Lipscher v. LRP Publications

• Citation: 60 USPQ2d 1468,266 F.3d 1305
• Decision Date: 27 September 2001
• Docket Number: Nos. 00-10370,00-10387,00-10654,00-11461,s. 00-10370
• Parties: (11th Cir. 2001) GENE D. LIPSCHER and ROBERT E. KEHOE, JR., Appellants, v. LRP PUBLICATIONS, INC., a foreign corporation, and JOANNE FIORE, Defendants-Appellees. LAW BULLETIN PUBLISHING COMPANY, an Illinois Company, Plaintiff-Appellant, v. LRP PUBLICATIONS, INC., a foreign corporation, and JOANNE FIORE, Defendants-Appellees. LAW BULLETIN PUBLISHING COMPANY, an Illinois Company, Plaintiff-Appellee, v. LRP PUBLICATIONS, INC., a foreign corporation, and JOANNE FIORE, Defendants-Appellants
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 1305

266 F.3d 1305 (11th Cir. 2001)

GENE D. LIPSCHER and ROBERT E. KEHOE, JR., Appellants, v. LRP PUBLICATIONS, INC., a foreign corporation, and JOANNE FIORE, Defendants-Appellees.

LAW BULLETIN PUBLISHING COMPANY, an Illinois Company, Plaintiff-Appellant, v. LRP PUBLICATIONS, INC., a foreign corporation, and JOANNE FIORE, Defendants-Appellees.

LAW BULLETIN PUBLISHING COMPANY, an Illinois Company, Plaintiff-Appellee, v. LRP PUBLICATIONS, INC., a foreign corporation, and JOANNE FIORE, Defendants-Appellants.

Nos. 00-10370, 00-10387, 00-10654, 00-11461

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

September 27, 2001

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Appeals from the United States District Court for the Southern District of Florida, D. C. Docket No. 98-08122-CV-KLR

Before BIRCH, MARCUS and WOOD, JR.^*, Circuit Judges.

WOOD, JR., Circuit Judge:

These appeals, which were consolidated for argument and decision in this court, arise out of a lawsuit filed by Law Bulletin Publishing Company ("Law Bulletin") against LRP Publications, Inc. ("LRP") and Joanne Fiore, an employee of LRP. Law Bulletin is an Illinois company which publishes and sells the Cook County Jury Verdict Reporter and the Illinois Jury Verdict Reporter, both of which are newsletters summarizing individual jury verdicts. Law Bulletin maintains a computerized database of this information which customers can search online for a fee. LRP publishes national statistical and historical jury verdict materials including the Personal Injury Valuation Handbook. The Handbook is a nine-volume set compiling statistical information which allows an attorney to calculate a statistical range of potential jury verdicts for different types of personal injuries. LRP maintains a computerized database of its information, which is made available to customers through the online legal research companies Westlaw and Lexis, as well as on CD-ROM. LRP also offers a telephone service which allows customers to call in search requests to be performed by LRP employees. Fiore was employed by LRP until 1998 and served as the Florida registered agent for LRP.¹

In November 1997, Law Bulletin filed suit against LRP and Fiore, alleging that LRP surreptitiously obtained subscriptions to Law Bulletin's verdict reporters by posing as a Florida law firm named "Fiore and Cohen" and then used the information from the newsletters as its basis for reporting jury verdicts from Illinois. According to Law Bulletin's complaint, in April 1993, LRP requested a subscription to Law Bulletin's Illinois Jury Verdict Reporter. Law Bulletin, recognizing LRP as a competitor and a suspected data pirate, responded to the subscription request by a letter dated May 20, 1993. The letter noted that Law Bulletin was "already aware of concerns expressed by others in the industry that your company may be engaging in various forms of misconduct." Given these concerns, Law Bulletin sought assurances from LRP, stating in its letter "[i]f you are willing, however, to confirm that you would like to obtain our publication for your personal information only, and not for the purpose of copying, reproducing, or remarketing any portion of the publication or the selected information which it contains, I would be happy to enroll you as a subscriber." LRP did not reply to the letter, and no subscription was entered. Sometime thereafter, Law Bulletin entered into two separate subscription agreements with "Fiore and Cohen," an entity² which, unbeknownst to Law Bulletin operated out of LRP's Florida satellite office. Law Bulletin alleges that LRP's reporting of Illinois jury verdicts was based entirely on the information obtained through the Fiore subscriptions.

The suit, which was originally filed in state court in Cook County, Illinois, was removed by the defendants in December 1997 to the United States District Court for the Northern District of Illinois. In January 1998, the court ordered the case transferred to the Southern District of Florida pursuant to 28 U.S.C. § 1404(a).

Law Bulletin's complaint alleged causes of action for breach of contract (Count 1); violations of both the Illinois Consumer Fraud Act, 815 Ill. Comp. Stat. 505/2, and the Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 510/2, (Count 2); violations of the Lanham Act, 15 U.S.C. § 1125, (Count 3); and common law unfair competition (Count 4). On June 18, 1998, the district court granted partial summary judgment in favor of LRP, dismissing Counts 2 and 4 based on a finding that they were preempted by the Copyright Act of 1976, 17 U.S.C. § 301. The district court denied LRP's motion for summary judgment on Law Bulletin's contract claim, holding that it was not preempted. As discovery progressed on the remaining claims, the district court recognized that "special problems" exist when competitors are engaged in a lawsuit "because it often appears that part of the strategy is to find out what the competitor is doing and using that for your economic advantage in the future." Therefore, in July 1998, the district court limited discovery to matters relating only to liability, staying discovery on matters relating to damages. On October 16, 1998, the district court granted in part LRP's motion for a protective order pursuant to Fed. R. Civ. P. 26(c). The October 16 order granted a protective order "as to [LRP]'s use of third-party jury verdict publications," based on a finding that the allegations in the complaint dealt only with LRP's improper use of Law Bulletin's jury verdict publications.

The matter was ultimately bifurcated, and, on March 1, 1999, the parties began a jury trial as to liability on Law Bulletin's breach of contract and Lanham Act claims. At the close of Law Bulletin's evidence, the court entered a directed verdict under Fed. R. Civ. P. 50(a) in favor of LRP on the Lanham Act claims. LRP rested without presenting evidence. The only question before the jury was whether the defendants had breached two form subscription agreements Fiore had signed. Both subscription agreements contained a provision entitled "Law Bulletin's Copyright Recognized," which provided in part,

We will not make any copies of any reports or disks for which this subscription is for, recognizing that the Law Bulletin Publishing Company has a copyright interest in each. Under no circumstances will we furnish any copies, or any of the information contained therein, in bulk form to any third-party, and we will not computerize, record, reproduce or re-market any portion of the publication or the selected material which it contains.

The jury determined LRP had breached the subscription agreements, and the court entered judgment in favor of Law Bulletin as to liability on the breach of contract claim.

A second round of discovery began as to damages. The district court, upon motion by LRP and Fiore, determined that, under Florida law, Law Bulletin could not proceed against both LRP, the principal, and Fiore, LRP's agent. Law Bulletin filed a notice of intent to proceed against LRP, and Fiore was removed as a defendant. Once again, discovery disputes arose between the parties. After numerous motions and a hearing, the district court held that information relating to LRP's profits and other sensitive financial information was not discoverable.

A jury trial on the issue of damages was scheduled to begin January 18, 2000. On November 1, 1999, LRP moved for summary judgment as to damages. The district judge heard oral argument on the motion on December 15, and issued a written ruling granting LRP's motion on December 23. According to the district court, Law Bulletin advanced two damage theories, seeking to recover damages based on its actual lost subscription sales and LRP's profits. The district court found that each of these theories failed as a matter of law. Because Law Bulletin had succeeded in proving liability, the district court awarded Law Bulletin nominal damages in the amount of $1.00.

Law Bulletin filed a timely appeal, Case No. 00-10387, challenging the dismissal of its state law and Lanham Act claims, the nominal damage award, and the district court's failure to order injunctive relief.³ LRP filed a timely cross-appeal, Case No. 00-10654, arguing the district court erred in refusing to dismiss Law Bulletin's breach of contract claims based on either Copyright Act preemption or public policy grounds and in denying LRP's request for attorney's fees and costs as a prevailing party under the Lanham Act. On March 1, 2000, the district court entered an order granting Law Bulletin's request for costs under Fed. R. Civ. P. 54(d)(1). LRP appeals this order in Case No. 00-11461. The attorneys who represented Law Bulletin in the district court, Robert Kehoe, Jr. and Gene Lipscher, have also filed pro se appeals, Case Nos. 00-10370 and 00-10371, challenging sanctions the district court ordered against them personally for violation of a discovery protective order.

A. Case No. 00-10387

1. Preemption of State Law Claims

Law Bulletin contends the district court erred in dismissing Counts 2 and 4 based on a finding that they were preempted by § 301 of the Copyright Act, 17 U.S.C. § 301. Law Bulletin claims the district court misconstrued its complaint in characterizing Counts 2 and 4 as resting solely on a "reverse passing off" theory. Law Bulletin asserts that these counts also encompassed claims of "acquisition misconduct" by LRP which are not preempted by the Copyright Act. Law Bulletin does not challenge the district court's finding of preemption with respect to Law Bulletin's "reverse passing off" claims in Counts 2 and 4. We believe Law Bulletin adequately pled claims of acquisition misconduct in its complaint by alleging LRP violated state law by "obtain[ing] a subscription to the Verdict Reporter by false pretense, knowing that [Law Bulletin] was willing to provide defendant LRP with a subscription only upon the...