                                                                     F I L E D
                                                               United States Court of Appeals
                                                                       Tenth Circuit
                                    PUBLISH
                                                                        SEP 4 1998
                  UNITED STATES COURT OF APPEALS
                                                                 PATRICK FISHER
                                                                           Clerk
                              TENTH CIRCUIT



 UTAH FOAM PRODUCTS CO., a
 Utah corporation,

       Plaintiff-Appellant-Cross-
       Appellee,
 v.
                                                Nos. 97-4007, 97-4008
 THE UPJOHN COMPANY, a
 Delaware corporation,

       Defendant-Appellee-Cross-
       Appellant.


                Appeal from the United States District Court
                          for the District of Utah
                          (D.C. No. 87-C-955-G)


C. Richard Henriksen, Jr., Henriksen & Henriksen, P.C., Salt Lake City, Utah,
(Ralph W. Curtis, Henriksen & Henriksen, P.C., Salt Lake City, Utah, with him
on the briefs) for Plaintiff-Appellant.

Jonathan A. Dibble, Ray, Quinney & Nebeker, Salt Lake City, Utah, (Stephen B.
Nebeker and Rick B. Hoggard, Ray, Quinney & Nebeker, Salt Lake City, Utah,
with him on the briefs) for Defendant-Appellee.


Before TACHA, BRORBY and EBEL, Circuit Judges.


EBEL, Circuit Judge.
      Plaintiff-Appellant Utah Foam Products Co. (“Utah Foam”) appeals from a

jury verdict and order of damages in its favor on its fraud and negligent

misrepresentation claims against Defendant-Appellee, The Upjohn Company

(“Upjohn”). Utah Foam claims that the district court erred in making certain

evidentiary rulings, in dismissing Utah Foam’s claim under the Utah Unfair Trade

Practices Act, and in denying Utah Foam’s request for prejudgment interest on

damages awarded. Utah Foam also claims that the district court judge erred in

refusing to recuse himself from the case. Upjohn brings a cross-appeal, claiming

that the district court erred in refusing to grant judgment as a matter of law in

favor of Upjohn on Utah Foam’s fraud and negligent misrepresentation claims.

We affirm the jury’s verdict and all of the district court’s rulings.



                                     Background

      This lengthy litigation grew out of a dispute about the price Upjohn

charged Utah Foam for polymeric isocyanate (trade name “PAPI”), a chemical

made by Upjohn and used by Utah Foam in making rigid sprayable polyurethane

foam, an insulating material. From 1978 until 1986, Upjohn contracted to supply

Utah Foam with PAPI 27, one of the types of isocyanate made by Upjohn.

According to Utah Foam, Upjohn fraudulently and negligently misrepresented to

Utah Foam that Utah Foam would always be the recipient of Upjohn’s “best


                                          -2-
price” for PAPI. See Utah Foam Products Co. v. The Upjohn Company, 930 F.

Supp. 513, 516 (D. Utah 1996). Utah Foam discovered this alleged fraud and

misrepresentation when circumstances forced Utah Foam to buy PAPI 27 from

one of Utah Foam’s competitors, and found that the competitor was able to offer

the product to Utah Foam at a lower price than that charged by Upjohn.

      In July, 1987, Utah Foam filed suit against Upjohn, claiming that Upjohn

violated Utah’s Unfair Practices Act, breached the contract, and committed fraud

and negligent misrepresentation. Utah Foam requested compensatory and

punitive damages. During a drawn-out period of pretrial litigation, the district

court repeatedly ruled that Upjohn’s records regarding the sales of PAPI 135

would not be subject to discovery in this case, because PAPI 135 was not of like

grade and quality to PAPI 27, the subject of Utah Foam’s Unfair Practices claim. 1

The district court also denied Utah Foam’s motions to compel production of sales

records of CPR, a wholly-owned subsidiary of Upjohn, on the basis that all

deliveries of PAPI from Upjohn to CPR qualified as intra-company transfers, and

not sales, and thus they were irrelevant to Utah Foam’s claims. On January 12,


      1
         Shortly before trial, Utah Foam successfully argued to the district court
that Upjohn’s PAPI 135 records were relevant to its fraud claim. However, in
light of Utah Foam’s unjustified tardiness in making this argument for the first
time so close to the scheduled start of trial, the court limited discovery of those
records to those already prepared by Upjohn (years 1983-1985). The court
refused to order production of PAPI 135 records from earlier years, on the
grounds that so doing would cause real prejudice to Upjohn.

                                         -3-
1994, the district court granted summary judgment to Upjohn on Utah Foam’s

state price discrimination claim. The district court dismissed Utah Foam’s breach

of contract claim on October 18, 1994. On December 18, 1995, the district court

ruled that Utah Foam’s experts’ testimony as to the calculation of damages would

be limited to proving lost margins, based upon differences in the net price paid

for PAPI, and not lost sales. On January 26, 1996, Utah Foam filed a motion for

recusal, on the ground that the district court judge had exhibited bias against Utah

Foam and favoritism for one of Upjohn’s counsel. After a hearing, the district

court denied the motion.

      Utah Foam’s fraud and negligent misrepresentation claims went to trial

before a jury on February 20, 1996. See Utah Foam, 930 F. Supp. at 515. The

jury found that Upjohn had made fraudulent and negligent misrepresentations to

Utah Foam regarding the price of PAPI, and awarded Utah Foam $313,593 in

compensatory damages plus $5.5 million in punitive damages. See id. at 516.

Upjohn moved under Federal Rule of Civil Procedure 50(b) to vacate or adjust the

award of compensatory damages on Utah Foam’s fraud and negligent

misrepresentation claims. See id. at 518. The court refused to vacate the award,

but reduced the amount of compensatory damages to $303,573.11. See id. at 518-

22, 532. The district court also denied Upjohn’s Rule 50(b) motion to vacate the

award of punitive damages, but granted its motion for remittitur, reducing the


                                        -4-
punitive damages award to $607,142.22. See id. at 523-32. In addition, the

district court denied Utah Foam’s motion for prejudgment interest. See id. at

522-23. The district court then issued an order offering Utah Foam the option of

accepting remittitur or undergoing a new trial on all issues. See Utah Foam

Prods. Co. v. The Upjohn Co., No. 87-C-955G, at 5-6 (D. Utah Nov. 19, 1996)

(unpublished order). Utah Foam accepted remittitur.

      Utah Foam now appeals the district court’s evidentiary rulings restricting

the discovery of Upjohn’s PAPI 135 sales records, prohibiting discovery of CPR’s

records, and limiting Utah Foam’s experts’ testimony as to estimated losses and

damages; the district court’s denial of prejudgment interest; the district court’s

dismissal of Utah Foam’s Utah Unfair Practices claim; and the district court’s

denial of Utah Foam’s motion to recuse. Upjohn cross-appeals the district court’s

refusal to grant Upjohn’s Rule 50(b) motion to vacate the jury’s finding of

liability for fraud and negligent misrepresentation.



                            I. Acceptance of remittitur

      In Donovan v. Penn Shipping Co., Inc., 429 U.S. 648, 650 (1977) (per

curiam), the Supreme Court reiterated “the longstanding rule that a plaintiff in

federal court, whether prosecuting a state or federal cause of action, may not

appeal from a remittitur order he has accepted.” The policy underlying this rule


                                         -5-
sounds in contract law. By accepting remittitur of damages in lieu of a new trial,

the plaintiff has accepted the benefit of not having to undergo the rigors, risks,

and costs of a new trial in exchange for an agreement not to challenge the

damages award or otherwise appeal any matter pertaining to the issues covered by

the remittitur offer. However, a party who has accepted remittitur of damages on

one cause of action may still appeal issues related to other causes of action not

subject to the remittitur order. See Denholm v. Houghton Mifflin Co., 912 F.2d

357, 359 & n.2 (9th Cir. 1990) (listing cases); Call Carl, Inc. v. BP Oil Corp., 554

F.2d 623, 626-27 (4th Cir. 1977); Bruce I. McDaniel, Annotation, Plaintiff’s

Right to Appeal Adverse Judgment on One Cause of Action As Affected by

Acceptance of Remittitur on Another Cause of Action, 41 A.L.R. Fed. 856, 857

(1979).

      In Alley v. Gubser Dev. Co., 785 F.2d 849, 856-57 (10th Cir. 1986), the

district court gave the plaintiffs a choice between remittitur of the jury’s punitive

damages award or a new trial on all issues. The plaintiffs chose remittitur. When

the plaintiffs attempted to appeal the district court’s denial of attorney’s fees and

prejudgment interest on the compensatory damages, we held that they were barred

from doing so under Donovan. See id. In short, the well-established rule is that

acceptance of remittitur of damages effectively waives the right to appeal any

issue pertaining to the causes of action covered by the remittitur offer. See


                                         -6-
Denholm, 912 F.2d at 360-61 (acceptance of remittitur of compensatory damages

bars appeal of pretrial orders excluding evidence relevant to proving those

damages). Moreover, acceptance of remittitur of either compensatory or punitive

damages bars appeal of issues related to both. See Alley, 785 F.2d at 857 (‘[T]he

district court’s remittitur embraced all issues considered in the case and . . . the

Alleys’ acceptance of the remittited judgment waives their right to appeal these

issues.”); see also Lanier v. Sallas, 777 F.2d 321, 322 (5th Cir. 1985) (because

punitive damages and compensatory damages based upon same cause of action are

“inextricably intertwined,” acceptance of remittitur of compensatory damages

barred appeal of district court’s refusal to submit issue of punitive damages to the

jury).

         Here, Utah Foam does not dispute that it had the choice of accepting either

remittitur of its damages based upon its fraud and negligent misrepresentation

claims or face a new trial on those claims. Nor does Utah Foam attack the district

court’s decision to impose remittitur, but rather seeks to appeal the court’s rulings

on issues directly related to Utah Foam’s claims at trial, namely, the district

court’s denial of pre-judgment interest, its rulings limiting the scope of discovery

of Upjohn’s PAPI records, its ruling denying discovery of CPR’s PAPI

documents, and its limitation of Utah Foam’s experts’ testimony as to the

calculation of damages. Because Utah Foam accepted remittitur of damages on


                                          -7-
its fraud and negligent misrepresentation claims and thereby avoided a complete

retrial of those issues, Alley bars Utah Foam’s appeal of all issues which relate to

those claims. We find that Utah Foam’s acceptance of remittitur waived the right

to appeal these issues and decline to consider them now.



                       II. Utah Unfair Practices Act claim

      Because the Utah Unfair Practices Act claim did not go before the jury in

this case and the district court did not order a retrial of that claim in the event

Utah Foam did not accept the remittitur on the fraud and negligent

misrepresentation claims, Utah Foam did not waive the right to appeal the

dismissal by summary judgment of the Unfair Practices Act claim. See Call Carl,

554 F.2d at 626-27 (acceptance of remittitur on fraud and deceit count does not

preclude appeal of directed verdict on Sherman Act count). We review a grant of

summary judgment de novo, applying the same standard as the district court. See

Sports Racing Servs., Inc. v. Sports Car Club of America, Inc., 131 F.3d 874, 882

(10th Cir. 1997). After reviewing the record on appeal, we conclude that the

district court did not err in granting Upjohn’s motion for summary judgment on

Utah Foam’s price discrimination claim.

      Discrimination in pricing is illegal “where the effect of such discrimination

may be substantially to lessen competition or tend to create a monopoly in any


                                         -8-
line of commerce . . . .” Utah Code Ann. § 13-5-3(1)(a) (1996); see Burt v.

Woolsulate, Inc., 146 P.2d 203, 205 (Utah 1944) (“It is not every discrimination

in price that is outlawed by the Utah Act, but only those which tend to

substantially lessen competition or tend to create a monopoly.”). The party

alleging illegal pricing discrimination bears the burden of showing that the illegal

conduct may have substantially impacted competition. See Gold Strike Stamp Co.

v. Christensen, 436 F.2d 791, 796-97 (10th Cir. 1970); Burt, 146 P.2d at 205.

Under Utah law, the term “commerce” means “intrastate commerce in the state of

Utah.” Utah Code Ann. § 13-5-5 (1996). It is not clear that the commerce

affected here was intrastate commerce. See Belliston v. Texaco, Inc., 521 P.2d

379, 381-82 (Utah 1974). However, even if the affected commerce was intrastate,

we agree with the district court that it was not substantially lessened by the

defendants’ conduct, and accordingly we affirm.

      At summary judgment, the district court held that Utah Foam could only

prove discriminatory pricing damages totaling $18,981 and could not prove injury

to competition. Thus, the district court dismissed the claim because Utah Foam

had failed to show that Upjohn’s price discrimination substantially impacted

competition in the Utah insulating foam market, as required by the statute. We

have carefully reviewed the district court’s order and the record, applying the

same standard used by the district court. We agree with the analysis and findings


                                         -9-
of the district court. Accordingly, we affirm the district court’s conclusion that

the defendant was entitled to summary judgment because its acts of discriminatory

pricing did not have, and were not likely to have, the effect of substantially

lessening competition or a tendency to create a monopoly in any line of

commerce. 2



                              III. Evidentiary issues

      Utah Foam asserts that the district court erred in not allowing it to discover

Upjohn’s PAPI 135 sales records and records of transfers of PAPI from Upjohn to

CPR, and claims that if it were allowed to present this evidence, its

anticompetitive damages would be shown to have had more than a de minimus

effect on commerce in Utah. We review the district court’s decision to exclude

evidence at the summary judgment stage for abuse of discretion. See Sports Car

Racing Servs., 131 F.3d at 894.

      Under the Utah price discrimination statute, comparisons of allegedly

similar discriminatory sales must be made among sales of products of “like grade

and quality.” Utah Code Ann. § 13-5-3(1)(a) (1996). The plaintiff bears the

burden of proving that the products in question were of like grade and quality.


      2
        We disagree with Utah Foam’s argument that the grant of summary
judgment against it on its state discriminatory pricing claim is inconsistent with
the jury verdict holding Upjohn liable for fraud and negligent misrepresentation.

                                        - 10 -
See Liggett Group, Inc. v. Brown & Williamson Tobacco Corp., 1989-1 Trade

Cas. (CCH) ¶ 68,583, at 61,103 (M.D.N.C. 1988). 3 “In fashioning a ‘like grade

and quality’ standard, courts have generally emphasized the presence, or absence,

[of] significant physical differences between products and the effect of those

differences upon consumer preferences.” Id. (listing cases). Also relevant to the

inquiry is whether there are “differences in the way in which a customer can or

must use the product.” J.P. Ludington, Annotation, What Are “Commodities” and

“Commodities of Like Grade and Quality,” within Provision of Robinson-Patman

Act Prohibiting Price Discrimination Between Different Purchasers of

Commodities of Like Grade and Quality– Federal Cases, 16 L. Ed. 2d 1097, 1101

(1967). Thus, “bona fide physical differences affecting consumer use or

marketability should be sufficient to cause products not to be of like grade and

quality.” ABA Section of Antitrust Law, Antitrust Law Developments 444-45 (4th

ed. 1997).

      Although Utah Foam asserts that PAPI 27 and PAPI 135 are very similar in

structure and may be used interchangeably, it is undisputed that PAPI 27 and


      3
        Because we find no controlling Utah law construing the phrase “like grade
and quality,” we look to federal law for guidance. See Belliston v. Texaco, Inc.,
521 P.2d 379, 380 (Utah 1974) (“Except for the jurisdictional requirements, the
language of Section 3(a) of the Unfair Practices Act is substantially similar to the
provisions of Section 13(a) of the Robinson-Patman Act.”); cf. Evans v. State, –
P.2d –, 1998 WL 327681, at *3 (Utah June 23, 1998) (citing Utah Code Ann.
§ 76-10-926).

                                       - 11 -
PAPI 135 differ, mainly in terms of viscosity and reactivity, particularly in colder

situations. As a result, some consumers prefer one over the other; Utah Foam’s

own president admitted in his affidavit and during depositions that the company

had a clear preference for PAPI 27 over PAPI 135 because of PAPI 27’s superior

performance qualities at high altitudes. Thus, the district court did not err in

holding that, for the purposes of Utah Foam’s price discrimination claim, PAPI

135 was not a product of “like grade and quality” to PAPI 27 and in refusing to

order discovery of Upjohn’s PAPI 135 sales records for the purposes of Utah

Foam’s price discrimination claim.

      Utah Foam also argues that the court erred in not allowing it to discover

CPR’s PAPI records. According to Utah Foam, CPR, a producer of foam

insulation systems, was both a competitor of Utah Foam in the Utah market and

an economic entity independent from Upjohn. Because the district court held

CPR to be economically indivisible from Upjohn, and because there was no

evidence offered that Upjohn used CPR to sell raw PAPI 27 to Utah Foam’s

competitors at lower prices than those available to Utah Foam, the court held that

Upjohn’s transfers of PAPI to CPR were not within the purview of the Utah price

discrimination statute.

      It is well established that a defendant’s transfers of product to a wholly

owned subsidiary is an intra-corporate transfer and not a “sale” for purposes of a


                                        - 12 -
price discrimination claim. See City of Mt. Pleasant, Iowa v. Associated Elec.

Coop., Inc., 838 F.2d 268, 277-79 (8th Cir. 1988); Russ’ Kwik Car Wash, Inc. v.

Marathon Petroleum Co., 772 F.2d 214, 221 (6th Cir. 1985); Security Tire &

Rubber Co. v. Gates Rubber Co., 598 F.2d 962, 966 (5th Cir. 1979). This is

because the wholly owned subsidiary and the parent company are seen as a single

economic actor. See Copperweld Corp. v. Independence Tube Corp., 467 U.S.

752, 770-71 (1984) (In the context of Section 1 of the Sherman Act, “A parent

and its wholly owned subsidiary have a complete unity of interest. Their

objectives are common, not disparate; their general corporate actions are guided

or determined not by two separate corporate consciousnesses, but one. They are

not unlike a multiple team of horses drawing a vehicle under the control of a

single driver. With or without a formal ‘agreement,’ the subsidiary acts for the

benefit of the parent, its sole shareholder.”)

      Utah Foam claims that CPR was in fact an “independent subsidiary” of

Upjohn, and therefore transfers of PAPI 27 from Upjohn to CPR should be treated

as “sales” under the price discrimination statute. Utah Foam points to the

following factors, all based upon the testimony of Upjohn’s Keith Edmonson,

Vice President and General Manager of Upjohn’s Chemical Division, as evidence

that CPR was sufficiently independent from Upjohn so as to render the two

separate economic entities:


                                         - 13 -
      (1) The title of goods passed to CPR when the product was shipped;
      (2) CPR recommended prices of the PAPI and systems it sold, which
      prices were never overruled by Upjohn; (3) Upjohn’s divisions, like
      Polymer and CPR, were allowed to set their own prices; (4) CPR had
      its own payroll department and personnel department; (5) CPR made
      decisions as to whom and to where it would sell its products; (6)
      CPR could reject the product it received from Upjohn based on its
      quality; and (7) CPR had its own accounting department and separate
      checking accounts.

(See Aplt. Br. at 26 (record citations omitted).) None of this evidence tends to

show that CPR was anything but an individual corporate “horse” pulling together

with its sister divisions for the benefit of their common “driver,” namely, Upjohn.

See Copperweld, 467 U.S. at 771. For its part, Upjohn points to evidence that all

of CPR’s essential activities were overseen by Mr. Edmondson, who wielded final

executive decision-making and accounting power over CPR. Simply because

Upjohn granted its CPR Division some measure of free reign over its activities

does not diminish the fact that the evidence shows that CPR operated solely for

the benefit and under the ultimate control of Upjohn. We conclude that the

district court did not abuse its discretion in holding that all transfers of PAPI 27

from Upjohn’s Chemicals Division to CPR were intra-company transfers and not

“sales” under the Utah price discrimination statute.

      In the alternative, Utah Foam claims that even if Upjohn and CPR were a

single economic entity, we should still find CPR’s sales records to be

discoverable in order to determine whether CPR sold PAPI 27 to Utah Foam’s


                                        - 14 -
competitors, in which case CPR’s sales could be attributed to its parent, Upjohn.

However, the record shows that CPR sold complete foam spray systems, and not

raw PAPI 27. Therefore, the district court did not abuse its discretion in deeming

CPR’s sales records irrelevant to this lawsuit.



                                    IV. Recusal

      Regarding recusal, Utah Foam merely argues that if we remand the case we

should send it back to a different judge on the ground that Judge Greene erred in

refusing Utah Foam’s request that he recuse himself. Because we have identified

no reason for remanding this case, we consider this argument moot. 4



                            V. Upjohn’s Cross-Appeal

      Upjohn appeals the district court’s refusal to vacate the jury verdict finding

it liable to Utah Foam for damages caused by its negligent misrepresentation and

fraud. We examine the negligent misrepresentation claim first.




      4
        Even if we were to treat this claim as an independent argument for
reversal, we would find no error.

                                        - 15 -
                         A. Negligent Misrepresentation

      Upjohn claims that under the negligent misrepresentation theory of liability

Utah Foam can only recover for the difference between the price it paid for the

product and the fair market value of the product. Upjohn then asserts that

because Utah Foam did not and cannot prove the fair market value of PAPI during

the times in question, it must lose on this claim as a matter of law. We disagree.

      Here, Upjohn does not dispute that the elements of negligent

misrepresentation were proved at trial. Instead, Upjohn argues that the damages

proved by Utah Foam are inappropriate for this claim, namely, that Utah Foam

only proved “benefit of the bargain” loss as opposed to pecuniary loss based on

the difference between the price it paid for PAPI and the fair market price.

      Under Utah law, the measure of damages for negligent misrepresentation

includes the amount of money necessary to compensate the plaintiff for its

detrimental reliance. See Forsberg v. Burningham & Kimball, 892 P.2d 23, 27

(Utah Ct. App. 1995). Such damages include “‘the difference between the value

of what [plaintiff] has received in the transaction and its purchase price or other

value given.’” Id. (quoting Restatement (Second) of Torts § 552(B)(1)(a)

(1976)).

      Here, the district court did just that. It held that the “market price” for this

case was not the price of PAPI on the open market but rather the price paid by


                                        - 16 -
Utah Foam’s competitors. See Utah Foam, 930 F. Supp. at 522. This approach to

calculating the difference between the value Utah Foam thought it was getting

and the actual value of the PAPI comports with the law in Utah. Thus, we affirm

the jury verdict against Upjohn for negligent misrepresentation.



                                     B. Fraud

      At trial, the jury found Utah Foam’s actual damages caused by Upjohn’s

negligent misrepresentation and fraud to be identical: $313,593. Utah Foam was

awarded this single amount, minus post-trial reductions by the district court.

Because on appeal Upjohn does not challenge the propriety of the negligent

misrepresentation verdict in Utah Foam’s favor (other than the damages

calculation), because the jury found Utah Foam’s damages from the two causes of

actions to be singular, and because we affirm the negligent misrepresentation

damages award, we need not address Upjohn’s argument that the district court

erred in refusing to grant its motion to vacate the jury verdict as to Utah Foam’s

fraud claim.



                                    Conclusion

      For the reasons stated above, the judgment below is AFFIRMED.




                                       - 17 -
