Jordan Khan Music Co. v. Taglioli

• Decision Date: 28 February 2023
• Docket Number: Civil Action 4:21-cv-00045
• Parties: JORDAN KAHN MUSIC COMPANY, LLC et al., Plaintiffs, v. DEAN “DENO” TAGLIOLI et al., Defendants.
• Court: U.S. District Court — Eastern District of Texas

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JORDAN KAHN MUSIC COMPANY, LLC et al., Plaintiffs, v. DEAN “DENO” TAGLIOLI et al., Defendants.

Civil Action No. 4:21-cv-00045

United States District Court, E.D. Texas, Sherman Division

February 28, 2023

MEMORANDUM OPINION AND ORDER

AMOS L. MAZZANT UNITED STATES DISTRICT JUDGE

Pending before the Court are Defendants' Opposed Motion for Bill of Costs (Dkt. #231), Plaintiffs' Bill of Costs Submission (Dkt. #232), Plaintiffs' Motion to Alter or Amend Judgment (Dkt. #234), and Plaintiffs' Motion for New Trial (Dkt. #235). Having considered the motions and relevant pleadings, the Court finds that Defendants' Opposed Motion for Bill of Costs (Dkt. #231). Plaintiffs' Bill of Costs Submission (Dkt. #232), Plaintiffs' Motion to Alter or Amend Judgment (Dkt. #234), and Plaintiffs' Motion for New Trial (Dkt. #235) should be DENIED.

BACKGROUND

Defendant Deno Taglioli (“Taglioli”) is the sole owner of Defendant Emerald City Band, Inc. (“ECB”) and sole member of Defendant Emerald City Management, LLC (“ECM”) (together with ECB, “Emerald City Entities” and collectively with Taglioli “Defendants”). Taglioli previously worked with Plaintiffs Scott Michaels (“Michaels”) and Jordan Kahn (“Kahn”), each musicians who have now cut ties with Defendants and pursued success with their own companies-Plaintiffs Scott Michaels Entertainment, LLC (“SME”) and Jordan Kahn Music Company, LLC (“JKMC”), respectively.

After Kahn's 2014 departure from the Emerald City Entities, ECM brought suit (“Prior Suit”) in this Court alleging several claims against Kahn, including violations of the Lanham Act (4:14-cv-358 (Dkt. #1)). Kahn countersued alleging Lanham Act violations against Defendants, among other claims (4:14-cv-358 (Dkt. #14)). The crux of the Prior Suit involved the parties' disagreement as to who held the license for the trademark “Downtown Fever.” The case proceeded to trial, but before the Court charged the jury, the parties entered into a settlement agreement (“Settlement”) (4:14-cv-358 (Dkt. #210)). The Court accordingly dismissed each of the claims with prejudice on April 4, 2016 (4:14-cv-358 (Dkt. #213)).

Then in January 2021, a new dispute broke out among the parties and the current case began. This time, Michaels, SME, and JKMC filed suit against Defendants, and Kahn eventually joined as a co-plaintiff. In essence, Plaintiffs' case revolved around allegations that Defendants engaged in a series of nefarious and illegal business tactics. According to Plaintiffs, Defendants' malfeasance was rampant as they alleged that Defendants used trademarks of other competitors committed cybersquatting, willfully infringed digital audio software for their live performances, knowingly interfered with competitors' business opportunities, and illegally operated their businesses in a single-family residence in violation of Plano, Texas city codes.

Although Plaintiffs' claims changed throughout the case, they eventually brought nine different causes of action against Defendants (Dkt. #186 at p. 3). Individually, JKMC alleged four-trademark related claims, including violations of the Lanham Act, common law trademark infringement, common law unfair competition, and unjust enrichment. Michaels meanwhile, alleged causes of action for fraud and promissory estoppel. As a tandem, JKMC and Kahn brought a claim for violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”). And lastly, Michaels, SME, and JKMC brought two different declaratory judgment causes of action:

one relating to the noninfringement of Defendants' copyrights and the other relating to the unenforceability of two noncompete agreements that Michaels signed with the Emerald City Entities.

On the opposing side, the Emerald City Entities put forward two counterclaims of their own-both relating to one another. In one claim, the Emerald City Entities alleged that Michaels and his business, SME, breached Michaels's noncompete agreements with the Emerald City Entities. In the other, the Emerald City Entities asserted JKMC tortiously interfered with the same agreements.

Eventually, the parties' case proceeded to a jury trial. Prior to the jury's deliberations, Plaintiffs orally moved for judgment as a matter of law on the Emerald City Entities' counterclaims, arguing that the noncompete agreements were unenforceable under Texas law (Dkt. #204). The Court granted the motion and dismissed the counterclaims (Dkt. #204); (Dkt. #222).^[1]At the conclusion of the parties' cases, the Court submitted the following claims for the jury to consider: JKMC's four-trademark related claims; Michaels's fraud claim; and JKMC and Kahn's RICO claim (Dkt. #206). On all claims, Defendants prevailed with no findings of wrongdoing (Dkt. #211). The Court entered the Final Judgment that dismissed Plaintiffs' case with prejudice and denied as moot JKMC, Michaels, and SME's request for declaratory judgment regarding the enforceability of the noncompete agreements (Dkt. #222).

Subsequently, the parties submitted various post-trial motions. On September 14, 2022, JKMC, Michaels, and SME filed a motion to alter or amend the Final Judgment under Federal Rule of Civil Procedure 59(e) (Dkt. #234), while Kahn and JKMC moved for a new trial under Federal Rule of Civil Procedure 59(a) (Dkt. #235). In addition to these two motions, Plaintiffs and Defendants both filed competing motions for costs under Federal Rule of Civil Procedure 54(d) and argued that they were entitled to recover litigation costs because they were prevailing parties in this case (Dkt. #231); (Dkt. #232).

LEGAL STANDARD

I. Motion for New Trial

Under Rule 59(a) of the Federal Rules of Civil Procedure, a new trial can be granted to any party to a jury trial on any or all issues “for any reason for which a new trial has heretofore been granted in an action at law in federal court.” FED. R. CIV. P. 59(A). “A NEW TRIAL MAY BE GRANTED, FOR EXAMPLE, IF THE DISTRICT COURT FINDS THE VERDICT IS AGAINST THE WEIGHT OF THE EVIDENCE, THE DAMAGES AWARDED ARE EXCESSIVE, THE TRIAL WAS UNFAIR, OR PREJUDICIAL ERROR WAS COMMITTED IN ITS COURSE.” Smith v. Transworld Drilling Co., 773 F.2d 610, 613 (5th Cir. 1985). However, “[u]nless justice requires otherwise, no error in admitting or excluding evidence - or any other error by the court or a party- is grounds for granting a new trial . . . At every stage of the proceeding, the court must disregard all errors and defects that do not affect any party's substantial rights.” FED. R. CIV. P. 61.

II. Motion to Amend or Alter Judgment

The Fifth Circuit has observed that “[a]ny motion that draws into question the correctness of a judgment is functionally a motion under Civil Rule 59(e), whatever its label.” Harcon Barge Co. v. D&G Boat Rentals, Inc., 784 F.2d 665, 669-70 (5th Cir. 1986) (en banc) (citing 9 MOORE'S FEDERAL PRACTICE ¶ 204.12[1] at 4-67 (1985)). “Rule 59(e) serves the narrow purpose of allowing a party to correct manifest errors of law or fact or to present newly discovered evidence. . . . Reconsideration of a judgment after its entry is an extraordinary remedy that should be used sparingly.” Templet v. HydroChem Inc., 367 F.3d 473, 479 (5th Cir. 2004) (internal citations and quotations omitted). The Fifth Circuit recognizes that Rule 59(e) “favor[s] the denial of motions to alter or amend a judgment.” Southern Constructors Grp., Inc. v. Dynalectric Co., 2 F.3d 606, 611 (5th Cir. 1993). The rule does not exist to be a vehicle for re-litigating old issues, presenting the case under new theories, obtaining a rehearing on the merits, or taking a “second bite at the apple.” Cabalcante v. United States, No. 4:16-cv-964, 2021 WL 2894086, at *1 (E.D. Tex. July 9, 2021) (citing Sequa Corp v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998)). However, it allows a party to “question the correctness of a judgment.” Templet, 367 F.3d at 478. The rule for reconsideration of a final judgment allows a court to alter or amend a judgment because of (1) an intervening change in controlling law, (2) the availability of new evidence not available previously, (3) the need to correct a clear error of law or fact, or (4) to prevent a manifest injustice. Schiller v. Physicians Res. Grp., Inc., 342 F.3d 563, 567 (5th Cir. 2003).

III. Bill of Costs

Federal Rule of Civil Procedure 54 provides that “[u]nless a federal statute, [the Federal Rules of Civil Procedure], or a court order provides otherwise, costs-other than attorney's fees- should be allowed to the prevailing party.” FED. R. CIV. P. 54(D)(1). THE COURT MAY TAX THE FOLLOWING:

(1) Fees of the clerk and marshal;

(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;

(3) Fees and disbursements for printing and witnesses;

(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.

28 U.S.C. § 1920.

The Fifth Circuit has explained that “Rule 54(d)(1) contains a strong presumption that the prevailing party will be awarded costs.” Pacheco v. Mineta, 448 F.3d 783, 793 (5th Cir. 2006) (citing Schwarz v Folloder, 767 F.2d 125, 131 (5th Cir. 1985)). The denial of costs is considered “in the nature of a penalty,” so the Court “may neither deny nor reduce a prevailing party's request for cost without first articulating some good reason for doing so.” Schwarz, 767 F.2d at 131. “The burden is on the party seeking an award of costs to show entitlement to an award.” DietGoal sitiInnovations LLC v. Chipotle Mexican...