Atturo Tire Corp. v. Toyo Tire Corp.
| Decision Date | 10 May 2022 |
| Docket Number | 14-cv-0206 |
| Parties | ATTURO TIRE CORPORATION, Counter-Plaintiff, v. TOYO TIRE CORPORATION, et al., Counter-Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Toyo brought this lawsuit alleging that Defendant Atturo Tire Corporation infringed Toyo's Open Country Mountain Tires trade dress. Atturo responded with seven counterclaims based on an action Toyo brought in 2013 before the United States International Trade Commission (ITC). With only Atturo's counterclaims remaining, the case proceeded to a jury trial in September 2021. Before the Court are the parties' post-trial motions. For the reasons stated below, Toyo's motion for judgment or alternatively a new trial [751] is granted in part and denied in part and Atturo's motion for injunctive relief and other corrective actions [753] is denied.
The following summarizes the background relevant to the present motions.[1] In 2016, Toyo moved for summary judgment on all of Atturo's counterclaims, arguing that the counterclaims arose out of Toyo's actions before the ITC (ITC Investigation No. 337-TA-894) and were protected from suit by the Noerr-Pennington doctrine.
Atturo bases its counterclaims on provisions in settlement agreements that Toyo negotiated restricting the ITC respondents' ability to purchase and distribute Atturo's tire, the Trail Blade M/T (hereinafter “Atturo Provisions”). On March 30, 2017, the Court denied Toyo's summary judgment motion finding that the Noerr-Pennington doctrine did not immunize its conduct. (Dkt. 362, “Noerr-Pennington Order”). The Court explained that Atturo was not among the named respondents in the ITC Action, nor were any Atturo tires listed among the allegedly infringing tires in Toyo's complaint. Id. On February 9, 2021, the Court entered summary judgment dismissing Toyo's claims for Lanham Act trade dress infringement and violation of the Illinois Deceptive Trade Practices Act, 815 Ill. Comp. Stat 510/2 (IDTPA). (Dkt. 661). The Court ruled that Toyo's asserted trade dress is functional and Toyo failed to establish secondary meaning. The Court also denied in large part Toyo's motion for summary judgment on Atturo's counterclaims. (Dkt. 660).
The Court scheduled a jury trial on Atturo's counterclaims for September 2021. Before trial the Court ruled on three Daubert motions and numerous motions in limine. Trial began September 16, 2021 and the jury entered a verdict on September 22, finding in favor of Atturo on six claims and in favor of Toyo on the Lanham Act claim. (Dkts. 740 744).[2] The jury awarded Atturo $10 million in compensatory damages and $100 million in punitive damages.
At issue in the post-trial motions are Atturo's counterclaims under Illinois state law for: tortious interference with contract (Count I), tortious interference with prospective business expectancy (Count II), defamation (Count III), unfair competition (Count IV), unjust enrichment (Count V), and violation of the IDTPA (Count VI).
Toyo seeks judgment in its favor based on the absolute litigation privilege and Noerr-Pennington immunity.
a Absolute Litigation Privilege
The Court finds that judgment is warranted in Toyo's favor on Counts III (defamation) and VI (IDTPA) because the Illinois absolute litigation privilege bars those claims.
The Court first briefly recounts the procedural history relevant to this defense. In March 2015, Judge Lee denied Toyo's motion to dismiss Atturo's defamation counterclaim [147]. In response to Toyo raising the absolute litigation privilege, the Judge explained that the privilege is an affirmative defense and he could not rule that the defamation claim was barred at the pleading stage.[3] In August 2020 Toyo moved for partial summary judgment, in part based on the absolute litigation privilege. (Dkt. 611). Toyo argued that the Court should grant it summary judgment on Atturo's defamation counterclaim as well as its other counterclaims to the extent they stemmed from the statements in the ITC settlement agreements. (Id. at 14-15).[4]In declining summary judgment based on the absolute litigation privilege, the Court relied too heavily on the Noerr-Pennington Order's finding that the agreement between Toyo and the ITC respondents with regard to Atturo was an action taken by the parties themselves, unrelated to the ITC proceeding. (Dkt. 660 at 12-13). On further consideration, the Court finds that the absolute litigation privilege protects Toyo's conduct from Atturo's defamation and IDTPA claims.
As a preliminary matter, the Court rejects Atturo's contention that the Noerr-Pennington Order is the “law of the case” and the Court must continue to find that the absolute litigation privilege does not apply. (Dkt. 754 at 39-40). The law of the case doctrine is “not hard and fast.” Kathrein v. City of Evanston, 752 F.3d 680, 685 (7th Cir. 2014) (quoting Tice v. Am. Airlines, Inc., 373 F.3d 851, 854 (7th Cir. 2004)).[5]Both the February 2021 and Noerr-Pennington orders were denials of summary judgment. Generally such denials mean only “that the case should go to trial.” See Switzerland Cheese Ass'n, Inc. v. E. Horne's Mkt., Inc., 385 U.S. 23, 25 (1966). The Seventh Circuit has distinguished summary judgment motions raising factual questions based on the sufficiency of the evidence from those raising a question of law. Chemetall GMBH v. ZR Energy, Inc., 320 F.3d 714, 719 (7th Cir. 2003). See also Young v. Ill. Dep't of Revenue, 601 F.Supp.2d 1055, 1057 (C.D. Ill. 2009) ( that after trial ); Thompson v. Frank, 730 N.E.2d 143, 145 (Ill.App.Ct. 2000) ().
In Illinois an attorney or private party to litigation is “absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of, a judicial proceeding in which he participates as counsel, if it has some relation to the proceeding.” Bedin v. Nw. Mem'l Hosp., 2021 IL App (1st) 190723, ¶ 39, appeal denied, No. 127257, 2022 WL 803425 (Ill. Jan. 26, 2022) (quoting Restatement (Second) of Torts § 586 (1977)). Although the privilege applies to a narrow class of communications, the defamatory matter in the proposed or pending proceeding need only have “some relation to the proceeding.” Kurczaba v. Pollock, 742 N.E.2d 425, 438 (Ill.App.Ct. 2000) (emphasis added); Johnson, 7 N.E.3d at 56. “[T]he pertinency requirement is not strictly applied.” Bedin, 2021 IL App (1st) 190723, at ¶ 40 (citation omitted).
Here the defamatory matter was contained in settlement agreements between Toyo and ITC respondents which were submitted to the ITC. Atturo does not argue that there were any defamatory statements beyond those in the settlement agreements or that Toyo disseminated these statements outside of the ITC Action. Toyo also argues, and Atturo does not dispute, that the statements were preliminary to and relate to this litigation, in which Toyo sued Atturo for trade dress infringement.
Thus given that the statements need only have some relation to the proceeding and courts “resolve all doubts in favor of pertinency, ” Jackson v. Walgreens Co., 2021 IL App (1st) 201261-U, ¶ 32, the Court finds that Toyo's statements in the ITC settlement agreements that it believed that Atturo was infringing had some relation to the ITC Action and to the 2014 complaint in this case.
In light of the above, the absolute litigation privilege bars Atturo's defamation claim. It is well-settled in Illinois that the privilege applies to defamation claims. See Johnson, 7 N.E.3d 52. Courts have also applied the absolute litigation privilege to deceptive trade practices claims. See PSN Ill., Inc. v. Ivoclar Vivadent, Inc., No. 04 C 7232, 2005 WL 2347209, at *6 (N.D. Ill. Sept. 21, 2005) (); PolyOne Corp. v. Lu, No. 14 CV 10369, 2018 WL 4679577, at *15 (N.D. Ill. Sept. 28, 2018) (applying privilege to commercial disparagement and IDTPA claims). Similar to the defamation claim, as seen in the Jury Instruction in this case (Dkt. 741), the IDTPA claim required that Toyo made “false and misleading statements.” (Id. at 23).[6]
Applying the privilege to Atturo's defamation and IDTPA claims furthers the purpose of the privilege: “Free access to the courts as a means of settling private claims or disputes is a fundamental component of our judicial system, and ‘ * * * courts should be open to litigants for the settlement of their rights without fear of prosecution for calling upon the courts to determine such rights.'” Lyddon v. Shaw, 372 N.E.2d 685, 690 (Ill.App.Ct. 1978) (citation omitted).[7]
The absolute litigation privilege does not bar Atturo's four other claims. On Count I, tortious interference with contract, a court from this district recently observed that no Illinois court had “weighed in on whether the absolute litigation privilege applies to claims for tortious interference with contract.” GC Am. Inc. v Hood, No. 20-CV-03045, 2022 WL 910556, at *6 (N.D. Ill. Mar. 29, 2022). See also Act II Jewelry, LLC v. Wooten, No. 15 C 6950, 2016 WL 4011233, at *6 (N.D. Ill. July 27, 2016) (...
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