In the

United States Court of Appeals

For the Seventh Circuit

No. 98-1879

MindGames, Inc.,

Plaintiff-Appellant,

v.

Western Publishing Company, Inc.,

Defendant-Appellee.

Appeal from the United States District Court

for the Eastern District of Wisconsin.

Nos. 94-C-552, 94-C-998--Lynn S. Adelman,

Judge.

Argued April 17, 2000--Decided June 22, 2000

 Before Posner, Chief Judge, and Fairchild

and Diane P. Wood, Circuit Judges.

 Posner, Chief Judge. This is a diversity

suit for breach of contract, governed by

Arkansas law because of a choice of law

provision in the contract. The plaintiff,

MindGames, was formed in March of 1988 by

Larry Blackwell to manufacture and sell

an adult board game, "Clever Endeavor,"

that he had invented. The first games

were shipped in the fall of 1989 and by

the end of the year, 75 days later,

30,000 had been sold. In March of 1990,

MindGames licensed the game to the

defendant, Western, a major marketer of

games. Western had marketed the very

successful adult board games "Trivial

Pursuit" and "Pictionary" and thought

"Clever Endeavor" might be as successful.

The license contract, on which this suit

is premised, required Western to pay

MindGames a 15 percent royalty on all

games sold. The contract was by its terms

to remain in effect until the end of

January of 1993, or for another year if

before then Western paid MindGames at

least $1.5 million in the form of

royalties due under the contract or

otherwise, and for subsequent years as

well if Western paid an annual renewal
fee of $300,000.

 During the first year of the contract,

Western sold 165,000 copies of "Clever

Endeavor" and paid MindGames $600,000 in

royalties. After that, sales fell

precipitously (though we’re not told by

how much) but the parties continued under

the contract through January 31, 1994,

though Western did not pay the $900,000

($1.5 million minus $600,000) that the

contract would have required it to pay in

order to be entitled to extend the

contract for a year after its expiration.

In February of 1994 the parties finally

parted. Later that year MindGames brought

this suit, which seeks $900,000, plus

lost royalties of some $40 million that

MindGames claims it would have earned had

not Western failed to carry out the

promotional obligations that the contract

imposed on it, plus $300,000 on the

theory that Western renewed the contract

for a third year, beginning in February

of 1994; Western sold off its remaining

inventory of "Clever Endeavor" in that

year.

 The district court granted summary

judgment for Western, holding that the

contract did not entitle MindGames to a

renewal fee and that Arkansas’s "new

business" rule barred any recovery of

lost profits. 944 F. Supp. 754 (E.D. Wis.

1996); 995 F. Supp. 949 (E.D Wis. 1998).

Although the victim of a breach of

contract is entitled to nominal damages,

Mason v. Russenberger, 542 S.W.2d 745

(Ark. 1976); Movitz v. First Nat. Bank of

Chicago, 148 F.3d 760, 765 (7th Cir.

1998); E. Allan Farnsworth, Contracts

sec. 12.8, p. 784 (3d ed. 1999),

MindGames does not seek them; and so if

it is not entitled to either type of

substantial damages that it seeks,

judgment was correctly entered for

Western. By not seeking nominal damages,

incidentally, MindGames may have lost a

chance to obtain significant attorneys’

fees, to which Arkansas law entitles a

prevailing party in a breach of contract

case. See Dawson v. Temps Plus, Inc., 987

S.W.2d 722, 729 (Ark. 1999).

 The rejection of MindGames’ claim to the

renewal fee for the second year (and a

fortiori the third) was clearly correct.

The contract conditioned Western’s right

to renew the contract for a second year

on its paying a renewal fee of $1.5
million (minus royalties already paid);

it was silent on the terms of a renewal

adopted by a new agreement of the parties

rather than by the exercise of an option

granted by the original contract. If

MindGames hadn’t wanted to renew the

contract and Western had insisted, then

Western would have had to pay the fee.

But if Western did not invoke a

contractual right to renew, if instead

the parties entered into a new agreement

to renew the contract, then MindGames had

no right to the renewal fee fixed in the

contract; that right was conditional on

Western’s exercising its contractual

right to renew. A conditional right in a

contract does not become an enforceable

right until the condition occurs,

Restatement (Second) of Contracts sec.

225(1) (1981), unless noncompliance with

the condition is excused by agreement,

Uebe v. Bowman, 420 S.W.2d 889 (Ark.

1967); Normand v. Orkin Exterminating

Co., 193 F.3d 908, 912 (7th Cir. 1999),

or by operation of law, Farnsworth, supra

sec. 8.3, p. 526, as where the other

party to the contract wrongfully prevents

the condition from occurring, id., sec.

8.6, pp. 544-45; Restatement, supra, sec.

225, comment b, which is not alleged, for

Western had no duty to exercise its right

of renewal. The condition that would have

entitled MindGames to demand a renewal

fee thus did not occur here; Western did

not invoke its contractual right to

extend the contract; after January 31,

1993, the parties were operating under a

new contract.

 The more difficult issue is MindGames’

right to recover lost profits for

Western’s alleged breach of its duty to

promote "Clever Endeavor." A minority of

states have or purport to have a rule

barring a new business, as distinct from

an established one, from obtaining

damages for lost profits as a result of a

tort or a breach of contract. E.g.,

Lockheed Information Management Systems

Co. v. Maximus, Inc., 524 S.E.2d 420,

429-30 (Va. 2000); Bell Atlantic Network

Services, Inc. v. P.M. Video Corp., 730

A.2d 406, 419-20 (N.J. Super. 1999);

Interstate Development Services of Lake

Park, Georgia, Inc. v. Patel, 463 S.E.2d

516 (Ga. App. 1995); Stuart Park

Associates Limited Partnership v.

Ameritech Pension Trust, 51 F.3d 1319,

1328 (7th Cir. 1995) (Illinois law);

Bernadette J. Bollas, Note, "The New
Business Rule and the Denial of Lost

Profits," 48 Ohio St. L. J. 855, 859 & n.

32 (1987). The rule of Hadley v.

Baxendale, 9 Ex. 341, 156 Eng. Rep. 145

(1854), often prevents the victim of a

breach of contract from obtaining lost

profits, but that rule is not invoked

here. Neither the "new business" rule nor

the rule of Hadley v. Baxendale stands

for the general proposition that lost

profits are never a recoverable item of

damages in a tort or breach of contract

case.

 Arkansas is said to be one of the "new

business" rule states on the strength of

a case decided by the state’s supreme

court many years ago. The appellants in

Marvell Light & Ice Co. v. General

Electric Co., 259 S.W. 741 (Ark. 1924),

sought to recover the profits that they

claimed to have lost as a result of a

five and a half month delay in the

delivery of icemaking machinery; the

delay, the appellants claimed, had forced

them to delay putting their ice factory

into operation. The court concluded,

however, that because there was no

indication "that the manufacture and sale

of ice by appellants was an established

business so that proof of the amount lost

on account of the delay . . . might be

made with reasonable certainty," "the

anticipated profits of the new business

are too remote, speculative, and

uncertain to support a judgment for their

loss." It quoted an earlier decision in

which another court had said that "he who

is prevented from embarking in [sic--must

mean ’on’] a new business can recover no

profits, because there are no provable

data of past business from which the fact

that anticipated profits would have been

realized can be legally deduced." Central

Coal & Coke Co. v. Hartman, 111 Fed. 96,

99 (8th Cir. 1901). That quotation is

taken to have made Arkansas a "new

business" state, although the rest of the

Marvell opinion indicates that the court

was concerned that the anticipated

profits of the particular new business at

issue, rather than of every new business,

were too speculative to support an award

of damages. On its facts, moreover,

Marvell was a classic Hadley v. Baxendale

type of case--in fact virtually a rerun

of Hadley, except that the appellants

alleged that they had notified the seller

of the icemaking machinery of the damages

that they would suffer if delivery was
delayed, and the seller had agreed to be

liable for those damages. The decision is

puzzling in light of that allegation; it

is doubly puzzling because, assuming that

by the time of the trial the ice factory

was up and running, it should not have

been difficult to compute the damages

that the appellants had lost by virtue of

the five and a half month delay in

placing the factory in operation.

Presumably it would have had five and a

half months of additional profits.

 Marvell has never been overruled; and

federal courts ordinarily take a

nonoverruled decision of the highest

court of the state whose law governs a

controversy by virtue of the applicable

choice of law rule to be conclusive on

the law of the state. E.g., Milwaukee

Metropolitan Sewerage District v.

Fidelity & Deposit Co., 56 F.3d 821, 823

(7th Cir. 1995); C & B Sales & Service,

Inc. v. McDonald, 111 F.3d 27, 29 n. 1

(5th Cir. 1997); New York Life Ins. Co.

v. K N Energy, Inc., 80 F.3d 405, 409

(10th Cir. 1996). But this is a matter of

practice or presumption, not of rule. The

rule is that in a case in federal court

in which state law provides the rule of

decision, the federal court must predict

how the state’s highest court would

decide the case, and decide it the same

way. Treco, Inc. v. Land of Lincoln

Savings & Loan, 749 F.2d 374, 377 (7th

Cir. 1984); New Hampshire Ins. Co. v.

Vieira, 930 F.2d 696, 701 (9th Cir.

1991); 19 Charles Alan Wright, Arthur R.

Miller & Edward H. Cooper, Federal

Practice and Procedure sec. 4507, pp.

126-50 (2d ed. 1996). Law, Holmes said,

in a controversial definition that is,

however, a pretty good summary of how

courts apply the law of other

jurisdictions, is just a prediction of

what the courts of that jurisdiction

would do with the case if they got their

hands on it. Oliver Wendell Holmes, "The

Path of the Law," 10 Harv. L. Rev. 457,

461 (1897). Since state courts like

federal courts do occasionally overrule

their decisions, there will be

occasional, though rare, instances in

which the best prediction of what the

state’s highest court will do is that it

will not follow its previous decision.

See, e.g., Burgess v. Lowery, 201 F.3d

942, 948 (7th Cir. 2000); Treco, Inc. v.

Land of Lincoln Savings & Loan, supra,

749 F.2d at 377; Lightning Lube, Inc. v.
Witco Corp., 4 F.3d 1153, 1176 (3d Cir.

1993); 19 Wright, Miller & Cooper, supra,

sec. 4507, pp. 141-49.

 That is the best prediction in this

case. Marvell was decided more than three

quarters of a century ago, and the "new

business" rule which it has been thought

to have announced has not been mentioned

in a published Arkansas case since. The

opinion doesn’t make a lot of sense on

its facts, as we have seen, and the

Eighth Circuit case on which it relied

has long been superseded in that circuit.

See, e.g., Central Telecommunications,

Inc. v. TCI Cablevision, Inc., 800 F.2d

711, 727-28 (8th Cir. 1986). The Arkansas

cases decided since Marvell that deal

with damages issues exhibit a liberal

approach to the estimation of damages

that is inconsistent with a flat rule

denying damages for lost profits to all

businesses that are not well established.

Jim Halsey Co. v. Bonar, 683 S.W.2d 898,

902-03 (Ark. 1985); Tremco, Inc. v.

Valley Aluminum Products Corp., 831

S.W.2d 156, 158 (Ark. App. 1992); Ozark

Gas Transmission Systems v. Barclay, 662

S.W.2d 188, 192 (Ark. App. 1983); J.W.

Looney, "The ’New Business Rule’ and

Breach of Contract Claims for Lost

Profits: Playing Mindgames with Arkansas

Law," 1997 Ark. L. Notes 43, 46-47. The

Ozark decision, for example, allowed an

orchard farmer to recover for the damages

to a new orchard. The "new business" rule

has, moreover, been abandoned in most

states that once followed it, e.g.,

Beverly Hills Concepts, Inc. v. Schatz &

Schatz, Ribicoff & Kotkin, 717 A.2d 724,

733-35 (Conn. 1998); AGF, Inc. v. Great

Lakes Heat Treating Co., 555 N.E.2d 634,

637-39 (Ohio 1990); No Ka Oi Corp. v.

National 60 Minute Tune, Inc., 863 P.2d

79, 81-82 (Wash. App. 1993); Orchid

Software, Inc. v. Prentice-Hall, Inc.,

804 S.W.2d 208, 210-11 (Tex. App. 1991);

Beck v. Clarkson, 387 S.E.2d 681, 683-84

(S.C. App. 1989); see also McNamara v.

Wilmington Mall Realty Corp, 466 S.E.2d

324, 330 (N.C. App. 1996); International

Telepassport Corp. v. USFI, Inc., 89 F.3d

82, 85-86 (2d Cir. 1996) (per curiam)

(New York law); Restatement, supra, sec.

352, comment b, and it seems to retain

little vitality even in states like

Virginia, which purport to employ the

hard-core per se approach. See Commercial

Business Systems, Inc. v. Bellsouth

Services, Inc., 453 S.E.2d 261, 268-69
(Va. 1995); see generally Eljer Mfg.,

Inc. v. Kowin Development Corp., 14 F.3d

1250, 1256 (7th Cir. 1994).

 Western tries to distinguish Ozark by

pointing to the fact that the plaintiff

there was an established orchard farmer,

albeit the particular orchard represented

a new venture for him. This effort to

distinguish that case brings into view

the primary objection to the "new

business" rule, an objection of such

force as to explain its decline and make

it unlikely that Arkansas would follow it

if the occasion for its supreme court to

choose arose. The objection has to do

with the difference between rule and

standard as methods of legal governance.

A rule singles out one or a few facts and

makes it or them conclusive of legal

liability; a standard permits

consideration of all or at least most

facts that are relevant to the standard’s

rationale. A speed limit is a rule;

negligence is a standard. Rules have the

advantage of being definite and of

limiting factual inquiry but the

disadvantage of being inflexible, even

arbitrary, and thus overinclusive, or of

being underinclusive and thus opening up

loopholes (or of being both over- and

underinclusive!). Standards are flexible,

but vague and open-ended; they make

business planning difficult, invite the

sometimes unpredictable exercise of

judicial discretion, and are more costly

to adjudicate--and yet when based on lay

intuition they may actually be more

intelligible, and thus in a sense clearer

and more precise, to the persons whose

behavior they seek to guide than rules

would be. No sensible person supposes

that rules are always superior to

standards, or vice versa, though some

judges are drawn to the definiteness of

rules and others to the flexibility of

standards. But that is psychology; the

important point is that some activities

are better governed by rules, others by

standards. States that have rejected the

"new business" rule are content to

control the award of damages for lost

profits by means of a standard--damages

may not be awarded on the basis of wild

conjecture, they must be proved to a

reasonable certainty, e.g., Beverly Hills

Concepts, Inc. v. Schatz & Schatz,

Ribicoff & Kotkin, supra, 717 A.2d at

733-34; AGF, Inc. v. Great Lakes Heat

Treating Co., supra, 555 N.E.2d at
638-39--that is applicable to proof of

damages generally. See, e.g., Jones Motor

Co. v. Holtkamp, Liese, Beckemeier &

Childress, P.C., 197 F.3d 1190, 1194-95

(7th Cir. 1999), and cases cited there;

Ashland Management Inc. v. Janien, 624

N.E.2d 1007, 1010 (N.Y. 1993);

Restatement, supra, sec. 352. The "new

business" rule is an attempt now widely

regarded as failed to control the award

of such damages by means of a rule.

 The rule doesn’t work because it manages

to be at once vague and arbitrary. One

reason is that the facts that it makes

determinative, "new," "business," and

"profits," are not facts, but rather are

the conclusions of a reasoning process

that is based on the rationale for the

rule and that as a result turns the rule

into an implicit standard. What, for

example, is a "new" business? What, for

that matter, is a "business"? And are

royalties what the rule means by

"profits"? MindGames was formed more than

a year before it signed the license

agreement with Western, and it sold

30,000 games in the six months between

the first sales and the signing of the

contract. MindGames’ only "business,"

moreover, was the licensing of

intellectual property. An author who

signs a contract with a publisher for the

publication of his book would not

ordinarily be regarded as being engaged

in a "business," or his royalties or

advance described as "profits." He would

be surprised to learn that if he sued for

unpaid royalties he could not get

thembecause his was a "new business."

Suppose a first-time author sued a

publisher for an accounting, and the only

issue was how many copies the publisher

had sold. Under the "new business" rule

as construed by Western, the author could

not recover his lost royalties even

though there was no uncertainty about

what he had lost. So construed and

applied, the rule would have no relation

to its rationale, which is to prevent the

award of speculative damages.

 Western goes even further, arguing that

even if it, Western, a well-established

firm, were the plaintiff, it could not

recover its lost profits because the sale

of "Clever Endeavor" was a new business.

On this construal of the rule, "business"

does not mean the enterprise; it means

any business activity. So Western’s sale
of a new game is a new business, yet we

know from the Ozark decision that an

orchard farmer’s operation of a new

orchard is an old business. 

 The rule could be made sensible by

appropriate definition of its terms, but

we find it hard to see what would be

gained, given the existence of the

serviceable and familiar standard of

excessive speculativeness. The rule may

have made sense at one time; the

reduction in decision costs and

uncertainty brought about by avoiding a

speculative mire may have swamped the

increased social costs resulting from the

systematically inadequate damages that a

"new business" rule decrees. But today

the courts have become sufficiently

sophisticated in analyzing lost-earnings

claims, and have accumulated sufficient

precedent on the standard of undue

speculativeness in damages awards, to

make the balance of costs and benefits

tip against the rule. In any event we are

far in this case, in logic as well as

time, from the ice factory whose opening

was delayed by the General Electric

Company. We greatly doubt that there is a

"new business" rule in the common law of

Arkansas today, but if there is it surely

does not extend so far beyond the facts

of the only case in which the rule was

ever invoked to justify its invocation

here. There is no authority for, and no

common sense appeal to, such an

extension.

 But that leaves us with the question of

undue speculation in estimating damages.

Abrogation of the "new business" rule

does not produce a free-for-all. What

makes MindGames’ claim of lost royalties

indeed dubious is not any "new business"

rule but the fact that the success of a

board game, like that of a book or movie,

is so uncertain. Here newness enters into

judicial consideration of the damages

claim not as a rule but as a factor in

applying the standard. Just as a start-up

company should not be permitted to obtain

pie-in-the-sky damages upon allegations

that it was snuffed out before it could

begin to operate (unlike the ice factory

in Marvell, which did begin production,

albeit a little later than planned),

capitalizing fantasized earnings into a

huge present value sought as damages, so

a novice writer should not be permitted

to obtain damages from his publisher on
the premise that but for the latter’s

laxity he would have had a bestseller,

when only a tiny fraction of new books

achieve that success. Damages must be

proved, and not just dreamed, though

"some degree of speculation is

permissible in computing damages, because

reasonable doubts as to remedy ought to

be resolved against the wrongdoer." Jones

Motor Co. v. Holtkamp, Liese, Beckemeier

& Childress, P.C., supra, 197 F.3d at

1194; see Restatement, supra, sec. 352,

comment a.

 This is not to suggest that damages for

lost earnings on intellectual property

can never be recovered; that

"entertainment damages" are not

recoverable in breach of contract cases.

That would just be a variant of the

discredited "new business" rule. What is

important is that Blackwell had no track

record when he created "Clever Endeavor."

He could not point to other games that he

had invented and that had sold well. He

was not in the position of the

bestselling author who can prove from his

past success that his new book, which the

defendant failed to promote, would have

been likely--not certain, of course--to

have enjoyed a success comparable to that

of the average of his previous books if

only it had been promoted as promised.

That would be like a case of a new

business launched by an entrepreneur with

a proven track record.

 In the precontract sales period and the

first year of the contract a total of

195,000 copies of "Clever Endeavor" were

sold; then sales fizzled. The public is

fickle. It is possible that if Western

had marketed the game more vigorously,

more would have been sold, but an equally

if not more plausible possibility is that

the reason that Western didn’t market the

game more vigorously was that it

correctly sensed that demand had dried

up.

 Even if that alternative is rejected, we

do not see how the number of copies that

would have been sold but for the alleged

breach could be determined given the

evidence presented in the summary

judgment proceedings (a potentially

important qualification, of course); and

so MindGames’ proof of damages is indeed

excessively speculative. See, e.g.,

Gentry v. Little Rock Road Machinery Co.,
339 S.W.2d 101, 104 (Ark. 1960); Hillside

Enterprises v. Carlisle Corp., 69 F.3d

1410, 1414 (8th Cir. 1995); K & R, Inc.

v. Crete Storage Corp., 231 N.W.2d 110,

115 (Neb. 1975); see also AGF, Inc. v.

Great Lakes Heat Treating Co., supra, 555

N.E.2d at 640. Those proceedings were

completed with no evidence having been

presented from which a rational trier of

fact could conclude on this record that

some specific quantity, or for that

matter some broad but bounded range of

alternative estimates, of copies of

"Clever Endeavor" would have been sold

had Western honored the contract.

MindGames obtained $600,000 in royalties

on sales of 165,000 copies of the game,

implying that Western would have had to

sell more than 10 million copies to

generate the $40 million in lost

royalties that MindGames seeks to

recover. Cf. Boxhorn’s Big Muskego Gun

Club, Inc. v. Electrical Workers Local

494, 798 F.2d 1016, 1023 (7th Cir. 1986).

 When the breach occurred, MindGames

should have terminated the contract and

sought distribution by other means. See

Farnsworth, supra, sec. 12.12, pp. 806-

08. The fact that it did not do so--that

so far as appears it has made no effort

to market "Clever Endeavor" since the

market for the game collapsed in 1991--is

telling evidence of a lack of commercial

promise unrelated to Western’s conduct.

 Although Western in its brief in this

court spent most of its time misguidedly

defending the "new business" rule,

clinging to Marvell for dear life (a case

seemingly on point, however vulnerable,

is a security blanket that no lawyer

feels comfortable without), it did argue

that in any event MindGames’ claim for

lost royalties was too speculative to

ground an award of damages for that loss.

The argument was brief but not so brief

as to fail to put MindGames on notice of

a possible alternative ground for

upholding the district court’s judgment;

we may of course affirm an award of

summary judgment on any ground that has

not been forfeited or waived in the

district court. United States v. Jackson,

207 F.3d 910, 917 (7th Cir. 2000).

MindGames did not respond to the argument

in its reply brief. It pointed to no

evidence from which lost royalties could

be calculated to even a rough

approximation. We find its silence
eloquent and Western’s argument

compelling, and so the judgment in favor

of Western is

Affirmed.

 Fairchild, Circuit Judge, dissenting in

part. I agree that (1) MindGames’ claim

for a renewal fee for the year following

the initial term of the Licensing

Agreement was properly dismissed, and (2)

we are not bound by Marvell Light & Ice

Co. v. General Electric Co., 259 S.W. 741

(Ark. 1924) to affirm the dismissal of

MindGames’ claim for loss of royalties

caused by breach of contract. I do,

however, respectfully disagree with the

conclusion that, as a matter of law, that

claim is too speculative to support an

award of damages.

 This was never a claim in which

MindGames sought to recover lost profits

from the operation of a business. The

damages sought would be measured by the

royalties which Western would have been

obliged to pay on sales which did not

occur because of Western’s alleged

failure to perform its contract.

Western’s obligation to pay royalties

arose from the sales of games

manufactured, promoted and sold by it,

and whether MindGames showed a profit, as

well as MindGames’ lack of history, was

wholly irrelevant. The ultimate questions

would be whether there was a breach by

Western and whether the breach caused a

loss of sales.

 Sales did not meet expectations. In the

period from March 30, 1990 to January

31,1991, 165,000 games were sold; in the

year ending January 31, 1992, 58,113; in

the year ending January 31, 1993, 26,394;

and in the year after the initial term,

7,438. The sales in the initial term

totaled approximately $4,000,000 and

royalties $600,000. Soon after January

31, 1993, Western was sufficiently

interested in continuing as licensee to

agree to pay a minimum royalty of $27,500

for the coming year. MindGames’ complaint
alleged that a substantial number of

games produced by Western failed to meet

quality standards; Western failed to

promote and make reasonable efforts to

sell; and its efforts did not meet

standards under the agreement or those

recognized in the industry. It is

MindGames’ position that these failures

caused loss of sales.

 Western’s motion for partial summary

judgment was premised on the new business

rule which Western perceived as announced

in Marvell, and the district court

granted the motion on that basis. If, as

we all agree, Marvell does not control

this case, then the applicable Arkansas

doctrine is that MindGames is entitled to

recover any royalties on sales which

MindGames can prove to a reasonable

certainty would have been made had

Western carried out the contract. The

rule that damages which are uncertain

cannot be recovered does not apply to

uncertainty as to the value of the

benefits to be derived, but to

uncertainty as to whether any benefit

would be derived at all. Jim Halsey Co.,

Inc. v. Bonar, 284 Ark. 461, 467-68 (Ark.

1985); Crow v. Russell, 226 Ark. 121, 123

(Ark. 1956).

 In my opinion we cannot say on this

record, as a matter of law, that

MindGames can not prove to a reasonable

certainty that Western’s failures to

perform, if proved, caused a loss of

sales.

 I would not hold that MindGames has

waived or forfeited its opportunity to

produce evidence of damages. It is true

that in responding to Western’s motion

for partial summary judgment MindGames

did not provide evidentiary material

tending to show the breaches by Western

nor that such breaches caused a loss of

sales. This should not be deemed a waiver

or forfeiture of an opportunity to do so

because of Western’s complete reliance in

its motion on the new business rule and

Marvell, which, if applied, would prevent

proof of breach and causation of loss.

Western’s motion did not reach the issue

of breach, and establishing damages would

require MindGames to prove that the

breach occurred and caused loss of sales.

Although Western, in its memorandum in

support of its motion did include a

section making the point that the success
of a new product in the entertainment

industry is especially difficult to

predict, it used that point to support an

argument that the new business rule was

particularly appropriate in this case,

and that the Arkansas Supreme Court would

be unlikely to retreat from the new

business rule under circumstances like

these. Western did not squarely assert,

as an alternative ground, that MindGames

could not prove to a reasonable certainty

that any breach by Western caused loss of

sales. Rather, Western urged that the

district court should strictly apply the

new business rule. 

 In this court, Western again relied on

Marvell and the new business rule, also

arguing, as it had in the district court,

that this type of case, involving a new

product in the entertainment industry, is

not one where the Arkansas Supreme Court

would retreat from its application of the

new business rule. Although at pages 30-

32 of its brief it asserted the

inherently speculative nature of a claim

for lost profits in the entertainment

industry, and cited cases, it failed

squarely to assert, as an alternative

ground, that its alleged failures to

perform, if proved, could not have been

proved to a reasonable certainty to have

caused lost sales. On page 5 of its reply

brief, MindGames referred to pages 29-32

of Western’s brief, and challenged as

contrary to Arkansas law "non-Arkansas

cases [cited by Western] in arguing that

businesses in the entertainment industry

are barred per se from claiming lost

profits." Again I do not think it is

appropriate to rely on waiver or

forfeiture.

 I would remand for further proceedings

on this part of MindGames’ complaint.