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Bright Harvest Sweet Potato Company, Inc. v. H.J. Heinz Company, L.P.

United States District Court, D. Idaho

December 16, 2016

BRIGHT HARVEST SWEET POTATO COMPANY, INC., Plaintiff,
v.
H.J. HEINZ COMPANY, L.P., Defendant.

          MEMORANDUM DECISIOIN AND ORDER

          B. Lynn Winmill Chief Judge United States District Court

         INTRODUCTION[1]

         The Court has before it Defendant's Motion for Judgment as a Matter of Law Pursuant to Federal Rule of Civil Procedure 50(b) and/or to Alter or Amend Judgment Pursuant to Federal Rule of Civil Procedure 59(e) (Dkt. 326), Plaintiff's Second Rule 59 Motion to Alter or Amend Judgment and for New Trial (Dkt. 327), and Defendant's Motion for New Trial Pursuant to Federal Rule 59(a) Dkt. 328).

         BACKGROUND

         A second trial in this case recently ended. Much of the background of the case is set forth in the Court's earlier decision granting a new trial. But the Court will outline the background again in limited detail here.

         This case involves a breach of contract claim brought against Heinz by Bright Harvest. Bright Harvest alleges Heinz breached the Co-Pack Agreement when they stopped purchasing sweet potato fries prior to its expiration. Bright Harvest and Heinz signed the Co-Pack Agreement on December 7, 2009. The Co-Pack Agreement set terms, conditions, and prices for Bright Harvest to produce sweet potato fries under Heinz's Ore-Ida label. (Dkt. 45-2, p. 1).

         The Agreement set forth that Heinz “shall place purchase orders with Co-Packer [Bright Harvest], and Co-Packer shall sell and deliver to Heinz, quantities of the products [sweet potato fries] under the terms of this Agreement.” (Dkt. 10-1, p. 4). The term of the Agreement was from December 1, 2009 until November 30, 2015. (Dkt. 10-1, p. 4). The Agreement established a “non-binding planning target of 10 million pounds of sweet potato fries per year, ” and indicated that it was “the intent of the Parties that Heinz will deliver to Co-Packer purchase orders for such Products as hereinafter provided, subject to the current capacity of Co-Packer to produce such Products.” (Dkt. 10-1, p. 5). In addition, Heinz was to provide rolling weekly demand files with 5 weeks of firm production orders and 8 weeks of forecast. (Dkt. 10-1, p. 5). No purchase order could exceed 50% of Bright Harvest's current forecasted volume without mutual consent. (Dkt. 10-1, p. 5). Further, Heinz was to provide Bright Harvest 12 to 18 month rolling forecasts quarterly for operational management and capacity planning. (Dkt. 10-1, p. 6).

         Bright Harvest began supplying Heinz with sweet potato fries in 2009. In the first year of the contract, Bright Harvest produced approximately half of the requested 400, 000 pounds of sweet potato fries, and in 2010, they produced 6 million pounds for Heinz. (Dkt. 45-1, p. 5). While the Agreement was still in effect, Heinz began producing sweet potato fries in its Ontario, Oregon facility. (Dkt. 45-1, p. 5). And, in March 2011, it submitted a 13-month rolling forecast to Bright Harvest requesting only 4.1 million pounds of sweet potato fries between April 2011 and 2012. (Dkt. 45-1, p. 6). Sweet Harvest claimed that this drop in requested production constituted a breach of the Co-Pack Agreement. To settle this dispute, Heinz drafted a letter revising its forecast from 4.1 million pounds to over 7 million pounds, which Bright Harvest signed. (Dkt. 45-1, p. 6). However, beginning in July of 2011, Heinz provided Bright Harvest with 12-18 month forecasts showing zero volume for all products after September 2012. (Dkt. 45-1, p. 8). Regarding this as a breach of the Co-Pack Agreement, Bright Harvest filed a breach of contract claim against Heinz in July 2011.

         A jury trial was held in March 2015. At the conclusion of the trial, the jury was given a special verdict form containing three questions. (Dkt. 153-1). The first question required the jury to determine whether or not the Co-Pack Agreement was an enforceable contract. The jury answered that it was. The second question asked the jury to decide whether or not Heinz had breached the Co-Pack Agreement. The jury answered that it had not. As a result, the third question regarding the amount of damages was not answered by the jury.

         Bright Harvest then filed a motion to amend the judgment, or, in the alternative, for a new trial. The Court granted a new trial. The second trial was conducted in February/March 2016. The jury in the second trial determined that the Co-Pack Agreement between the parties was an enforceable requirements contract, and that Heinz breached the contract. The jury then awarded damages of $976, 370.52 for lost fixed overhead, and $238, 518.56 for lost profits. Heinz now asks for judgment as a matter of law. Both parties also ask the Court to alter or amend the judgment, or for a new trial.

         LEGAL STANDARD

         The legal standards for a Rule 50(b) motion, a Rule 59(a) motion, and a Rule 59(e) motion are similar but not identical. The Court will set forth the legal standard for each motion as it separately addresses them below.

         ANALYSIS

         1. Heinz's Motion for Judgment on the Pleadings or to ...


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