InterRoyal Corp. v. Sponseller

• Decision Date: 14 November 1989
• Docket Number: No. 88-3903,88-3903
• Citation: InterRoyal Corp. v. Sponseller, 889 F.2d 108 (6th Cir. 1989)
• Parties: , 15 Fed.R.Serv.3d 985, 12 U.S.P.Q.2d 1892 INTERROYAL CORPORATION, a Delaware corporation, Plaintiff-Appellant, v. Ralph H. SPONSELLER, and Superior Roll-Forming Company, Inc., an Ohio corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 108

889 F.2d 108

58 USLW 2342, 15 Fed.R.Serv.3d 985,

12 U.S.P.Q.2d 1892

INTERROYAL CORPORATION, a Delaware corporation, Plaintiff-Appellant, v.Ralph H. SPONSELLER, and Superior Roll-Forming Company Inc., an Ohio corporation, Defendants-Appellees.

No. 88-3903.

United States Court of Appeals Sixth Circuit.

Argued April 21, 1989.

Decided Nov. 14, 1989.

George W. Stuhldreher, Gallagher, Sharp, Fulton & Norman, Cleveland, Ohio, Marco H. De Gaetano, Robert E. Purcell, argued, Theresa A. Brown, Law Offices of Robert E. Purcell, Englewood, Colo., for plaintiff-appellant.

Robert F. Deacon, Thomas J. Collin, argued, Thompson, Hine & Flory, Cleveland, Ohio, for defendants-appellees.

Before JONES and NORRIS, Circuit Judges, and WOODS, District Judge.^*

WOODS, District Judge.

InterRoyal Corporation commenced this lawsuit against a former employee, Ralph Sponseller, and Superior Roll-Forming Company on May 21, 1984, shortly after Superior employed Sponseller as its National Sales Director and began manufacturing True Gauge Shelving, a shelving product that was similar in design to InterRoyal's product.In its complaint, InterRoyal alleged that Sponseller breached his employment contract with InterRoyal by disclosing trade secrets to Superior and that Superior interfered with InterRoyal's contractual relations with Sponseller by obtaining trade secrets from Sponseller while he was still employed by InterRoyal.InterRoyal also claimed that Superior breached a contract with InterRoyal to not duplicate or use the design of InterRivet Shelving, a shelving product Superior had been manufacturing for InterRoyal pursuant to a June 8, 1981, purchase order.

On June 18, 1986, over two years after the commencement of the lawsuit, InterRoyal filed a motion for leave to file an amended complaint, which added claims of breach of fiduciary duty and unfair competition.The district court denied the motion to add claims of breach of fiduciary duty on November 26, 1986, and on January 23, 1987, denied the motion to add claims of unfair competition.

On January 26, 1987, Superior filed its motion for summary judgment.Superior accompanied the motion with a seventy-four page memorandum that contained a seventeen page statement of facts referencing specific portions of depositions and paragraphs of affidavits.Over five months later, InterRoyal filed its memorandum in response to Superior's motion.InterRoyal's response contained a fourteen page rendition of the facts that made only cursory reference to four of the seventeen depositions filed with the court and did not cite specific pages in the depositions or other documents of record to support its factual allegations.Sponseller filed his motion for summary judgment on September 2, 1987.His motion did not recite any facts or assert any legal arguments; it only incorporated Superior's motion by reference.

On November 2, 1987, the district court held a settlement conference that failed to achieve its intended results.At the close of the conference, the trial judge orally granted the defendants' motions for summary judgment and issued a written version of the order on November 13, 1987.In the district court's written order, the judge indicated that InterRoyal failed to meet its burden of responding to the defendants' motions because "its memorandum in opposition is devoid of references to any specific facts which may or may not be contained in the great bulk of depositions and exhibits which were filed on the eve of trial and more than five months after the filing of plaintiff's opposition."The judge indicated that the depositions to which InterRoyal referred in its memorandum were reviewed in their entirety and failed to raise a genuine issue of material fact.

On November 5, 1987, after the court's oral order, but prior to the written order, InterRoyal filed its own motion for partial summary judgment.The defendants did not respond to this motion and the court did not rule upon it.Instead, the district court entered a final judgment pursuant to Rule 54(b) of the Federal Rules of Civil Procedure as to all claims except Sponseller's age discrimination claim.InterRoyal then filed this appeal.

I.

On appeal, InterRoyal asserts that the trial court erred by granting the defendants' motions for summary judgment; by not granting InterRoyal's cross motion for summary judgment; and by denying InterRoyal's motion for leave to amend its complaint.

A.

InterRoyal asserts that the district court erred when it granted summary judgment to Superior and Sponseller because they failed to sustain their burden of establishing the absence of a genuine issue of material fact and, even if they met their initial burden, InterRoyal sustained its corresponding burden by establishing a genuine issue of material fact.

In Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265(1986), the Supreme Court held that "a party seeking summary judgment always bears the initial responsibility of informing the district court of the basis of its motion, and identifying those portions of the 'pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any,' which it believes demonstrates the absence of a genuine issue of material fact."Id. at 323, 106 S.Ct. at 2552.The Court did not, however, require the moving party to negate the nonmoving party's claim.Id. at 323, 106 S.Ct. at 2552("no express or implied requirement in Rule 56 that the moving party support its motions with affidavits or other materials negating the opponent's claim").

In the present case, Superior met its burden.It supported its version of the facts with designated portions of affidavits and deposition transcripts that tended to establish that InterRoyal's claimed trade secrets were not protectible; that it did not interfere with InterRoyal's contractual relations; and that summary judgment was, therefore, proper.

Once the party moving for summary judgment has satisfied its burden, "the adverse party'must set forth specific facts showing that there is a genuine issue for trial.' "Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202(1986)(quotingFed.R.Civ.P. 56(e));Celotex, 477 U.S. at 324, 106 S.Ct. at 2553.This "requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate specific facts showing that there is a genuine issue for trial."Celotex, 477 U.S. at 324, 106 S.Ct. at 2553(quotingFed.R.Civ.P. 56(e)).InterRoyal contends that it met this burden because it set forth specific facts raising a genuine issue of material fact and supported those facts by filing deposition transcripts and exhibits with the court.Superior disagrees and asserts that the nonmoving party can defeat a properly supported motion for summary judgment only by citing specific portions--presumably by page or paragraph number--of depositions, affidavits, and exhibits that raise a genuine issue of material fact.

A district court is not required to speculate on which portion of the record the nonmoving party relies, nor is it obligated to wade through and search the entire record for some specific facts that might support the nonmoving party's claim.Rule 56 contemplates a limited marshalling of evidence by the nonmoving party sufficient to establish a genuine issue of material fact for trial.This marshalling of evidence, however, does not require the nonmoving party to "designate" facts by citing specific page numbers.Designate means simply "to point out the location of."Webster's Third New International Dictionary (1986).

Of course, the designated portions of the record must be presented with enough specificity that the district court can readily identify the facts upon which the nonmoving party relies; but that need for specificity must be balanced against a party's need to be fairly apprised of how much specificity the district court requires.This notice can be adequately accomplished through a local court rule or a pretrial order.See e.g., Frito-Lay, Inc. v. Willoughby, 863 F.2d 1029, 1034(D.C.Cir.1988)(local rule);Stepanischen Merchants Despatch Transportation Corp., 722 F.2d 922, 931-32(1st Cir.1983)(local rule);Friedel v. City of Madison, 832 F.2d 965, 969(7th Cir.1988)(pretrial order);Nilsson, Robbins, Dalgarn, Berliner, Carson &...