what is the proper amount of damages? The factual
background relevant to this includes Sandoz's damages
calculations, Sandoz's witness's testi- mony on
damages, and other evidence that Sandoz was able to replace
the shipment to its customer, McKesson.
Complaint, Exel indicated that its damages equaled “the
value of the lost Shipment.” (Compl. at ¶¶
27, 34, 47, Doc. 2). In its Amended Initial Disclosures, Exel
continued to indicate that its damages equaled the value of
the stolen cargo. (Ex. A to SRT's Mot. Limine to Exclude
Undisclosed Evidence and Testimony at 3, Doc. 205-1).
produced spreadsheets showing its calculations for the value
of the stolen McKesson shipment. (See Docs. 100-1,
155-17). The value could be the “Net Delivery
Cost”: $8, 583, 631.10, it could be the “Net
Cost”: $5, 890, 338.82, or it could be the
“Consolidated Net Cost”: $ 2, 317, 634.73. (Docs.
100-1, 155-17). The parties agree that the “Net
Delivery Cost” is equal to market value. The parties
disagree about what constitutes replacement cost.
Gargiule deposition lies at the center of the Court's
inquiry. Martin Gargiule was, at the time of his deposition,
the Director of Finance in Sandoz's Business Planning and
Analysis group. (Gargiule Dep. at 6:2-3, Doc. 189-1).
Gargiule was, at the time of the incident, the associate
director of financial reporting and accounting at Sandoz.
(See Id. at 11:6-12:4). Gargiule and his team within
Sandoz's financial reporting and accounting group
prepared the spreadsheet reports that show Sandoz's
damages calculations. (Id. at 12:21-14:9). Gargiule,
while he was not involved in replacing the McKesson order,
testified about the nature of Sandoz's ordering system,
its inventory procedures, and its customer service reports,
all of which serve as indirect evidence regarding the
McKesson replacement order and other sales. Gargiule also
testified extensively about damages calculations contained in
the spreadsheets his team at Sandoz produced. He explained
how each category of costs was derived and why each was
relevant to the damages inquiry are two email chains. One
includes correspondence from Sandoz's Director of Supply
Chain Management, Penny Schumacher, in which Schumacher said
that “apparently the replacement order for McKesson was
placed yesterday.” (Doc. 161-2, PageID 4454). The other
email chain includes correspondence from a Sandoz
Transportation Supervisor, Robin Ochs, in which Ochs states
that “[o]ur cost has been finally derived. It's
$2.4 mil.” (Doc. 161-3 at PageID 4460). Ochs also
states in the same email chain that the net price of the
stolen shipment was $8.5 million, (PageID 4463), and that
Sandoz's cost of goods was $5.9 million, (Id.).
the parties' joint final pretrial statement indicates
that it is uncontroverted that “Sandoz provided
McKesson with a subsequent shipment to replace the stolen
shipment.” (Joint Final Pretrial Statement at 3-4, Doc.
the federal rules don't contemplate a motion for
reconsideration, they don't forbid it either. Courts may
entertain such motions on interlocutory orders. See
Rodriguez v. Tenn. Laborers Health & Welfare Fund,
89 F.App'x 949, 952 (6th Cir. 2004). Indeed,
“[d]istrict courts have authority both under common law
and Rule 54(b) to reconsider interlocutory orders and to
reopen any part of a case before entry of final
judgment.” Id. at 959.
the Court is asked to reconsider part of its ruling on a
motion for summary judgment, the familiar summary judgment
standard applies to the Court's analysis. “The
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). A genuine dispute is one where “the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). And
distilled to its essence, the inquiry under Rule 56 is
“whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of
law.” Id. at 251-52.
purpose of a motion in limine is to permit the Court to
decide evidentiary issues in advance of trial in order to
avoid delay and ensure an evenhanded and expeditious
trial.” DWS Int'l, Inc. v. Meixia Arts &
Handicrafts, Co., No. C-3:09-CV-458, 2011 WL 13157175,
at *1 (S.D. Ohio June 3, 2011). Here, the Court decides the
issue of which party bears the burden of proof to justify a
departure from the default measure of damages under the
Carmack Amendment, which is market value.