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American Hardware Manufacturers Association v. Reed Elsevier

July 27, 2010

AMERICAN HARDWARE MANUFACTURERS ASSOCIATION, PLAINTIFF,
v.
REED ELSEVIER, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge

CORRECTED MEMORANDUM OPINION AND ORDER

Plaintiff American Hardware Manufacturers Association (AHMA) has moved for reconsideration of Judge Manning's January 4, 2010 decision granting summary judgment in favor of the defendants on various claims. For the reasons stated below, the Court grants the motion in part.

Background

The undersigned judge is the fifth district judge to preside over this case. It was originally assigned to Judge Moran; it was supervised by Judge Shadur and Judge St. Eve during Judge Moran's illness; and it was reassigned to Judge Manning after Judge Moran's death. Judge Manning later recused herself, and the case was reassigned to the undersigned judge.

AHMA and defendant Reed Elsevier, Inc. (Reed) gave each other mutual releases as part of a "separation agreement" they executed in February 2003. The release covered any and all matters, including without limitations, all matters relating to, arising out of or in connection with the operation, management or conduct of the [National Hardware] Show, the Show Agreement or otherwise related to the Show Agreement, for the period from the beginning of time through the date hereof . . . .

Separation Agr. ¶ 7. A number of the claims AHMA has asserted in this action involve conduct that predated the releases. AHMA can sustain these claims only if can invalidate the releases. To that end, AHMA has asserted a claim for rescission of the separation agreement, alleging that it was induced to enter into the agreement by Reed's fraudulent misrepresentations.

In 2005, Judge Moran, dealing with a motion for summary judgment by Reed concerning its affirmative defense that certain claims were barred by the release, ruled that there were genuine issues of fact concerning the enforceability of the release based on AHMA's claim of fraudulent inducement. See American Hardware Mfrs. Assn. v. Reed Elsevier, Inc., No. 03 C 9421, 2005 WL 3236590 (N.D. Ill. Nov. 29, 2005). This motion and the ruling were made at a point in time when discovery was not yet complete.

In 2009, Reed filed another motion for summary judgment. It argued that it was entitled to summary judgment on AHMA's claims predating the separation agreement based on the release; on its release affirmative defense; and on certain counterclaims alleging breach of the release. Reed also sought summary judgment on two breach of contract claims asserted by AHMA -- one based on the separation agreement and another based on the parties' earlier agreement -- and on AHMA's claims of interference with prospective relations and civil conspiracy. Defendants Freeman Decorating Company and Freeman Decorating Services, Inc. (Freeman) moved for summary judgment on AHMA's civil conspiracy claim, its only remaining claim against Freeman.

Judge Manning granted the motion on January 4, 2010. She also entered summary judgment against AHMA on certain claims that were not the subject of either Reed's or Freeman's motions. American Hardware Mfrs. Assn. v. Reed Elsevier, Inc., No. 03 C 9421, 2010 WL 55708 (N.D. Ill. Jan. 4, 2009).

AHMA seeks reconsideration of Judge Manning's decision. The motion was filed before Judge Manning recused herself, and this Court has exactly the same authority that Judge Manning would have had to reconsider the January 4 decision. Reconsideration is appropriate when a court has made a manifest error of law or fact; when a court has made a decision outside the adversarial issues the parties presented; when it has misunderstood the evidence or arguments; when there has been an intervening change in the law; or when a party has newly discovered evidence unavailable when the matter was initially briefed. See Sigsworth v. City of Aurora, 487 F.3d 506, 511-12 (7th Cir. 2007); Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990); see also, Caisse Nationale de Crédit Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1269-70 (7th Cir. 1996).

1. Procedural issues

AHMA filed its motion for reconsideration on June 18, 2010, while the case was still pending before Judge Manning. Reed argues that AHMA waited too long after the January 4 ruling and that reconsideration now would be unfairly prejudicial because it will not allow sufficient time to prepare for trial.

The Court disagrees. First of all, after Judge Manning granted summary judgment, AHMA promptly sought certification of the ruling for immediate appeal under Federal Rule of Civil Procedure 54(b). Judge Manning did not rule on that motion until May 6, 2010, when she denied it. After that, AHMA states, and Reed does not dispute, that the parties engaged in an effort to settle their disputes. AHMA made the motion promptly after it became apparent that those efforts would not succeed. Under the circumstances, it did not wait too long.

Second, the Court is ruling on the motion for reconsideration nearly three and one-half months before the trial date of November 8, 2010 and intends to rule on the remaining issues in Reed's motion for summary judgment within the next seven to ten days. Even if the trial will be complex, a contention that three ...


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