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Trading Technologies International, Inc v. Espeed

March 29, 2011

TRADING TECHNOLOGIES INTERNATIONAL, INC., PLAINTIFF,
v.
ESPEED, INC., ESPEED INTERNATIONAL, LTD., ECCO LLC, AND ECCOWARE, LTD., DEFENDANTS.



The opinion of the court was delivered by: Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

This patent action comes before the Court following the entry of a Report and Recommendation [1341] entered on September 8, 2010 by Magistrate Judge Schenkier following this Court's referral [see 1334] of Plaintiff's motion to enforce money judgment and for sanctions [1324] to Judge Schenkier's docket pursuant to 28 U.S.C. § 636. Defendants eSpeed, Inc., eSpeed International, Ltd., Ecco LLC, and Eccoware, Ltd. ("eSpeed") and Plaintiff Trading Technologies International, Inc. ("TT") both have filed objections [1342 (eSpeed), 1343 (TT)] to Judge Schenkier's Report and Recommendation. For the reasons stated below, the Court overrules both parties' objections [1342, 1343] and adopts Judge Schenkier's report and recommendation (with one very minor exception on a factual point). Accordingly, the motion to enforce money judgment and for sanctions [1324] is respectfully denied, and the judgment entered on June 13, 2008 (nunc pro tunc to May 22, 2008) [1263] will be amended (also nunc pro tunc to May 22, 2008) to reflect -- in addition to the injunctive relief already set forth -- the jury verdict and post-remittitur damages award in the amount of $2,539,468.00, plus prejudgment interest at the prime rate, compounded monthly.

I. Background

In his September 8, 2010 Report and Recommendation [1341], Judge Schenkier (1) determined that Plaintiff is not entitled to an order enforcing the money judgment or sanctions and (2) recommended that the Court enter a corrected final judgment order pursuant to Federal Rule of Civil Procedure Rule 60(a). Both parties filed timely objections. eSpeed objects to Judge Schenkier's second recommendation -- namely, that the 2008 judgment order be corrected under Rule 60(a) -- on the ground that any such relief cannot be granted at this late date and would unfairly benefit TT and prejudice eSpeed. TT accepts Judge Schenkier's second recommendation, but contends that sanctions in the form of attorneys' fees and costs also should have been granted.

In considering the parties' objections, this Court reviews de novo the portions of the Report and Recommendation to which objections have been made. See 28 U.S.C. § 636(b)(1); see also Delgado v. Bowen, 782 F.2d 79, 82 (7th Cir. 1986). After undertaking a de novo analysis of the record, this Court may accept, reject, or modify the Magistrate Judge's recommendations. 28 U.S.C. § 636(b)(1).

II. Analysis

As a prelude to addressing the parties' objections, the Court notes (as did Magistrate Judge Schenkier) that the "historical facts" leading up to the entry of judgment by Judge Moran in 2008 are undisputed. In October 2007, at the conclusion of a month-long trial, the jury returned a verdict in TT's favor and awarded $3.5 million in damages. On February 5, 2008, Judge Moran entered an order granting eSpeed's motion for a remittitur, thereby leaving TT with the option of accepting a reduced verdict ($2.539 million) or proceeding to a new trial. On February 12, 2008, TT timely notified Judge Moran that it accepted the remittitur. On May 22, 2008, Judge Moran granted TT's motion for a permanent injunction -- a ruling that, in Judge Moran's view, ended the case in the district court. On June 12, 2008, TT submitted a proposed final judgment order that included the damages awarded by the jury, as reduced by the remittitur. The following day, the parties appeared before Judge Moran. Counsel for eSpeed inquired whether Judge Moran was inclined to enter the proposed order (as to which eSpeed had an objection). Although eSpeed never identified the nature of its objection, Judge Moran indicated that he would use his own form for the judgment document. Later that day, Judge Moran entered a judgment order, but that order omitted any reference to the damage award to TT.

The initial question raised by TT's motion is: what accounts for the failure of the judgment order to accurately reflect the disposition of all of the issues litigated in the district court? This Court agrees with Judge Schenkier that "the best explanation is likely the fallibility of human beings (judges included)." [1341, at 6.] Indeed, there really is no other plausible explanation. Every indication in the record -- before, on, and after June 13 -- shows that the parties and the judge believed the case to be over in the trial court.

In a brief filed on June 3, 2008, eSpeed expressed the view that "all issues are now resolved and ready for appeal, giving the Federal Circuit the benefit of a full record." [1252, at 5.] TT obviously concurred in that view; on June 12, 2008, it submitted a proposed final judgment order that incorporated the jury verdict (as reduced by the remittitur) as well as the permanent injunction order entered by the court.

The transcript of the proceedings before Judge Moran on June 13, 2008 (the date on which the judgment order was entered, nunc pro tunc to May 22) similarly reflects Judge Moran's view that the case was over in the district court. On that date, Judge Moran discussed various aspects of the appeal and noted that the parties were engaged in "jockeying for position before the Federal Circuit." 6/13/08 Tr. [1280] at 3. He presciently observed that "you people are perfectly capable of trying to influence the Federal Circuit, and the Federal Circuit is perfectly capable of making up its own mind as to how it wants to proceed." Id. at 3-4. And in indicating his inclination to use his own form of judgment rather than entering the proposed order submitted by TT, Judge Moran in no way suggested that the judgment would not include the damages award. See id. at 4.

Notably, the post-judgment proceedings before Judge Moran also are fully consistent with Judge Schenkier's surmise, shared by this Court, that the omission of the damages award from the judgment was the result of human error. A week after the entry of judgment, eSpeed filed a motion for a stay of judgment pending appeal without the posting of a supersedeas bond. [See 1268.] In his July 24, 2008 opinion granting eSpeed's request, Judge Moran referenced the extent to which eSpeed's revenue and assets exceeded the "amount of the judgment" and concluded that "eSpeed has more than enough cash on hand to satisfy TT's judgment." [1292, at 2-3.] That discussion plainly supports the view that the omission of the amount of damages was an inadvertent oversight. Had Judge Moran not believed that there was a money judgment, there would have been no reason for him to address -- and, indeed, no reason for eSpeed to have asked for -- a waiver of the bond requirement.

The record thus overwhelmingly confirms that there was an oversight or omission in the judgment order. As Judge Schnekier observed [see 1341, at 4, 6, 12], the parties must share some of the blame for the failure to correct the oversight. TT obviously knew that the judgment as entered differed in a material way from the one that TT itself had proposed. And the omission was not lost on eSpeed, as its filings in the Federal Circuit make clear.

Having delved into the archaeology to comprehend the omission from the judgment, Judge Schenkier went on to address the appropriate consequences. He concluded that "the most straightforward and sensible course of action here is to correct the final judgment order so that ...


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