MTR GAMING GROUP, INC. v. ARNEAULT
Filing
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MEMORANDUM AND OPINION re 27 MOTION for Partial Reconsideration of the Court's September 27, 2012 Order Granting Motion to Dismiss as to Count VI Under The Pennsylvania Trade Secrets Protection Act filed by MTR GAMING GROUP, INC. Signed by Judge Arthur J. Schwab on 8/29/2013. (lmt)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
MTR GAMING GROUP, INC. ,
Plaintiff,
v.
EDSON R. ARNEAULT,
Defendant.
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Civil Action No. 11-208 ERIE
MEMORANDUM OPINION
Before the Court is MTR’s Motion for Partial Reconsideration of the Court’s September
27, 2012 Order (doc. no. 23) Granting Arneault’s Motion to Dismiss Count VI (for Violation of
Pennsylvania’s Trade Secrets Protection Act) with Prejudice. Doc. no. 27.1 Arneault filed a
Response to the Motion for Partial Reconsideration (doc. no. 29), making the matter ripe for
disposition. For the reasons set forth below, MTR’s Motion for Partial Reconsideration will be
denied.
Because the Court writes primarily for the benefit of the parties who are intimately
familiar with the facts and procedural history of this case, and because the prior Court Order
(doc. no. 23) gave a thorough recitation of all relevant facts, a factual background will not be
provided as a separate section herein. Instead, the Court will set forth any facts necessary to
explain its decision to deny this Motion for Partial Reconsideration in the “Discussion” section,
infra.
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This case originated in the Erie Division of the United States District Court for the Western District of
Pennsylvania and was originally assigned to former Chief Judge McLaughlin. On August 27, 2013, this
case was reassigned to this Court for further adjudication.
I. Standard of Review
A Motion for Reconsideration is a device of limited utility. Pahler v. City of Wilkes
Barre, 207 F.Supp.2d 341, 355 (M.D. Pa. 2001). “The purpose of a Motion for Reconsideration
. . . is to correct manifest errors of law or fact or to present newly discovered evidence.” Howard
Hess Dental Laboratories Inc. v. Dentsply Intern., Inc., 602 F.3d 237, 251 (3d Cir. 2010), citing
Max’s Seafood Café by Lou Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999) (quoting
Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985).
Generally, a Motion for Reconsideration will only be granted if the moving party can
prevail on one of the following three grounds: (1) if there has been an intervening change in
controlling law; (2) if new evidence, which was not previously available, has become available;
or (3) if it is necessary to correct a clear error of law or to prevent manifest injustice. See,
Howard Hess Dental, 602 F.3d at 251, citing Max’s Seafood Café, 176 F.3d at 677.
A Court may not grant a Motion for Reconsideration when the motion simply restyles or
rehashes issues previously presented. Pahler 207 F.Supp.2d at 355; see also Carroll v. Manning,
414 Fed. Appx. 396, 398 (3d Cir. 2011) (affirming denial of “motion for reconsideration and
‘petition’ in support thereof appears to merely reiterate the allegations made in the . . . petition
and does not set forth any basis justifying reconsideration.”); and Grigorian v. Attorney General
of U.S., 282 Fed. Appx. 180, 182 (3d Cir. 2008) (affirming denial of Motion to Reconsider
because it “does nothing more than reiterate the arguments underlying his motion to reinstate the
appeal.”).
A Motion for Reconsideration “addresses only factual and legal matters that the Court
may have overlooked . . . . It is improper on a motion for reconsideration to ask the Court to
rethink what [it] had already thought through rightly or wrongly.” Glendon Energy Co. v.
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Borough of Glendon, 836 F. Supp. 1109, 1122 (E.D. Pa. 1993) (internal citation and quotes
omitted). Because federal courts have a strong interest in the finality of judgments, motions for
reconsideration should be granted sparingly. Rossi v. Schlarbaum, 600 F.Supp.2d 650, 670 (E.D.
Pa. 2009).
II. Discussion
Returning to the three bases upon which a Partial Motion for Reconsideration, such as
this one, may be granted, MTR here does not argue that: (1) there has been an intervening
change in controlling law, nor (2) new evidence, which was not previously available, has become
available; rather, Plaintiff claims that reconsideration of Chief Judge McLaughlin’s prior Order
(doc. no. 23) is necessary to (3) correct a clear error of law or to prevent manifest injustice.
A.
The Court’s Interpretation of the Release of MTR’s Claims
1. Interpretation of Sections 3.1 and 3.2 of the Settlement Agreement
First, MTR contends that the Court’s interpretation of the phrase “any and all claims” set
forth in its Settlement Agreement with Arneault incorrectly assumed that “any and all claims”
included future claims, thereby constituting a clear error of law or creating a manifest injustice.
Doc. no. 28, p. 2.
Under West Virginia law, settlement agreements are contracts and subject to enforcement
like any other contract.2 Marcus v. Staubs, 736 S.E.2d 360, 374 (W.Va. 2012). Contract
interpretation is a question of law requiring a court to determine the meaning and legal effect
solely from the document’s contents. Stanley v. Huntington Nat. Bank, 492 Fed.Appx. 456, 459
(4th Cir. 2012). Where the contract language is clear and unambiguous, it “cannot be construed
and must be given effect and no interpretation thereof is permissible.” Stanley v. Huntington Nat.
Bank, 492 Fed.Appx. 456, 459 (4th Cir. 2012) quoting Berkeley Cnty. Pub. Serv. Dist. v. Vitro
2
The parties agree that West Virginia law applies to the contract (i.e., the Settlement Agreement) at issue.
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Corp. of Am., 162 S.E.2d 189, 200 (W.Va. 1968); see also Kanawha Banking & Trust Co. v.
Gilbert, 46 S.E.2d 225, 232–33 (W.Va. 1947). A contract is ambiguous only if it is “reasonably
susceptible of two different meanings or is of such doubtful meaning that reasonable minds
might be uncertain or disagree as to its meaning.” Mylan Labs. Inc. v. Am. Motorists Ins. Co.,
226 W.Va. 307, 700 S.E.2d 518, 524 (2010). In interpreting the contract, the court must construe
the terms of the contract so as to give meaning and effect to every part of the contract. Goodman
v. Resolution Trust Corp., 7 F.3d 1123, 1127 (4th Cir. 1993).
As noted above, MTR urges this Court to reconsider the determination that the plain
meaning “any and all claims” included future claims. “[A]lthough a general release usually
includes only claims in existence at the time it is executed, it may bar contingent and future
claims when the intent of the parties to that effect is clear.” Nahtel Corporation v. West Virginia
Pulp & Paper Co., 141 F.2d 1 (2d Cir. 1944); see also, Murphy v. North Am. River Runners, Inc.,
412 S.E.2d 504, 511 (W.Va. 1991) (Language of a preinjury exculpatory agreement or
anticipatory release stating that defendant is relieved in effect from all liability for any future loss
or damage is sufficiently clear to waive common-law negligence action, even though language
does not include explicitly the words “negligence” or “negligent acts or omissions”).
In Multiplex, Inc. v. Raleigh County Bd. of Educ., 709 S.E.2d 561 (W.Va. 2011), the
Supreme Court of Appeals of West Virginia determined that a release stating that it was limited
to “events arising out of the alleged wrongful acts set forth in the aforementioned Complaint
[filed in 2006 by the plaintiff]” was the only matter released, because this was the only such
matter as may fairly be said to have been within the contemplation of the parties at the time the
release was executed. 706 S.E.2d at 564.
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Here, it is undisputed that the parties agreed to the following in their multi-page
Settlement Agreement: In Section 3.1, Arneault agreed to release MTR from, “any and all
claims . . . which [Arneault] now has or may have against [MTR] through and including the
Effective Date of this [Settlement] Agreement.” See section 3.1 of the Settlement Agreement.
In Section 3.2 of the same Settlement Agreement, MTR released Arneault from “any and all
claims . . . actual or alleged, known or unknown, including those which relate to the Lawsuit, the
Employment Agreement, the DCA[,] and, . . . all claims under the Consulting Agreement.” See
section 3.2 of the Settlement Agreement.
Based on this distinctive and divergent language found in two successive clauses of the
Settlement Agreement, and a comparison of same, the Court determined that document clearly
expressed the parties’ intent to bar all any and all claims of MTR (including those that were
“known and unknown” and including those which related to the Lawsuit, etc.), as well as the
parties’ intent to bar any and all of Arneault’s claims through the effective date of the Settlement
Agreement. The different language signaled to the Court that the parties differed with respect to
the scope of their releases. The Court continues to conclude that a plain reading of these two
clauses results in two different scopes, and the Court declines to “rethink” this matter, given that
it is clear that Court has already thought it through.
2. Interpretation of Sections 3.7 of the Settlement Agreement
Next, the Court held that the “Settlement Agreement makes clear that MTR was aware of
and concerned about the possibility that Arneault might engage in the unauthorized disclosure of
its trade secrets at some point in the future.” Doc. no. 23, p. 29, citing Section 2.5 of the
Settlement Agreement. The Court also noted that Section 2.6 of the Settlement Agreement
required Arneault to return all proprietary trade secret information to MTR. Id., p. 30. Finally,
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the Court noted that Section 3.7 of the Settlement Agreement “expressly reserves to MTR the
right to enforce this contractual obligation notwithstanding the release provision [referring to
Section 3.2 where MTR released Arneault from “any and all claims”].” The Court continued in
this vein by stating:
In creating this contractual remedy, the parties mutually acknowledged
MTR’s interest in preserving its confidential trade secrets from unauthorized
divulgence on the part of Arneault in the future. Further, the parties expressly
empowered MTR to protect against this contingency, but only insofar as MTR could
enforce its contractual rights under the Settlement Agreement. Importantly, the
reservation-of-rights clause in the Settlement Agreement applies only to “rights,
privileges, benefits, duties or obligations imposed upon any of the Parties by reason
of, or otherwise arising under, this Agreement.” (Complaint Ex. 2 at ¶ 3.7 (emphasis
added).) Because this reservation-of-rights provision expressly preserves only
contractual remedies arising under the Settlement Agreement and omits any mention
of rights arising under statutory or common law tort principles, and in light of the
otherwise broad language of the release language, we may infer that the release
provision was intended to cover the type of tortious trade secret violations contained
in Count 6. This inference is especially warranted given the parties’ express
acknowledgement in the Settlement Agreement that they were represented by counsel
during the negotiations process and entered into the Agreement with full awareness of
its terms. See West, supra, at *2 (upholding general release provision which was
clear and unambiguous where, among other things, the plaintiffs against whom the
provision was being raised were represented by counsel during the negotiation of the
settlement and were apparently aware of and consented to the release language).
Accord Grant County Sav. & Loan Ass’n v. RTC, 968 F.2d 722, 724-25 (8th Cir.
1992) (cited in Grant, supra, for the proposition that “court of appeals will assume
parties were fully aware of the terms and scope of their agreement when they have
negotiated the release with the assistance of counsel and agreed to the language”).
Id., pp. 30-31.
MTR contends that this conclusion is in discord with West Virginia law. In support of its
contention, MTR cites authority from the Court of Appeals for the Fourth Circuit, and claims
those cases stand for the proposition that West Virginia law allows a party to assert both a
statutory claim under West Virginia’s Uniform Trade Secrets Act as well as breach of contract
claim for violating a trade secret provision. Doc. no. 28, p. 11. While this Court certainly
acknowledges those cases, the Court notes that MTR incorrectly asserts that the Court of
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Appeals for the Fourth Circuit has determined that a party such as MTR cannot relinquish, vis-àvis its Settlement Agreement with Arneault, any statutory claim it may hope to pursue under
West Virginia’s Uniform Trade Secrets Act. A party is free to contract away any rights it may
have, and as Judge McLaughlin’s Opinion noted (see quote above), MTR did just that with the
assistance of its own counsel. Again, this Court will not “rethink” that issue, and, will not grant
MTR’s Motion for Reconsideration in this regard.
3. Interpretation Required Extrinsic Evidence and Discovery
Third, MTR suggests that the language of the Release is ambiguous and should not be
interpreted at this juncture of the legal proceedings, thereby allowing the parties to move forward
with discovery on Count VI. MTR cites law from the United States Court of Appeals for the
Third Circuit for the procedural question of whether a Motion to Dismiss under Fed.R.Civ.P. 12
is the appropriate stage of litigation to interpret a settlement agreement such as the one in this
case. In making this argument, MTR first assumes that the Court found the relevant provisions
of the Settlement Agreement ambiguous.
The Court properly considered the Settlement Agreement’s terms (which impacted its
ruling on Count VI), because the Settlement was attached to the Complaint, and said terms were
not ambiguous. These terms were plain on their face and, as noted above, the Court conducted a
thorough analysis of each relevant section of the Settlement Agreement, and ultimately
concluding that the “plain meaning” of those relevant sections called for the dismissal of Count
VI.
As this Court has noted above, West Virginia contract interpretation law requires a Court
to determine the meaning and legal effect solely from the document’s contents, see Stanley,
supra., and settlement agreement are subject to the rules of contract interpretation and
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enforcement. See Huntington Nat. Bank, supra. MTR’s suggestion that the Court committed a
“manifest legal error” when it without considering extrinsic evidence or allowing discovery is
not a viable argument, given that the Settlement Agreement was unambiguous and thus,
consideration of such evidence would have violated both procedural Third Circuit and
substantive Fourth Circuit law.
III. Conclusion
Based on the foregoing law and authority, the Court will deny MTR’s Motion for
Reconsideration of the Court’s September 27, 2012 Order (doc. no. 23) and will enter an
appropriate Order simultaneously with the filing of this Opinion.
s/Arthur J. Schwab
Arthur J. Schwab
United States District Judge
cc:
All ECF counsel of record
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