United States District Court, N.D. Illinois
February 19, 2004.
SOUTH BEACH BEVERAGE COMPANY, Counterclaim Plaintiff,
RUSH BEVERAGE COMPANY, INC., and R.J. CORK NATURALS, INC., Counterclaim Defendants
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
The Counterclaim Plaintiff, South Beach Beverage Company, Inc.
("South Beach"), filed counterclaims against the Counterclaim Defendants,
Rush Beverage Company, Inc. and R.J. Con-Naturals, Inc., for, among
reasons, breach of contract. Presently before the Court is the South
Beach's Motion for Summary Judgment against Rush Beverage Company, Inc.
and RJ. Con-Naturals. For the following reasons, South Beach's Motion for
Summary Judgment is granted.
Summary judgment is appropriate when no genuine issue of material fact
exists and the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c); Cincinnati Ins. Co. v. Flanders Elec. Motor Serv.,
Inc., 40 F.3d 146, 150 (7th Cir. 1994). "One of the principal purposes of
the summary judgment rule is to isolate and dispose of factually
unsupported claims or defenses. . . ." Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986) (Celotex). Thus, although the moving party on a
motion for summary judgment is responsible for demonstrating to the court
why there is no genuine issue of material fact, the non-moving party must
go beyond the
face of the pleadings, affidavits, depositions, answers to
interrogatories, and admissions on file to demonstrate, through specific
evidence, that a genuine issue of material fact exists and to show that a
rational jury could return a verdict in the non-moving party's favor.
Celotex, 477 U.S. at 322-27; Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
254-56 (1986) (Anderson); Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986) (Matsushita); Waldridge v. Am. Hoechst
Corp., 24 F.3d 918, 923 (7th Cir. 1994).
Disputed facts are material when they might affect the outcome of the
suit. First Ind. Bank v. Baker, 957 F.2d 506, 507-08 (7th Cir. 1992).
When reviewing a motion for summary judgment, a court must view all
inferences to be drawn from the facts in the light most favorable to the
opposing party. Anderson, 477 U.S. at 247-48; Popovits v. Circuit City
Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999). However, a metaphysical
doubt will not suffice. Matsushita, 475 U.S. at 586. If the evidence is
merely colorable or is not significantly probative or is no more than a
scintilla, summary judgment may be granted. Anderson, 477 U.S. at
Counterclaim Defendants failed to respond to South Beach's motion for
summary judgment of Rule 56.1(a) Statement of Facts. Counterclaim
Defendants' failure to comply with Rule 56.1(b) results in accepting as
true all facts set out in a Rule 56.1(a) statement. See Smith v. Lamz,
321 F.3d 680, 682-83 (7th Cir. 2003). Even though Counterclaim Defendants
failed to respond to South Beach's statement of material facts and such
facts are deemed admitted, South Beach's Motion for Summary Judgment will
only be granted if it can demonstrate that there is no genuine issue of
material fact and that they are entitled to judgment as a matter of law.
See Johnson v. Gudmundson, 35 F.3d 1104, 1112 (7th Cir. 1994).
Accordingly, the undisputed facts,
for the purposes of this motion, taken from South Beach's Local Rule
56.1(a) & (b) statements of material facts (referred to herein as "Pl.'s
56.1") and exhibits, are as follows.
Rush Beverage is a corporation organized and existing under the laws of
Illinois with its principal place of business In Blue Island, Illinois.
Pl.'s 56.1 ¶ 1. Robert J. Corr is the president of Rush Beverage and
R.J. Corr Naturals. Pl.'s 56.1 ¶ 2. South Beach is a Delaware
corporation with its principal place of business in Norwalk,
Connecticut. South Beach is the successor in interest to South Beach
Beverage Company, LLC, a Connecticut limited liability company. Pl.'s
56.1 ¶ 4.
In or about June 2000, South Beach Beverage Company, LLC began
developing a new energy drink known as "Adrenaline Rush." Pl.'s 56.1
¶ 5. On September 6, 2000, South Beach Beverage Company, LLC received
a letter from Corr, alleging that South Beach Beverage Company, LLC's use
of "Adrenaline Rush" in connection with beverage products would lead to
consumer confusion with R.J. Corr Naturals' "Rush" trademarks and
demanding that South Beach Beverage Company, LLC cease all further use of
"Adrenaline Rush." Pl.'s 56.1 ¶ 6.
Following negotiation, South Beach Beverage Company, LLC and R. J. Corr
Naturals entered into an agreement (the "Consent Agreement") effective
September 29, 2000. Pl.'s 56.1 ¶ 7. Pursuant to the Consent Agreement,
R.J. Corr Naturals agreed "never to use or license others to use the mark
`Rush' in combination with the words Adrenaline or SOBE in connection
with beverage products." Pl.'s 56.1 ¶ 8. The Consent Agreement further
provided that "Corr will refrain from taking any legal action or
initiat[ing] any other legal proceedings that would hinder South Beach in
its free and unfettered use and registration" of the "SOBE Adrenaline
Rush" mark. Pl.'s 56.1 ¶ 9. South Beach Beverage Company, LLC paid R.J.
Naturals $30,000 and agreed to certain restrictions on the use of
the mark "SOBE Adrenaline Rush." Pl.'s 56.l ¶ 10.
South Beach Beverage Company, LLC assigned its rights under the consent
agreement to South Beach. Pl.'s 56.1 ¶ 11. R J. Corr Naturals assigned
its rights under the Consent Agreement to Rush Beverage. Pl.'s 56.l ¶
In November 2000, South Beach launched the "SOBE Adrenaline Rush"
energy drink in the United States. Pl.'s 56.1 ¶ 13. South Beach
complied in all respects with the terms of the Consent Agreement. Pl.'s
56.1 ¶ 14. Rush Beverage filed the instant suit on July 23, 2001,
alleging breach of the Consent Agreement. Pl.'s 56.1 ¶ 15.
South Beach seeks summary judgment on liability as to its Fourth Cause
of Action contained in its Answer with counterclaims, a breach of
contract claim. South Beach also seeks to voluntarily withdraw its
remaining counterclaims. Finally, South Beach seeks to refer the matter
to a magistrate judge for a determination of damages.
Under the law of the case doctrine, a ruling by a trial court, in an
earlier stage of the case, is binding on subsequent stages of the case.
See, e.g., Fed'n of Adver. Indus. Representatives v. City of Chicago,
326 F.3d 924 (7th Cir. 2003) (applying law of the case principles to
appeals). In a December 12, 2002 opinion, this Court found that the
Consent Agreement is not unconscionable and is enforceable and that South
Beach performed its obligations under the Consent Agreement. Therefore,
Rush Beverage may not, at this stage, re-litigate these determinations.
Moreover, the undisputed facts demonstrate Rush Beverage violated its
contractual obligations. Counterclaim Defendants alleged in their Amended
Complaint that South Beach's use of "Adrenaline Rush" violated trademark
laws. Those claims were held to be without merit in the December 12, 2002
Rush Beverage's filing and prosecution of these claims violated
paragraph four of the
Consent Agreement, which prohibited Corr from taking any legal action
that would hinder South Beach from using the "SOBE Adrenaline Rush"
trademark. Therefore, Rush Beverage breached the Consent Agreement, and
South Beach is entitled to damages.
South Beach requests that the determination of damages be referred to a
magistrate judge. South Beach also voluntarily dismisses its remaining
counterclaims. "Liability in a contract case . . . does not depend on
proof of injury. Proof of liability is complete when the breach of
contract is shown." Hydrite Chem. Co. v. Calumet Lubricants Co.,
47 F.3d 887, 891 (7th Cir. 1995). However, South Beach has not presented
any authority allowing a transfer to the magistrate on the limited issue
of damages. Therefore, South Beach's request to transfer the
determination of damages to a magistrate judge is denied.
For the foregoing reasons, South Beach's Motion for Summary Judgment is
granted. South Beach's remaining counterclaims are voluntarily withdrawn.
South Beach's request to transfer the determination of damages to a
magistrate judge is denied.
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