Raffel Systems LLC v. Man Wah Holdings LTD Inc

              UNITED STATES DISTRICT COURT                               
              EASTERN DISTRICT OF WISCONSIN                              


RAFFEL SYSTEMS, LLC,                                                      

    Plaintiff,                                                           

        v.                             Case No. 18-CV-1765               

MAN WAH HOLDINGS LTD, INC.,                                               
MAN WAH (USA) INC., and XYZ                                               
COMPANIES 1-10,                                                           

          Defendants.                                                    


     ORDER ON PLAINTIFF’S MOTION FOR ENTRY OF JUDGMENT                   


    Following a ten-day trial, on June 17, 2022, the jury returned a special verdict 
awarding damages in favor of the plaintiff, Raffel Systems, LLC, and against the defendants, 
Man Wah Holdings LTD, Inc. and Man Wah (USA) Inc. (collectively “Man Wah”). (Docket 
# 439.) Presently before me is Raffel’s request that final judgment be entered immediately in 
accordance with Fed. R. Civ. P. 58(b)(2)(A). (Docket # 446, Docket # 449, Docket # 453.) 
Man Wah opposes the request. (Docket # 447, Docket # 452.) For the reasons explained 
below, I will not enter final judgment at this time and will set a briefing schedule to address 
post-verdict motions.                                                     
                           ANALYSIS                                      
    The jury awarded Raffel $106,267,317.00 in damages, consisting of $6,981,617.00 on 
its trade dress infringement claim, $98,500,00.00 on its misappropriation claim, $425,300.00 
on its patent infringement claim, and $360,400.00 on its false patent marking claim. (Docket 
#  439.)  Of  the  $98.5  million  awarded  on  Raffel’s  claim  for  the  common  law  tort  of 
misappropriation, $97.5 million consists of an award of punitive damages while $1 million 
was awarded in compensatory damages. (Id. at 3.)                          
    Both parties have indicated they intend to file post-trial motions. Raffel intends to seek 
attorney’s fees and costs (Docket # 447-1 at 2) while Man Wah intends to challenge the jury’s 

punitive damages award and issues related to duplicative recovery (id.) Specifically, regarding 
the punitive damages award, Man Wah argues the jury’s award of $97.5 million exceeds 
Wisconsin’s statutory damages cap which limits recovery of punitive damages to “twice the 
amount of any compensatory damages recovered by the plaintiff or $200,000, whichever is 
greater.” 

Wis. Stat. § 895.043

(6). In other words, Man Wah argues that the punitive damages 
award should be reduced to $2 million. Raffel has indicated, however, that it intends to 
challenge the applicability of Wisconsin’s damages cap. (Docket # 449 at 1 n.1.)  
    Invoking Rule 58(b)(2)(A), Raffel argues that judgment should be entered immediately 
to trigger the parties’ ability to file post-verdict motions. Man Wah counters that the Court 

should address all post-trial issues prior to entering judgment, or at the very least, address the 
statutory damages cap on the punitive damages award prior to judgment.    
    Fed. R. Civ. P. 58(b)(2)(A) provides that the court “must promptly approve the form 
of the judgment, which the clerk must promptly enter, when: (A) the jury returns a special 
verdict or a general verdict with answers to written questions.” While Rule 58 speaks of the 
court acting “promptly,” it is well within the district court’s discretion to delay entry of final 
judgment while addressing post-verdict motions. Passananti v. Cook Cnty., 

689 F.3d 655

 (7th 
Cir. 2012) is instructive. In Passananti, the district court entered judgment after ruling on the 
defendants’ Rule 50(b) motion, rather than immediately after the jury verdict was returned. 

Id. at 661

. Despite Rule 50(b) stating that the motion must be filed “no later than 28 days after 
the entry of judgment”; the Passananti court found that because the district court did not enter 
judgment immediately after the verdict was returned, the defendants’ Rule 50(b) was timely. 

Id.

 In other words, despite Rule 50(b) requiring such motions be filed no later than 28 days 
after the entry of judgment, the court did not interpret the rule as requiring a judgment be 

entered to trigger a party’s ability to file the motion.                  
    The plaintiff then “[took] the argument a step further” and argued that the district 
court committed reversible error under Rule 58 by failing to enter judgment on the jury’s 
verdict “promptly.” 

Id.

 Plaintiff argued that had judgment been entered “promptly,” the 
defendants’ Rule 50(b) motion would have been late. 

Id.

 The Seventh Circuit rejected this 
argument, stating:                                                        
    We put aside the ability of parties to rely on the district court’s decision not to 
    enter  judgment  immediately,  for  the  argument  still  lacks  merit.  Rule  58 
    provides that the clerk of the court, without awaiting the court’s direction, must 
    promptly prepare, sign, and enter the judgment when a jury returns a general 
    verdict, unless the court orders otherwise. Fed. R. Civ .P. 58(b)(1)(A). The jury 
    reached its verdict in this matter on June 10. On June 22, the court held a status 
    conference and ordered the defense to file its Rule 50(b) motion by July 21. In 
    other words, the court ordered otherwise.                            

Id.

 The Seventh Circuit, while acknowledging that Rule 58 “makes prompt entry of judgment 
the norm,” states that district courts nevertheless “have ample discretion to manage their cases 
and to delay entry of judgment if there are sound reasons to do so.” 

Id.

 As such, the court 
found “no abuse of discretion in the district court’s decision to postpone entry of judgment 
for four months in this case while it considered and eventually granted the defendants’ 
motion.” 

Id.

                                                              
    The district court’s course of action in Epic Sys. Corp. v. Tata Consultancy Servs. Ltd., No. 
14-CV-748-WMC, 

2017 WL 4357993

 (W.D. Wis. Sept. 29, 2017) is also instructive. In Epic 
Sys., the plaintiff asserted a variety of federal and state law claims arising out of defendants 
repeatedly accessing plaintiff’s web portal without authorization while servicing a mutual 
client. 

Id. at *1

. These claims included: breach of contract, trafficking of passwords, fraudulent 
misrepresentation, misappropriation of trade secrets, unfair competition, unjust enrichment, 
and deprivation of property. (Docket # 855 in Case No. 14-CV-748.) After a ten-day jury trial, 

a jury returned a verdict in favor of the plaintiff and against the defendants on all of the 
plaintiff’s claims. In a special verdict form dated April 15, 2016, the jury awarded plaintiff 
$240 million in compensatory damages and $700 million in punitive damages. (Docket # 871 
in Case No. 14-CV-748.)                                                   
    The next day, the district court provided a briefing schedule to file post-trial motions, 
including the defendants’ challenge to the compensatory and punitive damages verdicts. 
(Docket # 875 in Case No. 14-CV-748.) In a written decision dated September 29, 2017, the 
court ultimately reduced the plaintiff’s compensatory damages award to $140 million. Epic 
Sys., 

2017 WL 4357993

 at *5 (finding “a further award of $100 million strikes the court as 

both excessive and without sufficient mooring in the facts of record”). The parties both 
acknowledged the applicability of Wisconsin’s statutory punitive damages cap of “no more 
than  two  times  the  amount  of  compensatory  damages”;  thus,  the  bulk  of  the  parties’ 
arguments  rested  on  whether  a  punitive  damage  award  of  $280  million  violated  the 
defendants’ due process rights. 

Id.

 at *7–9. The court ultimately found that $280 million in 
punitive damages was not excessive (although the Seventh Circuit ultimately disagreed, 
reducing the punitive damage award to $140 million, see Epic Sys. Corp. v. Tata Consultancy 
Servs. Ltd., 

980 F.3d 1117, 1145

 (7th Cir. 2020)), and judgment was entered on October 3, 
2017 (Docket # 978 in Case No. 14-CV-748), more than a year after the jury returned its 

verdict.                                                                  
      I find there are sound reasons in this case to delay entry of final judgment. Again, the 
bulk of the jury’s verdict consists of its $97.5 million punitive damages award. Wisconsin has 
a statutory cap on punitive damages, 

Wis. Stat. § 895.043

(6), that has been applied to torts 
such  aS  misappropriation  of  trade  secrets,  fraudulent  misrepresentation,  and  unfair 
competition. See Epic Sys. Corp. v.  Tata Consultancy Servs. Ltd., 

980 F.3d at 1138, 1145

. Raffel, 
however, intends to challenge the applicability of the punitive damages cap. (Docket # 449 at 
1 n.1.) Given the parties’ disagreement on this legal issue making up the bulk of the jury’s 
damages  award,  it is prudent to  first  address  the  issue  rather than  entering  a judgment 
potentially inconsistent with Wisconsin law. 
      Beyond the punitive damages award, the parties intend to raise additional issues such 
as costs,  attorney’s fees,  and challenges to the compensatory damages awards.  Given the 
scope  of the  disputes,  all  issues  should  be  addressed  prior  to  entering  final judgment. 
Otherwise, the judgment may require multiple amendments. For these reasons, I will enter 
the following briefing schedule, suggested by the parties, for consideration of all post-verdict 
issues (Docket # 447-1 at 4): 
         1.  Opening Briefs due no later than August 5, 2022; 
         2.  Briefs in Opposition due no later than September 1, 2022; and 
         3.  Reply briefs, if any, due September 23, 2022. 
Consistent with the parties’ discussions, I will allow the omnibus briefs to be no more than 40 
pages in length. (See id. at 2.)

                                  ORDER 
     NOW, THEREFORE, IT IS ORDERED that final judgment will not be entered at 
this time. The parties will abide by the following briefing schedule to address all post-verdict 
issues: 
        1.  Opening Briefs due no later than August 5, 2022; 
        2.  Briefs in Opposition due no later than September 1, 2022; and 
        3.  Reply briefs, if any, due September 23, 2022. 

     Dated at Milwaukee, Wisconsin this 1* day of July, 2022. 

                                         BY THE COURT 

                                         NANCY J d 
                                         United States Magistrate Judge