Pac-West Distrib. NV v. AFAB Indus. Servs.
| Decision Date | 22 May 2023 |
| Docket Number | Civil Action 19-3584 |
| Parties | PAC-WEST DISTRIBUTING NV LLC, Plaintiff v. AFAB INDUSTRIAL SERVICES, INC., et al., Defendants |
| Court | U.S. District Court — Eastern District of Pennsylvania |
The sellers and distributors of various cleaning products find themselves in something of a messy procedural morass. Pac-West Distributing NV LLC initiated this lawsuit, alleging that AFAB Industrial Services, Inc., and Everett Farr III[1] infringed upon Pac-West's trademarks and trade dresses breached the parties' prior settlement agreement, and tortiously interfered with Pac-West's current and prospective contractual relationships. AFAB filed various counterclaims, asserting, inter alia, that Pac-West tortiously interfered with AFAB's contractual relationships, that Pac-West's marks should be cancelled or deemed abandoned for unlawful use, and that Pac-West's marks should be cancelled because they were fraudulently obtained. Because AFAB has failed to satisfy its evidentiary burden as to the tortious interference and fraud claims, and because the Court declines to adopt a lawful use requirement the Court grants Pac-West's motion for summary judgment challenging the AFAB counterclaims in part and deems this motion moot in part.
The Court writes for the benefit of the parties and assumes basic familiarity with the facts of this case. See Pac-W Distrib. v. AFAB Indus. Servs., Inc., No 19-3584, 2020 WL 4470447, at *1-*2 (E.D. Pa. Aug. 4, 2020).
AFAB previously sued Pac-West in 2015 for common law defamation, tortious interference with prospective business relations, and unfair competition. See Farr et al. v. Pac-West Distrib. NV LLC. el al., No. 16-cv-175. AFAB also filed a petition to cancel Pac-West's registrations for its RUSH, PWD, and POWER PAK PELLET marks and notices of opposition to Pac-West's applications for NEVER FAKE IT! and SUPER RUSH. In that earlier suit, Pac-West counterclaimed for defamation, false advertisement, trade dress infringement, false designation of origin, and common law unfair competition, claiming that AFAB infringed upon its trademarks and trade dresses associated with the RUSH, PWD, SUPER RUSH, POWER-PAK PELLET and the unregistered NEVER FAKE IT! marks. The parties entered into a settlement agreement on August 23, 2016 that, among other terms, dismissed the litigation with prejudice and resolved the petition to cancel and notices of opposition.
Three years after the supposed resolution of the parties' commercial claims against each other, Pac-West filed the instant action against AFAB and Mr. Farr in August 2019. Pac-West's amended complaint states that it owns various trademarks for its products, which include nail polish removers, incense, desiccants, and other related cleaning products.
Pac-West alleges that AFAB has “purposefully advertised, promoted, offered for sale, sold, distributed and continue[s] to advertise, promote, offer for sale, sell and distribute” products that infringe on Pac-West's IRON HORSE, RUSH ORIGINAL, and GOLD RUSH marks as well as various trade dresses associated with its products bearing the IRON HORSE, RUSH ORIGINAL, GOLD RUSH, SUPER RUSH, RUSH, and NEVER FAKE IT! marks. Am. Compl. ¶¶ 14, 20, 34. Pac-West contends that AFAB's products mimic the color combinations, images, the position, format, size, and content of text, the “clutter free overall layout,” and bottle shapes of various Pac-West products. Id., ¶¶ 21,39. Pac-West asserts that AFAB made changes to its product labels and packaging to mimic Pac-West's trade dresses after the parties entered into the settlement agreement. Id. ¶ 43.
Pac-West also alleges that AFAB breached the 2016 settlement agreement by failing to identify its corporate name and address on the packaging of products bearing the words RUSH, PWD, SUPER RUSH, POWER-PAK PELLET, and NEVER FAKE IT! Id. ¶ 63.
AFAB filed an answer with three counterclaims and then a month later filed First Amended Counterclaims. The Court granted Pac-West's motion for partial dismissal of these counterclaims. Pac-W. Distrib. NV LLC v. AFAB Indus. Servs. Inc., No. 19-cv-3584, 2022 WL 717276, at *5 (E.D. Pa. Mar. 10, 2022). Pac-West filed the now-pending motion for partial summary judgment on the remaining counterclaims. The Court heard oral argument and has accepted the parties' written submissions.
Summary judgment should be granted only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotation marks omitted). “The mere existence of a scintilla of evidence in support of the [claimant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [claimant].” Anderson v. Liberty) Lobby, Inc., 477 U.S. 242, 252 (1986). There is nothing unfamiliar in the foregoing description of the legal landscape for evaluating summary judgment issues.
Pac-West moves for summary judgment on Counts III, IV, V, VI, VII, and VII of AFAB's counterclaims. At oral argument, AFAB agreed to withdraw Count III, relating to Pennsylvania's Unfair Trade Practices and Consumer Protection Law, 73 Pa Cons. Stat. § 201-1, et seq. Therefore, the Court deems this portion of Pac-West's summary judgment motion moot and turns to the remaining counts.
Counts IV and V of AFAB's counterclaims assert that Pac-West tortiously interfered with contractual relations between AFAB and its distributors by representing that, under the terms of the settlement agreement, AFAB was not permitted to sell products bearing the PWD, RUSH, SUPER RUSH, GOLD RUSH, POWER PAK PELLET, IRON HORSE, and/or NEVER FAKE IT WITHOUT IT! marks, thereby confusing AFAB's distributors, To prevail on a claim for tortious interference with existing or prospective contractual relationships under Pennsylvania law, AFAB must prove:
Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199, 212 (3d Cir. 2009).
Pac-West challenges these counterclaims on two grounds, First, Pac-West asserts that AFAB has not pled these counterclaims with enough specificity because the counterclaims identify neither any particular distributors or statements made by Pac-West nor any specific allegations of Pac-West's wrong fill conduct or intention to harm AFAB's business. The only evidence that AFAB musters in opposition is the deposition of Sarita Krupa, an employee with one of AFAB's distributors, who testified that Trent Taylor, Pac-West's corporate agent, asked her company not to do business with AFAB and that this “damaged” the business relationship with AFAB. Krupa Dep. at 41:3-23. Because AFAB does not identify any other specific statements made by Pac-West, the Court may only entertain possible tortious inference claims based on Ms, Krupa's testimony.
Pac-West's second argument is that AFAB has presented no evidence that the alleged statement made to Ms. Krupa resulted in any damages. Under Pennsylvania law, damages for a tortious interference claim may be established by reference to “the pecuniary loss of the benefits of the contract or the prospective relation;. .. consequential losses for which the interference is a legal cause; and . . . actual harm to reputation, if [it is] reasonably to be expected to result from the interference.” Pawlowski v. Smorto, 588 A.2d 36, 40 (Pa. Super. Ct. 1991).
AFAB cites to Ms. Krupa's deposition testimony that Mr. Taylor's statements “damaged” her company's relationship with AFAB. But there is no evidence in the record that Ms. Krupa's company ceased its dealings with AFAB as a result of these statements.[2] To prevail on a tortious interference claim, AFAB must be able to provide specific evidence of legal, monetary damages stemming from any alleged interference. On that front, there is no evidence in the record from which a jury could even begin to ascertain either the amount, or even the existence, of AFAB's pecuniary losses. Indeed, in its counter-statement of facts, AFAB repeatedly asserts that “[i]t is impossible to know” whether Pac-West's statements resulted in lower sales, lost business opportunities, or reputational harm to AFAB. Def.'s Counter-Statement of Facts ¶¶ 108,109,111. Without evidence, and faced with the claimant's own acknowledgement of the impossibilities at hand, there can be no triable issue as to damages. Therefore, the Court grants summary judgment in Pac-West's favor on Counts IV and V.
Counts VI and VII of AFAB's counterclaims seek cancellation of Pac-West's marks on the grounds that the marks are not “in use in commerce” as required by the Lanham Act, see 15 U.S.C. § 1051(a)(3)(C), or, alternatively, Pac-West and its predecessors have abandoned their marks by failing to use them in commerce.[3]
...
To continue reading
Request your trial