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JAMSPORTS AND ENTERTAINMENT v. PARADAMA PRODUCTIONS

August 15, 2005.

JAMSPORTS AND ENTERTAINMENT, LLC, Plaintiff,
v.
PARADAMA PRODUCTIONS, INC., et al. Defendants.



The opinion of the court was delivered by: MATTHEW KENNELLY, District Judge

MEMORANDUM OPINION AND ORDER

This case was tried to a jury on the claims of plaintiff JamSports and Entertainment, LLC against defendants Paradama Productions, Inc., d/b/a AMA Pro Racing; Clear Channel Entertainment, Inc., and various other Clear Channel entities (collectively, "Clear Channel"). The jury returned a verdict for JamSports against AMA Pro on JamSports' claim of breach of contract (Count 1), for JamSports against Clear Channel on JamSports' claims of tortious interference with contract (Count 3) and tortious interference with prospective advantage (Count 18), and for Clear Channel on JamSports' claim for violation of the Sherman Act (Count 15).*fn1 The jury assessed compensatory damages of $169,315.19 against AMA Pro on the breach of contract claim, compensatory damages of $17,144,573 against Clear Channel on the two tortious interference claims, and punitive damages of $73,000,000 against Clear Channel on those same claims.

JamSports has not sought a new trial on the antitrust claim. Clear Channel has moved for entry of judgment as a matter of law under Federal Rule of Civil Procedure 50(b) or in the alternative for a new trial under Federal Rule of Civil Procedure 59(a). AMA Pro has moved to alter or amend the judgment against it pursuant to Federal Rule of Civil Procedure 59(e) but has not sought a new trial on the breach of contract claim. For the reasons stated below, the Court enters judgment as a matter of law in Clear Channel's favor on Count 18, the claim for tortious interference with prospective advantage, orders a new trial (at least as to damages) on Count 3, the claim for tortious interference with contract, and otherwise denies the defendants' motions.

  Discussion

  Rule 50 of the Federal Rules of Civil Procedure provides that a court may grant a motion for judgment as a matter of law against a party if "there is no legally sufficient evidentiary basis for a reasonable jury to find for the party on that issue. . . ." Fed.R.Civ.P. 50(a), incorporated in id. 50(b). A jury verdict may not be overturned under Rule 50 "so long as it rests on a reasonable basis in the record." Haschmann v. Time Warner Entertainment Co., 151 F.3d 591, 599 (7th Cir. 1998); see also, e.g., Filipovich v. K & R Express Systems, Inc., 391 F.3d 859, 863 (7th Cir. 2004). In considering a motion under Rule 50, the evidence must be viewed in the light most favorable to the part that prevailed, drawing all reasonable inferences in its favor. See, e.g., Filipovich, 391 F.3d at 863.

  Under Federal Rule of Civil Procedure 59(a), a court may grant a new trial to all or any of the parties on all or part of the issues if the jury's verdict was "against the weight of the evidence, the damages are excessive, or if for other reasons the trial was not fair to the moving party." Fed.R.Civ.P. 59(a); see Shick v. Illinois Dept. of Human Services, 307 F.3d 605, 611 (7th Cir. 2002).

  1. Claim of breach of contract (Count 1)

  Count 1 was JamSports' claim against AMA Pro for breach of their November 2, 2001 letter of intent. Prior to trial, the Court ruled that the letter of intent was a binding contract obligating AMA Pro to negotiate exclusively and in good faith with JamSports toward a final supercross promotion agreement for a 90 day period, prohibited AMA Pro from entering into any discussion or negotiation with anyone else, barred the parties from divulging the letter of intent's terms, and required AMA Pro to advise JamSports promptly if it received another offer. See JamSports and Entertainment, LLC v. Paradama Productions, Inc., 336 F. Supp. 2d 824, 846-47 (N.D. Ill. 2004) (JamSports II); Jury Instructions at 18. The Court ruled on summary judgment that AMA Pro had breached the last of these obligations. JamSports II, 336 F. Supp. at 847; see Jury Instructions at 18. JamSports also contended that AMA Pro had breached the letter of intent by divulging its terms to Clear Channel, discussing and negotiating with Clear Channel during the exclusivity period, and failing to negotiate with JamSports in good faith. See Jury Instructions at 18.

  The jury found in JamSports' favor on this claim. The jury was instructed that in the event of a finding for JamSports, it was entitled to compensation "for any losses that you find were proximately caused by the particular breach or breaches of the November 2, 2001 letter of intent that you find AMA Pro committed." Jury Instructions at 35. The jury awarded $1.00 in lost profits and $169,314.19 in out of pocket expenses, for a total of $169,315.19. It is reasonably clear from the evidence that the amount awarded for out of pocket expenses was composed of the expenses that JamSports incurred in trying to land the AMA Pro supercross promotion contract.

  As noted earlier, on JamSports' claim against Clear Channel for tortious interference with this same contract, the jury awarded JamSports lost profits of $17,144,573. Relying on the jury's simultaneous award of lost profits and out of pocket expenses, AMA Pro seeks to amend the judgment to require JamSports to elect between these two remedies, arguing that otherwise JamSports would obtain a double recovery. AMA Pro has not moved for a new trial — presumably because it does not consider the verdicts inconsistent, as we will discuss later in this decision — and does not seek entry of judgment as a matter of law on the grounds of insufficiency of the evidence.

  The Court rejects AMA Pro's argument. Based on the verdicts that were returned by the jury, AMA Pro's claim of double counting is without merit. As JamSports points out, the lost profits analysis performed by its damages expert, Stephen Siwek, did not account for the amounts that JamSports had already spent to try to get the supercross promotion contract. Rather, his determination of lost profits was based on the expenses that JamSports would have incurred in the future had it actually landed the supercross deal. Thus, contrary to AMA Pro's argument, there is no basis to believe that the two awards amounted to double counting.

  Even if AMA Pro's request for an election of remedies had merit, however, it would be premature. In this decision, the Court grants Clear Channel's motion for judgment as a matter of law on one of the claims on which JamSports prevailed and directs a new trial, at least as to damages, on the other such claim. Thus at present there is no other remedy to "elect" other than the damages awarded against AMA Pro. For these reasons, the Court denies AMA Pro's motion to alter or amend the judgment.

  2. Claim of tortious interference with prospective advantage (Count 18)

  In Count 18, JamSports claimed that Clear Channel tortiously interfered with its prospect of concluding a promotion agreement with AMA Pro. The jury was told that on this claim, JamSports had to establish five elements: (1) JamSports reasonably expected to enter into a business relationship with AMA Pro, (2) Clear Channel knew this and (3) interfered intentionally and unjustifiably, (4) causing a termination of JamSports' expectation, and (5) causing damage to JamSports. If JamSports established these elements, the jury was advised, it had to consider whether Clear Channel's actions constituted competing with JamSports for prospective business. The Court's instructions stated that "[a] firm is entitled to compete for prospective business, so long as it acts with the intention, at least in part, of furthering its own business, and is not motivated by spite or ill will." Jury Instructions at 30. If Clear Channel proved this, then the jury was to ...


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