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Karma International, LLC v. Indianapolis Motor Speedway, LLC

United States Court of Appeals, Seventh Circuit

September 18, 2019

Karma International, LLC, Plaintiff-Appellant,
v.
Indianapolis Motor Speedway, LLC, Defendant-Appellee.

          Argued April 12, 2019

          Appeals from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. l:16-cv-02182 - William T. Lawrence, Judge.

          Before Flaum, Easterbrook, and Sykes, Circuit Judges.

          SYKES, CIRCUIT JUDGE.

         The Indianapolis 500 race has been a fixture of American life since 1911, interrupted only by world war. So when its 100th running arrived in 2016, organizers wanted to shift the race-weekend entertainment into high gear. They engaged Karma International, LLC, an event-planning company, to host a ticketed party.

         Unlike the Indianapolis 500 itself-which sold out for the first time in history-the Karma party was a disappointment. Poor ticket sales prevented Karma from covering its expenses. Karma sued the racetrack for breach of contract, accusing it of failing to adequately promote the party. The racetrack counterclaimed, alleging that Karma ignored its own advertising obligations. The district judge rejected Karma's claim at summary judgment, ruling that the damages theory rested on speculation. A jury found Karma liable on the counterclaim, awarding $75,000 in damages. Karma appeals, seeking review of the summary-judgment ruling and the denial of its posttrial motions for judgment as a matter of law or a new trial.

         We affirm. Karma's evidence of damages is indeed speculative, so its claim fails under Indiana law. And we see no reason to second-guess the jury's determination that Karma breached the parties' contract by failing to fulfill its promises to advertise the event online.

         I. Background

         The Indianapolis Motor Speedway, LLC, sponsors the annual Indianapolis 500 race and associated race-weekend events, which include musical acts and other festivities. In 2015 Karma International became a licensee of Maxim, a men's magazine. Karma has hosted Maxim-branded entertainment at large sporting events, including a party prior to the 2016 Super Bowl in San Francisco.

         In early 2016 Karma began negotiations with the Speedway to host a Maxim-branded event at that year's 100th-running of the race. The parties eventually agreed on terms memorialized in a March 2016 agreement. The Speedway promised to provide "marketing support via [its] social channels and ... dedicated e-mail to [its] database." In return Karma pledged to promote race-weekend activities with a "banner ad on Maxim.com (minimum 1 million impressions)." It also promised to provide "marketing support via Maxim social channels for [the Indy 500] [m]usic events (Carb Day, Legend's Day and Indy 500 Snake Pit)."

         To fulfill its advertising obligations under the contract, the Speedway sent four promotional e-mails in May 2016 promoting the Maxim party:

• May 9: A dedicated e-mail to 334 sponsors and suite ticketholders
• May 20: A dedicated e-mail to 13,824 fans
• May 21: A cross-promotional e-mail to ...

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