United States Court of Appeals For the Seventh Circuit ____________________ Nos. 23-1555 and 23-1556 CHARLES HESS, et al., Plaintiffs-Appellees, Cross-Appellants,

v. BIOMET, INC. and ZIMMER BIOMET HOLDINGS, INC., Defendants-Appellants, Cross-Appellees. ____________________

Appeals from the United States District Court for the Northern District of Indiana, South Bend Division. No. 3:16-cv-00208-JD-MGG — Jon E. DeGuilio, Chief Judge. ____________________

ARGUED DECEMBER 4, 2023 — DECIDED JUNE 25, 2024 ____________________

Before ROVNER, SCUDDER, and PRYOR, Circuit Judges. SCUDDER, Circuit Judge. When medical-device manufac- turer Zimmer Biomet was still in its infancy, it signed a gen- erous compensation agreement with six leading sales distributors, guaranteeing them a lifetime of long-term commissions on all sales “made within the subject distribu- torship” after their retirement. The company proceeded to grow exponentially, acquiring half a dozen competitors, expanding its product lines, and branching into new medical 2 Nos. 23-1555 & 23-1556 specialties. Biomet’s growth generated a dispute regarding which categories of products fell “within the subject distribu- torship” such that the company must continue to pay long- term commissions on their sale. The district court determined that the agreement was ambiguous on the point and sent the case to trial. The jury returned a split verdict, finding that Biomet owed long-term commissions on some products but not others. Biomet then appealed the denials of its motions for summary judgment and judgment as a matter of law, and the distributors cross-appealed the dismissal of two counts of their complaint. We affirm across the board. The district court was right to dismiss the two counts in the distributors’ complaint. It also correctly determined that the distributorship agreement was ambiguous regarding the particular categories of products it covered. And we have little difficulty concluding that the trial record supports the jury’s verdict in favor of the distributors on their Indiana breach-of-contract claim. I Zimmer Biomet is one of the world’s largest medical- device manufacturers, surpassing $7 billion in annual sales. But it did not start out that way. In the early 1980s, Biomet was a small startup with a lim- ited catalog of joint-replacement products. Seeking to expand, the company approached a handful of well-connected sales representatives and offered them generous compensation to join its fledgling operation. The strategy worked. From 1980 to 1983, Biomet successfully poached six high-earning sales- people from competitors, including lead plaintiff Charles Hess. Nos. 23-1555 & 23-1556 3

Hess and his colleagues signed an identical distributor- ship agreement with Biomet. The agreement guaranteed exclusive rights to sell “Biomet products” within specific regions and receive commissions up to 30%. To further sweeten the deal, Biomet enrolled the distributors in a “long- term commission program,” under which they would con- tinue to receive a specified fraction of the company’s “net sales” after retirement. The agreement defined “net sales” as follows: “gross sales made within the subject distributorship at the time this program is initiated and actually collected by Biomet.” Biomet grew rapidly in subsequent years. By 1990 the company had acquired three of its former competitors. These acquisitions allowed Biomet to expand its existing suite of orthopedic products while also branching into new specialties like sports medicine. Biomet allowed the distributors to sell new product lines on a case-by-case basis. The company gave Hess a