Law of Cards: Beckett v. COMC Becomes a Seinfeld Episode
Last week in the Beckett v. Check Out My Cards (COMC) case, Beckett filed a motion to amend its complaint to add a breach of contract claim against COMC. As I wrote then, motions to amend this early are normally granted, especially when the "new" claims arise from the same set of facts.
Despite this, COMC filed an opposition to Beckett's motion.
It's likely a loser, but COMC really uses this brief not to win on this issue (although it would take a win, I'm sure), but rather to re-argue its case, and again to try and make Beckett look like the bad guy.
It does a good job with that.
COMC's story is: Beckett wanted to buy COMC, and only after being turned down, did Beckett immediately terminate the contract. Soon thereafter, COMC pointed out to Beckett that under the contract, early termination was only proper for "good cause," and saying "no" to being bought out did not constitute good cause. Beckett later responded with what it now alleged was "good cause," but, the "good cause" was pretty lame and since it was a post hoc justification, was not the real reason for terminating the contract.
COMC's story reminds me of a Seinfeld episode where Jerry tried to return a jacket he bought because he didn't like the salesman that sold it to him. When asked why he was retuning it, Jerry responded, "For spite."
Like the Beckett/COMC contract, the store had a (kind of) "for cause" return policy. Jerry could return the jacket if there was a problem or if he was unhappy with it, but "spite" didn't meet the conditions for a return.
Jerry then tried to change his reason for returning it, but since he said "spite" first, he couldn’t.
That’s what we have here:
Beckett: I want to buy you.
COMC: No, we cost too much.
Beckett: Well if I can't buy you, then I'm terminating our contract out of spite!
COMC: But you can't terminate without cause, and "for spite" is not good cause.
Beckett: Well, uh, then we're terminating because, uh, we're no longer offering these services anymore. Yeah, we'll go with that.
COMC: But you already said, "For spite."
Legal aside - What is it with me analogizing trading card cases with famous Jerrys? First, I anointed the Upper Deck v. Upper Deck battle as a Jerry Springer Experience (which, by the way, the UD court later approved as "apt"), and now Beckett v. COMC is a Seineld episode?
Regardless as to how the court handles Beckett's new claim, the case will be decided by how the following two issues are answered:
Did Beckett properly or improperly terminate the contract?
And, if Beckett properly terminated the contract, did the information used by COMC constitute either trade secrets or information that was covered by the contract?
If Beckett improperly terminated the contract, the case is over and COMC wins. If Beckett properly terminated the contract, and COMC used data that constitutes either trade secrets or information that was covered by the contract, then Beckett wins.
My opinion still is the likeliest result is that COMC wins. Unless Beckett has some facts we haven't seen yet, it did not terminate the contract for "good cause."
And as a litigator, I would love to play that scene from Seinfeld to the jury during opening statements while explaining COMC's story. Most cases are won/lost during opening, and letting Jerry Seinfeld tell your story is likely all COMC needs to win.
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