Guidance Endodontics, LLC v. Dentsply International, Inc., CIV 08-1101 JB/RLP.
| Decision Date | 08 September 2009 |
| Docket Number | No. CIV 08-1101 JB/RLP.,CIV 08-1101 JB/RLP. |
| Parties | GUIDANCE ENDODONTICS, LLC, a New Mexico Limited Liability Company, Plaintiffs, v. DENTSPLY INTERNATIONAL, INC. a Delaware Business Corporation, and Tulsa Dental Products, LLC, a Delaware Limited Liability Company, Defendants. and Dentsply International, Inc. and Tulsa Dental Products, LLC, Counter Plaintiffs, v. Guidance Endodontics, LLC and Dr. Charles Goodis, Counter Defendant. |
| Court | U.S. District Court — District of New Mexico |
Kyle C. Bisceglie, Renee M. Zaystev, Olshan, Grundam, Frome, Rosenweiz & Woldosky, LLP, New York, NY, John J. Kelly, Donald A. DeCandia, Ryan Flynn, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, NM, for the Plaintiff and Counter-Defendants.
Brian M. Addison, Vice President, Secretary, and General Counsel, Dentsply International, Inc., York, PA, Thomas P. Gulley, Rebecca L. Avitia, Lewis and Roca, LLP, Albuquerque, NM, for the Defendants and Counter-Plaintiffs.
THIS MATTER comes before the Court on Dentsply/TDP Motion for Summary Judgment Against Guidance on Count VI (Lanham Act), Count IV (Delaware Unfair Practices Act) and Count V (New Mexico Unfair Practices Act), filed July 7, 2009 (Doc. 182). The Court held hearings on August 21, 2009 and September 2, 2009. The primary issues are: (i) whether evidence of alleged false statements by Dentsply International, Inc. ("Dentsply") and Tulsa Dental Products, LLC's ("TDP") (collectively "the Defendants") sales representatives is inadmissible hearsay; (ii) whether that evidence, if admissible, is sufficient to create a factual issue whether the Defendants violated the Lanham Act; (iii) whether either New Mexico's Unfair Practices Act ("New Mexico UPA") or Delaware's Deceptive Trade Practices Act ("DPA") can apply to the Defendants's conduct without having unlawful extraterritorial effect; and (iv) whether the evidence is sufficient to create a genuine factual issue whether either state statute was violated. Because the Court finds that Plaintiff Guidance Endodontics, LLC ("Guidance") has presented sufficient evidence to sustain the claims, it will deny the motion with respect to Counts V and VI. Because, however, there is no evidence that any conduct or harm occurred in Delaware, it will grant the motion for summary judgment as to Count IV.
This case concerns a suit that Guidance, a small endodontic-equipment company, has brought against the much larger Defendants, who are both Guidance's rivals and its suppliers. More background on the lawsuit general is set forth in the Court's earlier opinion. See Guidance Endodontics, LLC v. Dentsply Intern., Inc., 633 F.Supp.2d 1257, 1260-65 (D.N.M.2008) (Browning, J.). In this motion, the Defendants largely challenge the admissibility and adequacy of Guidance's evidence of unfair business practices, but do not present a significant number of alleged facts of their own. Thus, the Court lays out the evidence that Guidance contends is admissible and sufficient to defeat summary judgment.
According to Guidance, the Defendants, who dominate the endodontics instrument market, waged an organized campaign to drive it out of business. As relevant here, Guidance accuses the Defendants of running a marketing campaign which involved falsely representing to actual and potential Guidance customers that Guidance was no longer able to supply files. Guidance has provided several declarations to support these allegations.
Around September 2008, Debra Ruggles, Guidance's office manager, who normally answers calls to Guidance's main number, began receiving calls from customers asking if the Defendants were suing Guidance and if Guidance was going out of business. See Declaration of Debra S. Ruggles in Opposition to Defendants' Motion for Summary Judgment ¶ 5, at 2 (executed July 28, 2009, filed July 29, 2009) (Doc. 212) ("Ruggles Decl."). One unidentified man called and said he had heard that Guidance was no longer making V-Taper Files and wanted to know why. See id. ¶ 7, at 2. Suspecting that the Defendants' sales representatives were making negative comments about Guidance, Ruggles talked with John Ferone, Guidance's sales manager, who had also been receiving similar calls, and Sharon Bettes-Grove, its operations manager. See id. ¶¶ 8-9, at 2-3. They decided to began documenting the calls on "Negative Call Sheets." Id. ¶ 9, at 3. Before October 2, 2008, when she began documenting calls, Ruggles received five or six calls indicating generally that the callers had heard that Guidance was being sued and could no longer sell products. See id. ¶ 10, at 3. From October 2, 2008 to November 14, 2008, Ruggles documented five calls that were variations on the same theme: that a sale representative of one of the Defendants had told the caller that Guidance was being sued and could no longer sell or manufacture its products. See id. ¶¶ 11-16, at 3-4; Exhibits A to E, Negative Calls/Comments Received Sheets (Doc. 212-2). Ruggles also states that she received one or two similar calls after October 2, 2008, which she did not document. See Ruggles Decl. ¶ 17, at 5.
Ferone's declaration largely corroborates Ruggles' statements. He asserts that, before October 2, 2008, he received between three and five negative calls of a similar nature to those Ruggles received. See Declaration of John P. Ferone in Opposition to Defendants' Motion for Summary Judgment ¶ 6, at 2 (executed July 28, 2009, filed July 29, 2009)(Doc. 213)("Ferone Decl."). Throughout October and November of 2008, Ferone received another five similar calls, some of which he documented. See id. ¶¶ 8-12, at 2-4; Exhibits F, G, Negative Calls/Comments Received Sheets (Doc. 213-2). Bettes-Grove's declaration largely corroborates the other two; it states that she received one negative call, which she documented, in which a dentist from Las Vegas, Nevada said that she had heard from a sales representative from a large company that Defendant Tulsa Dental Products, LLC was buying out Guidance and Guidance could no longer sell files. See Declaration of Sharon Bettes-Groves in Opposition to Defendants' Motion for Summary Judgment ¶ 6, at 2 (executed July 28, 2009, filed July 29, 2009) (Doc. 214) ("Bettes-Grove Decl."); Exhibit H, Negative Calls/Comments Received Sheet (Doc. 214-2).
In addition to the declarations of its employees, Guidance offers the declaration of David Stramback, a dentist and Guidance customer from New Jersey. Stramback says that Jason Halsey, a Tulsa Dental sale representative, came to visit him and asked what endodontics products he used. See David Stramback's Declaration ¶¶ 5-6, at 2 (executed December 1, 2008, filed July 29, 2009) (Doc. 216) ("Stramback Decl."). When he found out that Stramback used Guidance products, Haley told Stramback that Guidance had just lost a major lawsuit and that Stramback would no longer be able to order Guidance files. See id. ¶ 6, at 2. Guidance also offers the declarations of Samuel Kratchman and Theresa Casada. Each testified that a representative of Defendants contacted them, informed them that Guidance files were no longer available, and offered to provide them with files from Dentsply/TDP. See Theresa Casada Declaration ¶¶ 6-10 (executed December 2, 2008, filed July 29, 2009) (Doc. 216) ("Casada Decl."); Samuel I. Kratchman Declaration ¶¶ 5-9 (executed November 26, 2008, filed July 29, 2009) (Doc. 216) ("Kratchman Decl.").
Guidance also points to a series of internal emails of employees of the Defendants which indicate an underlying scheme to put Guidance out of business. For example, Brandon Miller, a sales employee of Tulsa Dental, wrote that recent litigation had forced Guidance files off the market, and encouraged his team to "get in every Guidance account that you know of this week and convert them using Godfather!!!!"1 Exhibit 7, Email dated September 10, 2008 (Doc. 215-2). And an email from Bill Newell, vice president and general manager at Tulsa Dental, discusses plans to attract Guidance customers and suggests that a "Guidance Target List" is needed to "AGGRESSIVELY target [Guidance] accounts with Max fire power." Exhibit 8, Email dated September 5, 2008 (Doc. 215-2). Another employee wrote about the need to "[u]nleash a massive and overwhelming force" against Guidance, Exhibit 12, Email dated March 5, 2009 (Doc. 215-12), and also urged: Exhibit 13, Email dated March 5, 2009 (Doc. 215-12). Other emails reiterate the message of aggressive targeting of Guidance customers.
This evidence is the crux of the issues here. Beyond arguing that Guidance lacks admissible evidence of wrongful statements, however, the Defendants also make a few other contentions about the facts. First, they contend that, based on the Complaint, Guidance has 5,400 customers. See Motion ¶ 1, at 2. Guidance says that the number is a fair approximation, but that as of September 1, 2008, Guidance had just over four-thousand customers who had purchased products. See Exhibit 5, Customer List (Doc. 215-2). Second, the Defendants contend that Guidance mailed marketing brochures to approximately five-thousand dentists. See Dentsply/TDP's Memorandum in Support of this Motion for Summary Judgment on Counts VI (Lanham Act), Count IV (Delaware Unfair Practices Act), and Count V (New Mexico Unfair Practices Act) of Guidance's Complaint at 2, filed July 7, 2009 (Doc. 183) ("Memo"). Guidance says that this number is an approximation and deals only with obturators and not with all Guidance products. See Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment on Counts IV, V and VI of Plaintiff's Complaint at 7, filed July 29, 2009 (Doc. 211) ("Response"). Third, the Defendants contend that, according to Guidance, there are fifty-thousand...
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