Boehner v. Heise

• Decision Date: 12 August 2010
• Docket Number: No. 03 Civ. 5453(THK),03 Civ. 5453(THK)
• Citation: 734 F.Supp.2d 389
• Parties: Jeffrey BOEHNER, Tom Fok, and Springland Trading, Inc., Plaintiffs, v. Lyn HEISE, Joan Eckes, and Ginseng Board of Wisconsin, Defendants.
• Court: U.S. District Court — Southern District of New York

734 F.Supp.2d 389

Jeffrey BOEHNER, Tom Fok, and Springland Trading, Inc., Plaintiffs,

v.Lyn HEISE, Joan Eckes, and Ginseng Board of Wisconsin, Defendants.

No. 03 Civ. 5453(THK).

United States District Court,

S.D. New York.

Aug. 12, 2010.

David John Hoffman, Law office David J. Hoffman, Joseph Thomas Roccanova, Yuen Roccanova Seltzer & Suerd LLP, New York, NY, for Plaintiff.

Steven Andrew Morgenlender, Patrick Michael Murphy, Steven Andrew Morgenlender, McCabe, Collins, McGeough & Fowler, LLP, McCabe, Collins, McGeough & Fowler, LLP, Carle Place, NY, for Defendant.

MEMORANDUM OPINION AND ORDER

THEODORE H. KATZ, United States Magistrate Judge.

Plaintiffs Jeffrey Boehner, Tom Fok, and Springland Trading, Inc. (collectively, "Plaintiffs") bring this diversity action against Defendants Lyn Heise, Joan Eckes, and the Ginseng Board of Wisconsin (collectively, "Defendants"), asserting claims for libel, tortious interference with economic relations, tortious interference with prospective business relations, and breach of contract. Plaintiffs allege that Defendants leveled defamatory accusations against them in a letter to Senator Russell Feingold of Wisconsin, in an effort to convince the United States Customs Service ("Customs") to detain shipments of Plaintiffs' ginseng product. Plaintiffs further contend that Defendants did so to wrongly interfere with, and gain a competitive advantage over, Plaintiffs' wholesale and retail ginseng trade business. As a result, Plaintiffs contend that they suffered severe economic harm. ( See Complaint ("Compl.").)

Defendants have moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. They contend that the statements contained in their January 2, 2003 letter to Senator Feingold (the "letter") are not actionable because they were truthful. Moreover, Defendants argue, even if the statements were inaccurate, they are subject to a qualified privilege and are not actionable, as Plaintiffs fail to demonstrate that Defendants acted with malice. Defendants also contend that Plaintiffs' tortious interference claims are without merit because Plaintiffs fail to submitproof of any interference with an existing contract or prospective business relationship. Defendants further argue that Plaintiffs' tortious interference claims are barred by the Noerr-Pennington doctrine. Finally, Defendants argue that they did not breach their contract with Plaintiffs to provide Wisconsin Ginseng Program Seals ("seals"), because they provided Plaintiffs with the requested seals within a reasonable period of time after being provided requested documentation and payment. ( See Defendants' Memorandum of Law in Support of Motion for Summary Judgment, dated Mar. 29, 2010 ("Defs.' Mem.").)

Plaintiffs oppose the motion, arguing that there are material issues of fact in dispute on each of their claims. ( See Plaintiffs' Memorandum of Law in Opposition to Motion for Summary Judgment, dated May 19, 2010 ("Pls.' Mem.").)

The parties have consented to trial before this Court, pursuant to 28 U.S.C. § 636(c). For the reasons that follow, Defendants' motion is granted in part and denied in part.

FACTUAL BACKGROUND

The following facts, except as otherwise noted, are undisputed and drawn primarily from the parties' affidavits and statements pursuant to Local Civil Rule 56.1 of the Southern District of New York.

I. The Parties

Plaintiffs, Jeffrey Boehner ("Boehner"), Tom Fok ("Fok"), and Springland Trading, Inc. ("Springland"), are New York wholesalers and retailers of ginseng and other medicinal herbs and roots. Among Springland's products are two types of ginseng-the Asian root, which is grown primarily in East Asia, and the Wisconsin root, which is overwhelmingly cultivated in one county in Wisconsin.

Defendant, the Ginseng Board of Wisconsin, Inc. ("GBW"), is a non-profit corporation created by statute and regulated by the Wisconsin Department of Agriculture, Trade and Consumer Protection (the "DATCP"). GBW is an independent trade organization, which is elected, operated, and funded wholly by producers and handlers of Wisconsin ginseng, to administer the ginseng marketing order promulgated by the DATCP. GBW's primary functions are to promote the welfare of the Wisconsin ginseng industry and to protect its product from unfair competition. As part of its responsibilities. GBW operates the Wisconsin Seal Program to assure the authenticity and protect the integrity of Wisconsin ginseng products, by guaranteeing consumers that the products they buy contain 100% pure Wisconsin ginseng. ( See Deposition Transcript of Joan Eckes, dated Apr. 22, 2008 ("Eckes Dep."), at 19-20:18-4.) A seal is attached to barrels of Wisconsin ginseng and delivered to wholesalers, who are then permitted to affix the seal to the ginseng that they sell either to retailers or the general public. ( See Deposition Transcript of Lyn Heise, dated Apr. 23, 2008 ("Heise Dep."), at 15-16:19-3.)

As of January 2, 2003, Defendant Joan Eckes was the manager of GBW. Up until 1998, Eckes had grown and cultivated ginseng in the state of Wisconsin. As of January 2, 2003, Defendant Lyn Heise was a member of GBW. At all times relevant to this action, Heise was a grower of Wisconsin ginseng.

II. The Letter

Shortly before January 2, 2003, GBW began to develop concerns regarding the importation of Asian ginseng, based on conversations Eckes had with Customs employee Cornelia Miller and other government officials. ( See Defs.' 56.1 St. ¶ 5.)Specifically, GBW became concerned about imported ginseng that was clearing Customs in New York, even though it contained impermissibly high levels of pesticides, among other things. Some of GBW's concerns related directly to Springland. ( See id. ¶ 6.) According to Eckes, Jeffrey Boehner's name "kept cropping up as far as, you know, getting shipments out of customs, and his name is very similar to the head of customs." ¹ ( See Eckes Dep. at 86.) In addition, Eckes received the so-called "hot list" on a monthly basis, which listed companies scheduled to receive imported ginseng that was flagged for inspection. ( See id. at 45-46.) Although Springland was on the "hot list," Eckes believed, based on her conversations with Customs employees and other government officials, that certain shipments to Springland were not being tested.² ( See id. at 89-90.)

In light of these concerns, on January 2, 2003, Eckes and Heise sent a letter to United States Senator Russell Feingold of Wisconsin, on behalf of GBW. The letter requested assistance from Senator Feingold, noting that large quantities of foreign ginseng imports that were either fraudulent, or contaminated with pesticides, were being shipped to the United States each year. It claimed that California Customs and the FDA were effectively preventing such shipments from entering the market. However, the letter then went on to say that in New York, shipments that previously were denied entry in California and scheduled for testing for pesticides, were released from the port without undergoing the required tests.

Following the description of the New York problem, Defendants stated that:

Specifically, Jeffrey Bonner [sic], has been very successful in getting shipments released for his boss, Tom Fok. Tom Fok and his companies were "hot listed"-yet, nothing happened. Every month his shipments are not being tested, yet some others are. Supposedly Jeffrey Bonner [sic] worked for Customs before working for Tom Fok and Ming Fok. The fact that New York Customs will not hold his shipments to test them in port, while testing others, shows an extreme problem. On a rare occasion [that] customs actually came to Tom Fok's warehouse, tests are done on "switched" samples in the Springland Warehouse. Barrels released to the warehouse by Customs aren't sealed so that only Customs can open the barrel-a small yellow tag can easily be transferred.

We are asking for your assistance since apparently Springland warehouse now contains thousands of pounds of untested imported root. He imports 1 million pounds of root each year, shipments every week of approximately 25,000 pounds. What is needed is an official inquiry from a U.S. Senator specifically asking that the testing be done in port, with no release to his warehouse. Many surprises will be forthcoming.

( See Defs.' Mem. Ex. C.)

Defendants concluded the letter saying "The Wisconsin Ginseng Industry is veryappreciative of your efforts to aid our industry and to insure the safety of Americans." ( Id.)

III. Searching of Plaintiffs' Imports

Plaintiffs believe that the letter "caused, and continues to cause, U.S. Customs Agents in New York to repeatedly hold and strip-test Springland's entire ginseng shipment inventory at the port of arrival." ( See Pls.' Mem. at 6.) They base their contention on the patterns and practices of Customs in inspecting their imported ginseng, both before and after the letter was written.

Before the letter was written, in November 2002, the United States Food and Drug Administration ("FDA") issued a "hold design" for one of Plaintiffs' imported shipments. A "hold design" is a notice requiring a sampling and examination of the marked product. Upon inspection, pesticides were discovered within the shipment, leading to the package's rejection and shipment back to its sender. ( See Deposition Transcript of Jeffrey Boehner, dated Nov. 23, 2009 ("Boehner Dep."), at 106-08:7.) The FDA also held, tested, and denied entry to another of Plaintiffs' imported shipments, that was sent by air, because of pesticides found in a sample. ( See Deposition Transcript of Tom Fok, dated Nov. 24, 2009 ("Fok Dep."), at 47-55:14; Boehner Dep. at 136-138:1.)

During the time in which the imports were being held and sampled, they were allowed entry and were kept in a segregated space adjacent to Plaintiffs' warehouse facility, on West 29th Street in New York City, until the completion of the tests. The only people who had access to the locked storage...