Keystone Plastics, Inc. v. C & P Plastics, Inc.

• Decision Date: 17 January 1975
• Docket Number: No. 72-3430,72-3430
• Citation: 506 F.2d 960
• Parties: KEYSTONE PLASTICS, INC., Plaintiff-Appellant-Cross Appellee, v. C & P PLASTICS, INC., et al., Defendants-Appellees-Cross Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 960

506 F.2d 960

184 U.S.P.Q. 454

KEYSTONE PLASTICS, INC., Plaintiff-Appellant-Cross Appellee, v. C & P PLASTICS, INC., et al., Defendants-Appellees-Cross Appellants.

No. 72-3430.

United States Court of Appeals, Fifth Circuit.

Jan. 17, 1975.

John Cyril Malloy, Miami, Fla., Howard C. Miskin, Rogers, Hoge & Hills, New York City, Moise W. Dennery, New Orleans, La., for plaintiff-appellant-cross appellee.

John H. Oltman, Fort Lauderdale, Fla., Hiram P. Settle, Jr., Bernard J. Cantor, Detroit, Mich., for defendants-appellees-cross appellants.

Appeals from the United States District Court for the Southern District of Florida.

Before WISDOM and GOLDBERG, Circuit Judges, and LYNNE, District Judge.

LYNNE, District Judge:

Tried by capable and diligent counsel, factual disputes pertaining to the manufacture of extruded polypropylene plastic bristles for use in mechanical street sweeper brushes produced a record of immense volume ¹ in the court below.

The resolution of such disputes and the legal questions arising therefrom by Judge King appear in his Findings of Fact and Conclusions of Law published in Keystone Plastics, Inc. v. C & P Plastics, Inc., 340 F.Supp. 55 (D.C.1972).

To avoid supererogation reference will be freely made to such published findings in addressing the issues formulated by appellant. ² Of preliminary concern is the admitted adoption by the trial court of the findings and conclusions prepared by counsel for appellees ³ and entry thereof without prior notice to counsel for plaintiff.

This Court has consistently expressed its disapproval of the practice of unconditionally adopting findings submitted by one of the parties to the litigation. The reason should be self-evident. The reviewing court deserves the assurance that the trial court has come to grips with apparently irreconcilable conflicts in the evidence, such as appear in the case sub judice, and has distilled therefrom true facts in the crucible of his conscience.

Of course, in areas of highly specialized litigation the typical trial judge is apt to be unfamiliar with the nomenclature common to the art or science involved. In such cases he needs help in reducing his ultimate decision to accurate and understandable words.

As the organ of the court in Louis Dreyfus & Cie. v. Panama Canal Company, 298 F.2d 733, 738 (5th Cir. 1962), Judge Wisdom commented:

In analyzing the significance that should be attached to the adoption by the trial judge of findings drafted by one of the litigants, common sense may be a better guide than ideal decision-making. As an ideal matter it would be desirable for the trial judge to draft his own findings in every case. This would supply insurance, for the benefit of the appellate court, that the trial judge did indeed consider all the factual questions thoroughly and would guarantee that each word in the finding is impartially chosen. In the workaday world, however, it may often be necessary for a hardpressed district court to take assistance from counsel in articulating his decision. This assistance may be especially helpful in a case involving complex and technical subject matter, as in patent cases, where the aid of a specialist may be but a shade short of indispensable. In such cases it must be assumed that the trial judge considered the case from all angles and reached his decision independently before placing reliance on the proposed findings. The ultimate question that the judge must face is whether to enter judgment for plaintiff or defendant, and he must decide this question on his own before deciding which proposed findings to accept.

There is a technique utilized by trial judges which fairly accommodates this requirement of specialized assistance in the preparation of findings of fact in such cases to the imperative that such findings be his and his alone. Counsel for the party who is due to prevail in the tentative opinion of the court will be requested to submit proposed findings of fact and conclusions of law to the court and simultaneously to serve a copy thereof upon adverse counsel. Thereafter, at a hearing attended by counsel for all interested parties, the court will proceed to enter findings and conclusions as proposed or as appropriately modified. ⁴

But, contrary to the insistance of plaintiff, this Court is committed to the proposition that, even though the trial court has ignored this reiterated admonition and has uncritically accepted findings proposed by one of the parties, such findings must be tested by the standard of review mandated by Rule 52, F.R.Civ.P., 28 U.S.C.A. ⁵

In the seminal case of Zenith Corp. v. Hazeltine, 395 U.S. 100, 123, 89 S.Ct. 1562, 1576, 23 L.Ed.2d 129 (1969), that standard was clearly explicated:

In applying the clearly erroneous standard to the findings of a district court sitting without a jury, appellate courts must constantly have in mind that their function is not to decide factual issues de novo. The authority of an appellate court, when reviewing the findings of a judge as well as those of a jury, is circumscribed by the deference it must give to decisions of the trier of the fact, who is usually in a superior position to appraise and weigh the evidence. The question for the appellate court under Rule 52(a) is not whether it would have made the findings the trial court did, but whether 'on the entire evidence (it) is left with the definite and firm conviction that a mistake has been committed.'

It would be a mistake to suppose that the 'clearly erroneous' rule provides an escape value for the reviewing court, for the key to its application is not the findings made by the court but the substantiality of the record evidence to support such findings. The frequently onerous task of canvassing the whole record when it is contended that certain findings are clearly erroneous is inescapable. In another context the Supreme Court has written:

(A) reviewing court is not barred from setting aside a . . . decision when it cannot conscientiously find that the evidence supporting that decision is substantial, when reviewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the (Court's) view. Universal Camera Corp. v. Labor Bd., 340 U.S. 474, 488, 71 S.Ct. 456, 465, 95 L.Ed. 456 (1951).

Literally, hundreds of hours have been devoted to an analysis of the evidence admitted by the trial court in the case sub judice. It would unduly extend this opinion to discuss the evidence both supportive of and opposed to the critical Findings of Fact, numbered 12 through 76, ⁶ entered by Judge King.

I. The Trade Secrets Claim.

Contending that the trial court erred in finding that none of its trade secrets were taken or used by defendants, plaintiff adduced evidence tending to paint a sordid picture of bribery and theft. It is accurately summarized in Judge King's Findings of Fact numbered 9, through the third sentence of Finding 13. ⁷

No choice of laws problem is apprehended. Both the law of New Jersey, ⁸ where the piracy is said to have occurred, and that of Florida, ⁹ where its fruits were claimed to have been utilized, afford protection of trade secrets. Recently, in University Computing Co. v Lykes-Youngstown, 504 F.2d 518 (5th Cir. 1974), this court has articulated legal standards on protection of trade secrets. ¹⁰ It is reasonable to suppose that both New Jersey and Florida would apply these standards which were anticipated by the Supreme Court in Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 94 S.Ct. 1879, 40 L.Ed.2d 315 (1974), in holding that federal patent supremacy does not preempt state trade secret protection.

At trial, defendants adopted the strategy of compelling the witness, William Gould, in his oral testimony, to identify one by one the components of appellant's extrusion line which he regarded as plaintiff's trade secrets, and thereafter to demonstrate that all were commonly known and used in the art. Judge King dealt seriatim with the claims thus developed in his Findings of Fact, numbered 24 through 55. ¹¹

The thrust of plaintiff's argument here, and advanced in the court below, as recognized by Finding of Fact No. 48 ¹² is that the trade secret for which it claims protection and which it insists was misappropriated by defendants is its entire, integrated line comprised of its unique combination of steps and equipment, rather than the components thereof viewed in isolation. That the whole of a manufacturing process may be greater than the sum of its parts is not the paradox it seems at first blush.

However, the court explicitly found that 'Defendants extrusion line differs in every material detail from the line of Keystone . . .. In short, while there is a similarity in the general overall arrangement and processing, the two lines differ substantially in every material detail.' ¹³ The court further found that '. . . Keystone's line and process were not a trade secret, the relevant information being known to the art, and furthermore, it was not used by C & P.' ¹⁴

In assessing the substantiality of the foregoing ultimate fact findings, due consideration has been given to the personal observation and inspection by the trial judge of the extrusion line processes and techniques utilized by defendants.

In United States v. Stewart, 201 F.2d 135, 137 (5th Cir. 1953), this Court stated:

The observations made by the court from its physical inspection of the premises were for all purposes matters of evidence that were not and could not be set out in the record . . .. In such a case, it is not within this court's province to substitute its finding of fact for those of the trial court, particularly since they are supported by substantial evidence and are not clearly erroneous.

Thus, the judgment of the Court that defendants are not liable to plaintiff under plaintiff's claim of misappropriation of trade secrets is firmly grounded upon dispositive findings of fact, supported by substantial...