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Keystone Northeast, Inc. v. Keystone Retaining Wall Systems, LLC

United States District Court, D. South Carolina, Greenville Division

March 25, 2015

Keystone Northeast, Inc., f/k/a Pavers Plus GSP, Inc., assignee of Madawaska Brick and Block Corp., Plaintiff,
Keystone Retaining Wall Systems, LLC, f/k/a Keystone Retaining Wall Systems Inc., a division and wholly owned subsidiary of Contech Construction Products, Inc., Defendants.



This matter is before the Court on the motion of the defendants, Keystone Retaining Wall Systems, LLC ("KRWS") and Contech Construction Products, LLC ("Contech") (collectively "the defendants") for reconsideration and clarification (ECF No. 134) and on the motion of the plaintiff Keystone Northeast, Inc. ("KNE") to alter or amend (ECF No. 135). The Court will reconsider and revise its previous order as stated herein.


On March 16, 2015, the Court issued an Opinion and Order in this case granting in part and denying in part the defendants' motion for summary judgment and granting in substantial part the plaintiff's motion for summary judgment (ECF No. 131) (the "Summary Judgment Order"). The background of the case is thoroughly discussed in the Summary Judgment Order, and the Court assumes familiarity with the terms, facts, and findings therein. On March 20, 2015, the defendants filed a motion for reconsideration and clarification, moving the Court to reconsider its finding that "[t]he defendants would not have automatically been entitled to terminate the License Agreement at the end of the term in 2010, so the plaintiff is not precluded from seeking damages accruing beyond that time" ("Finding 3").[1] In support of its request, the defendants cited a number of cases that, while relevant, were not cited in its original briefing. At the Court's invitation, the plaintiff submitted a motion to reconsider the Courts finding that "[t]he Transfer Agreements do depend on the License Agreement, so the plaintiff did not have a perpetual right to receive royalties regardless of its compliance with the License Agreement" ("Finding 4"). Both parties have filed responses in opposition to the motions to reconsider. ( See ECF Nos. 136 and 137.)


The plaintiff filed its motion pursuant to Rule 59(e), and the defendants did not invoke a particular rule. The Summary Judgment Order is an interlocutory order under Rule 54(b) because it did not resolve all of the claims to the point where judgment could be entered. See Am. Canoe Ass'n v. Murphy Farms, Inc., 326 F.3d 505, 514 (4th Cir. 2003) ("[A]n order of partial summary judgment is interlocutory in nature."); Akers v. Caperton, 998 F.2d 220, 223 (4th Cir. 1993) (observing that the disposition of a case that left the issues of damages and injunctive relief to be determined was an interlocutory order because it "did not adjudicate all the claims and the rights and liabilities of all the parties'") (quoting Fed.R.Civ.P. 54(b)). "Although the Fourth Circuit Court of Appeals has not specifically articulated the standard for evaluating a motion for reconsideration filed under Rule 54(b), the Court has held motions under Rule 54(b) are not subject to the strict standards applicable to motions for reconsideration of a final judgment.'" Long v. O'Reilly's Auto. Stores, Inc., No. CIV.A. 6:12-901-MGL, 2014 WL 2864589, at *1 (D.S.C. June 23, 2014) (quoting Am. Canoe Ass'n, 326 F.3d at 514). "So long as the same case remains alive, there is power to alter or revoke earlier rulings." 18B Charles Allan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure 4478, at 637 (2d ed. 2002).

Nevertheless, "[d]istrict courts in the Fourth Circuit look to the standards of motions under Fed.R.Civ.P. 59 for guidance." Id; see also Pure Fishing, Inc. v. Normark Corp., No. CA 3:10-2140-CMC, 2012 WL 4009628, at *1 (D.S.C. Sept. 12, 2012) aff'd, 564 F.Appx. 601 (Fed. Cir. 2014) ("This court finds the standard applicable to reconsideration of final orders useful, though non-binding.") As with a motion under Rule 59, "appropriate reasons for granting reconsideration under Rule 54 are: (1) to follow an intervening change in controlling law; (2) on account of new evidence; or (3) to correct a clear error of law or prevent manifest injustice." Long, 2014 WL 2864589 at * 2. This Court notes that a party's failure to cite authorities that were available at the time of the original briefing and were clearly relevant is not typically a justification for a motion to reconsider under Rule 59. See Great W. Cas. Co. v. Marathon Oil Co., No. 99 C 3101, 2001 WL 699957, at *3 (N.D. III. June 21, 2001) ("refus[ing] to permit [a party] to make new arguments using authorities that were available and relevant at the time [the party] filed its earlier motion"); Noon v. Sailor, No. NA99-0056-C-H/G, 2000 WL 684219, at *1 (S.D. Ind. Apr. 17, 2000) (cautioning that "a federal district court's decision is not a first draft, subject to a prolonged cycle of further comment, debate, and revision"); Potter v. Potter, 199 F.R.D. 550, 553 (D. Md. 2001) (observing that "[h]indsight being perfect, any lawyer can construct a new argument to support a position previously rejected by the court, especially once the court has spelled out its reasoning in an order").

The defendants have not provided an explanation for their failure to cite most of the authorities upon which they now rely.[2] The submission of these authorities at this stage is particularly problematic because the Court had originally scheduled the trial of this case to begin yesterday, affording the plaintiff a very limited opportunity to respond to this new authority. The Court is reluctant to revisit a lengthy order, which was drafted following a careful review of extensive briefing, but it is mindful that its "ultimate responsibility" is "to reach the correct judgment under law." Am. Canoe Ass'n, 326 F.3d at 515.

For this reason, the Court will consider the defendants' additional authority on Finding 3 and has also invited the plaintiff to move for the reconsideration of Finding 4. The Court has always been uncomfortable with the defendants' arguments in support of Finding 4, but accepted them as a reasonable limitation on the harsh implications of Finding 3. Furthermore, the importance of Finding 4 was arguably diminished by Finding 3 because the plaintiff would continue to receive the royalty share it was promised provided that it met minimal quotas, which were less than half the quotas of its former manufacturers. While the Court would prefer not to revise its Summary Judgment Order any more than necessary, it would be unfair to reconsider Finding 3 without also reconsidering Finding 4.


As noted above, the defendants urge the Court to reconsider its ruling on Finding 3 and the plaintiff urges the Court to reconsider Finding 4. Each will be discussed in turn.

I. Finding 3

The Court reached Finding 3 in response to the following question it posed in the Summary Judgment Order:

B. Assuming that it did not have a right to terminate the License Agreement at the end of 2008, would KRWS have been able to terminate the License Agreement as a matter of right at the end of 2010?

(S.J. Order at 17.) The Court found that "[t]he defendants would not have automatically been entitled to terminate the License Agreement at the end of the term in 2010, " and that, consequently, "the plaintiff [was] not precluded from seeking damages accruing beyond that time." (S.J. Order at 36-37.) The License Agreement provided in relevant part:

This Agreement shall commence as of the date hereof and continue until the first to occur of:
(a) January 1, 2001, with renewals for successive year terms as per the terms of previously existent license agreement with subsequent establishment of performance goals reasonably based upon previous years performance and market condition;
(b) Termination by mutual agreement of the parties;
(c) Termination under the provisions of Paragraph 20 of ...

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