03-8780.061-JCD July 31, 2006

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

ADVERTISING SPECIALTY INSTITUTE, )

 )

Plaintiff, ) 

 )

v. ) No. 03 C 8780

 ) 

HALL-ERICKSON, INC. d/b/a The )

Motivation Show, and NATIONAL )

PREMIUM SHOW, INC., d/b/a The )

Motivation Show, )

 )

 Defendants. )

MEMORANDUM OPINION

Before the court are two motions: (1) the motion of defendant

National Premium Show, Inc. for summary judgment; and (2)

defendants’ motion to strike certain exhibits attached to

plaintiff’s supplemental memorandum of law in opposition to

defendants’ motions for summary judgment. For the reasons

explained below, the motion for summary judgment is granted in part

and denied in part, and the motion to strike is denied. 

BACKGROUND

This is a breach of contract action brought by Advertising

Specialty Institute (“ASI”) against Hall-Erickson, Inc. (“HallErickson”) and National Premium Show, Inc. (“NPS”). Plaintiff ASI

is a corporation that is involved in the promotional products
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1/ Promotional products are articles of merchandise that are marked with

a company’s name or logo and used in corporate marketing and communications

programs. (Amended Complaint, ¶ 7.)

industry.1 In its own words, ASI “acts as a meeting place where

suppliers of promotional products can interact with distributors of

promotional products.” (Amended Complaint, ¶ 7.) Defendants HallErickson and NPS are in the business of producing and managing

trade shows; one of their shows, the “Motivation Show,” is held

annually in Chicago and is self-described as “The World’s Largest

Collection of Incentive Merchandise, Travel & Meeting Destinations,

Recognition Awards, Promotional Products and Business Gifts.” (Id.

¶¶ 8-9, 11.)

ASI sues on a written contract (the “Agreement”) that it

entered into with, ostensibly, The Motivation Show on February 6,

2001, concerning ASI’s participation in the show over a three-year

period from November 1, 2000 through October 31, 2003. The thrust

of the Agreement was that The Motivation Show would provide ASI

with exhibit space for a pavilion at the show, and ASI would

participate in the show and encourage its member suppliers and

distributors to participate in the show as well. In exchange for

ASI’s endorsement of and participation in the show, ASI received

“[a]ssurance that this agreement [would] not be extended to any

other promotional products association, trade show, or conference

(i.e.: PPAI).” (Amended Complaint, Ex. A, Agreement, at 2, ¶ 8.)

(PPAI--Promotional Products Association International--is a
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2/ “Co-locate” is a term of art within the trade-show industry denoting

an agreement by two or more entities to conduct trade shows concurrently in the

same or adjacent facilities. (Amended Complaint, ¶ 20.) 

competitor of ASI.) In addition, the Agreement granted ASI the

“right of first refusal concerning any activity, alliance, or

opportunity concerning the promotional product/advertising

specialty industry.” (Id. at 2, ¶ 9.) The Agreement also

contained the following cancellation provision:

This Agreement may be cancelled by either party, upon

written notice to the other party, within the first 60

days of each program year (program year, for the purposes

of this Agreement, will be defined as November 1 to

October 31.)

The Motivation Show agrees that it shall not enter into

similar agreements with any other entity, for example,

national trade associations such as, the Promotional

Products Association International, regional trade

associations, trade shows or conferences, that are

involved in the promotional products/advertising

specialty industry during the term of this Agreement and

for a period of twelve (12) months following any

termination. 

 

(Id. at 3.) 

In the summer of 2002, ASI learned that defendants were

coordinating with PPAI to “co-locate” PPAI’s annual trade show with

The Motivation Show at the same exhibition venue in Chicago,

McCormick Place, and at the same time, September 16 through

September 18, 2003.2 Given that PPAI is its competitor, ASI

objected and repeatedly asked defendants to inform the Chicago

Convention and Tourism Bureau (the “CCTB”) that The Motivation Show

and the PPAI event were competitive. Defendants, however, sent a
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3/ ASI originally filed its complaint in Pennsylvania state court. HallErickson removed the case to a federal district court in Pennsylvania, which, on

Hall-Erickson’s motion, transferred the case to this court pursuant to 28 U.S.C.

§ 1404(a).

letter to the CCTB advising that the shows were not competitive

events. 

Then, on December 19, 2002, following several communications

with ASI regarding ASI’s dissatisfaction with the “co-location”

plans, Hall-Erickson sent a letter to ASI in which it stated that

it was canceling the Agreement, effective immediately. In the same

letter, Hall-Erickson proposed a new contract between the parties

that was materially indistinguishable from the Agreement, except

that it changed the term from 2000-2003 to 2002-2005, and it

omitted the clauses giving ASI a right of first refusal and

prohibiting defendants from entering into similar agreements within

twelve months of termination of the agreement. Despite the

termination of the Agreement, defendants continued to solicit ASI’s

participation in the 2003 Motivation Show. The Motivation Show and

the PPAI show did run on overlapping dates at the same venue in

Chicago in September 2003. 

ASI initially filed a three-count complaint against HallErickson, which moved for dismissal.3 We determined that pursuant

to the choice-of-law provision in the Agreement, Pennsylvania law

governs this dispute. We dismissed plaintiff’s “equitable
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estoppel” claim with prejudice, but denied the motion as to

plaintiff’s breach of contract claims. 

Plaintiff later sought, and was granted, leave to file an

amended complaint. The amended complaint, which added NPS as a

defendant, contains two claims for breach of contract. Count I is

labeled “declaratory judgment,” but simply seeks a declaratory

judgment that defendants breached the Agreement. In Count II, ASI

alleges that defendants breached the Agreement by (1) allowing PPAI

to co-locate with The Motivation Show and thereby extending the

Agreement to PPAI; (2) failing to grant ASI the right of first

refusal “concerning any activity, alliance, or opportunity

concerning the promotional product/advertising specialty industry”;

(3) failing to grant ASI the ability to approve exhibitors in the

ASI pavilion to ensure that no exhibitor competed with ASI; (4)

failing to preclude PPAI from scheduling its show contemporaneously

with The Motivation Show in September 2003; (5) failing to advise

the CCTB that the shows were competitive; and (6) forwarding a

letter to the CCTB advising that the shows were not competitive. 

Defendants then filed motions for summary judgment, and on

November 17, 2005, we held oral argument on those motions. In a

minute order of the same date, we stated:

Oral argument held on each of the two defendants’ motions

for summary judgment. The motion of the defendant HallErickson, Inc. for summary judgment is denied. The court

believes that there is a genuine issue of fact as to

whether this defendant was a party to the contract.
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As to the defendant National Premium Show, Inc., the

court finds that there are genuine factual issues as to

whether the defendant caused the Chicago Convention and

Tourism Bureau to permit PPAI to conduct its 1993 show at

McCormick Place at the same time defendant conducted its

show, and as to whether the two shows were competitive.

On that basis, the court would deny defendant’s motion

for summary judgment but for the additional issue of

whether such conduct by defendant, if proved, would

violate the contract between the parties. The question

here is whether the 12-month restriction following

termination applies to paragraph 9 of the contract. The

parties will brief this issue . . . . 

(Minute Order of November 17, 2005.) 

The parties have now filed supplemental briefs. Defendants

have also filed a motion to strike certain exhibits attached to

plaintiff’s supplemental memorandum of law. 

DISCUSSION

A. NPS’s Motion for Summary Judgment

Summary judgment “shall be rendered forthwith if the

pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any, show that there is

no genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law.” Fed. R. Civ. P.

56(c). In considering such a motion, the court construes the

evidence and all inferences that reasonably can be drawn therefrom

in the light most favorable to the nonmoving party. See Pitasi v.

Gartner Group, Inc., 184 F.3d 709, 714 (7th Cir. 1999). “Summary

judgment should be denied if the dispute is ‘genuine’: ‘if the

evidence is such that a reasonable jury could return a verdict for
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4/ We will use the term “defendants” for convenience here, although there

is a genuine issue as to whether Hall-Erickson was a party to the Agreement. 

the nonmoving party.’” Talanda v. KFC Nat’l Mgmt. Co., 140 F.3d

1090, 1095 (7th Cir. 1998) (quoting Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986)). The court will enter summary

judgment against a party who does not “come forward with evidence

that would reasonably permit the finder of fact to find in [its]

favor on a material question.” McGrath v. Gillis, 44 F.3d 567, 569

(7th Cir. 1995).

We previously held that there is a genuine issue of fact as to

whether Hall-Erickson was a party to the Agreement and that there

are genuine factual issues as to whether defendants caused the CCTB

to permit PPAI to conduct its 2003 show at McCormick Place at the

same time defendants conducted the Motivation Show, and as to

whether the two shows were competitive. 

After reviewing the parties’ supplemental briefs and

statements of material fact, we can draw additional conclusions as

a matter of law. There is no genuine issue that under the plain

language of the Agreement, defendants4 were permitted to cancel the

Agreement without cause, upon written notice to the other party,

within the first sixty days of each program year. Hall-Erickson

did so in December 2002, and the Agreement was therefore canceled.

The Agreement prohibited defendants from “enter[ing] into similar

agreements with any other entity . . . for a period of twelve (12)
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months following any termination.” The issue requiring

supplemental briefing was whether paragraph 9 of the Agreement,

which gave ASI the “right of first refusal concerning any activity,

alliance, or opportunity concerning the promotional

product/advertising specialty industry,” was in effect during the

twelve-month period. By the plain language of the Agreement, the

answer is no. Plaintiff has failed to persuade us otherwise. The

only possible reasonable reading of the Agreement is that the sole

obligation defendants had to ASI after termination was to refrain

from entering into “similar agreements with any other entity”

during the twelve-month period. 

Furthermore, there is no evidence from which a jury could

reasonably find that defendants entered into a “similar agreement”

with PPAI (or any other entity) either prior to termination of the

Agreement or during the twelve-month period after termination.

Plaintiff contended at oral argument that the co-location of The

Motivation Show with the PPAI show violated “the spirit of the

agreement.” (Tr. of November 17, 2005 Hearing at 33). We noted

that the “spirit” of the Agreement (or what plaintiff asserts is

its “spirit”) does not govern, but rather its literal language.

(Id. at 34.) The Agreement prohibited defendants from extending

“this agreement” to any other association such as PPAI, and from

entering into “similar agreements” with any other entity during

the twelve months after termination. There is no evidence that
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5/ Another pre-termination activity that is alleged in the complaint to

have been a breach is the failure to grant ASI the ability to approve exhibitors

in the ASI products pavilion. The parties have given this alleged breach little,

if any, attention. As far as we can tell, there is no evidence that defendants

failed to grant ASI this approval ability. The evidence regarding PPAI is

irrelevant to this allegation because PPAI did not have an exhibit at The

Motivation Show, let alone in ASI’s pavilion. 

defendants extended the Agreement to any other association during

the time the Agreement was in effect. Moreover, plaintiff has

failed to come forth with any evidence that defendants entered into

a “similar agreement” during the time the Agreement was in effect

or during the twelve-month period. An agreement “similar” to the

Agreement between the parties would necessarily involve The

Motivation Show allowing a competitor of plaintiff to have an

exhibit in the show. That is not what occurred with PPAI; it is

doubtful that defendants entered into any agreement with PPAI, but

there is no evidence that defendants entered into a “similar”

agreement with PPAI. 

Thus, the only issue that remains as to breach is whether

defendants violated the Agreement during the time that it was in

effect–-prior to December 19, 2002--by failing to grant plaintiff

the right of first refusal “concerning any activity, alliance, or

opportunity concerning the promotional product/advertising

specialty industry.”5 Plaintiff has submitted sufficient evidence

to create a genuine factual issue as to whether, in mid-2002 (prior

to canceling the Agreement), defendants engaged in an activity,
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alliance or opportunity with PPAI and failed to give plaintiff the

right of first refusal. 

Defendants argue that plaintiff cannot recover lost profits

for this breach because under Pennsylvania law, lost profits must

have been reasonably foreseeable in order to be recoverable.

Defendants contend--without citation to relevant authority--that

due to the existence of the cancellation provision of the

Agreement, it was unreasonable for plaintiff to assume that the

Agreement would continue in 2003, and therefore unreasonable for it

to expect any profits in regard to its relationship with

defendants. Defendants’ argument, taken to its logical extreme, is

that simply because the Agreement includes a cancellation

provision, plaintiff could never reasonably expect any damages to

result from any breach of the Agreement. We are unpersuaded.

Defendants also contend that with respect to restitution, any

purported value that ASI claims it did not receive in return for

the beneficial endorsements it gave defendants was caused by

cancellation of the Agreement and not any alleged breach. That,

however, is a factual issue for trial. 

In conclusion, the motion of NPS for summary judgment will be

granted in large part. The motion will be denied to the extent

that we have found a genuine factual issue as to whether defendants

breached the “right of first refusal” provision of the Agreement

prior to termination. 
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B. Defendants’ Motion to Strike

Defendants have filed a motion to strike a number of exhibits

that are attached to plaintiff’s supplemental memorandum of law in

opposition to defendants’ motions for summary judgment. Defendants

object to the exhibits on grounds of lack of foundation and

hearsay.

Motions to strike are generally disfavored except when they

serve to expedite. See Heller Fin., Inc. v. Midwhey Powder Co.,

883 F.2d 1286, 1294 (7th Cir. 1989). The instant motion does not

serve to expedite; instead, it has generated an unnecessary

additional set of briefs. Instead of asserting a long list of

objections to plaintiff’s various exhibits, defendants should have

incorporated their objections into their substantive summary

judgment briefs and explained why the exhibits and objections are

relevant to the issues raised in the summary judgment motions. We

found it unnecessary to rely on the challenged exhibits in deciding

the summary judgment motions, so the motion to strike will be

denied as moot. When the time comes for trial, defendants may wish

to bring a motion in limine, but at this juncture it is unnecessary

to address defendants’ objections to the exhibits. 

CONCLUSION

The motion of defendant National Premium Show, Inc. for

summary judgment is granted in part and denied in part as follows:
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There is no genuine issue that under the plain language of the

Agreement, the Agreement could be terminated without cause, upon

written notice to the other party, within the first sixty days of

each program year and that Hall-Erickson terminated the Agreement

in December 2002. There is no genuine issue that paragraph 9 of

the Agreement did not apply during the twelve months following

termination. There is no evidence from which a jury could

reasonably find that defendants entered into a “similar agreement”

with PPAI (or any other entity) either prior to termination of the

Agreement or during the twelve-month period after termination. The

only issue that remains as to breach is whether defendants violated

the Agreement during the time that it was in effect–-prior to

December 19, 2002--by failing to grant plaintiff the right of first

refusal. 

Defendants’ motion to strike certain exhibits attached to

plaintiff’s supplemental memorandum of law in opposition to

defendants’ motions for summary judgment is denied. 

DATE: July 31, 2006

ENTER: ___________________________________________

John F. Grady, United States District Judge