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Bobrick Corp v. Santana Prod Inc, 10-2187 (2011)

Court: Court of Appeals for the Third Circuit Number: 10-2187 Visitors: 30
Filed: Apr. 06, 2011
Latest Update: Feb. 22, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT No. 10-2187 _ THE BOBRICK CORPORATION; BOBRICK WASHROOM EQUIPMENT; THE HORNYAK GROUP, INC., Appellants v. SANTANA PRODUCTS, INC., SANTANA PRODUCTS LIQUIDATING TRUST; MICHAEL T. LYNCH, SR.; MICHAEL T. LYNCH JR.; JOHN A. CARNEY; JAMES M. GAVIGAN; WILLIAM E. JACKSON, ESQ. On Appeal from the United States District Court for the Middle District Of Pennsylvania District Court No. 07-cv-01521 District Judge: The Honorable Thomas I. V
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                                                           NOT PRECEDENTIAL

                    UNITED STATES COURT OF APPEALS
                         FOR THE THIRD CIRCUIT


                                  No. 10-2187
                                 _____________

    THE BOBRICK CORPORATION; BOBRICK WASHROOM EQUIPMENT;
                   THE HORNYAK GROUP, INC.,
                                       Appellants

                                        v.

  SANTANA PRODUCTS, INC., SANTANA PRODUCTS LIQUIDATING TRUST;
    MICHAEL T. LYNCH, SR.; MICHAEL T. LYNCH JR.; JOHN A. CARNEY;
           JAMES M. GAVIGAN; WILLIAM E. JACKSON, ESQ.


                 On Appeal from the United States District Court
                      for the Middle District Of Pennsylvania
                           District Court No. 07-cv-01521
                District Judge: The Honorable Thomas I. Vanaskie


                Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                                March 21, 2011

        Before: FUENTES, SMITH and VAN ANTWERPEN, Circuit Judges

                              (Filed: April 6, 2011)


                                 _____________

                                   OPINION
                                 _____________



FUENTES, Circuit Judge.


                                       -1-
       This is the latest installment in a protracted, arduous, and complicated dispute

dating back to 1996. Bobrick and Bobrick Washroom Equipment, Inc. (“Bobrick”) are

California corporations engaged in the business of manufacturing and selling toilet

partitions. Hornyak Group Inc., is a sales representative for Bobrick in Pennsylvania,

New Jersey, and Delaware. Santana is a Virginia corporation headquartered in

Pennsylvania whose toilet partitions competed with those of Bobrick. In 1996, Santana

brought an action against Bobrick and Hornyak alleging violations of state and antitrust

law. After that suit was dismissed, Bobrick and Hornyak filed the complaint in this case,

which alleged that Santana’s1 actions in the underlying antitrust litigation constituted a

common law abuse of process claim and violated 42 Pa. C.S. § 8351(a), Pennsylvania’s

wrongful use of civil proceedings statute. Plaintiffs now appeal from the District Court’s

dismissal of their Amended Complaint. For the reasons set forth in the District Court

opinion, we will affirm.2

                                             I.

       The underlying facts relating to the original dispute between Bobrick, its sales

agents, and Santana are discussed at length in our previous opinion, see Santana v.

Bobrick, 
401 F.3d 123
(3d Cir. 2005) (“Bobrick I”), and in the District Court’s opinion


1
  Bobrick and Hornyak named Santana Products, Santana Products Liquidating Trust,
Michael T. Lynch, Sr., Michael T. Lynch Jr., John A. Carney, James M. Gavigan and
William E. Jackson, Santana’s attorney in the underlying action, (collectively “Santana”),
as defendants. Michael T. Lynch, Sr., was the owner and operator of Santana during the
relevant time period. Lynch, Jr., Carney, and Gavigan were alleged to be part of the
group responsible for the underlying litigation.
2
  The District Court had jurisdiction pursuant to 28 U.S.C. § 1332. We have jurisdiction
over this final order pursuant to 28 U.S.C. § 1291.
                                             -2-
sub judice, Bobrick v. Santana, 
698 F. Supp. 2d 479
(M.D. Pa. 2010). Therefore, because

we write only for the parties and assume their familiarity with the factual and procedural

history of this case, we will set forth only the information necessary for resolution of the

issues before us.

       In 1996, Santana filed a complaint alleging that Bobrick, Hornyak, and another

sales representative, Vogel Sales Company, were informing government architects that

Santana’s products posed a hazard under the fire safety codes in order to induce the

government to specify Bobrick’s products for use in its projects. The complaint alleged

violations of Section 43 of the Lanham Act, 15 U.S.C. § 1125(a), Sections 1 and 2 of the

Sherman Act, 15 U.S.C. §§ 1-2, and a state law claim of tortious interference with a

prospective contract.

       In 2003, following three years of discovery that included 270 subpoenas, the

deposition of 200 witnesses, the inspection of over a million pages of documents, and

exchanges of 550,000 documents, the District Court issued an eighty-three page decision

granting summary judgment in favor of defendants on the Sherman Act and state law

claims, but denying summary judgment on the Lanham Act claim. Santana Products,

Inc. v. Bobrick Washroom Equipment, Inc., 
249 F. Supp. 2d 463
(M.D. Pa. 2003).3

       In Bobrick I, we affirmed the grant of summary judgment in favor of the

defendants on the Sherman Act, Section 1 claim and the state law claim of tortious


3
  
See 249 F. Supp. 2d at 479-92
(discussing application of Noerr/Pennington doctrine),
503-15 (summary judgment in favor of defendants on Section 1 claim), 518-20
(summary judgment in favor of defendants on Section 2), 542 (summary judgment in
favor of defendants on state law claim of tortious interference).
                                             -3-

interference.4 401 F.3d at 131-35
, 140-41. However, we concluded that Santana’s

Lanham Act claim was barred by the doctrine of laches, 
id. at 135-39,
and thus refrained

from reaching the District Court’s decision that Santana’s claims were barred by the

Noerr/Pennington doctrine, 
id. at 130-31.
We therefore remanded the Lanham Act claim

with instructions for the District Court to dismiss it as barred by the doctrine of laches,

effectively terminating the litigation. 
Id. at 141,
cert. denied, Santana Products, Inc. v.

Bobrick Washroom Equipment, Inc., 
546 U.S. 1031
(2005).

       Our decision in Bobrick I led to the next phase of this dispute.5 On August 17,

2007, Bobrick and Hornyak filed a two-count complaint in the District Court for the

Middle District of Pennsylvania against Santana. Count One alleged a violation of the

Dragonetti Act, Pennsylvania’s statutory tort for wrongful use of civil proceedings, and

Count Two alleged a common law abuse of process claim. A Dragonetti Act claim for

wrongful use of civil proceedings has five elements, that: (1) the current plaintiff

prevailed in the underlying action; (2) the defendants acted in a grossly negligent manner

or without probable cause; (3) the defendant had an improper purpose in pursuing the

underlying action; (4) the proceedings terminated in favor of the plaintiff; and (5) the

plaintiff was harmed. 42 Pa. Cons. Stat. Ann. §§ 8351(a), 8352; see also McNeil v.

4
  The parties did not appeal the District Court grant of Bobrick’s summary judgment
motion on the Sherman Act Section 2 claim.
5
  As the District Court noted, this Complaint constitutes the third unsuccessful attempt
by Bobrick or a Bobrick sales representative to seek fees or other redress for the
underlying litigation. See Santana Prods., Inc. v. Sylvester & Assoc., Ltd., No. 98-CV-
6721, 
2006 U.S. Dist. LEXIS 98045
, at *1 (E.D.N.Y. Nov. 8, 2006), aff’d., 279 Fed.
Appx. 42 (2d Cir. 2008); Vogel Sales Co. v. Santana Prods., Inc., No. 2005-CV-5085
(Lackawanna Co., May 23, 2007), aff’d mem., 
963 A.2d 581
(Pa. Super. 2008) app.
denied, 
973 A.2d 412
(Pa. 2009).
                                             -4-
Jordan, 
894 A.2d 1260
, 1274-75 (Pa. 2006). As for Count Two, the Pennsylvania

common law tort of abuse of process permits a plaintiff to recover if he can “show that

the defendant used legal process against the plaintiff in a way that constituted a

perversion of that process and caused harm to the plaintiff.” Gen. Refractories Co. v.

Fireman’s Fund Ins. Co., 
337 F.3d 297
, 304 (3d Cir. 2003).

       On October 18, 2007, Santana and Jackson filed a joint motion to dismiss. On

February 26, 2008, the District Court issued an order staying discovery, but permitted the

deposition of one additional person. Oral argument on the motion to dismiss was held on

June 27, 2008.

       On March 22, 2010, the District Court granted the motion to dismiss. After

examining the plain language of the Dragonetti Act, its purpose, and the court cases

tackling the issue, the District Court concluded that a Dragonetti Act claim is not made

out if there was probable cause for any of the claims in the underlying litigation. The

court next found that, because probable cause existed for Santana’s original Lanham Act

claim, Bobrick’s Dragonetti Act claim failed as a matter of law. The court also

determined that the Amended Complaint did not contain factual claims and contentions

showing that defendants were grossly negligent in bringing and continuing to prosecute

the 1996 litigation, and thus the alternative grounds for a Dragonetti Act were also

lacking. For these reasons, the motion to dismiss Count One was granted. Turning to

Count Two, plaintiffs’ abuse of process claim, the court concluded that the Amended

Complaint did not allege facts from which it could be inferred that Santana’s primary



                                             -5-
purpose in bringing the underlying litigation was improper. Thus, Count Two was also

dismissed.

                                             II.

       On appeal, Bobrick and Hornyak argue that the District Court erred in its

interpretation of the elements of a Dragonetti Act claim; erroneously found that there was

probable cause for the Lanham Act claim; and improperly determined that the Amended

Complaint did not contain sufficient allegations of “improper purpose” or “gross

negligence” to survive a motion to dismiss. In addition, plaintiffs contend that the stay of

discovery was an abuse of discretion.

       In its detailed and thoughtful opinion, which was partly based on its significant

experience with the underlying litigation and its related cases, the District Court

explained its reasons for granting Santana’s motion to dismiss on the same issues raised

on appeal. Since we can add little to the District Court’s reasoning, we will affirm the

order granting summary judgment substantially for the reasons set forth in the court’s

thorough opinion.6 In addition, after reviewing the briefs and the record, we are not

persuaded by Bobrick and Hornyak’s argument on appeal that the court made improper

findings of fact, drew impermissible inferences in favor of Santana, inappropriately relied

on other court decisions, or otherwise erroneously applied the Rule 12(b)(6) standard.7


6
  Therefore, we will also decline appellants’ invitation to certify the Dragonetti Act issue
to the Pennsylvania Supreme Court.
7
 On March 29, 2011, Bobrick and Hornyak submitted a letter pursuant to Rule 28(j)
directing our attention to a case recently argued before the Supreme Court, Fox v. Vice,
594 F.3d 423
(5th Cir. 2010), cert. granted, 
79 U.S.L.W. 3063
(U.S. Nov. 2, 2010) (No.
                                             -6-
                                                  III.

       For the reasons above, we will affirm the District Court’s grant of Santana and

Jackson’s motion to dismiss.




10-114). The question in Fox is whether a defendant can recover fees under 42 U.S.C. §
1988 for a 42 U.S.C. § 1983 suit that is deemed frivolous, when the state law claims
arising out of the same facts and conduct have not been deemed frivolous. Fox also
raises the question of how those fees should be apportioned. After reviewing Fox, we
conclude that the issues therein are not applicable to the matter before us. Fox involves
the interpretation of two federal statutes and does not appear to raise any constitutional
issues. In the instant case, we deal solely with issues of state law and the Pennsylvania
Dragonetti Act.
                                            -7-

Source:  CourtListener

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