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Reynolds v. University of Pennsylvania

January 27, 2010

FRANK REYNOLDS
v.
THE UNIVERSITY OF PENNSYLVANIA



The opinion of the court was delivered by: O'neill, J.

MEMORANDUM

Beginning on September 29, 2009, a five day jury trial was held in the above captioned matter. At its conclusion, the jury found in favor of Reynolds and awarded him $435,678. Penn thereafter filed a motion for judgment as a matter of law ("JMOL") or, alternatively, for a new trial. Presently before me are Penn's motion, Reynolds's response in opposition and Penn's reply. Oral argument was held on January 21, 2010. For the following reasons, I will deny Penn's motion for judgment as a matter of law and grant its motion for a new trial.

BACKGROUND

Reynolds was a student in the Executive Masters in Technology Management ("EMTM") program at the University of Pennsylvania. He alleges that at the time he applied to the program Penn officials represented to him that upon completion of the program: (1) he would receive a degree that could be represented as both a degree in management from Wharton and a degree in technology from Penn Engineering; (2) he would be considered a Wharton student with all of the rights, privileges and access to resources available to Wharton students; and (3) he could describe his affiliation as being with the Wharton School, the University of Pennsylvania and/or Penn Engineering.*fn1 At the beginning of his second year in the program, Reynolds allegedly discovered all three representations to be false.*fn2

Accordingly, on October 18, 2005, Reynolds commenced this lawsuit by writ of summons in the Philadelphia County Court of Common Pleas. On March 3, 2006, he filed his complaint and served it upon Penn. On March 22, 2006, Penn removed the case to this court.*fn3

As Reynolds's lawsuit was making its way to this court, a companion case, Harsh v. The University of Pennsylvania, et al., No. 06-1236, was doing the same. There, Anurag Harsh, a classmate of Frank Reynolds, complained of similar conduct by Penn. The cases proceeded along parallel schedules but were never consolidated.

Discovery continued through the summer of 2007. During that process, Reynolds and Harsh asserted that the alleged misrepresentations by Penn were contained, among other places, in a variety of PowerPoint presentations, websites and emails from Penn administrators. The parties devoted considerable time and energy to the question of whether the documents cited by Reynolds and Harsh were authentic or whether, as Penn alleges, the documents had been altered to support plaintiffs' claims. Penn focused particular attention on a PowerPoint presentation given by Joel Adler, then-associate director of the EMTM program, to a group of prospective students that included Reynolds, and an email from Adler to Harsh answering several questions about the EMTM program. In his complaint, Reynolds included the text of the Adler/Harsh email that he alleges formed the basis of his contract with Penn. Compl. ¶ 86. After review of its own copy of that email, Penn found several material inconsistencies. Likewise, Reynolds also included in his complaint a copy of several of the PowerPoint slides that he alleges were shown to him by Adler at an information session. Compl. ¶ 65, 68, 69. Reynolds confirmed in his deposition that those slides were shown to him by Joel Adler. He claimed he remembered them in part because of the Wharton logo located in the bottom left corner of each slide. Reynolds Dep. 160:1-8, Feb. 6, 2007. Again, review by Penn of its own copy of that PowerPoint presentation revealed several material inconsistencies. After ten successful discovery motions, Penn received copies of the PowerPoint and emails and their data sources.*fn4 Expert inspection of those data sources lead Penn to conclude that Harsh and/or Reynolds had altered the documents to strengthen their cases. This conclusion was based in part on the fact that the PowerPoint presentation produced by Reynolds and Harsh included a Wharton logo that did not exist until a year after Adler gave the relevant presentation. The expert also concluded that the PowerPoint presentation was saved using software that wasn't available until May 2003, roughly a year after Reynolds and Harsh claim to have downloaded it. With respect to the email, expert analysis of computers owned by Reynolds and Harsh revealed three versions of the email stored on Reynolds's computer. Each is different from the others, and all three differ from the copy obtained from Adler's computer. In light of this information, Penn concluded that Reynolds and Harsh had committed fraud on the court and moved to exclude all the allegedly doctored evidence. Def.'s Mot. to Exclude, Aug. 4, 2008. On September 15, 2008, I denied the motion and held that whether plaintiffs had fabricated evidence was a question of fact to be resolved by a jury. On the same day, I granted Harsh's motion to dismiss his lawsuit with prejudice.

On September 1, 2009, the remaining parties in this action stipulated to the dismissal of the RICO claim and Reynolds subsequently moved to remand the case to state court. In the interest of judicial economy, I denied the motion and retained supplemental jurisdiction over the remaining state law claims.

On September 28, 2009, the day before trial began*fn5, Reynolds filed a "Motion To Preclude Reference To And Evidence Pertaining To Anurag Harsh." That motion represented a rather dramatic about-face in the positions of both parties. Just one year earlier Penn had moved for, and Reynolds had opposed, the exclusion of the allegedly altered documents. Apparently abandoning the position that he took during the discovery phase--that the documents contained Penn's misrepresentations--Reynolds sought to exclude the exhibits on the grounds that they were irrelevant and that their probative value was substantially outweighed by their prejudicial effect. The obvious time constraints prevented Penn from filing full briefing in response to Reynolds's motion. It did, however, submit a letter brief opposing the motion on the grounds that "the altered evidence and related exhibits are relevant [because] that is what Reynolds claims he relied [on] in choosing the EMTM program. Even if Reynolds tries to revise his claim to exclude the altered evidence, he is subject to cross examination against his previous statements made under oath." On the morning of trial, counsel for Penn again registered opposition to the exclusion of the allegedly altered documents. He emphasized that as early as in his complaint Reynolds had asserted that he had been shown the allegedly altered documents during the admissions process. Thus, Penn argued that at minimum it should be allowed to present evidence showing that the documents referenced in the complaint were not the same as those shown in the admissions presentation. In Penn's view, regardless of whether Reynolds had actually altered the documents or even known that they had been altered, the fact that he claimed to have been shown documents that were not included in the admissions presentation would have affected the jury's appraisal of his credibility. In response, Reynolds's counsel asserted that he intended to prove his case without any reference to the allegedly altered documents. I granted the motion to exclude. That ruling provides the basis for Penn's present motions.

STANDARD OF REVIEW

A. Motion for Judgment as a Matter of Law

Rule 50(b) of the Federal Rules of Civil Procedure governs the court's ability to grant JMOL after a jury trial. JMOL, a sparingly invoked remedy, is appropriate only where "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149 (2000). In determining whether such a legally sufficient evidentiary basis exists, the court must review all the evidence in the record and draw all reasonable inferences in favor of the non-moving party. Id. at 150. The court may not, however, make credibility determinations or weigh the evidence--those functions are reserved for the jury. Id. In sum, a motion for JMOL "should be granted only if, viewing the evidence in the light most favorable to the non-movant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability." Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993).

B. Motion for a New Trial

Rule 59 governs the court's ability to grant a new trial. The rule allows the court to grant a new trial after a jury trial "for any reason for which a new trial has heretofore been granted in an action at law in federal court . . . ." Fed. R. Civ. P. 59(a)(1)(A). The standard by which a motion for a new trial is judged depends on the grounds upon which the motion rests. Klein v. Hollins, 992 F.2d 1285, 1289-90 (3d Cir. 1993).

Where a new trial is sought on the grounds that the jury's verdict was against the weight of the evidence, the court may grant the motion "only where the record shows that the jury's verdict resulted in a miscarriage of justice or where the verdict, on the record, cries out to be overturned or shocks our conscience." Williamson v. Consol. Rail Corp., 926 F.2d 1344, 1353 (3d Cir. 1991). This high standard provides due respect for the jury's primary function as factfinder. Otos Tech., Co., Ltd. v. OGK America, Inc., No. 03-1979, 2007 WL 2374995, at *3 (D.N.J. Aug. 13, 2007) (citing Hurley v. Atlantic City Police Dep't., 933 F. Supp. 396, 403 (D.N.J. 1996)).

Where, on the other hand, the asserted basis for a new trial involves a matter originally within the trial court's discretion--e.g., evidentiary rulings--the court has much wider latitude. Klein, 992 F.2d at 1289-90. In such cases, the court's inquiry is twofold: (1) whether an error was in fact committed; and (2) whether that error was so prejudicial that denial of a new trial would be "inconsistent with substantial justice." Farra v. Stanley-Bostitch, Inc., 838 F. Supp. 1021, 1026 (E.D. Pa. 1993) (citing Bhaya v. Westinghouse Elec. Corp., 709 F. Supp. 600, 601 (E.D. Pa. 1989), aff'd, 922 F.2d 184 (3d Cir. 1990)). With respect to the determination of prejudice under the second prong, "a new trial must be granted unless it is highly probable that [the erroneous ruling] did not affect the [objecting party's] substantial rights." Bhaya, 709 F. Supp. at 601-602 (citing McQueeney v. Wilmington Trust Co., 779 F.2d 916, 928 (3d Cir. 1985)).

DISCUSSION

With these standards in mind, I turn now to Penn's arguments in support of its alternative motions. I will first discuss why a grant of JMOL would be inappropriate under these circumstances. Then, I will discuss the factors that have lead me to conclude that a new trial is necessary to ensure Penn's rights are protected.

A. JMOL Is Inappropriate Because There Is Insufficient Evidence To Support a Finding that Reynolds Committed Fraud on the Court and the Record Contains Sufficient Evidence upon which a Jury Could Find Penn Liable

Penn makes two arguments in support of its motion for judgment as a matter of law. First, it argues that Reynolds has implicitly admitted that his evidence was fraudulent and therefore his lawsuit should be dismissed. Second, it argues that the evidence Reynolds presented at trial did not satisfy his burden of proving the existence of a contract and breach thereof.

1. There Is Insufficient Evidence To Support a Finding that Reynolds Committed Fraud on the Court

Penn's first argument relies on cases from other jurisdictions wherein the plaintiffs, in prosecuting their cases, committed fraud on the court. See Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989) (affirming the district court's dismissal of a lawsuit where the plaintiff had attached to his complaint a wholly fictional purchase agreement); Plasse v. Tyco Elecs. Corp., 448 F. Supp. 2d 302, 308 (D. Mass. 2006) (dismissing the plaintiff's complaint after finding clear and convincing evidence of extensive and egregious misconduct). Penn argues that Reynolds's last minute withdrawal of the altered documents constitutes an admission that his primary evidence was fraudulent. Reynolds disagrees, arguing that there has been no evidence submitted that proves either that the documents were altered or that he was aware of or participated in alteration of documents. He also vigorously contends that he has not admitted, implicitly or otherwise, to any involvement with altered documents.

I agree with Reynolds. The Aoude Court noted that "dismissal . . . is an extreme remedy, and should not lightly be engaged." Aoude, 892 F.2d at 1118. Where a motion to dismiss is premised on fraud on the court, such fraud must be proven by clear and convincing evidence.

Id.; Plasse, 448 F. Supp. 2d at 308. In Aoude, for example, the decision as to whether the plaintiff had committed fraud on the court was an easy one--he admitted to it. Aoude, 892 F.2d at 1118-1119 ("By Aoude's own admission, he fabricated the purchase agreement; gave it to his lawyer; read the complaint before it was filed; realized that counsel, acting on his behalf, proposed to annex the bogus agreement to the complaint (thus representing it to be authentic); and nevertheless authorized the filing.").

The evidence presently in the record cannot support a finding by clear and convincing evidence that Reynolds has committed fraud on the court. First, unlike in Aoude, Reynolds has not admitted that the documents upon which his case is based are fraudulent. Quite to the contrary, both in his briefs and at oral argument Reynolds expressly denied making such an admission or relying on fraudulent evidence. Penn's attempt to characterize Reynolds's last minute tactical adjustment as an admission of fraud is unavailing. There are any number of practical reasons why Reynolds would choose to pursue one case theory instead of another. Without much more, I ...


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