K&N Eng'g, Inc. v. Spectre Performance
| Decision Date | 20 September 2011 |
| Docket Number | Case No. EDCV 09-01900-VAP (DTBx) |
| Court | U.S. District Court — Central District of California |
| Parties | K&N ENGINEERING, INC., A CALIFORNIA CORPORATION v. SPECTRE PERFORMANCE, A CALIFORNIA CORPORATION |
CIVIL MINUTES -- GENERAL
PRESENT: HONORABLE VIRGINIA A. PHILLIPS, U.S. DISTRICT JUDGE
Marva Dillard
Courtroom Deputy
None Present
Court Reporter
ATTORNEYS PRESENT FOR
PLAINTIFFS:
None
ATTORNEYS PRESENT FOR
DEFENDANTS:
None
PROCEEDINGS: MINUTE ORDER: (1) GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT; AND (2) DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (IN CHAMBERS)
Before the Court are a Motion for Partial Summary Judgment ("Plaintiff's Motion") filed by Plaintiff and Counter-Defendant K&N Engineering, Inc. ("Plaintiff" or "K&N") and a Motion for Partial Summary Judgment ("Defendant's Motion") filed by Defendant Spectre Performance, Inc. ("Defendant" or "Spectre"). After considering the papers filed in support of, and opposition to, the Motions, and the parties' arguments advanced at the September 12, 2011, hearing, the Court GRANTS in part and DENIES in part K&N's Motion and DENIES Spectre's Motion.
Initials of Deputy Clerk: jh-relief
I. PROCEDURAL HISTORY
On October 9, 2009, K&N filed its Complaint against Spectre. (Doc. No. 1.) On February 26, 2010, Spectre filed its Counter-Claim against K&N. (Doc. No. 20.) Spectre filed its First Amended Counter-Claim ("FACC") on February 22, 2011, asserting claims for:
(Doc. No. 52.) As relief, Spectre seeks preliminary and permanent injunctions, recovery of attorneys' fees, and costs of suit. (FACC at 11-13.)
On March 21, 2011, K&N filed a Motion to Exclude, and on April 18, 2011, Spectre filed a Motion to Exclude. (Doc. Nos. 60, 98.) On May 12, 2011, the Court ruled on the parties' respective motions, granting K&N's motion in part, and denying Spectre's motion. The May 12 Order excluded Harold Bettes's Supplemental and "Reply" Reports, and Dr. Christian Tregillis's quantification of the corrective advertising costs. (May 12 Order at 28.) The Court also granted K&N's motion to exclude in part as to Spectre's use of Dr. Christian Wheeler's Survey ("the Wheeler Survey"); Spectre is limited to using the survey for damages apportionment only and may not introduce the survey to demonstrate causation for its case-in-chief. (Id.)
On April 8, 2011, the parties filed their Motions for partial summary judgment and supporting documents. (Doc. Nos. 80, 81.) On April 22, 2011, the parties filed their Oppositions and supporting documents. (Doc. No. 106 (Def.'s Opp'n); Doc. No. 110 (Pl.'s Opp'n).) And, on May 2, 2011, the parties filed their Replies. (Doc. No. 129 (Pl.'s Reply); Doc. No. 130 (Def.'s Reply).)1
II. FACTS
The parties object to several of each other's "uncontroverted facts" as irrelevant. To the extent those facts are not mentioned, the Court has not relied on them in reaching its decision.2
Additionally, Spectre objects to almost every paragraph in K&N's supporting declarations with nearly identical objections: argumentative, lacks foundation, improper lay opinion testimony, and "the documents speak for themselves."3 Spectre provides no explanation for these objections; they are baldly stated. Except as described further below, the Court overrules these objections, but has independently considered the admissibility of the evidence underlying the parties' SUFs, and has not considered facts that are irrelevant or based upon inadmissible evidence.
Moreover, much of the evidence cited in support of the parties' facts do not support the facts adequately. In such cases, the Court has not relied on the stated fact, but instead considered and relied on the underlying evidence to the extent the evidence was, itself, admissible.
The Court finds the following material facts are supported adequately by admissible evidence and are uncontroverted. They are "admitted to exist without controversy" for the purposes of the Motions. L.R. 56-3 (); Fed. R. Civ. P. 56(e)(2) ().
K&N and Spectre sell competing automotive air intake products, including air filters that replace "original equipment manufacturer" ("OEM") air filters, and air intake kits that replace the entire factory-installed air path to the engine. (Doc. No. 93 (K&N's "Statement of Uncontroverted Facts and Conclusions of Law ("Pl.'s SUF") ¶ 1; Doc. No. 107 (Spectre's "Statement of Genuine Disputes" ("Def.'s SGI")) ¶ 1; Doc. No. 80-5 (Spectre's "Statement of Uncontroverted Facts and Conclusions of Law" ("Def.'s SUF") ¶ 1; Doc. No. 110-1 (K&N's "Response to [Spectre's] Statement of Uncontroverted Facts and Conclusions of Law ("Pl.'s SGI") ¶ 1.)4 K&N's President and Chief Executive Officer is Steven Rogers ("Rogers"), its Vice President of Communications is Timothy Martin ("Martin"), and its Vice President of Product Development and Engineering is Steve Williams ("Williams"). (Def.'s SUF ¶ 3; Pl.'s SGI ¶ 3.)
Since 1969, K&N has manufactured and sold cotton gauze reusable air filters for use in automobiles and motorcycles. (Pl.'s SUF ¶ 2; Def.'s SGI ¶ 2.) K&N currently manufactures more than 600 different air intake systems and, since 1992,has sold more than 2.2 million air intake systems. (Pl.'s SUF ¶ 3; Def.'s SGI ¶ 3.) Since approximately 2004, Spectre sold cotton-gauze reusable air filters, and has sold air intake systems since approximately 2007. (Pl.'s SUF ¶ 4; Def.'s SGI ¶ 4.) K&N's intakes were advertised, offered for sale, and sold in California. (Def.'s SUF ¶ 12; Pl.'s SGI ¶ 12.)5
The parties' air intake systems and filters are designed to reduce the air flow restriction caused by OEM air filters, thereby potentially increasing the engine's power. (Pl.'s SUF ¶ 7; Def.'s SGI ¶ 7; Doc. No. 83 (Decl. of Steve Williams ("Williams Decl.")) ¶ 8.) Air filter restriction is typically measured by the amount of air flow allowed, measured in cubic feet per minute ("CFM"), while engine power is typically measured in horsepower ("HP"). (Pl.'s SUF ¶ 8; Def.'s SGI ¶ 8.)
The restriction of air flow caused by an automotive air filter creates an air pressure differential between two points in an air filter system. (Pl.'s SUF ¶ 12; Def.'s SGI ¶ 12.) The greater the restriction between measurement points in an air flow system, the higher the pressure drop. (Doc. No. 82 (Decl. of Kenneth Conti ( ) ¶ 4.)6 To compare air filter products, therefore, it is necessary to compare the CFM of air flow at the same pressure drop, and measured in the same manner. (Pl.'s SUF ¶ 16; Conti Decl. ¶ 5.)7
Since 2002, K&N's air filter packaging has included two bar graphs comparing air flow rates, each comparing a "K&N Washable Reusable Air Filter" to an equivalent "Average Disposable Aftermarket Air Filter." Above the two bar graphs, the packaging states (Slaughter Opp'n Decl., Ex 18 at 3.)8 The first chart is for a "Round Filter," No. E-1500, and reports an air flow of 881 CFM for K&N's filter, compared to 545 CFM for the average aftermarket filter. (Id.) The second chart is for a "Panel Filter," No. 33-2042, and reports an air flow of 441 CFM for K&N's filter, compared to 319 CFM for the average aftermarket filter. (Id.)
Since 2001, K&N has performed its own air flow testing on the SuperFlow SF-1020 flow bench, using the protocols described on K&N's website, www.knfilters.com ("K&N's Website"). (Pl.'s SUF ¶ 20.)9 K&N's expert, KennethConti, has opined that K&N's protocol reliably and accurately tests the air flow rate for the filters. (Pl.'s SUF ¶ 23; Doc. No. 82 (Decl. of Kenneth Conti ("Conti Decl.")) ¶¶ 7-11.)10
Using this protocol, K&N has performed air flow testing on the K&N filters shown in the graphs and their equivalents. (Pl.'s SUF ¶ 24; Williams Decl. ¶¶ 17-18.)11 The bar graph depicts the results of the tests run in June 2001 for the E-1500 filter and its aftermarket equivalents, and in April 2002 for the 33-2042 filter and its equivalents. (Pl.'s SUF ¶ 25; Williams Decl. ¶ 17.)12 In the June 2001 test on K&N's E-1500 filter, K&N obtained results of 881 CFM for the K&N filter, but 548.4 CFM for the average aftermarket filter. (Williams Decl., Ex. 3.)13 Similarly, in the April 2002test on K&N's 30-2042 filter, K&N obtained results of 441 CFM for the K&N filter, but 319 CFM for the average aftermarket filter. (Williams Decl., Ex. 4.)14
K&N publishes on its Website and includes in the package for each K&N air intake system a horsepower guarantee ("the horsepower guarantee"), promising a refund if a K&N intake does not result in an increase in horsepower; the horsepower guarantee has been on K&N's Website since 2004. (Pl.'s SUF ¶ 38; Williams Decl. ¶ 42; Def.'s SUF ¶ 67; Doc. No. 111 ()15 Spectre does not challenge the horsepower guarantee. (Def.'s Opp'n at 6:26-7:2; Def.'s SGI ¶ 39.)
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