CASE 0:13-cv-01875-SRN-JJK Document 30 Filed 11/21/13 Page 1 of 6
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MINNESOTA
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` Case No. 13-cv-1875 (SRN/JJK)
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`MEMORANDUM OPINION
`AND ORDER
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`David John,
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` Plaintiff and Counter-Defendant,
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`v.
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`MainGate, Inc.,
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`
`
` Defendant and Counter-Claimant.
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`
`
`Kathryn K. Smith and Michael S. Sherrill, Sherrill Law Offices, PLLC, 4756 Banning
`Avenue, Suite 212, White Bear Lake, Minnesota 55110, for Plaintiff and Counter-
`Defendant.
`
`Lora Mitchell Friedemann and Ted C. Koshiol, Fredrikson & Byron, PA, 200 South Sixth
`Street, Suite 4000, Minneapolis, Minnesota 55402, for Defendant and Counter-Claimant.
`
`SUSAN RICHARD NELSON, United States District Judge
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`I.
`
`INTRODUCTION
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`This matter is before the Court on MainGate Inc.’s Motion for Judgment on the
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`Pleadings [Doc. No. 10]. For the reasons set forth below, the Court grants this motion.
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`II.
`
`BACKGROUND
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`Defendant and Counter-Claimant MainGate, Inc. is a sports-focused
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`merchandising and marketing company. (Answer and Countercl. ¶ 1 [Doc. No. 4]; Pl.’s
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`Reply to Def.’s Countercl. ¶ 1 [Doc. No. 7].) MainGate sells purple hats with gold braids
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`and white horns as Minnesota Vikings memorabilia. (Id.) In 2001, Plaintiff and
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`1
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MINNESOTA
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`
`
`
`
`
`
` Case No. 13-cv-1875 (SRN/JJK)
`
`MEMORANDUM OPINION
`AND ORDER
`
`
`
`
`David John,
`
`
`
` Plaintiff and Counter-Defendant,
`
`
`v.
`
`MainGate, Inc.,
`
`
`
` Defendant and Counter-Claimant.
`
`
`
`Kathryn K. Smith and Michael S. Sherrill, Sherrill Law Offices, PLLC, 4756 Banning
`Avenue, Suite 212, White Bear Lake, Minnesota 55110, for Plaintiff and Counter-
`Defendant.
`
`Lora Mitchell Friedemann and Ted C. Koshiol, Fredrikson & Byron, PA, 200 South Sixth
`Street, Suite 4000, Minneapolis, Minnesota 55402, for Defendant and Counter-Claimant.
`
`SUSAN RICHARD NELSON, United States District Judge
`
`I.
`
`INTRODUCTION
`
`This matter is before the Court on MainGate Inc.’s Motion for Judgment on the
`
`Pleadings [Doc. No. 10]. For the reasons set forth below, the Court grants this motion.
`
`II.
`
`BACKGROUND
`
`Defendant and Counter-Claimant MainGate, Inc. is a sports-focused
`
`merchandising and marketing company. (Answer and Countercl. ¶ 1 [Doc. No. 4]; Pl.’s
`
`Reply to Def.’s Countercl. ¶ 1 [Doc. No. 7].) MainGate sells purple hats with gold braids
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`and white horns as Minnesota Vikings memorabilia. (Id.) In 2001, Plaintiff and
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`1
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`CASE 0:13-cv-01875-SRN-JJK Document 30 Filed 11/21/13 Page 2 of 6
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`Counter-Defendant David John applied for a copyright registration for a “Vikings hat”: a
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`gold and purple hat with gold braids and white horns (“Copyright”). (Ex. A to Compl.
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`[Doc. No. 1-1].)
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`A. The First Lawsuit
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`In December 2010, John sued MainGate in this Court, Case No. 10-cv-4902
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`(SRN/JJK) (“First Lawsuit”), alleging that MainGate was infringing the Copyright.
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`(Compl. ¶ 6 [Doc. No. 1].) MainGate denied infringement and alleged that the Copyright
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`was invalid. (Countercl. ¶ 11 [Doc. No. 4]; Reply ¶ 11 [Doc. No. 7].)
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`On February 13, 2012, the parties participated in a settlement conference for the
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`First Lawsuit before Magistrate Judge Jeffrey J. Keyes, and they reached a settlement
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`agreement. The parties read the terms of the agreement into the court record:
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`MS. FRIEDEMANN: . . . The first term of the settlement agreement is that
`Mr. John represents and warrants that he owns Copyright—the copyright
`reflected in copyright Registration Number VA 1-169-450 entitled
`“Vikings Hat,” and I’ll refer to that as “the copyright.”
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`Mr. John grants MainGate a license to the copyright.
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`The monetary terms of the license are as follows:
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`MainGate will pay $18,125 within 30 days of today’s date and a second
`payment of $18,125 on or before October 1, 2012.
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`MainGate may sell its existing inventory of the accused Helga Hats.
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`Then going forward, all future Helga Hats, MainGate will pay a royalty of
`$3 per hat. Those royalties will be paid annually on or before January 30th
`of each year, and along with the payment MainGate will provide
`documentation of the sales that supports the royalty.
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`Mr. John may audit MainGate’s Helga Hat sales, if he chooses, once a year
`at his expense. The purpose of the audit, of course, [is] to determine that
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`CASE 0:13-cv-01875-SRN-JJK Document 30 Filed 11/21/13 Page 3 of 6
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`the royalty amount is proper.
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`The terms of this royalty obligation is for the life of the copyright and it
`shall end when the copyright ends. During that time, neither side can
`withdraw from this agreement for the life of the copyright.
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`In exchange for this agreement, Mr. John releases MainGate from all claims
`he may have, whether legal or equitable, as of today’s date.
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`This settlement is being entered into to resolve a disputed claim and it shall
`not be construed as an admission of infringement or wrongdoing.
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`The terms of this agreement are confidential and will not be disclosed
`except as necessary for tax or legal advice, and the parties’ discussions
`today that led to the agreement are also confidential and will not be
`disclosed.
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`If an inquiry is made to either party regarding this case, the parties agree
`that they will say that they have achieved an amicable settlement and that it
`is confidential, or something to that effect.
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`This agreement, that I hopefully have read in accurately, is the entire
`agreement of the parties and supersedes all prior negotiations, and the
`parties have agreed that the terms will be reflected in this transcript and
`there is no intention of documenting the agreement further.
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`THE COURT: All right. Very good.
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`Counsel, you have heard all of the terms that were recited by Ms.
`Friedemann. Do all of those terms accurately reflect this settlement, Mr.
`Haugen?
`
`MR. HAUGEN: Correct, your Honor. In point-by-point fashion, I simply
`made sure that I checked my notes from the latest conversations back and
`forth and I believe that everything is covered.
`
`(Settlement Conference Tr. at 2-4, Ex. A to Answer and Countercl. [Doc. No. 4].) Under
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`the settlement agreement, MainGate made the two installment payments of $18,125.
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`(Countercl. ¶ 18 [Doc. No. 4]; Reply ¶ 18 [Doc. No. 7].)
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`CASE 0:13-cv-01875-SRN-JJK Document 30 Filed 11/21/13 Page 4 of 6
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`B. John’s Requests for Audit
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`A few months after settling the First Lawsuit, John requested a physical audit of
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`MainGate’s inventory. (Countercl. ¶ 19 [Doc. No. 4]; Reply ¶ 19 [Doc. No. 7].) On
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`August 13, 2012, MainGate responded by letter, indicating that it had sold only 106 hats
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`since the settlement agreement, and that it had not made any royalty-bearing sales. (Ex.
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`B to Answer and Countercl. [Doc. No. 4].) MainGate also stated that it has several
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`thousand non-royalty bearing hats in inventory and would not need to order royalty-
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`bearing hats for some time. (Id.)
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`In early 2013, John requested another audit of MainGate’s records. (Countercl. ¶
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`22 [Doc. No. 4]; Reply ¶ 22 [Doc. No. 7].) MainGate responded with reports showing
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`total sales of Vikings hats in 2012, sales by month, and the break down between adult and
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`youth sizes. (Ex. C to Answer and Countercl. [Doc. No. 4]; Reply ¶¶ 23, 24 [Doc. No.
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`7].) MainGate stated that it only sold inventory that existed when the parties entered into
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`the settlement agreement. (Countercl. ¶ 25 [Doc. No. 4]; Reply ¶ 25 [Doc. No. 7].)
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`C. The Current Litigation
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`On April 5, 2013, John sent a letter to MainGate, purporting to terminate the
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`settlement agreement based on MainGate’s refusal to permit John to audit its records.
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`(Compl. ¶ 10 [Doc. No. 1].) When MainGate did not stop selling Vikings hats from its
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`existing inventory, John filed this lawsuit, alleging that MainGate was infringing the
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`4
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`Copyright. (Id. ¶¶ 26-30.)
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`CASE 0:13-cv-01875-SRN-JJK Document 30 Filed 11/21/13 Page 5 of 6
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`III. DISCUSSION
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`A. Standard of Review
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`Federal Rule of Civil Procedure 12(c) provides that a motion for judgment on the
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`pleadings is appropriate after the pleadings are closed. FED. R. CIV. P. 12(c). A motion
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`for judgment on the pleadings will be granted “only where the moving party has clearly
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`established that no material issue of fact remains and the moving party is entitled to
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`judgment as a matter of law.” Waldron v. Boeing Co., 388 F.3d 591, 593 (8th Cir. 2004).
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`A motion for judgment on the pleadings is evaluated under the same standard as a
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`Rule 12(b)(6) motion to dismiss for failure to state a claim. Clemons v. Crawford, 585
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`F.3d 1119, 1124 (8th Cir. 2009). Well-pleaded facts, not legal theories or conclusions,
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`determine the adequacy of the complaint. Id. The facts alleged in the complaint “must
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`be enough to raise a right to relief above the speculative level.” Id.
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`B. Release of the Copyright Infringement Claim
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`MainGate argues that the Complaint does not state a plausible claim for relief
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`because John’s sole claim in this case is copyright infringement, which was previously
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`settled and released. (MainGate’s Mem. in Supp. of Mot. for J. on the Pleadings at 9
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`[Doc. No. 13].)
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`The Court agrees with MainGate. John acknowledges that the settlement
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`agreement terms include a “release of Plaintiff’s claims which exist as of the date of the
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`agreement.” (Pl.’s Mem. in Opp’n to Def.’s Mot. for J. on the Pleadings at 11 [Doc. No.
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`22].) As of the date of the agreement, February 13, 2012, John had a claim against
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`MainGate for copyright infringement. (Compl. ¶¶ 10-16 in Case No. 10-cv-4902
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`CASE 0:13-cv-01875-SRN-JJK Document 30 Filed 11/21/13 Page 6 of 6
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`(SRN/JJK) [Doc. No. 1].) Thus, by entering into the settlement agreement, John released
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`this claim. In the instant litigation, John brings a claim of copyright infringement against
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`MainGate. (Compl. ¶¶ 26-30 [Doc. No. 1].) Because John previously released this
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`claim, he cannot bring the same claim again here. Accordingly, John fails to state a claim
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`for relief for copyright infringement.
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`C. John’s Breach of Contract Arguments
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`John also argues that MainGate breached the Copyright license, rendering the
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`settlement agreement void. (Nov. 20, 2013, Hr’g Tr. at 4; Pl.’s Mem. in Opp’n to Def.’s
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`Mot. for J. on the Pleadings at 14-20 [Doc. No. 22].) The Complaint, however, does not
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`assert a breach of contract claim. Because this issue is not properly before the Court, the
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`Court declines to rule on John’s breach of contract arguments.
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`IV. ORDER
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`Based on the foregoing, and all the files, records, and proceedings herein, IT IS
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`HEREBY ORDERED:
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`1. Defendant and Counter-Claimant’s Motion for Judgment on the Pleadings
`[Doc. No. 10] is GRANTED.
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`LET JUDGMENT BE ENTERED ACCORDINGLY.
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`Dated:
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`November 21, 2013
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`s/ Susan Richard Nelson
`SUSAN RICHARD NELSON
`United States District Court Judge
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`6
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