FB Leopold Co. v. Roberts Filter Mfg. Co., Inc.

• Decision Date: 10 March 1995
• Docket Number: Civ. A. No. 92-2427.
• Citation: 882 F. Supp. 433
• Parties: The F.B. LEOPOLD CO., INC., Plaintiff, v. ROBERTS FILTER MANUFACTURING COMPANY, INC., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

882 F. Supp. 433

The F.B. LEOPOLD CO., INC., Plaintiff, v. ROBERTS FILTER MANUFACTURING COMPANY, INC., Defendant.

Civ. A. No. 92-2427.

United States District Court, W.D. Pennsylvania.

March 10, 1995.

COPYRIGHT MATERIAL OMITTED

Webb, Burden, Ziesenheim & Webb, P.C., John W. McIlvaine, III, Pietragallo, Bosick & Gordon, John E. Hall, Pittsburgh, PA, for plaintiff.

Feldstein, Grinberg, Stein & McKee, Stanley M. Stein, Dickie, McCamey & Chilcote, P.C., Leland P. Schermer, Pittsburgh, PA, for defendant.

OPINION AND ORDER OF COURT

AMBROSE, District Judge.

Pending before the Court are two Motions for Summary Judgment filed by Plaintiff, The F.B. Leopold Co. hereinafter Leopold, pursuant to Fed.R.Civ.P. 56. Leopold initiated this patent infringement action on December 18, 1992. Defendant, Roberts Filter Manufacturing Company hereinafter Roberts Filter, has filed a counterclaim for declaratory judgment of invalidity and non-infringement of Leopold's patents, and has also asserted claims under § 43(a) of the Lanham Act, as well as claims which seek relief for unfair competition, anti-trust, and defamation. The instant Motions for Summary Judgment concern Roberts Filter's counterclaims for anti-trust and defamation. Oral argument on these motions was held on February 17, 1995. For the reasons set forth below, Leopold's Motion for Summary Judgment as to Defendant's Defamation Counterclaim will be granted in part and denied in part. Leopold's Motion for Summary Judgment as to Defendant's Antitrust Counterclaim will be granted.

Summary judgment may only be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Rule 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against the party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). In considering a motion for summary judgment, this Court must examine the facts in a light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden is on the moving party to demonstrate that the evidence creates no genuine issue of material fact. Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir.1987). The dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A fact is material when it might affect the outcome of the suit under the governing law. Id. Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof at trial. Celotex, 477 U.S. at 322, 106 S.Ct. at 2552.

Because the facts have been set forth (extensively) in the parties' briefs¹, and this action has been the subject of various motions previously addressed by this Court, we need only briefly summarize the nature of this action here. The claims which are the subject of this suit primarily are the result of the efforts of Leopold and Roberts Filter to secure a bid on a public contract to supply filtration equipment for the City of Reading's Maiden Creek Filter Plant Filter Rehabilitation Project. Leopold and Roberts Filter are competitors in the water filtration business.

In December, 1989, the City of Reading began preparing a rehabilitation project for its Maiden Creek Filtration Plant. The City of Reading worked on this project in conjunction with engineers from Entech, Inc. and BCM. Leopold sales representatives corresponded with the engineers concerning the use of the Leopold IMS plate and media for the project. (See Volume I of Roberts Filter's Exhibits, Exhibit 31) During this time, Leopold was pursuing a patent for its "Cap for Underdrains in Gravity Filters." (See Volume I of Roberts Filter's Exhibits, Exhibits 34, 35) The patent was eventually issued on September 22, 1992, and is referred to by the parties as the "427 patent."² (See Volume I of Roberts Filter's Exhibits, Exhibit 39) The patented product essentially consists of a Leopold underdrain and a porous plate (the "IMS Cap").³ (Leopold's Exhibits (Antitrust), Exhibit 5; see also Leopold's Exhibits (Defamation), Exhibit 10)

Leopold was designated as the basis of the design for the Maiden Creek Filter Rehabilitation Project. (Leopold's Exhibits (Antitrust), Exhibit 8, p. 1) Roberts Filter also sought to bid on the project. (See Volume I of Roberts Filter's Exhibits, Exhibits 32, 38, 56) Roberts was eventually added as an acceptable alternative supplier for the project. (Volume I of Roberts Filter's Exhibits, Exhibits 44, 62)

A series of meetings and an exchange of correspondence then ensued concerning Leopold's assertion that the design proposed by Roberts Filter for the project would infringe on Leopold's 427 patent. (See e.g. Volume I of Roberts Filter's Exhibits, Exhibits 45, 49, 53, 55, 58, 60, 63, 64) The bidding for the project was initially set for November 18, 1992, but was postponed so that additional tests could be conducted on the proposed designs. (Volume I of Roberts Filter's Exhibits, Exhibit 62, p. 2) On December 18, 1992, Leopold filed the instant action alleging, inter alia, that a demonstration conducted by Roberts Filter at the Godwin Pump facility in New Jersey infringed on Leopold's patent. At the December 29, 1992, pre-counsel meeting of the Reading City Counsel, it was decided that all bids on the filtration contracts would be rejected and the bidding was again postponed. (Volume I of Roberts Filter's Exhibits, Exhibit 62, p. 5; see also Leopold's Exhibits (Antitrust), Exhibit 17) Ultimately, Leopold was unable to bid on the City of Reading project and Roberts Filter was awarded the contract. (Volume I of Roberts Filter's Exhibits, Exhibit 68)

We will first address Leopold's Motion for Summary Judgment with respect to Defendant's counterclaim for defamation. Leopold contends that summary judgment should be granted in its favor for a number of reasons. Specifically, Leopold argues that it was either absolutely or conditionally privileged to publish the alleged defamatory statements and asserts various theories in support of these privileges. Leopold also claims that the statements that are the subject of this action are not defamatory and that Roberts Filter has failed to come forward with sufficient evidence to establish damage to the reputation or, to the extent that Roberts Filter has attempted to assert a claim for commercial disparagement, no pecuniary loss has been shown.

The following has been identified by Roberts Filter as the subject of the defamation claim:

(a) That on or about October 21, 1992, Leopold, by and though its President and CEO, Marvin A. Brown, sent a letter to the Purchasing Agent of the City of Reading in which letter Brown accused Roberts of knowingly infringing the Leopold patent; copies of that letter were sent to various other persons; Leopold supplemented that letter with verbal communications to agents of the City of Reading, including Russell Smith, Reading's project engineer (Paras. 1-4, Seconded Amended Count V);

(b) That in early October, 1992, employees of Leopold met with Russell Smith and, by means of oral communication and through the exhibition of a device which falsely purported to be a sample of the Roberts' product, disparaged Roberts' product, suggesting that it was of flimsy construction and would not perform the functions that it was designed to perform. (Id., Paras. 8 and 9) (Bareis, pp. 29-44, Ex. 88; Smith, pp. 144-145, Ex. 89);

(c) That on or about February 17, 1993, James Lefever, a sales representative of Leopold, with Leopold's full knowledge, approval and cooperation, appeared before a meeting of Reading City Council and further accused Roberts of knowingly infringing Leopold (sic) patent and engaging in a conspiracy with city engineers to provide a product with which so infringed (Id., Para. 10) (Lefever, pp. 65070, Ex. 74, Ex. 75; ex. 97, pp. 6-7); and

(d) That on November 12, 1992, Leopold's Regional Sales Manager, Nelson Bareis, in a letter directed to Hazen & Sawyer, engineers on the Detroit project, accused Roberts of designing a product which would infringe the Leopold patent and requested that Roberts be eliminated as an acceptable supplier (Id., Para 12) (Ex. 55).

Roberts Filter's Brief in Opposition to Summary Judgment, pp. 100-101.

In Pennsylvania, actions for defamation are governed by 42 Pa.Cons.Stat.Ann. § 8343 which provides:

(a) Burden of Plaintiff. — In an action for defamation, the plaintiff has the burden of proving, when the issue is properly raised:

(1) The defamatory character of the communication.

(2) Its publication by the defendant.

(3) Its application to the plaintiff.

(4) The understanding by the recipient of its defamatory meaning.

(5) The understanding by the recipient of it as intended to be applied to the plaintiff.

(6) Special harm resulting to the plaintiff from its publication.

(7) Abuse of a conditionally privileged occasion.

(b) Burden of defendant.

(1) The truth of the defamatory communication.

(2) The privileged character of the occasion on which it was published.

(3) The character of the subject matter of defamatory comment as of public concern.

42 Pa.Cons.Stat.Ann. § 8343 (1982).

Additionally, we would note that although Count V of Roberts Filter's Second Amended Complaint is entitled "Defa...