Metropolitan News-Enterprise


Monday, February 11, 2019


Page 1


Ninth Circuit:

$44 Million Award Against Cigar-Maker Must Be Restored

Three-Judge Panel Finds No Basis for Judge Upsetting Jury’s Verdict


By a MetNews Staff Writer


The Ninth U.S. Circuit Court of Appeals on Friday ordered the reinstatement of a jury’s $44 million award against Swisher International Inc., the world’s largest cigar-maker, based on its effort to stifle competition from an upstart rival.

Following the jury’s April 2016 determination that plaintiff Trendsettah USA Inc. (“TSI”) incurred damages in the amount of $44,446,482 based on the defendant’s conduct, United States District Court Judge James V. Selna of the Central District of California made posttrial rulings and, later reconsidering them, granted summary judgment to Swisher on the antitrust claims.

Selna also granted Swisher a new trial on a claim of attempted monopolization, and found it was entitled to judgment, as a matter of law, on a claim of actual monopolization. He denied Swisher’s motion for judgment as a matter of law in connection with attempted monopolization.

Underlying Conduct

Initially Swisher manufactured cigarillos for TSI which marketed them under its own brand name, “Splitarillos.” But when that brand gained burgeoning popularity, diverting sales from “Swisher Sweets,” Swisher declined to fill TSI’s orders.

Selna granted summary judgment to Swisher on the antitrust claims in response to the Ninth Circuit’s Sept. 9, 2016 opinion in Aerotec International, Inc. v. Honeywell International, Inc. There, Circuit Judge M. Margaret McKeown wrote:

[T]there is only a duty not to refrain from dealing where the only conceivable rationale or purpose is ‘to sacrifice short-term benefits in order to obtain higher profits in the long run from the exclusion of competition.”

District Court’s Error

Friday’s memorandum opinion, by a three-judge panel, says:

“[I]n reconsidering summary judgment, the district court failed to draw all reasonable inferences in favor of TSI, the nonmoving party. To the contrary, the district court cited evidence that Swisher had introduced at trial to support its assertion that it had legitimate business reasons for its conduct. But in rendering its verdict, the jury clearly had rejected this evidence….Therefore, the district court’s post-trial grant of summary judgment to Swisher on the antitrust claims must be reversed.”

Selna granted Swisher a new trial on the TSI’s claim that the defendant had attempted to monopolize the field in light of his conclusion that, in light of Aerotec, he had given an incorrect instruction. He had told jurors:

“Thus, if Swisher’s conduct harmed TSI’s independent interests and made sense only to maintain monopoly power, it was not based on legitimate business purposes.”

That, the memorandum opinion declares, “adequately and accurately instructed the jury on the applicable law.”

Jury’s Prerogative

It says Selna erred in granting Swisher judgment as a matter of law on the monopolization claim “because the jury could agree with Swisher’s expert that the relevant market was national, and agree with TSI’s expert that Swisher was liable for national damages.”

The opinion agrees with Selna’s denial of judgment to Swisher on the cause of action for attempted monopolization, saying that there was a basis for a jury to find that Swisher had attempted to monopolize the national market but only succeeded in monopolizing regional markets.

The case is Trendsettah USA, Inc. v. Swisher International, Inc., 16-56823.


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