Case: 3:09-cv-00392-slc Document #: 124 Filed: 08/18/10 Page 1 of 6
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF WISCONSIN
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`ERICK WOODS,
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`v.
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`Plaintiff,
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`ADAM RESNICK and F&I SOURCE, LLC,
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`Defendants.
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`OPINION AND ORDER
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`09-cv-392-slc
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`In an opinion and order entered July 16, 2010, this court rejected defendant Adam
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`Resnick’s claim that he is a joint author, as that term is defined under the Copyright Act, of the
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`Dealer Finance System. In particular, I found that Resnick had failed to show that the
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`contributions that he made to the system in the form of mock-ups of screen displays and Excel
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`spreadsheets, referred to in this litigation as the “original prototype,” were independently
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`copyrightable. Now before the court are two motions: 1) Resnick’s motion for reconsideration
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`of the joint authorship issue on the ground of newly-discovered evidence; and 2) his request, in
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`the alternative, to remand this case to state court for adjudication of the state law counterclaims
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`regarding licensing and trade secrets. For the reasons stated below, I am denying Resnick’s
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`motion for reconsideration and declining to exercise supplemental jurisdiction over the state law
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`claims.
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`OPINION
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`I. Motion for Reconsideration
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`Resnick’s new evidence consists of a Certificate of Copyright Registration issued by the
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`United States Copyright Office on July 7, 2010, granting Resnick a copyright in “Unpublished
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`Prototype (Mock-ups and Excel spreadsheets) of Menu Driven Dealer Finance System.”
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`According to Resnick, the registration corresponds to the “original prototype” that this court
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`Case: 3:09-cv-00392-slc Document #: 124 Filed: 08/18/10 Page 2 of 6
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`found to be not copyrightable and creates a genuine issue of material fact with regard to whether
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`Woods is the exclusive owner in the copyright in the source code.
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`Resnick had filed this application with the Copyright Office on April 28, 2010, ten
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`months after Woods filed this lawsuit, nine months after Resnick filed his answer and
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`counterclaim, eight months after the pretrial conference setting the firm schedule for this case,
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`and not quite two weeks after Woods filed his motion for summary judgment on the federal
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`copyright claim. Briefing continued thereafter on the summary judgment motion by both sides,
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`and the court granted Woods’s motion on July 16, 2010 in a 28-page order that involved a
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`significant commitment of judicial resources. Ten days later, Resnick first alerted the court that
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`the copyright had issued on July 7, 2010, nine days before the court ruled against Resnick on
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`the copyright issue. Resnick had not previously reported to the court or to Wood or his attorney
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`that he had filed this application.
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`As Resnick points out, under Rule 54(b), any order adjudicating fewer than all the claims
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`may be revised at any time before the entry of judgment adjudicating all the claims and the
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`rights and liabilities of all the parties. Nevertheless, motions to reconsider an order under Rule
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`54(b) are judged by largely the same standards as motions to alter or amend a judgment under
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`Rule 59(e): to correct manifest errors of law or fact or to present newly discovered evidence.
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`Rothwell Cotton Co. v. Rosenthal & Co., 827 F.2d 246, 251 (7th Cir. 1987). “A Rule 59(e) motion
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`‘does not provide a vehicle for a party to undo its own procedural failures, and it certainly does
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`not allow a party to introduce new evidence or advance arguments that could and should have
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`been presented to the district court prior to the judgment.’” United States v. Resnick, 594 F.3d
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`Case: 3:09-cv-00392-slc Document #: 124 Filed: 08/18/10 Page 3 of 6
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`562, 568 (7 Cir. 2010) (quoting Bordelon v. Chicago School Reform Bd. of Trustees, 233 F.3d 524,
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`529 (7 Cir. 2000)).
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`Resnick seems to think that the Certificate of Registration is “newly discovered” because
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`he did not receive it until July 7, 2010, after the parties had completed briefing on the summary
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`judgment motions. However, if this certificate is the game-changer that he says it is, then why
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`didn’t he alert the court immediately upon receiving it? Resnick should have asked the court
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`to admit the evidence then, before the court decided the summary judgment motions, rather than
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`submit it after-the fact. More logical and efficient still, back in April, 2010, Resnick should have
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`announced the fact of his application and requested a stay of the summary judgment proceedings
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`until he received a decision from the copyright office. But keeping the application secret for
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`three months while plaintiff’s lawyers and the court toiled on plaintiff’s summary judgment
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`motion and then waiting to announce the copyright until after the court’s adverse decision
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`constitute unsound, unfair and unacceptable tactical decisions.
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`Because Resnick could have–and should have–introduced the certificate while the
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`summary judgment motions were pending, it is not newly-discovered and affords no basis for
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`reconsideration. Rothwell, 827 F.2d at 251 (evidence is “newly discovered” when it could not
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`have been introduced during the pendency of the summary judgment motion).
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`Further, Resnick has failed to make any convincing argument why the certificate would
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`matter to the outcome. His motion appears to rest on 17 U.S.C. § 410(c), which provides that
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`a certificate of registration made before or within five years after first publication of the work
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`shall, in any judicial proceedings, constitute “prima facie evidence of the validity of the copyright
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`and of the facts stated in the certificate.” However, as the court of appeals pointed out in Mid
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`Case: 3:09-cv-00392-slc Document #: 124 Filed: 08/18/10 Page 4 of 6
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`America Title Co. v. Kirk, 59 F.3d 719, 721 (7 Cir. 1995), § 410(c) simply creates a rebuttable
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`presumption. “[T]he burden of proof in the sense of the risk of nonpersuasion . . . remains
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`throughout the trial upon the party on whom it was originally cast.” Id. (quoting Fed. R. Evid.
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`301). In his motion for reconsideration, Resnick makes no attempt to show that he could carry
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`his burden of showing that he is a joint author of the Dealer Finance System in light of the
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`contrary evidence submitted by Woods or explain in any detail how the court’s decision would
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`be different if it allowed him to introduce the certificate. His mere assertion that the certificate
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`gives rise to “a genuine issue of material fact” is too conclusory to show that reconsideration is
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`warranted. Accordingly, the court’s order granting summary judgment to plaintiff stands.
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`II. State Law Claims
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`The next question is what to do with Resnick and F&I Source’s state law counterclaims,
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`which involves their claims that Woods granted them a license to use the Dealer Finance System
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`and that the software’s source code contains trade secret information authored, developed,
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`contributed and owned by Resnick or F&I Source. Resnick argues that the claims should be
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`decided by the state court that is presiding over the pending state court action, whereas Woods
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`asserts only that no issues remain for trial.
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`Although I agree with Woods that no federal claims remain to be decided at trial, it is
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`undisputed that no party moved for summary judgment on Resnick and F&I Source’s state law
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`counterclaims. Accordingly, these claims remain viable. Neither party suggests that grounds
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`exist for exercising diversity jurisdiction over the case, so the only ground for jurisdiction is 28
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`Case: 3:09-cv-00392-slc Document #: 124 Filed: 08/18/10 Page 5 of 6
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`U.S.C. § 1367, under which a court has supplemental jurisdiction over state law claims that form
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`"part of the same case or controversy" as the federal claims.
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`Under § 1367(c)(3), a federal district court may decline to exercise supplemental
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`jurisdiction over state law claims once federal claims have been dismissed. Indeed, the "general
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`rule" is that state law claims should be dismissed when all federal law claims are dismissed before
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`trial. Wright v. Associated Insurance Companies, Inc., 29 F.3d 1244, 1251 (7th Cir. 1994). It is
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`only in certain "unusual" circumstances that those factors will warrant retaining jurisdiction. Id.;
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`see also Hansen v. Board of Trustees, 551 F.3d 599, 608-09 (7th Cir. 2008) ("When all federal
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`claims have been dismissed prior to trial, the principle of comity encourages federal courts to
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`relinquish supplemental jurisdiction."). It may be proper to retain jurisdiction over state law
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`claims under § 1367 when, for example, the statute of limitations has run on a state law claim,
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`substantial judicial resources have been expended on the claims or resolution of the claims is
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`clear. Wright, 29 F.3d at 1251-52; Hansen, 551 F.3d at 608-09.
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`None of these unusual circumstances is present in this case. There is no suggestion that
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`the statute of limitations has run on the state law counterclaims and this court has expended
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`virtually no judicial resources on the claims. Apart from his inaccurate assertion that no claims
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`remain for trial, Woods has not identified any reason why it would be appropriate for this court
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`to decide the state law claims. A state law action for dissolution of the limited liability company
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`is currently pending. Under these circumstances, the best approach is to leave the state law
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`claims to the state courts. Wright, 29 F.3d at 1251. Therefore, I will decline to exercise
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`supplemental jurisdiction over the state law counterclaims and dismiss those claims without
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`prejudice to them being considered in the pending state court action.
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`Case: 3:09-cv-00392-slc Document #: 124 Filed: 08/18/10 Page 6 of 6
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`IT IS ORDERED that:
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`ORDER
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`1. Adam Resnick’s motion for reconsideration (dkt. 114) is DENIED.
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`2. Adam Resnick and F&I Source LLC’s state law counterclaims are DISMISSED
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`without prejudice.
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`3. The clerk of court is directed to enter judgment in favor of plaintiff Erick Woods and
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`close this case.
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`Entered this 17 day of August, 2010.
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`BY THE COURT:
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`/s/
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`STEPHEN L. CROCKER
`Magistrate Judge
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