JTS Choice Enterprises, Inc. v. E.I. Du Pont De Nemours and Company et al

Filing 494

ORDER denying 482 Plaintiffs Amended Motion to Alter or Amend Judgment Pursuant to F.R.C.P. 59(e) ECF No. 480 is DENIED, by Judge William J. Martinez on 7/22/2014.(evana, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 11-cv-03143-WJM-KMT
JTS CHOICE ENTERPRISES, INC.,
Plaintiff,
v.
E.I. DUPONT DE NEMOURS AND COMPANY,
Defendant.

ORDER DENYING PLAINTIFF’S MOTION TO ALTER OR AMEND JUDGMENT
PURSUANT TO F.R.C.P. 59(e)

Plaintiff JTS Choice Enterprises (“Plaintiff”) brings this action against Defendant
E.I. DuPont De Nemours and Company (“Defendant” or “DuPont”) alleging that
Defendant engaged in anticompetitive actions that violated various federal and state
laws. (Sec. Am. Compl. (“SAC”) (ECF No. 100) pp. 17-28.) On February 26, 2014, the
Court entered an Order denying Plaintiff’s Motion for Partial Summary Judgment and
granting Defendant’s Motion for Summary Judgment (“SJ Order”) (ECF No. 467).
Before the Court is Plaintiff’s Motion to Alter or Amend that SJ Order (“Motion”). (ECF
No. 480). For the reasons set forth below, the Motion is denied.
I. LEGAL STANDARD
Plaintiff has filed the instant Motion pursuant to Federal Rule of Civil Procedure
59(e). (ECF No. 480.) “Rule [59(e)] was adopted to make clear that the district court
possesses the power to rectify its own mistakes in the period immediately following the
entry of judgment.” White v. N.H. Dep’t of Emp’t, 455 U.S. 445, 450 (1982) (internal

quotation marks and brackets omitted). Accordingly, the Court may amend the
judgment in its discretion to correct clear error, including a misapprehension of the
controlling law, or to prevent manifest injustice. Servants of the Paraclete v. Does, 204
F.3d 1005, 1012 (10th Cir. 2000).
A Rule 59(e) motion “cannot be used to advance [new] arguments that could
have been raised in prior briefing.” Grynberg v. Total S.A., 538 F.3d 1336, 1354 (10th
Cir. 2008); see also GSS Grp. Ltd. v. Nat’l Port Auth., 680 F.3d 805, 812 (D.C. Cir.
2012) (“Rule 59(e) motions are aimed at reconsideration, not initial consideration.”)
(internal quotations omitted). It also cannot be used to expand an argument to
encompass new issues that could have been raised prior to entry of judgment. Steele
v. Young, 11 F.3d 1518, 1520 n.1 (10th Cir. 1993) (“Rule 59(e) cannot be used to
expand a judgment to encompass new issues which could have been raised prior to
issuance of the judgment.”). Finally, Rule 59(e) does not permit a party to rehash
arguments that were previously addressed. Servants of the Paraclete, 204 F.3d at
1012 (holding that a party moving to reconsider a prior ruling should not “revisit issues
already addressed or advance arguments that could have been raised in prior
briefing.”).
As the Court has yet to enter judgment, Rule 59(e) does not technically apply to
this case. See Fed. R. Civ. P. 59(e) (“A motion to alter or amend a judgment must be
filed no later than 28 days after the entry of the judgment.”) (emphasis added).
However, the United States Court of Appeals for the Tenth Circuit has recognized that a
district court has broad discretion to reconsider its interlocutory rulings before the entry

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of judgment. See Rimbert v. Eli Lilly & Co., 647 F.3d 1247, 1251 (10th Cir. 2011)
(“[D]istrict courts generally remain free to reconsider their earlier interlocutory orders.”).
That discretion extends to rulings on summary judgment motions that resolve less than
the entire case. See Fye v. Okla. Corp. Comm’n, 516 F.3d 1217, 1223-24 n.2 (10th Cir.
2008).
Because judgment has yet to be entered in this case, the Court may apply a less
stringent standard than that applicable to a Rule 59(e) motion. See Nat’l Bus. Brokers,
Ltd. v. Jim Williamson Prods., Inc., 115 F. Supp. 2d 1250, 1256 (D. Colo. 2000).
However, “[n]otwithstanding the district court’s broad discretion to alter its interlocutory
orders, the motion to reconsider ‘is not at the disposal of parties who want to rehash old
arguments.’” Id. (quoting Young v. Murphy, 161 F.R.D. 61, 62 (N.D. Ill. 1995)).
“Rather, as a practical matter, to succeed in a motion to reconsider, a party must set
forth facts or law of a strongly convincing nature to induce the court to reverse its prior
decision.” Id. Even under this lower standard, “[a] motion to reconsider should be
denied unless it clearly demonstrates manifest error of law or fact or presents newly
discovered evidence.” Id.
II. ANALYSIS
Plaintiff’s Second Amended Complaint brought anti-trust claims under the
Sherman Act and the Clayton Act, and state law claims for common law fraud, breach
of the duty of good faith and fair dealing, and a violation of the Colorado Consumer
Protection Act. (ECF No. 100.) The Court granted summary judgment in Defendant’s
favor on all claims. (ECF No. 467.) However, in the instant Motion, Plaintiff seeks

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reconsideration of only those portions of the Court’s SJ Order that relate to Plaintiff’s
claims for fraud and breach of the duty of good faith and fair dealing. (ECF No. 480.)
Thus, the Court will discuss only those portions of the SJ Order.
A.

Fraud Claim
Plaintiff contends that, in granting summary judgment for Defendant, the Court

failed to recognize disputed material facts, misconstrued Plaintiff’s arguments, and
caused manifest injustice to Plaintiff. (ECF No. 480 at 15.) In response, Defendant
contends that Plaintiff is attempting to reargue deficient fraud theories or raise new
theories that were not previously briefed. (ECF No. 486 at 4.) The Court will address
Plaintiff’s arguments below.
1.

Agency Theory

Plaintiff first contends that it can prevail on its fraud claim—even in the absence
of evidence showing that Mr. Fallows was aware that his statements were
false—through the agency doctrine. (ECF No. 480 at 16-18.) Specifically, Plaintiff
contends that Mr. Fallows was not required to be aware that his statements were false
so long as DuPont executives knew that Mr. Fallows was providing false information.
(Id.)
This agency theory of liability was not raised in Plaintiff’s affirmative Motion for
Summary Judgment or in Plaintiff’s opposition to Defendant’s Motion for Summary
Judgment. (See ECF Nos. 350 & 370.) Plaintiff’s prior briefing did not cite the sources
it now quotes, and did not argue that DuPont could be held liable for innocent acts of its
agents. (Id.) As it was Plaintiff’s burden to show that summary judgment was not

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appropriate, and Plaintiff chose not to make this argument in either its response to
Defendant’s Motion or in its affirmative summary judgment motion, the Court will not
permit Plaintiff to raise this new argument in the instant Motion. See Snowden v.
Connaught, 138 F.R.D. 138, 139-40 (D. Kan. 1991) (“[A] party who fails to present his
strongest case in the first instance generally has no right to raise new theories or
arguments in a motion to reconsider.”)
Accordingly, the Court declines to consider whether Plaintiff could have prevailed
on summary judgment under the agency theory.
2.

Knowledge of Assistance via Empowerment Dollars Account

Plaintiff next argues that it has presented evidence that “directly contracts” the
Court’s prior findings of fact, and which establishes that it can prevail on the fraud
claim. (ECF No. 480 at 20.) In its affirmative Motion for Summary Judgment, Plaintiff
argued that Mr. Fallows knowingly stated that he did not know where Metro was getting
the money to offer deep discounts to Plaintiff’s customers, and that such money did not
come from DuPont. (ECF No. 350 at 25.) The Court found that these statements were
false because DuPont admitted that it had guaranteed a loan for Metro. (ECF No. 467
at 14-15.) However, the Court found that these false statements could not support a
fraud claim because Mr. Fallows did not know about the loan payments, so he did not
know his statements were false. (Id.)
In the instant Motion, Plaintiff points to evidence showing that Mr. Fallows had
access to Metro’s Empowerment Dollars account and was tasked with meeting with
Metro to review how Metro was using those Empowerment Dollars, so he knew about
the additional Empowerment Dollars that DuPont was providing to Metro. (ECF No.
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480 at 20.) Plaintiff therefore argues that it has presented evidence from which a
reasonable juror could find that Mr. Fallows knew that DuPont was to Metro money that
Metro was using to solicit Plaintiff’s customers. (Id.)
Notably, in its affirmative Motion for Summary Judgment, Plaintiff did not cite any
of this evidence in support of its argument that Mr. Fallows made knowingly false
statements. (ECF No. 350 at 27.) In that brief, Plaintiff argued only that “Mr. Fallows
affirmatively told [Plaintiff] that DuPont had not given Metro any funding, with knowledge
that he had not been apprised of the details of the sale and in fact did not know whether
DuPont had provided any funds to Metro.” (Id.) This argument suggested that DuPont
could be held liable for fraud because Mr. Fallows made false statements, despite the
fact that Mr. Fallows did not know his statements were false. The Court rejected this
argument in its SJ Order. (ECF No. 467 at 15.) Plaintiff’s Motion for Summary
Judgment did not argue that Mr. Fallows was aware of DuPont providing additional
Empowerment Dollars to Metro, or that Mr. Fallows had made misrepresentations about
any money other than the funds Metro used to acquire DCC. (ECF No. 350 at 27.)
Thus, Plaintiff failed to put this specific evidentiary fact at issue in its affirmative Motion
for Summary Judgment.
Additionally, in opposing Defendant’s Motion for Summary Judgment, Plaintiff
failed to make any argument regarding Mr. Fallows’s knowledge of additional
Empowerment Dollars that were provided to Metro. (ECF No. 370 at 31-33.) Instead,
Plaintiff simply cross-referenced its own Motion for Summary Judgment which, as noted
above, did not address this issue. (Id. at 33.) Thus, despite bearing the burden of
showing a triable issue of disputed fact, Plaintiff failed to properly raise this issue in its
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prior briefing.
The failure to raise this argument alone is sufficient basis to deny the Motion to
Reconsider. However, even considering the evidence Plaintiff now cites, the Court
sees no reason to reconsider its prior ruling. Plaintiff alleged that DuPont was liable for
fraud because Mr. Fallows repeatedly informed Plaintiff that he did not know where
Metro was getting the money to offer such deep discounts to Plaintiff’s customers.
(ECF No. 350 at 25.) The emails Plaintiff quotes in the instant Motion do not show that
these statements were false. Rather, these emails are communications between Mr.
Fallows, his superiors at DuPont, and representatives from Metro discussing how
DuPont could support Metro’s efforts to solicit new customers—i.e., customers that
were currently using competing paint lines—including providing additional
Empowerment Dollars. (See ECF No. 480-29 & 480-31 (referencing Metro’s attempts
to win over a customer that had previously been using BASF/FM paint).) These emails
do not show that DuPont was providing Metro with additional Empowerment Dollars that
Metro was using to lure Plaintiff’s customers into changing jobbers. As such, even
considering the new argument Plaintiff raises in the instant Motion, Plaintiff has not
shown that summary judgment on its fraud claim was inappropriate.
3.

Intent to Fulfill Promises to Stop Metro’s Poaching

Plaintiff next argues that the Court made erroneous factual findings in
conjunction with Mr. Fallows and Mr. Garcia’s intent to fulfill their promises to assist
Plaintiff. (ECF No. 480 at 20-21.) The Court previously found that “Plaintiff has failed
to point to any evidence showing that, at the time the disputed statements were made,
Messrs. Fallows and Garcia did not intend to fulfill the promises that they made to
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Plaintiff regarding their future conduct.” (ECF No. 467 at 17.) Plaintiff now contends
that this finding ignored evidence in the record. (ECF No. 480 at 22-23.)
As with previous arguments, the degree to which Plaintiff’s argument in the
instant Motion differs from its prior briefing is astonishing. In its affirmative Motion for
Summary Judgment, Plaintiff argued that it could prevail on its fraud claim because
DuPont’s regional managers, Messrs. Fallows and Garcia, were assuring Plaintiff that
they were doing everything they could to stop Metro from poaching customers, but that
DuPont’s national management team was undermining these efforts. (ECF No. 350 at
26-27 (“Despite any efforts made by the District Managers to control Metro, DuPont’s
national managers continued to encourage Metro’s behavior and never had the intent to
prevent Metro from soliciting JTS’s customers.”); ECF No. 395 at 18 (“DuPont cannot
escape liability for [Mr. Fallows’s] promises to stop Metro, because those promises
were coupled by a present intent by certain of its national managers not to stop
Metro.”).) Plaintiff cited evidence showing that Messrs. Fallows and Garcia’s efforts to
stop Metro from poaching its customers were ineffective, but blamed DuPont’s upper
management rather than the district managers. (Id.)
Having failed to prevail on that theory, Plaintiff changes course in the instant
Motion and attempts to blame Messrs. Fallows and Garcia. (ECF No. 480 at 22-23.)
Plaintiff claims that their statements that they would “do everything they could” to stop
Metro from taking Plaintiff’s customers were fraudulent because there is evidence
showing that Messrs. Fallows and Garcia had other tools at their disposal that they
could have used to punish Metro. (Id. at 22.)
Even if the Court were to consider this newly raised argument, Plaintiff’s claim in
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this regard suffers the same fatal flaw it did in the prior briefing. None of the evidence
Plaintiff cites shows that Messrs. Fallow or Garcia had the present intent not to fulfill
their promises at the time such promises were made. As such, these promises cannot
form the basis for a fraud claim. Nelson v. Gas Research Inst., 121 P.3d 340, 343
(Colo. Ct. App. 2005) (holding that a promise to do something in the future is not
actionable “[u]nless the speaker making the representations deliberately falsified his or
her intention to induce reliance.”). Thus, the Court sees no reason to reconsider its
prior ruling.
4.

Statements by other DuPont officials

Plaintiff next argues that the Court’s SJ Order misconstrued its position with
regard to the fraud claim. (ECF No. 480 at 24.) Plaintiff contends that its fraud claim
was not limited to statements made by Messrs. Fallows and Garcia, but that other
national managers for DuPont also made fraudulent statements. (Id. at 25-26.)
In its affirmative Motion for Summary Judgment, Plaintiff stated:
In response to JTS’s repeated inquiries about how Metro
could afford to offer such tremendous discounts to JTS’s
customers, see ¶ 66, Messrs. Fallows and Garcia repeatedly
told JTS (i) that DuPont did not know where Metro was
getting the money to fund its discounts, (ii) that the money
did not come from DuPont, and (iii) that Metro was not
getting anything that JTS was not also getting. These
statements were false.
(ECF No. 350 at 25.) Plaintiff also stated:
Upon Metro’s arrival in Colorado, Messrs. Fallows
and Garcia assured JTS that there would not be a change in
the market, and that they would not permit Metro to solicit
JTS’s customers. ¶ 59. They also told JTS that they would
treat it “fairly,” in that they would not do anything to give
Metro a competitive edge. ¶¶ 77-78. These statements were
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false.
In response to JTS’s “ongoing” requests to DuPont
that it stop Metro from soliciting its customers, ¶¶ 60-62,
DuPont also told JTS (i) that it would stop Metro, (ii) that the
problem had been addressed, and (iii) that Metro would be
held accountable under the Champion Program. ¶¶ 70-71.
These statements were false.
(Id. at 26.) The evidence cited by Plaintiff in support of these arguments (denoted by
the paragraph numbers which refer to the statement of facts section of Plaintiff’s brief),
shows that all of the allegedly false statements cited by Plaintiff were made by either
Mr. Fallows or Mr. Garcia. Thus, the only false statements specifically mentioned by
Plaintiff in the prior briefing were those attributed to Messrs. Fallows and Garcia.
The party opposing summary judgment bears the burden of pointing to specific
evidence in the record showing that a reasonable juror could find in its favor. Cross v.
The Home Depot, 390 F.3d 1283, 1290 (10th Cir. 2004) (“[O]n a motion for summary
judgment, it is the responding party’s burden to ensure that the factual dispute is
portrayed with particularity, without depending on the trial court to conduct its own
search of the record.”). This is particularly true with regard to fraud claims which, even
at the pleading stage, must be identified with a heightened level of particularity. See
Midgley v. Rayrock Mines, Inc., 374 F.Supp.2d 1039, 1047 (D.N.M. 2005) (“To survive
a motion to dismiss, an allegation of fraud must ‘set forth the time, place, and contents
of the false representation, the identity of the party making the false statements and the
consequences thereof.’”). The Court will not permit Plaintiff to re-cast its arguments
regarding which false statements supported its fraud claims.

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B.

Breach of the Duty of Good Faith and Fair Dealing
Plaintiff claims that the Court mischaracterized its argument regarding the basis

upon which DuPont breached the duty of good faith and fair dealing. (ECF No. 480 at
27.) Plaintiff contends that, because of this mischaracterization, the Court did not
address Plaintiff’s claim that DuPont improperly used the “anti-poaching” provision of
the Champion Contract to prevent Plaintiff from attempting to acquire Metro’s
customers, while allowing Metro to pursue Plaintiff’s customers. (Id.)
The Court disagrees that it failed to address this contention. In fact, the Court
held that, because Plaintiff was not an intended third-party beneficiary of the contract
between DuPont and Metro, “Plaintiff cannot show that Defendant breached the
covenant of good faith and fair dealing it owed to Plaintiff by failing to enforce the terms
of its contract with Metro.” (ECF No. 467 at 22.) In the instant Motion, Plaintiff offers no
evidence showing that it was a third-party beneficiary of the contract between DuPont
and Metro, and fails to offer any argument showing that the Court’s prior reasoning was
incorrect. Instead, Plaintiff continues to rehash old arguments, citing evidence in the
record showing that DuPont could have taken additional steps to punish Metro for
soliciting Plaintiff’s customers. (ECF No. 480 at 28.) As the Court has already ruled,
any deficiencies with regard to how DuPont enforced the Champion Contract between
DuPont and Metro cannot be pursued by Plaintiff. Thus, the Court sees no reason to
reconsider its prior ruling in favor of Defendant on Plaintiff’s claim for breach of the duty
of good faith and fair dealing.

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C.

Fairness and Judicial Economy
In sum, though the Court retains the ability to reconsider interlocutory motions

under a less stringent standard than that imposed by Rule 59(e), in consideration of
both judicial economy and fairness to the parties, judges in this district have imposed
limits on their broad discretion to revisit interlocutory orders and consider whether new
evidence or new legal authority has emerged, or whether the prior ruling was clearly in
error when deciding motions to reconsider interlocutory orders. See, e.g., Montano v.
Chao, 2008 WL 4427087, at *5-6 (D. Colo. Sept. 28, 2008) (applying Rule 60(b)
analysis to the reconsideration of interlocutory order); M.M. v. Zavaras, 939 F. Supp.
799, 801 (D. Colo. 1996) (applying law of the case doctrine to motion for
reconsideration of interlocutory order).
In the initial round of summary judgment briefing, Plaintiff had the opportunity to
respond to Defendant’s Motion for Summary Judgment, and also to file its own
affirmative Motion for Summary Judgment. Plaintiff’s briefing on these prior Motions
totaled nearly one hundred pages of fact and argument, and was accompanied by over
150 exhibits. (See ECF Nos. 350, 370 & 395.) In these briefs, Plaintiff had the
opportunity to make its best arguments, cite any relevant evidence, and rebut
Defendant’s contentions. The Court considered all of both parties’ submissions before
entering its SJ Order.
In the instant Motion, Plaintiff has failed to cite an intervening change in the law,
any evidence that was unavailable at the time of the original briefing, or any need to
correct clear error or prevent manifest injustice. Instead, Plaintiff has used the instant

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Motion to rehash old arguments, reframe pre-existing evidence, and attempt to raise
new arguments that could have been brought forth in its initial briefs. The Court will not
permit a Motion to Reconsider to be used as a second bite at the summary judgment
apple. See Fye v. Okla. Corp. Comm’n, 2006 WL 2792673, *2 (W.D. Okla. Sept. 26,
2006) (“Although the Court is free to reconsider and reverse its decision on an
interlocutory order, the circumstances do not warrant such reversal. In this case,
considerations of fairness and judicial economy clearly outweigh Plaintiff's interest in
getting a second (or third) bite at the summary judgment apple.”).
III. CONCLUSION
For the reasons set forth above, Plaintiff’s Amended Motion to Alter or Amend
Judgment Pursuant to F.R.C.P. 59(e) (ECF No. 480) is DENIED.
Dated this 22nd day of July, 2014.
BY THE COURT:

William J. Martínez
United States District Judge

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