Trilogy Communications v. Times Fiber Commun.

• Citation: 47 F.Supp.2d 774
• Decision Date: 29 May 1998
• Docket Number: No. Civ.A. 3:91-CV-542WS.,Civ.A. 3:91-CV-542WS.
• Parties: TRILOGY COMMUNICATIONS, INC., Plaintiff, v. TIMES FIBER COMMUNICATIONS, INC. and LPL Technologies, Inc., Defendants.
• Court: U.S. District Court — Southern District of Mississippi

47 F.Supp.2d 774

TRILOGY COMMUNICATIONS, INC., Plaintiff, v. TIMES FIBER COMMUNICATIONS, INC. and LPL Technologies, Inc., Defendants.

No. Civ.A. 3:91-CV-542WS.

United States District Court, S.D. Mississippi, Jackson Division.

May 29, 1998.

Peter Larkin Doran, Thomas Calvin Wells, Wells, Moore, Simmons & Hubbard, Jackson, MS, Joseph V. Colainni, Laurence Evan Stein, Hung Trong T. Than, Pennie & Edmonds, Washington, DC, Thomas A. Canova, Brian Douglas Siff, Pennie & Edmonds, New York City, Michael Farrell, The Kullman Firm, Jackson, MS, George C. Summerfield, Jr., Radar, Fishman & Grauer, Bloomfield Hills, MI, for Trilogy Communications, Inc., plaintiff.

John C. Henegan, Butler, Snow, O'Mara, Stevens & Cannada, Jackson, MS, J. Cal Mayo, Jr., Mayo, McDavid, PLLC, Oxford, MS, for Times Fiber Communications, Inc., LPL Technologies, Inc., defendants.

MEMORANDUM OPINION AND ORDER

WINGATE, J.

Before the court is the motion of the plaintiff Trilogy Communications, Inc., (hereinafter "Trilogy") for judgment as a matter of law with regard to the defendants' state law counterclaims of malicious prosecution and unfair competition. Brought on day two in a jury trial between the parties, after defendants had rested on their case-in-chief, Trilogy's motion is governed by Rule 50¹ of the Federal Rules of Civil Procedure. Trilogy argues that judgment as a matter of law is appropriate in the instant case because the evidence presented by Times Fiber Communications, Inc., and LPL Communications, Inc., (hereinafter the "defendants"), even after viewing all reasonable inferences in the light most favorable to the defendants, is so strongly in favor of Trilogy that a rational jury could not arrive at a contrary verdict. See London v. MAC Corporation of America, 44 F.3d 316, 318 (5th Cir.), cert. denied, 516 U.S. 829, 116 S.Ct. 99, 133 L.Ed.2d 53 (1995). Of course, if there is substantial evidence of such quality and weight that reasonable and fair-minded jurors might reach a different conclusion, then this court would be compelled to deny Trilogy's motion. Id. However, this court has heard the defendants' arguments in support of their counterclaims and is persuaded that judgment as a matter of law is appropriate in the instant case.

BACKGROUND

This lawsuit originally was brought by Trilogy pursuant to Title 35 U.S.C. §§ 271, 281, and 283 - 285, accusing the defendants of patent infringement.² This court's jurisdiction over the patent dispute was based on Title 28 U.S.C. §§ 1338(a) (district courts have original jurisdiction of any civil action arising under any Act of Congress relating to patents), 1391(c), and 1400(b) (permitting civil actions for infringement to be brought in the federal district where the defendant has sufficient contacts or has committed acts of infringement).

This core patent infringement dispute between the parties erupted over the manufacturing processes associated with coaxial cable.³ The manufacturing processes in question were two methods of causing a protective metal sheath to adhere to foam insulation which is formed around a metal core capable of transmitting telephone and television signals. According to the defendants, Trilogy's method of making coaxial cable involved melting a core layer of foam insulation at least along its surface in order to cause it to adhere to the inside wall of the protective metal sheath, thereby creating a strong bond between the foam and the metal sheath which would not leak. This result was referred to as "fusion-bonding."⁴ Defendants contend that the method they used to bind the metal sheath to the core layer of foam was different because it involved an adhesive material which is heated just enough to cause the foam and the metal sheath to bind with one another. The difference, argued the defendants, was that the foam insulation in the defendants' cable was not melted as it was in Trilogy's cable.

After Trilogy filed the instant patent infringement lawsuit, the defendants filed counterclaims of malicious prosecution and unfair competition which are governed by Mississippi law, moved for summary judgment on the merits of Trilogy's patent infringement claims, and additionally contended that Trilogy's patent claims were barred by the doctrines of either res judicata or collateral estoppel. On December 1, 1995, this court entered its Memorandum Opinion and Order granting summary judgment to the defendants on the merits of Trilogy's patent claims. However, this court denied the defendants' motion for summary judgment insofar as it was based on the contention that a North Carolina federal district court's decision in Trilogy v. Comm Scope Co., 754 F.Supp. 468 (W.D.N.C.1990), where virtually all of the patent infringement issues pending before this court in the instant case were resolved by the North Carolina district court against Trilogy, should be viewed as dispositive of those same issues in the lawsuit before this court. The defendants asked this court to regard the patent issues in the instant case to be barred by the doctrines of res judicata and/or collateral estoppel, notwithstanding that Trilogy v. Comm Scope Co. later was vacated by the United States Court of Appeals for the Federal Circuit while the case was on appeal because the parties announced to the Federal Circuit that they had settled the case. This court was not persuaded that it could rely on a vacated opinion as providing sufficient foundation for finding that either of the doctrines of issue preclusion urged by the defendants could be applied in the instant case. This court's reasons for rejecting the defendants' arguments in favor of applying the principles of res judicata and/or collateral estoppel are set forth fully in a separate Order.

As previously noted, the defendants also raised the counterclaims of malicious prosecution and unfair competition counterclaims against Trilogy under Mississippi law. These counterclaims were held in abeyance while Trilogy pursued its appeal of this court's findings on the merits of the patent claims to the United States Court of Appeals for the Federal Circuit. The Federal Circuit in Trilogy Communications, Inc. v. Times Fiber Communications, Inc., and LPL Technologies, Inc., decided May 8, 1997, agreed with this court's interpretation of the patent documents, affirmed this court's Memorandum Opinion and Order, and remanded the case for final resolution of the defendants' counterclaims.

RULE 50—JUDGMENT AS A MATTER OF LAW

A jury was selected and trial was conducted on the issues of malicious prosecution and unfair competition. After the defendants had been fully heard on their counterclaims, the jury was directed to withdraw from open court while Trilogy moved for judgment as a matter of law pursuant to Rule 50 of the Federal Rules of Civil Procedure. Rule 50 of the Federal Rules of Civil Procedure permits a trial court to grant an opposing party's motion for judgment as a matter of law if "there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." In such circumstances, the trial court must view the entire trial record in the light most favorable to the nonmovant, drawing reasonable factual inferences in its favor. Conkling v. Turner, 18 F.3d 1285, 1300 (5th Cir.1994). The "decision to grant a directed verdict ... is not a matter of discretion, but a conclusion of law based upon a finding that there is insufficient evidence to create a fact question for the jury." Id. at 1300-01, quoting In re Letterman Brothers Energy Securities Litigation, 799 F.2d 967, 972 (5th Cir. 1986), cert. denied, 480 U.S. 918, 107 S.Ct. 1373, 94 L.Ed.2d 689 (1987); and see Burch v. Coca-Cola Company, 119 F.3d 305, 313 (5th Cir.1997), citing Conkling v. Turner. "If the facts and inferences point so strongly and overwhelmingly in favor of the moving party ... that reasonable jurors could not have arrived at a contrary verdict," then this court must conclude that the motion should be granted. See Resolution Trust Corporation v. Cramer, 6 F.3d 1102, 1109 (5th Cir.1993), citing Boeing v. Shipman, 411 F.2d 365, 374 (5th Cir.1969); Crist v. Dickson Welding, Inc., 957 F.2d 1281, 1285 (5th Cir.), cert. denied, 506 U.S. 864, 113 S.Ct. 187, 121 L.Ed.2d 132 (1992). In the instant case, this court finds that the defendants have failed to establish a prima facie case of malicious prosecution or unfair competition sufficient to withstand Trilogy's motion for judgment as a matter of law.

THE DEFENDANTS' COUNTERCLAIMS

A. Applicable Law

The defendants' counterclaims of unfair competition and malicious prosecution are Mississippi state law claims, not federal claims. Therefore, pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), the applicable substantive law for resolving these counterclaims is taken from the forum in which this court sits, the law of the State of Mississippi. Rittenhouse v. Mabry, 832 F.2d 1380, 1382 (5th Cir.1987); DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1264 (5th Cir.1983).

Accordingly, this court's jurisdiction over the defendants' counterclaims is predicated on Title 28 U.S.C. § 1367(a) which provides for supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Original jurisdiction in the instant was provided by federal patent law. However, as above-stated, Mississippi law, not federal patent law, governs the resolution of the defendants' malicious prosecution and unfair competition. Thus, to determine whether the defendants at this stage have made out a prima facie case of either malicious prosecution or unfair competition, or both, this court is required to look to Mississippi law, and, of course, Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) commands this court...