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SOLIDFX, LLC v. Jeppesen Sanderson, Inc.

United States District Court, D. Colorado

February 9, 2018

SOLIDFX, LLC, Plaintiff,


          William J. Martínez United States District Judge

         Now before the Court is Plaintiff Solid FX, LLC's (“SOLIDFX”) Motion to Reconsider (ECF No. 442) (the “Motion”), which asks this Court to reinstate the damages award of more than $42 million previously vacated by the Tenth Circuit Court of Appeals, on the grounds that the contract provision which the Tenth Circuit interpreted as a complete bar to those damages should nevertheless be held unenforceable. As explained below, the Tenth Circuit's mandate plainly forecloses SOLIDFX's argument, and so the Motion to Reconsider is denied.

         I. BACKGROUND

         More detailed background of this case has been set out in prior orders, and in the Tenth Circuit's opinion, SOLIDFX, LLC v. Jeppesen Sanderson, Inc., 841 F.3d 827, 836-38 (10th Cir. 2016) (“SOLIDFX”), cert. denied, 138 S.Ct. 75, 199 L.Ed.2d 183 (2017), and is not repeated here. Familiarity with the more detailed background of this case is presumed.

         In brief summary, SOLIDFX is a software development company which entered into a license agreement with Defendant Jeppesen Sanderson, Inc. (“Jeppesen”), giving SOLIDFX access to certain of Jeppesen's proprietary products in exchange for SOLIDFX's agreement to create software platforms to display Jeppesen's terminal charts, which are used by pilots worldwide, on electronic tablets or e-books. When Jeppesen instead developed its own applications to display its terminal charts on Apple iPads, SOLIDFX sued Jeppesen on antitrust claims and for breach of contract and related claims.

         After the Court granted summary judgment against SOLIDFX's antitrust claims, the case proceeded to trial. Ruling from the bench on the parties' cross-motions for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(a)(1), the Court addressed both parties' arguments regarding the application and consequence of § 8.2 of the license agreement. Jeppesen argued, inter alia, that this provision barred SOLIDFX from recovering any lost profit damages. SOLIDFX argued, inter alia, that § 8.2 did not bar all lost profit damages, and that § 8.2 should be held unenforceable as a matter of public policy, at least to the extent that it barred recovery to an unconscionable degree and/or because Jeppesen's conduct had been willful or wanton. (See generally Trial Tr. at 1407- 31, 1855-73 (ECF Nos. 355, 356).)

         In its Rule 50(a)(1) rulings, this Court interpreted § 8.2 of the license agreement as a matter of law, concluding it prohibited recovery of lost profit damages only to the extent such amounts constituted consequential damages, but did not preclude SOLIDFX from recovering lost profits that amounted to direct damages. (Trial Tr. at 1865-070.)

         In addition-and most relevant here-the Court rejected SOLIDFX's argument that § 8.2 is unenforceable. In particular, the Court rejected SOLIDFX's argument that under Core-Mark Midcontinent, Inc. v. Sonitrol Corporation, 300 P.3d 963 (Colo.App. 2012) (“Core-Mark”), and a related line of authority, § 8.2 should be held unenforceable “if the jury find[s] that the defendant willfully and wantonly breached the contract.” (Trial Tr. at 1864.) The Court reasoned that the facts here are readily distinguishable from the concerns implicated in Core-Mark (id.), and that, “[Core-Mark] and many other Colorado cases, have recognized that damages limitations provisions are generally enforceable, ” (id. at 1865). The Court further concluded that “Section 8.2 . . . does not limit damages to an unconscionable degree, ” since it “does not cover any direct damages flowing from the breach of contract.” (Id. at 1864-65.) Given those observations, the Court ruled that SOLIDFX had “failed to put forth any reason why [the Court] should refuse to give the parties what they bargained for and enforce Section 8.2.” (Id. at 1865.) It is this holding that § 8.2 is enforceable which SOLIDFX's present Motion asks the Court to reconsider.

         After the Court entered its Rule 50(a) rulings, the matter was submitted to the jury, which found for SOLIDFX on all claims, awarding over $42 million in damages on SOLIDFX's breach of contract claims, an additional $173, 000 for Jeppesen's fraudulent misrepresentation (an amount later vacated based on the economic loss doctrine (ECF No. 369))[1], and $1 for each of SOLIDFX's other claims. (ECF No. 343-6.)

         Following extensive post-trial motions practice, in which the parties raised, renewed, and exhaustively briefed their respective arguments related to § 8.2, the Court entered final judgment in SOLIDFX's favor, awarding a total of $42, 923, 000 on the breach of contract claims, reflecting three kinds of damages. (See ECF Nos. 370, 407; SOLIDFX, 841 F.3d at 832.)[2]

         On appeal, the Tenth Circuit reversed this Court's interpretation of § 8.2 of the license agreement, holding that it “unambiguously precludes either party from recovering lost profits, ” and that “[w]e must enforce the unambiguous exclusion of lost profits contained in Subsection 8.2.1.” SOLIDFX, 841 F.3d at 838. Accordingly, the Tenth Circuit vacated the damages award “to the extent it includes lost profits of any stripe, ” while concluding that all components of the damages for breach of contract amounted to lost profits, thus, “vacat[ing] the portions of the jury's verdict that awarded $20, 922, 500 in lost profits from SOLIDFX's projected iPad app sales during the initial term of the contract; $21, 385, 500 for lost business value based on anticipated lost profits after the initial contract term; and $615, 000 for lost profits for tailored terminal charts for the iRex device.” Id. at 838, 843.[3]

         Thus, the result on appeal vitiated SOLIDFX's damages recovery as a practical matter, while leaving undisturbed the jury's findings of liability, as well as its nominal damages awards of $1 for each of SOLIDFX's claims of breach of the duty good of good faith and fair dealing and for intentional interference with business relations.


         A. Rules 59(e) & 60(b)

         SOLIDFX's Motion is styled as a Motion for Reconsideration but invokes and seeks review under Federal Rule of Civil Procedure 60(b)(5) & (6). (ECF No. 441 at 6-7.)

         Under Rule 60(b)(5), the Court, “[o]n motion and just terms, ” may relieve a party from a final judgment or other order, if “the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed ...

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