American Ice Co. v. Royal Petroleum Corp.
Decision Date | 20 November 1958 |
Docket Number | No. 12656.,12656. |
Citation | 261 F.2d 365 |
Parties | AMERICAN ICE COMPANY v. ROYAL PETROLEUM CORPORATION, Alfred A. Abrahams, Sydney J. Bacal and Edward B. Grabosky, Appellants. |
Court | U.S. Court of Appeals — Third Circuit |
COPYRIGHT MATERIAL OMITTED
Alfred L. Luongo, Philadelphia, Pa. (Morris L. Weisberg, Blank, Rudenko, Klaus & Rome, Philadelphia, Pa., on the brief, for appellant Royal Petroleum Corp.; Marvin Comisky, Brumbelow & Comisky, Joseph H. Resnick, Philadelphia, Pa., on the brief, for appellants Alfred A. Abrahams, Sydney J. Bacal and Edward B. Grabosky), for appellants.
Abraham L. Freedman, Philadelphia, Pa. (Louis J. Goffman, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., on the brief), for appellee.
Before GOODRICH, STALEY and HASTIE, Circuit Judges.
Appellant Royal Petroleum Corporation and the three individual appellants, Abrahams, Bacal and Grabosky, have invoked our jurisdiction under Section 1292 of Title 28 of the United States Code to review an interlocutory order of the district court restraining them from certain alleged acts of unfair competition until final disposition of litigation challenging those acts. Appellee American Ice Co., plaintiff below, is a competitor of Royal Petroleum Corporation in the retail selling and distribution of fuel oil in eastern Pennsylvania where all transactions relevant to this case occurred. Diversity jurisdiction has brought this dispute into a federal court, and it is clear, as all concerned agree, that the law of Pennsylvania determines the questions in controversy.
Asking for equitable relief, American has charged in the present suit that Royal and its three named employees have unfairly and unlawfully diverted and attempted to divert fuel oil business from it by soliciting the trade of consumers named in certain customer lists which American had purchased for value from ABC-Federal Oil and Burner Co., Inc. False and unfair disparaging of the capacity of American to assure continuing fuel oil service is also charged.
On a motion for a temporary injunction the district court received testimony and made findings of fact. It appeared that the claim of American was founded upon an agreement between American and ABC-Federal under which American attempted to acquire the business advantage of serving ABC-Federal's fuel oil customers in a situation where the latter was abandoning the business of selling fuel oil. The agreement provided for the transfer of certain ABC-Federal assets to American, among them a list of ABC-Federal fuel oil customers supported by data concerning individual fuel oil needs and individual financial responsibility. The agreed consideration, which was actually paid to ABC-Federal by American, included $28,421.35, which would later be credited to American as an advance in the computation of commissions which it agreed to pay ABC-Federal over a four year period on its fuel oil sales to persons named on the ABC-Federal customer lists. Although appellants claim that the purport of this agreement is not clear, we think there is no serious question but that the parties agreed that American should succeed to the good will and trade advantages enjoyed by ABC-Federal as the supplier of the fuel oil requirements of the listed customers.
Pennsylvania law has recognized customer data of the kind involved here as confidential and highly valuable information entitled to protection as a trade secret. Morgan's Home Equipment Corp. v. Martucci, 1957, 390 Pa. 618, 136 A.2d 838; Hahn v. Andrews, 1957, 182 Pa.Super. 338, 126 A.2d 519. Had ABC-Federal attempted to frustrate its bargain in this case by action designed to divert the trade of these customers to a third supplier such action would unquestionably have warranted the restraining interposition of a court of equity. Cf. Snyder Pastuerized Milk Co. v. Burton, 1912, 80 N.J.Eq. 185, 83 A. 907; S. F. Myers Co. v. Tuttle, C.C. S.D.N.Y.1910, 183 F. 235.
True, ABC-Federal is not a party to this litigation. But the individual appellants had been employees of ABC-Federal. The evidence before the court below adequately showed for purposes of preliminary injunction that, whatever these defendants may have done in obtaining or...
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