Sher v. RBC Capital Markets. LLC, Civil Action No. GLR-11-1998

• Court: United States District Courts. 4th Circuit. United States District Court (Maryland)
• Writing for the Court: Chambers of GEORGE L. RUSSELL, III United States District Judge
• Parties: MEMORANDUM TO COUNSEL RE: Joel I. Sher v. RBC Capital Markets. LLC
• Docket Number: Civil Action No. GLR-11-1998
• Decision Date: 14 September 2016

MEMORANDUM TO COUNSEL RE: Joel I. Sher
v.
RBC Capital Markets. LLC

Civil Action No. GLR-11-1998

UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND

September 14, 2016

Chambers of GEORGE L. RUSSELL, III United States District Judge

Dear Counsel:

Pending before the Court is Defendant's, RBC Capital Markets, LLC ("RBC"), Motion to Alter or Amend the Judgment Pursuant to Federal Rule of Civil Procedure 59(e) (ECF No. 155). No hearing is necessary. See Local Rule 105.6 (D.Md. 2016). For the reasons outlined below, the Court will deny the Motion.

On August 26, 2015, the Court issued an Order denying RBC's Motion for Summary Judgment, granting Plaintiff's, Joel I. Sher, Chapter 11 Trustee for Thornburg, Inc. (the "Trustee"), Cross Motion for Summary Judgment, and entering judgment in favor of the Trustee in the amount of $26,259,188 plus prejudgment interest at New York's statutory rate of 9% from August 14, 2007 though the date of judgment. (ECF No. 153). On September 22, 2015, RBC filed the present Motion to Alter or Amend the Judgment Pursuant to Rule 59(e) (ECF No. 155), arguing the Court clearly erred in applying state law to determine the prejudgment interest award. The Trustee filed an Opposition on October 9, 2015 (ECF No. 157), and RBC submitted a Reply on October 26, 2015 (ECF No. 158).

The Court may only alter or amend a final judgment under Rule 59(e) in three circumstances: "(1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice." Pac. Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998). Rule 59(e) "permits a district court to correct its own errors, 'sparing the parties and the appellate courts the burden of unnecessary appellate proceedings.'" Id. (citation omitted). Altering or amending a final judgment "is an extraordinary remedy which should be used sparingly." Id. (quoting 11 Wright et al., Federal Practice & Procedure § 2810.1, at 124 (2d ed. 1995)). Accordingly, a party may not use a Rule 59(e) motion "to raise arguments which could have been raised prior to the issuance of the judgment" or "to argue a case under a novel legal theory that the party had the ability to address in the first instance." Id.

When a party argues that Rule 59(e) relief is necessary to correct a clear error of law or to prevent manifest injustice, mere disagreement with the Court's previous decision will not suffice. U.S. ex rel. Becker v. Westinghouse Savannah River Co., 305 F.3d 284, 290 (4th Cir. 2002) (quoting Hutchinson v. Staton, 994 F.2d 1076, 1082 (4th Cir. 1993)). Rather, to justify altering or amending a judgment on this basis, "the prior judgment cannot be 'just maybe or probably wrong; it must . . . strike [the court] as wrong with the force of a five-week-old, unrefrigerated

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dead fish.'" Fontell v. Hassett, 891 F.Supp.2d 739, 741 (D.Md. 2012) (alteration in original) (quoting TFWS, Inc. v. Franchot, 572 F.3d 186, 194 (4th Cir. 2009)). Hence, a "factually supported and legally justified" decision does not constitute clear error. See Hutchinson, 994 F.2d at 1081-82.

As a preliminary matter, the Trustee argues RBC's Rule 59(e) Motion is procedurally barred. First, RBC is precluded from using Rule 59(e) to challenge the prejudgment interest award because in its summary judgment briefs, RBC did not oppose the Trustee's request for prejudgment interest. In other words, RBC waived its right to contest the Court's prejudgment interest award. To be sure, "[a] motion under Rule 59(e) is not authorized to enable a party to complete presenting his case after the court has ruled against him." Pac. Ins. Co., 148 F.3d at 403 (citation omitted). At the summary judgment stage, however, RBC argued it is not liable for breaching the parties' Master Purchase Agreement and, therefore, the Trustee is not entitled to any damages. (See generally Def.'s Mem. Supp. Mot. Summ. J., ECF No. 131). Because prejudgment interest is an element of damages, RBC implicitly argued against an award of prejudgment interest. See Eden v. Amoco Oil Co., 741 F.Supp. 1192, 1196 (D.Md. 1990). What is more, the Trustee cites no authority for the proposition that a defendant must argue why the plaintiff is not entitled to every specific form of damages when the defendant contests all liability.

Second, the Trustee contends Rule 59(e) is only an appropriate vehicle to resolve prejudgment interest claims when a plaintiff wins a damage award and then, after judgment is entered, moves to add prejudgment interest to the award. According to the Trustee, only the plaintiff should be permitted to "wait to see" if...