AGSouth Genetics, LLC et al v. Glick
Filing
84
MEMORANDUM OPINION & ORDER, Plfs' 64 Motion for Summary Judgment as to Dft's Counterclaim is GRANTED as set out; Dft's 65 Motion for Partial Summary Judgment is GRANTED IN PART, only to the extent that summary judgment is granted as to Plfs' claim that Dft is liable for his purchase of seed in 2003, & Dft's motion is DENIED in all other respects. Signed by Judge Callie V. S. Granade on 9/22/2011. (tot)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
AGSOUTH GENETICS, LLC, et al.,
Plaintiffs,
v.
DWANE GLICK,
Defendant.
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CIVIL ACTION NO. 09-0742-CG-M
MEMORANDUM OPINION AND ORDER
This matter is before the court on plaintiffs’ motion for summary judgment as
to defendant’s counterclaim (Doc. 64), defendant’s motion for partial summary
judgment (Doc. 65), defendant’s response in opposition to plaintiffs’ motion (Doc.
76), plaintiffs’ response in opposition to defendant’s motion (Doc. 77), defendant’s
reply (Doc. 78) and plaintiffs’ reply (Doc. 79). For reasons that will be explained
below, the court finds that plaintiffs’ motion for summary judgment as to
defendant’s counterclaim is due to be granted and defendant’s motion for partial
summary judgment is due to be granted in part, only to the extent that the
plaintiffs claim defendant is liable for his purchase of seed in 2003. In all other
respects, defendant’s motion for summary judgment is due to be denied.
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FACTS
This action arises from the defendant’s alleged sale of wheat seed in violation
of the Plant Variety Protection Act (PVPA), 7 U.S.C. § 2321 et. seq.. The complaint
asserts the following claims: (Count One) damages for infringement of § 2541(a) of
the PVPA: (Count Two) an injunction pursuant to § 2563 of the PVPA ; (Count
Three) damages for violation of the Lanham Act ; and (Count Four) treble damages
and attorneys fees under § 2565 of the PVPA. (Doc. 1). Defendant asserts a
counterclaim labeled as a claim for abuse of process but which also alleges that
plaintiffs wrongfully entrapped him and “consciously or deliberately engaged in
oppression, fraud, wantonness or malice with regard to Glick.” (Doc. 16).
Plaintiffs obtained a license giving them exclusive rights to certain wheat
varieties, AGS 2000 and/or AGS 2485, that are protected by the PVPA . (Doc. 1
¶ 14; Doc. 1-1; Doc. 1-2; Doc. 1-5; Doc. 1-6). Defendant purchased AGS 2485 wheat
seed in June 2003. (Doc. 68, p. 1-2; Doc. 79-1). According to the defendant, he
placed an order for public variety seed and had no notice that what he received was
a protected variety until he was served with this lawsuit. (Doc. 68, p. 2; Doc. 71-1, p.
4). However, defendant admits knowing that the seed was AGS seed and testified
that it came in red and white AGS bags (Doc. 71-1, p. 4; Doc. 19-1).
Zelotis Wofford called defendant and said he was trying to find some wheat
seed to plant. (Doc. 71-1, p. 5). Mr. Wofford is an investigator working for the Nolan
law group who was hired on plaintiffs’ behalf. (Doc. 72, p. 3; Doc. 73, p. 9). Wofford
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has worked for the Nolan Group for about three years providing information on
illegal seed practices. (Doc. 72, p. 3). Defendant Glick set up a time for Wofford to
come out and talk to him. (Doc. 71-1, p. 5). A couple of days later, Wofford came out
to defendant’s farm to talk to him and Wofford recorded their conversation. (Doc.
71-1, pp. 3, 6).
Wofford told Glick he wanted wheat seed and that he planned to harvest it to
make his money back. (Doc. 71-1, p. 4; Doc. 79-4, p. 1). Defendant told Wofford he
would sell him AGS 2000 seed for $8 a bushel. (Doc. 79-4, pp. 2, 3). Defendant
stated that he had sent off a sample of the seed and that it was 97% germ. (Doc. 794, p. 2). According to a transcript of the recorded conversation, Glick stated:
I’m planting it to harvest and I have to sell it to you for feed wheat,
just simply because the State makes me, you know what I mean. …
legally, I have to sell it to you as feed wheat. But it, I am planting it for
a crop, you see what I’m saying? … the State of Alabama and the seed
companies will not let me sell it for seed wheat, you see what I’m
saying? … I have to call it feed wheat, even though it will grow perfect
for seed; there’s nothing wrong with it, but I can’t sell it as seed wheat,
you see what I mean? I mean, it’s a technicality that, that’s the reason
you can buy it from me for eight dollars, or you can go up there and
buy bags of it at the Co-op, or wherever, and spend probably eighteen
dollars for a fifty pound bag.
(Doc. 79-4, p. 4). At one point in the conversation, Wofford stated that he wanted
200 bushels and the defendant confirmed that he could dump 200 bushels in
Wofford’s truck. (Doc. 77-2, pp. 2-3). Defendant also testified that he would guess
he had about 12 thousand bushels of wheat in his bins. (Doc. 77-4).
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According to defendant, he does not put flour crop in the same bin as seed
crop because the seed crop has malathion in it. (Doc. 79-5). Defendant reports that
he has never sold seed to an individual before and would not have considered it
other than to do this man a favor. (Doc. 71-1, p. 10). The seed he bought from AGS
was the parent seed to what he sold to Wofford. (Doc. 71-1, p. 1).
Wofford took 20 bags of wheat seed from defendant at $10 per bag for a total
of $200, which he paid for in cash. (Doc. 72, p. 9). The law firm was supposed to
reimburse Wofford for the purchase. (Doc. 72, p. 10). Wofford reports that he
“sampled” the grain – he took a probe and pulled samples from the bags, 15 to the
bag, and then poured a little out of each bag into two 5 gallon buckets. (Doc. 72, p.
10). Wofford disposed of the rest of the seed in a landfill at Foley, Alabama. (Doc.
72, pp. 10-11). Wofford sealed the two 5 gallon buckets and transported them back
to the law firm’s storage facility. (Doc. 72, p. 11). Wofford also turned the samples
over to the law firm in cups folded over and sealed and placed in a paper bag. (Doc.
72, p. 12). Although he told the defendant he would plant and harvest the seed, he
did not actually plant any of it. (Doc. 72, p. 13).
DISCUSSION
I. Summary Judgment Standard
Federal Rule of Civil Procedure 56(c) provides that summary judgment shall
be granted: Aif the pleadings, depositions, answers to interrogatories, and
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admissions on file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to judgment as a
matter of law.@ The trial court=s function is not Ato weigh the evidence and
determine the truth of the matter but to determine whether there is a genuine issue
for trial.@ Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). AThe mere
existence of some evidence to support the non-moving party is not sufficient for
denial of summary judgment; there must be >sufficient evidence favoring the
nonmoving party for a jury to return a verdict for that party.=" Bailey v. Allgas, Inc.,
284 F.3d 1237, 1243 (11th Cir. 2002) (quoting Anderson, 477 U.S. at 249). "If the
evidence is merely colorable, or is not significantly probative, summary judgment
may be granted." Anderson, at 249-250. (internal citations omitted).
The basic issue before the court on a motion for summary judgment is
Awhether the evidence presents a sufficient disagreement to require submission to a
jury or whether it is so one-sided that one party must prevail as a matter of law.@
See Anderson, 477 U.S. at 251-252. The moving party bears the burden of proving
that no genuine issue of material fact exists. O'Ferrell v. United States, 253 F.3d
1257, 1265 (11th Cir. 2001). In evaluating the argument of the moving party, the
court must view all evidence in the light most favorable to the non-moving party,
and resolve all reasonable doubts about the facts in its favor. Burton v. City of Belle
Glade, 178 F.3d 1175, 1187 (11th Cir. 1999). AIf reasonable minds could differ on
the inferences arising from undisputed facts, then a court should deny summary
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judgment.@ Miranda v. B&B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th
Cir. 1992) (citing Mercantile Bank & Trust v. Fidelity & Deposit Co., 750 F.2d 838,
841 (11th Cir. 1985)).
Once the movant satisfies his initial burden under Rule 56(c), the non-moving
party "must make a sufficient showing to establish the existence of each essential
element to that party's case, and on which that party will bear the burden of proof at
trial." Howard v. BP Oil Company, 32 F.3d 520, 524 (11th Cir. 1994)(citing Celotex
Corp. v. Catrett, 477 U.S. 317, 324 (1986)). Otherwise stated, the non-movant must
Ademonstrate that there is indeed a material issue of fact that precludes summary
judgment.@ See Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The
non-moving party Amay not rest on the mere allegations or denials of the [non-moving]
party=s pleading, but .... must set forth specific facts showing that there is a genuine
issue for trial.@ Fed. R. Civ. P. 56(e) AA mere >scintilla= of evidence supporting the
[non-moving] party=s position will not suffice; there must be enough of a showing that
the jury could reasonably find for that party.@ Walker v. Darby, 911 F.2d 1573, 1577
(11th Cir. 1990) (citation omitted). A[T]he nonmoving party may avail itself of all facts
and justifiable inferences in the record taken as a whole.@ Tipton v. Bergrohr GMBHSiegen, 965 F.2d 994, 998 (11th Cir. 1992). AWhere 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
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issue for trial.@ Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574
at 587 (1986) (internal quotation and citation omitted).
II. Motions
A. Defendant’s Motion for Partial Summary Judgment
Defendant moves for partial summary judgment of plaintiffs’ PVPA claims on
the following grounds: (1) that Wofford never intended to plant the wheat seed and
thus, the sale did not violate the PVPA; (2) that his damages should be limited
pursuant to § 2567 because defendant had no notice or knowledge that the seed was a
protected variety; (3) that there is no proof that defendant purchased AGS wheat in
violation of the PVPA; and (4) that there are no exceptional circumstances that would
entitle plaintiffs to attorney’s fees under 7 U.S.C. § 2565.
“The Plant Variety Protection Act of 1970, 7 U.S.C. § 2321 et seq., protects
owners of novel seed varieties against unauthorized sales of their seed for replanting
purposes.” Asgrow Seed Co. v. Winterboer, 513 U.S. 179, 181, 115 S.Ct. 788, 790 (U.S.
1995). Congress passed the Plant Variety Protection Act (PVPA), “in order to provide
developers of novel plant varieties with ‘adequate encouragement for research, and for
marketing when appropriate, to yield for the public the benefits of new varieties,’” Id.
(quoting 7 U.S.C. § 2581). “The PVPA extends patent-like protection to novel varieties
of sexually reproduced plants (that is, plants grown from seed) which parallels the
protection afforded asexually reproduced plant varieties (that is, varieties reproduced
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by propagation or grafting) under Chapter 15 of the Patent Act. .” Id. To further these
goals, the PVPA provides a cause of action for infringement against any person who
performs without authority any of the following:
(1) sell or market the protected variety, or offer it or expose it for sale,
deliver it, ship it, consign it, exchange it, or solicit an offer to buy it, or
any other transfer of title or possession of it;
(2) import the variety into, or export it from, the United States;
(3) sexually multiply, or propagate by a tuber or a part of a tuber, the
variety as a step in marketing (for growing purposes) the variety;
(4) use the variety in producing (as distinguished from developing) a
hybrid or different variety therefrom;
(5) use seed which had been marked “Unauthorized Propagation
Prohibited” or “Unauthorized Seed Multiplication Prohibited” or progeny
thereof to propagate the variety;
(6) dispense the variety to another, in a form which can be propagated,
without notice as to being a protected variety under which it was
received;
(7) condition the variety for the purpose of propagation, except to the
extent that the conditioning is related to the activities permitted under
section 2543 of this title;
(8) stock the variety for any of the purposes referred to in paragraphs (1)
through (7);
(9) perform any of the foregoing acts even in instances in which the
variety is multiplied other than sexually, except in pursuance of a valid
United States plant patent; or
(10) instigate or actively induce performance of any of the foregoing acts.
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7 U.S.C. § 2541(a). “The developer of a novel variety obtains PVPA coverage by
acquiring a certificate of protection from the Plant Variety Protection Office.” Asgrow
Seed Co., 513 U.S. at 181 (citing 7 U.S.C. §§ 2421, 2422, 2481-2483)
1. Sale for Propagation
Defendant asserts that, because the sale to Wofford was not really for the
purpose of replanting and harvesting the seed, the sale does not violate the PVPA.
The court notes that this court has recently addressed this argument in a case that is
almost factually identical to this one. In AGSouth Genetics, LLC. v. Cunningham,
2011 WL 1833016, Case No. 09-745-C (S.D. Ala. May13, 2011), this court found that
an intent to replant was not required for an infringement of plaintiffs’ rights under
the PVPA. Ibid. at *5-6. This court further found that even if the PVPA required that
the sale be for the purpose of propagation, there was evidence that the defendant
knew he was selling the seed for that purpose. Id. at *6. The undersigned agrees with
this court’s prior analysis and finds that for the reasons stated in Cunningham, an
intent to replant is not a prerequisite to infringement. Further, as in Cunningham,
there is evidence in this case that the defendant understood that the sale was for the
purpose of replanting and harvesting. As such there is evidence that the defendant’s
intent was to sell the seed for propagation. After the sale was complete, whether
propagation ultimately occurred does not change the purpose of the sale.
Defendant objects to the plaintiffs’ submission of a transcript of the taped
conversation as evidence on the basis that it constitutes hearsay that has not been
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authenticated. Defendant contends that this evidence cannot be used to support
plaintiffs’ claim that the defendant intended to sell the seed for the purpose of
propagation. However, as also discussed in Cunningham, “the district court may
consider a hearsay statement if the statement could be reduced to admissible form at
trial” Id. at *4 (quoting Hill v. Manning, 236 F.Supp.2d 1292, 1297 (M.D. Ala. 2002).
The transcript may be authenticated at trial and is otherwise admissible as
admissions of a party opponent. Therefore, the court may consider the evidence on
summary judgment.
2. Limitation of Damages Pursuant to § 2567
Defendant asserts that plaintiffs’ damages should be limited by 7 U.S.C. § 2567
because he had no notice or knowledge that the wheat seed was a protected variety.
Section 2567 provides the following:
Owners may give notice to the public by physically associating with or
affixing to the container of seed of a variety or by fixing to the variety, a
label containing either the words “Unauthorized Propagation Prohibited”
and after the certificate issues, such additional words as “U.S. Protected
Variety”. In the event the variety is distributed by authorization of the
owner and is received by the infringer without such marking, no damages
shall be recovered against such infringer by the owner in any action for
infringement, unless the infringer has actual notice or knowledge that
propagation is prohibited or that the variety is a protected variety, in
which event damages may be recovered only for infringement occurring
after such notice. As to both damages and injunction, a court shall have
discretion to be lenient as to disposal of materials acquired in good faith
by acts prior to such notice.
7 U.S.C. § 2567. Defendant contends that he requested a public variety of seed and
asserts that there is no evidence that the statutorily approved notices were on the
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bags of wheat he purchased. However, there is evidence that defendant had actual
knowledge that the seed he purchased was a protected variety. The transcript of the
recorded conversation between defendant and Wofford indicates that defendant knew
that the seed was protected by the PVPA. Defendant told Wofford he would sell him
AGS seed and stated that he could not legally sell it to Wofford for propagation. The
court finds this evidence is sufficient to raise a genuine issue of material fact.
3. Defendant’s Purchase of AGS Wheat
Defendant asserts that plaintiffs “have no proof that [defendant] purchased any
AGS wheat from ‘individuals’, ‘producers’ or ‘growers’ in violation of the Act as
alleged.” To the extent defendant asserts that there is no evidence he purchased AGS
wheat that is protected by the PVPA, the court finds to the contrary. Defendant has
admitted to purchasing AGS wheat seed 2485 and there is evidence that the seed is
protected by the PVPA. However, defendant’s assertion appears to be that he did not
violate the PVPA by purchasing the AGS wheat seed. Count One of the complaint
alleges that defendant, without authorization from AGSouth, “purchased the AGS
2000 and/or AGS 2485 varieties for reproductive purposes in violation of the PVPA.
The court agrees that plaintiffs have not presented any evidence or explained how
defendant’s mere purchase violated the PVPA. It is unclear whether plaintiffs
actually intended to make such an allegation since Count One appears to primarily
claim damages for defendant’s unauthorized sale of AGS seed and plaintiffs do not
appear to argue in their briefs that defendant’s purchase violated the PVPA. To the
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extent plaintiffs contend defendant is liable for his purchase of the seed in 2003, the
court finds defendant is entitled to summary judgment.
4. Exceptional circumstances
Defendant asserts that there are no exceptional circumstances that would
entitle plaintiffs to attorney’s fees under 7 U.S.C. § 2565. Section 2565 states that
“[t]he court in exceptional cases may award reasonable attorney fees to the prevailing
party.” 7 U.S.C. § 2565. Plaintiffs assert that “using the evidence before us and the
sheer volume of AGS wheat seed the Defendant used as a platform and the callous
ignorance of Plaintiffs’ rights shown by Defendant, Plaintiffs intend to argue this case
constitutes exceptional conduct thus permitting an award of attorneys’ fees and costs
to Plaintiffs for Defendant’s blatant violations of PVPA.” (Doc. 77, p. 7). Plaintiffs
appear to contend that defendant has sold AGS wheat on more than one occasion, but
has not offered any evidence of any sale other than the single sale of 20 bushels to
Wofford. Plaintiffs contend that during the Cunningham case discussed above, the
defendant in that case in answer to interrogatories stated that Glick may have
information about wheat seed that Cunningham Farms purchased from the Glick
farming operation. (Doc. 79-8, p. 1). Cunningham’s interrogatory answers go on to
state that he did not remember where or when he purchased wheat seed in 2008, that
in 2007 he may have purchased a small quantity of seed, he wasn’t sure but that it
was likely purchased from one of four vendors, one of which was Glick farming
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operation. The court finds that discovery answers in another case indicating that
Glick may have information about a possible sale that might have occurred is not
sufficient to raise a question of fact regarding a second purchase. However, there is
evidence that defendant had a very large amount of seed available to sell and was
willing to sell Wofford at least 200 bushels of wheat for propagation knowing that the
sale would violate the PVPA. While it is not clear that such circumstances constitute
“exceptional circumstances,” the court finds there is sufficient evidence to raise a
genuine issue of fact regarding the issue.
B. Plaintiffs’ Motion for Summary Judgment
Plaintiffs move for summary judgment as to defendant’s counterclaim. Defendant
labels his counterclaim as a Complaint for Abuse of Process but also states that
plaintiffs wrongfully entrapped him and “consciously or deliberately engaged in
oppression, fraud, wantonness or malice with regard to Glick.”
“In order to establish an abuse of process claim under Alabama law, a plaintiff
must show: (1) an ulterior purpose; (2) a wrongful use of process; and (3) malice.”
ClassroomDirect.com, LLC v. Draphix, LLC , 314 Fed.Appx. 169, 174, 2008 WL
185512, *4 (11th Cir. 2008); Yeomans v. Forster and Howell, Inc. 2010 WL 3716394,
*12 (M.D. Ala. Sept. 10, 2010) (citing C.C. & J., Inc. v. Hagood, 711 So.2d 947, 950
(Ala. 1998)). “Additionally, ‘abuse of process concerns the wrongful use of process
after it has been issued.’” Id. (quoting C.C. & J., Inc. v. Hagood, 711 So.2d 947, 950
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(Ala. 1998)). “[T]here is no liability where the defendant has done nothing other than
carry out the process to its authorized conclusion, even though with bad intentions.”
Id. at 175 (citing Willis v. Parker, 814 So.2d 857, 865 (Ala. 2001)). Glick’s claim does
not allege that plaintiffs have engaged in wrongful conduct after initiating process by
filing this lawsuit. Accordingly, the court finds that defendant cannot maintain his
claim for abuse of process.
To the extent that defendant has asserted a claim for entrapment, the court is
aware of no viable tort in Alabama for entrapment regarding civil liability. To the
extent defendant has attempted to assert a claim for fraud, the court finds he has
failed to properly plead such a claim. Glick’s fraud claim does not meet the notice and
specificity requirements of Rules 9 and 12 . FED. R. CIV. P. 9, 12. The Cunningham
case is again instructive as it discusses an almost identical counterclaim under almost
identical circumstances. As this court found in Cunningham, the defendant in this
case has failed to properly raise a claim for fraud. See Cunningham, 2011 WL 1833016
at *7-9.
CONCLUSION
For the reasons stated above, plaintiffs’ motion for summary judgment as to
defendant’s counterclaim (Doc. 64) is GRANTED, and defendant’s motion for partial
summary judgment (Doc. 65) is GRANTED IN PART, only to the extent that
summary judgment is granted as to plaintiffs’ claim that defendant is liable for his
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purchase of seed in 2003; in all other respects, defendant’s motion for partial summary
judgment is DENIED.
DONE and ORDERED this 22nd day of September, 2011.
/s/ Callie V. S. Granade
UNITED STATES DISTRICT JUDGE
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