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Inc. v. Sterling Commerce America, Inc

United States District Court, E.D. Tennessee

May 6, 2019

AMERICA'S COLLECTIBLES NETWORK, INC., d/b/a JEWELRY TELEVISION, Plaintiff,
v.
STERLING COMMERCE AMERICA, INC., Defendant.

          H. Bruce Guyton Magistrate Judge

          MEMORANDUM OPINION

          TRAVIS R. MCDONOUGH UNITED STATES DISTRICT JUDGE

         The United States Court of Appeals for the Sixth Circuit vacated this Court's prejudgment-interest award and remanded the case for further proceedings as to prejudgment interest. (Doc. 916, at 6.)

         I. BACKGROUND

         This case lives on, now ten years old, after many delays. Although the parties requested and agreed to some of the delays, the Court's own inaction accounts for most of the elapsed time. Previously, the Court awarded prejudgment interest equitably discounted by the impact of the Court's periods of dormancy. On remand, the Court must determine what effect, if any, its delays should have on the appropriate prejudgment-interest award.

         Plaintiff America's Collectibles Network Inc., d/b/a Jewelry Television (“JTV”) initiated this action on April 3, 2009 (Doc. 1), and filed an amended complaint on June 29, 2009 (Doc. 16). Defendant Sterling Commerce (America), Inc. (“Sterling”), filed a motion to dismiss JTV's complaint on July 22, 2009. (Doc. 18.) After the parties briefed the motion to dismiss, JTV moved to file a second amended complaint, which the Court allowed. (See Docs. 27, 31.) Sterling moved to dismiss JTV's second amended complaint on December 7, 2009. (Doc. 33.) On May 26, 2011-approximately seventeen months after Sterling filed its motion to dismiss JTV's second amended complaint-the Court entered its order denying Sterling's motion to dismiss. (Docs. 52, 53.)

         Seven months later, the Court entered the first scheduling order in December 2011- thirty-two months into the litigation. (Doc. 65.) That scheduling order set a trial date of August 5, 2013. (Id.) In August 2012, however, the Court granted the parties' motion to extend deadlines and reset trial for February 10, 2014. (Doc. 86.)

         On September 12, 2012, JTV filed a motion for partial summary judgment. (Doc. 87.) While that motion was pending, the parties again filed a joint motion for extension of time to complete discovery and to extend pretrial deadlines. (Doc. 144.) The Court granted the parties' motion and reset the trial for October 27, 2014, but warned that “in light of the potentially substantial record that will likely be filed with multiple motions for summary judgment, the trial date is subject to revision by the court as may be necessary to adequately address such motions.” (Doc. 153.) The Court's order also provided that fact discovery would close on December 31, 2014, approximately two months after the trial date. (See Doc. 144, at 5; Doc. 153.)

         On January 22, 2014, the parties filed a motion for a stipulated briefing schedule regarding dispositive motions. (Doc. 225.) In its order granting the parties' motion, the Court reset the trial for March 24, 2015. (Doc. 227.) On February 5, 2014, JTV filed a motion to amend the Court's scheduling order and to reopen limited discovery. (Doc. 229.) On February 7, 2014, the Court entered an order staying the deadlines for filing dispositive motions pending its ruling on JTV's motion to reopen limited discovery. (Doc. 236.) Two weeks later, the Court amended the scheduling order and reopened limited discovery. (Doc. 245.)

         On June 20, 2014, Sterling filed its motion for summary judgment. (Doc. 258.) Briefing was complete on October 2, 2014. (Docs. 316, 342.) Later that month, the Court ordered the parties to mediation, cancelled the March 2015 trial date, and stayed the case pending mediation. (Doc. 346.) The mediation failed, and on March 2, 2015, the Court lifted the stay and reset trial for August 26, 2016. (Doc. 365.)

         On March 14, 2016, more than a year later and almost two years after Sterling filed its motion for summary judgment, the presiding judge recused himself from the case. (Docs. 400, 401.) The Court subsequently entered an amended scheduling order resetting the trial for May 9, 2017. (Doc. 415.) On September 7, 2016-810 days after Sterling filed its motion for summary judgment-the Court granted in part and denied in part Sterling's motion. (Doc. 419.) In that same order, the Court also denied JTV's four-year-old motion for partial summary judgment. (Id.)

         Trial of this matter began on May 11, 2017. (Doc. 751.) On June 8, 2017, the jury returned a verdict for JTV on both tort and contract claims. (Doc. 814.) After briefing on election of remedies, the Court entered its judgment on October 5, 2017, awarding JTV: (1) $13, 000, 000 for negligent misrepresentation; (2) prejudgment interest pursuant to Tennessee Code Annotated § 47-14-123 at the rate of 1.22% per year, totaling $1, 350, 053.64; and (3) postjudgment interest pursuant to 28 U.S.C. § 1961 at a rate of 1.22% per year, compounded annually. (Doc. 868.)

         On November 2, 2017, JTV moved to alter the judgment, arguing that the prejudgment interest rate was inadequate.[1] (Doc. 870.) JTV argued for a rate of 5.4% because that rate reflected JTV's average cost of debt capital from September 2008 through September 2017. (Docs. 870, 870-1.) On January 9, 2018, the Court denied JTV's motion to alter the judgment, explaining that “equitable considerations-namely, the length of this litigation and delays not attributable to [Sterling]-merited awarding prejudgment interest at a rate significantly less than the [ten-percent] maximum permitted under Tennessee law.” (Doc. 879, at 4.)

         On March 26, 2019, the Sixth Circuit vacated the Court's prejudgment-interest award and remanded the case to this Court for further ...


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