United States District Court, N.D. Illinois, Eastern Division
JOSHUA WOODARD, NEIL WESTFALL, ALEX SHELNUTT, JEREMY MCKINNON, all professionally known as A DAY TO REMEMBER, Plaintiffs/Counter-Defendants,
VICTORY RECORDS, INC., AND ANOTHER VICTORY, INC., Defendants/Counter-Plaintiffs.
MEMORANDUM OPINION AND ORDER
Z. Lee, Judge
Joshua Woodard, Neil Westfall, Alex Shelnutt, and Jeremy
McKinnon, members of the band A Day to Remember
(“ADTR”), have sued Defendant/Counter-Plaintiff
Victory Records, Inc. (“Victory”) on various
claims stemming from a 2006 recording agreement. On March 31,
2016, this Court ruled on the parties' cross-motions for
summary judgment. Mem. Op. & Order, ECF No. 392. This
ruling, in pertinent part, dismissed ADTR's claim that
Victory owed ADTR underpaid digital royalties due to
application of an incorrect royalty rate. Id. at 13.
ADTR now asks the Court to reconsider its dismissal of that
claim. For the reasons that follow, ADTR's motion to
reconsider  is denied.
explained in greater detail in the Court's order on
summary judgment, the substance of ADTR and Victory's
recording agreement was set out in a document called the
“Deal Memo.” Mem. Op. & Order 2-3. The
parties disagree in various respects about what the Deal Memo
states. In particular, the parties disagree about what the
Deal Memo provides as the proper royalty rate for digital
downloads. Id. at 2. Victory claims that the rate on
digital downloads should mirror that for sales of physical
ADTR albums, i.e., a range of 11.5 percent to 16.6
percent. Id. Conversely, ADTR insists that the
correct rate should mirror the rate applied to revenue from
third-party licenses, i.e., 50 percent. Id.
order on summary judgment, the Court agreed with Victory that
this dispute was not properly before the Court. The Court
disagreed with ADTR that Paragraph 20 of ADTR's Second
Amended Complaint-the only portion of the complaint that
Victory cited as giving notice of a claim based on the
royalty rate for digital downloads-was fairly construed as
referring to such a claim. Id. at 12. To that end,
the Court observed that “the question of the proper
rate for digital downloads was not raised in the complaint or
at any other point in the proceedings” prior to a
report proffered by ADTR's expert, Wayne Coleman, after
the filing of ADTR's Second Amended Complaint.
Id. at 13. The Court therefore granted Victory's
motion for summary judgment and dismissed the claim.
Federal Rule of Procedure 54(b), “any order . . . that
adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties does not end the
action as to any of the claims or parties and may be revised
at any time before the entry of a judgment adjudicating all
the claims and all the parties' rights and
liabilities.” Fed.R.Civ.P. 54(b). But while motions to
reconsider under Rule 54(b) are permitted, “they are
disfavored.” Patrick v. City of Chi., 103
F.Supp.3d 907, 911 (N.D. Ill. 2015). They serve a very
limited purpose: correcting manifest errors of law or fact
and presenting newly discovered evidence. Id.
(citations omitted). This is a heavy burden for the moving
party and makes a motion for reconsideration an inappropriate
medium to “rehash” past arguments, id.
(citations omitted), or revisit improvident strategic
decisions made earlier. Birdo v. Dave Gomez, No. 13
C 6864, 2016 WL 6070173, at *1 (N.D. Ill. Oct. 17, 2016)
(citation omitted). Additionally, “[t]he Seventh
Circuit has long refused to consider arguments that were not
presented to the district court in response to summary
judgment motions.” Wells-Griffin v. St. Xavier
Univ., 26 F.Supp.3d 785, 792 (N.D. Ill. 2014) (citations
and internal quotation marks omitted).
seeking to persuade the Court to reverse its order dismissing
the royalty rate claim, ADTR suggests the Court should have
looked to Paragraph 21 of its Second Amendment Complaint,
which, according to ADTR, provides notice of the royalty rate
claim, rather than focusing only on Paragraph 20. Pls.'
Mot. Reconsider & Mem. Supp. 3-4. ADTR directs the
Court's attention to the final sentence in Paragraph 21,
which states, “Defendants have also breached the
parties' Deal Memo by failing and refusing to pay at
least $850, 000 in record, publishing, and merchandising
royalties currently due and owing to Plaintiffs.”
Id. This, ADTR argues, is sufficient notice of its
intent to dispute the royalty rate.
Court rejects this argument for two reasons. First, ADTR did
not present this argument in response to Victory's motion
for summary judgment, Pls.' Resp. Opp'n Defs.'
Mot. Summ. J. 7-12 & n.9, ECF No. 360., and does not
offer any explanation in their motion for reconsideration as
to why. Rather, in responding to Victory's motion, ADTR
elected to direct the Court only to Paragraph 20, which this
Court found at best “woefully incomplete” and at
worst “deceptive and misleading.” Mem. Op. &
Order 12. If ADTR is to be taken at its word, and Paragraph
21 was intended to provide adequate notice of a claim
disputing the royalty rate, ADTR's decision not to refer
to Paragraph 21 initially is befuddling. This is especially
so given ADTR's admission that this argument would have
been “simpl[e]” to make. Pls.' Mot.
Reconsider 4 n.3. Because a motion for reconsideration is not
the proper vehicle to raise this argument, the Court need not
consider its merits.
the Court will briefly explain why it does not read Paragraph
21 to provide notice of a disputed digital royalty rate. The
sentence ADTR highlights is pulled from the very bottom of
the following paragraph:
In addition, Plaintiffs have the right to manufacture and
sell merchandise at their live concerts and/or sell it
directly to consumers, which rights Plaintiffs have
exercised. The only restriction upon Plaintiffs'
merchandise rights is that they may not sell to “any
retailer.” Plaintiffs have not done so. Nevertheless,
the Defendants have wrongfully withheld royalties which are
earned, due and payable to Plaintiffs, expressly because
Plaintiffs have exercised these rights. Defendants, alleging
that by selling merchandise directly to consumers through a
“webstore, ” Plaintiffs have breached the Deal
Memo, have withheld at least $100, 000 as a
“penalty.” These sums are rightfully monies due
and payable to the Plaintiffs. On information and belief, and
despite repeated demands for accurate and complete
accountings, the Plaintiffs believe that Defendants have
withheld and continue to withhold wrongfully sums in excess
of $100, 000. Defendants have also breached the parties'
Deal Memo by failing and refusing to pay at least $850, 000
in record, publishing, and merchandising royalties currently
due and owing to Plaintiffs.
2d Am. Compl. ¶ 21, ECF No. 216 (emphasis added). As
should be obvious, by selectively quoting the final sentence
of Paragraph 21, ADTR fails to account for Paragraph 21's
obvious theme: merchandising rights and royalties. ADTR makes
no effort to explain the selected sentence in the context of
the entire paragraph. This is little different from
ADTR's previous attempt to source the royalty rate claim
in Paragraph 20.
ADTR seizes on the word “record” in the selected
sentence, providing a supplemental affidavit from expert
Wayne Coleman asserting “record” can be read to
refer to “digital record, ” and thus, to digital
record royalties. Pls.' Mot. Reconsider, Ex. 1. Once
again, there is no reason ADTR could not have presented this
affidavit initially, and the Court need not even consider it.
Nevertheless, it is worth noting that ADTR's argument, in
conjunction with Coleman's affidavit, says nothing as to
how the reader is to imply a dispute about digital royalty
rate into the final sentence of Paragraph 21. Even
if ADTR was unsure as to the type and quantum of damages owed
at the time it filed the Second Amended Complaint,
id. at 2 n.2, and therefore decided to expand the