First Technology Capital, Inc. v. BancTec, Inc.

Filing 106

OPINION AND ORDER: The Court GRANTS 92 Motion for Leave to File, ORDERS the Clerk to file DE 93-1 in the record as the surreply to 90 and DENIES BancTec permission to file a sur-surreply. Signed by Magistrate Judge Robert E. Wier on June 26, 2017. (AWD) cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON
FIRST TECHNOLOGY CAPITAL,
INC.,
Plaintiff,
v.
BANCTEC, INC.,
Defendant.

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No. 5:16-CV-138-REW

OPINION AND ORDER

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FTC moves for leave to file a surreply to BancTec’s reply in support of its motion
for summary judgment. DE ##92 (Motion), 93 (Memorandum), 93-1 (Proposed surreply).
BancTec does not oppose FTC filing a surreply “so long as” the Court also permits a
“response” to the surreply, or, “for lack of a more elegant term,”1 a sur-surreply. DE #95
(Response), 95-1 (Proposed sur-surreply). FTC replied, opposing BancTec filing a sursurreply. DE #97. The issues, as convoluted as the parties made them, are ripe for
consideration.
“Although the Federal Rules of Civil Procedure do not expressly permit the filing
of sur-replies, such filings may be allowed in the appropriate circumstances, especially
‘when new submissions and/or arguments are included in a reply brief, and a
nonmovant’s ability to respond to the new evidence has been vitiated.’” Key v. Shelby
Cnty., 551 F. App’x 262, 265 (6th Cir. 2014) (quoting Seay v. Tenn. Valley Auth., 339
F.3d 454, 481 (6th Cir. 2003)). “[M]any courts have noted” that surreplies “are highly

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Rednour v. Wayne Tp., 51 F. Supp. 3d 799, 810 (S.D. Ind. 2014).
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disfavored.” Liberty Legal Found. v. Nat’l Democratic Party of the USA, Inc., 875 F.
Supp. 2d 791, 797 (W.D. Tenn. 2012). The Sixth Circuit reviews a district court’s
decision whether to grant leave to file a surreply “under the deferential abuse-ofdiscretion standard.” Mirando v. U.S. Dep’t of Treasury, 766 F.3d 540, 549 (6th Cir.
2014). A district court abuses its discretion, for example, when it denies permission to
file a surreply after a party presents “new arguments and new evidence in [its] reply
brief.” Eng’g & Mfg. Servs., LLC v. Ashton, 387 F. App’x 575, 583 (6th Cir. 2010).
Overall, though, “[w]hether to permit a party to file a surreply is a matter left to the trial
court’s discretion.” Rose v. Liberty Life Ins. Co. of Boston, No. 3:15-CV-28-DJH-CHL,
2015 WL 10002923, at *1 (W.D. Ky. Oct. 19, 2015); see also First Tech. Capital, Inc. v.
BancTec, Inc., No. 5:16-CV-138-REW, 2016 WL 7444943, at *1-*2 (E.D. Ky. Dec. 27,
2016) (previously, in this case, granting FTC leave to file a surreply and setting out the
standard).
The Court has, in the context of the motion, fully assessed the underlying
briefing—DE ##72, 80, and 90—as well as the briefing on the requests for leave to file a
surreply and sur-surreply—DE ##92, 93, 95, and 97. The Court, in an exercise of its
discretion, finds FTC’s proposed surreply appropriate and BancTec’s proposed sursurreply inappropriate.2 The questions are properly distinct, and the Court bifurcates the
analysis:
First—Has FTC justified filing a surreply? Yes.

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The Court also agrees with FTC that BancTec’s approach to the issue—seeking to file
an additional brief by simply attaching it to a response, instead of filing a separate motion
for leave—was procedurally improper. See DE #97, at 2. The Court, attempting to
efficiently evaluate BancTec’s contentions on the merits, will effectively construe DE
#95 as containing a motion for leave to file a sur-surreply.
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The Sixth Circuit’s focus is whether “new submissions and/or arguments are
included in a reply brief.” Key, 551 F. App’x at 265; Ashton, 387 F. App’x at 583. Here,
as FTC persuasively lays out and BancTec does not in any way dispute, BancTec
“offer[ed] a completely new argument” in DE #90 that it had not made in DE #72—“that
even if it did breach Schedule 8 by failing to pay a month of rent, FTC ‘treated the
contract as continuing’ and cannot withhold performance of its end of what BancTec sees
as the Schedule 8 bargain . . . or alternatively, that even if there were a breach and ‘FTC
did not treat the contract as continuing, the alleged breach was not material.’” DE #93, at
2 (emphases in original). These arguments are indeed new to the reply. Compare DE #721 (not making these arguments), with DE #90 (making them). The Court also finds FTC’s
proposed surreply to, indeed, be “confined completely to the new theory offered by
BancTec in reply[.]” DE #93, at 3.
Additionally, FTC filed the motion for leave to file a surreply essentially
immediately (1 day) after BancTec’s reply, greatly diminishing any timing or
gamesmanship concerns that may negatively tinge surreply motions. See Key, 551 F.
App’x at 265 (“[c]onsidering the amount of time that passed between Shelby County’s
filing of its reply brief and Key’s filing of her motion for leave to file a sur-reply” and
concluding the district court did not abuse its discretion in denying Key permission to file
a surreply given an “unexplained delay of six months in moving for leave to file” it).
Overall, under the Sixth Circuit’s standard, and in light of BancTec’s complete lack of
opposition, the Court finds permitting an FTC surreply, in these circumstances,
appropriate. FTC should fairly have an opportunity to address the new arguments or
theories BancTec injected into the reply.

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Second—Has BancTec justified filing a sur-surreply? No.
BancTec does not attempt, in any way, to meet the legal standard for filing a sursurreply. Rather, it simply asserts, citing no authority, that “[b]ecause [it] must carry the
burden of proof for its motion for summary judgment . . . [it] should be permitted to have
the final word.” DE #95, at 1.
That is not the law. Indeed, the argument runs counter to the fundamental
principles behind surreply authorization. Of course, in an ordinary briefing cycle, a
movant does have the final word. See LR 7.1(c) (permitting replies). However, when the
movant improperly (as BancTec did here) uses its reply to introduce new arguments not
contained in the underlying motion, the movant opens the door to the Court authorizing
the nonmovant to file a surreply to address and conclude briefing on the novel reply
theories. See, e.g., Key, 551 F. App’x at 265. BancTec’s argument logically dictates that
every surreply authorization automatically, if implicitly, sanctions a sur-surreply, which,
of course, is not correct (and BancTec cites utterly no authority for the proposition). See,
e.g., Novartis Corp. v. Webvention Holdings, LLC, No. CCB-11-3620, 2016 WL
3162767, at *2 n.3 (D. Md. June 7, 2016) (considering a sur-surreply only because
“Novartis could not have addressed [new] surreply arguments”); PacTool Int’l, Ltd. v.
Kett Tool Co., Inc., No. C06-5367BHS, 2011 WL 2194010, at *1 (W.D. Wash. June 6,
2011) (denying leave to file a sur-surreply); Hill v. Ford Motor Co., No. 1:11-cv-799JEC, 2014 WL 916486, at *9 (N.D. Ga. Mar. 10, 2014) (same); Duchardt v. Midland
Nat’l Life Ins. Co., 265 F.R.D. 436, 439 (S.D. Iowa 2009) (noting the Court’s
“discretion” to “consider” a sur-surreply). The Court does not permit surreplies, and
certainly not sur-surreplies, as a matter of course.

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Further, even evaluating BancTec’s request under the standard surreply
authorization rubric, BancTec does not claim (much less establish) that FTC’s surreply
raises any novel arguments or theories. The Court has reviewed the proposed sur-surreply
and finds that it does not address any new arguments that FTC improperly inserted in its
surreply. Indeed, FTC properly restrained the scope of its surreply to the new issues
BancTec improperly included in reply. The proposed sur-surreply merely responds to the
surreply arguments (none of which is new), an insufficient basis to permit yet another
brief. Enough, says the Court.
For these reasons, the Court GRANTS DE #92, ORDERS the Clerk to file DE
#93-1 in the record as a surreply to DE #90, and DENIES BancTec permission to file a
sur-surreply.
This the 26th day of June, 2017.

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