Empire Today, LLC v. National Floors Direct, Inc. et al

Filing 352

Judge Joseph L. Tauro: ORDER entered. MEMORANDUM AND ORDER.(Geraldino-Karasek, Clarilde)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
EMPIRE TODAY, LLC,
Plaintiff,
v.
NATIONAL FLOORS DIRECT, INC.,
et al.,
Defendants.

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Civil Action No. 08-11999-JLT

MEMORANDUM
June 2, 2011
TAURO, J.
I.

Introduction
This case involves a dispute primarily between Empire Today, LLC (“Plaintiff”) and

National Floors Direct, Inc. (“NFD”), two at-home (or on-site) carpet and flooring providers.
Plaintiff brought various claims against NFD, including tortious interference, Lanham Act
violations (trademark infringement as well as false or misleading advertisement), and alter ego
liability. NFD counterclaimed for defamation, tortious interference, false or misleading
advertisement under the Lanham Act, and abuse of process.
During a thirteen-day trial, the jury heard most of Plaintiff’s and NFD’s claims, excluding
those claims under Massachusetts General Laws chapter 93A, which this court has reserved.1 The
jury found against Plaintiff on all of its claims and in favor of NFD on its abuse of process
counterclaim. Following this adverse jury verdict, Plaintiff filed a Motion for Judgment as a

1

See infra note 7.

Matter of Law, Pursuant to Fed. R. Civ. P. 50(b) [#303]. Additionally, both Plaintiff and NFD
filed the following motions asserting claims under Chapter 93A: NFD’s Motion for Judgment on
Its Counterclaim Under M.G.L. Chapter 93A [#312], Plaintiff’s Motion to Strike Defendant’s
Motion for Judgment on Its Chapter 93A Counterclaim [#324], Plaintiff’s Motion for Judgment
on Its Chapter 93A Claim [#327], and NFD’s (1) Opposition to Empire’s Motion to Strike NFD’s
Chapter 93A Counterclaim; (2) Opposition to Empire’s Motion to Strike NFD’s Fee Petition, or
in the Alternative, (3) NFD’s Motion to Amend Counterclaim [#333].
Presently at issue are the aforementioned motions as well as NFD’s request for attorneys’
fees: NFD’s Application for Attorney’s Fees and Costs Under Mass. Gen. L. Ch. 93A [#316],
NFD’s Motion for Attorneys’ Fees Pursuant to 15 U.S.C. § 1117(A) [#321], and Plaintiff’s
Motion to Strike Defendant’s Application for Attorney’s Fees and Costs Under Mass. Gen. L.
Ch. 93A [#331]. For the following reasons, Plaintiff’s Motions and NFD’s Motions are
DENIED.2
II.

Background
Plaintiff brought this suit against NFD on December 2, 2008.3 After filing an Answer on

March 3, 2009,4 NFD submitted an Amended Answer and Counterclaim on October 12, 2009.5

2

Plaintiff’s Assented to Motion to Redact Portions of Trial Record [#320] and NFD’s
Assented to Motion to Redact Portion of Trial Record [#337] are ALLOWED.
3

See Compl. Injunctive & Other Relief [#1].

4

Answer Def. Nat’l Floors Direct, Inc. 1st Am. Compl. [#38].

5

Nat’l Floors Direct Inc.’s Am. Answer & Countercl. [#91] (excluding abuse of process
as a counterclaim).
2

Eventually Plaintiff filed a Third Amended Complaint,6 which contained ten counts. Seven of
those counts were directed against NFD, five of which were as follows7: tortious interference with
Plaintiff’s contractual relationships, tortious interference with Plaintiff’s advantageous business
relationships, Lanham Act violations for trademark infringement8 and false or misleading
advertisement,9 and alter ego liability.10
Plaintiff also alleged three counts against former sales representatives and employees for
breaching their sales agreements, confidentiality agreements, and duties of loyalty.11 Plaintiff
reached settlement agreements with these individuals before the end of trial.12
NFD filed its Answer and Counterclaim,13 including a Chapter 9A claim that this court
reserved for its own judgment. NFD’s Counterclaim alleged five counts: defamation, tortious
interference with NFD’s advantageous business relationships, a Lanham Act violation for false

6

3d Am. Compl. [#148].

7

The seven counts, numbers four through ten, were also directed against Samuel (“Sam”)
Rosenberg, two of his children, Daniel (“Dan”) and Aaron Rosenberg, as well as Tower
Management Solutions LLC (“Tower Management”) and Tower M. Solutions, Inc. See 3d Am.
Compl., 37–49 [#148]. This court later reserved two of those sevens counts against NFD, both
Chapter 93A claims, for itself. See Trial Tr. vol. 9, 155:1–16, Oct. 15, 2010 [#294].
8

See 15 U.S.C. § 1114.

9

See id. § 1125(a)(1).

10

3d Am. Compl. [#148].

11

3d Am. Compl., 35–37 [#148].

12

See Order Granting Mot. Voluntary Dismissal Pursuant Settlement Fourteen Defs.
Without Prejudice [#204]; Order Granting Voluntary Dismissal Without Prejudice Defs. John Jary
& RJ Connection Group, LLC [#205]; Order Dismissal [#258].
13

Nat’l Floors Direct Inc.’s Ans. & Counterclaim Empire’s 3d Am. Compl. [#160]
[hereinafter Ans. & Countercl. 3d Am. Compl.].
3

and misleading advertising, and abuse of process.
Plaintiff brought two Chapter 93A claims against NFD. One Chapter 93A claim alleged
that NFD engaged in unfair or deceptive business practices by interfering with Plaintiff’s
contractual relationships, inducing Plaintiff’s employees to violate their duties of loyalty, and
using Plaintiff’s trade secrets and other confidential and proprietary information.14 Plaintiff’s
other Chapter 93A claim alleged that NFD engaged in unfair methods of competition and unfair
or deceptive business practices in trade or commerce by NFD’s use of certain advertising
statements that Plaintiff alleged NFD could not substantiate.15
In its Chapter 93A claim, NFD alleged that Plaintiff engaged in unfair or deceptive acts in
the conduct of trade or commerce by its advertising, its defamation of NFD, and its interference
with NFD’s business relationships.16
After a thirteen-day trial that excluded the Chapter 93A claims, the jury found against
Plaintiff on all of its claims, in favor of NFD solely on its abuse of process counterclaim, and
awarded NFD $500,000.00.17
A.

Findings of Fact18

14

3d Am. Compl., 41–42 [#148].

15

3d Am. Compl., 31–34 [#148].

16

Ans. & Countercl. 3d Am. Compl., 41–42 [#160].

17

Verdict Form [#396].

18

This court does not discuss the Parties’ claims at trial that are not relevant to the
Parties’ pending motions.
4

Based upon the evidence, the jury could have found the following facts.19 Plaintiff is a
shop-at-home, home improvement company that sells and installs carpet and flooring in, among
other places, the Boston and Hartford areas.20 NFD is a direct competitor of Plaintiff in the
Boston and Hartford markets.21 Unlike other companies, neither Plaintiff nor NFD utilizes
storefronts, and both have a comparatively limited selection of inventory.22 Both Plaintiff and
NFD emphasize next-day installation,23 focus on television advertising,24 and rely on effective
salespeople.25
Plaintiff’s former employees and sales representatives entered into agreements that
included confidentiality, non-compete, and non-solicitation provisions.26 Some of those

19

See, e.g., Cambridge Plating Co. v. Napco, Inc., 85 F.3d 752, 756 (1st Cir. 1996)
(reciting facts as jury could have found them in the context of considering 93A and 50(b) claims);
Astrolabe, Inc. v. Esoteric Techs. Pty, Ltd., No. 01-11352-PBS, 2002 U.S. Dist. LEXIS 5764, at
*2 (D. Mass. Mar. 29, 2002) (same).
20

See, e.g., Trial Tr. vol. 1, 132:16–24, Sept. 27, 2010 [#255]; Pl. Empire Today, LLC’s
Pre-Trial Mem., Ex. A [#217].
21

See, e.g., Trial Tr. vol. 2, 121:13–15, Sept. 28, 2010 [#256]; Pl. Empire Today, LLC’s
Pre-Trial Mem., Ex. A [#217]; Trial Tr. vol. 10, 32:13–17, 51:20–53:5, 108:18, 118:3–4,
129:8–13, Oct. 12, 2010 [#308].
22

See Trial Tr. vol. 1, 138:9–139:4 [#255]; Trial Tr. vol. 7, 10:5–21, 33:19–22, 137:1–3,
Oct. 6, 2010 [#268].
23

Trial Tr. vol. 1, 139:14–22 [#255]; Trial Tr. vol. 7, 185:6–13 [#268].

24

See Trial Tr. vol. 1, 141:23–142 [#255]; Trial Tr. vol. 7, 139:16–140:2 [#268].

25

See, e.g., Trial Tr. vol. 1, 143:22–25 [#255]; Trial Tr. vol. 7, 10:5–21, 105:24–106:2

[#268].
26

See, e.g., Pl.’s Trial Ex. NNN, 4 (Donald Plouff’s agreement); Trial Tr. vol. 6,
13:18–15:6, Oct. 4, 2010 [#262]. See generally Pl.’s Trial Exs. 57–69, 73–99 (Plaintiff’s
confidentiality and nondisclosure agreements); Trial Tr. vol 2, 30:9 [#256].
5

employees had been managers.27 Roughly ten managers and thirty sales representatives left
Plaintiff to work for NFD,28 some under acrimonious conditions.29
Plaintiff argued that NFD, through its employees and management, had solicited Plaintiff’s
employees to leave Plaintiff and join NFD.30 One former sales representative for both Plaintiff and
NFD testified as such.31 This former representative also testified that NFD had Plaintiff’s flooring
samples and documentation, including (allegedly) confidential par sheets32 and a “pre-installation
checklist.”33 Her testimony, however, was sharply disputed by various individuals’ testimony34
and at times contradicted by her cross-examination.35
27

See, e.g., Trial Tr. vol. 2, 15:17–18 [#256].

28

Trial Tr. vol. 2, 22:10–11 [#256] (Steve Silver’s examination); Trial Tr. vol. 6, 96:7–11
[#262] (Dan Rosenberg’s examination).
29

Trial Tr. vol. 2, 24:2–25:25 [#256] (Plaintiff’s version of Amidon’s departure). But
some representatives seem to have then returned to Plaintiff. Trial Tr. vol. 2, 97:2–6 [#256].
30

Trial Tr. vol. 1, 101:19–22 [#255] (opening statements).

31

Trial Tr. vol. 3, 99:9–100:21, 101:20–25, 105:21–25, Sept. 29, 2010 (testimony of
Diane Johnston) [#260].
32

See Pl.’s Trial Ex. 20 (Plaintiff’s “Boston Par Sheet”). Par sheets, or pricing sheets,
generally identify products and various pricing levels associated with the commissions that
representatives can receive for selling those products. Trial Tr. vol. 2, 152:16–20 [#256]. Par
sheets may also identify specifics about those products, such as the face weight, vendor, or fiber
type, as well as which products are being promoted. Trial Tr. vol. 1, 152:24–154:2 [#255].
Plaintiff’s par sheets also include information on financing and other charges. Trial Tr. vol. 1,
156:15–22 [#255].
33

Trial Tr. vol. 3, 102:15–104–17, 105:5–20 [#260] (testimony of Diane Johnston).

34

See, e.g., Trial Tr. vol. 6, 56:4–18, 59:19–60:6 [#262] (testimony of Donald Plouff);
Trial Tr. vol. 11, 83:24–84:11, Oct. 13, 2010 [#309] (testimony of Jack Danhof that he never saw
one piece of Plaintiff’s documentation or samples).
35

Trial Tr. vol 3, 117:5–118:24, Sept. 29, 2010 [#260] (Diane Johnston admitting that she
went to NFD on her own initiative after a chance meeting with an NFD representative).
6

In fact, both Parties may have had each others’ old par sheets and commission structure.36
But it is unclear whether this material was proven as confidential and the Parties do not press the
matter post-trial on the 50(b) or 93A claims.
Since April 2006, NFD has advertised commercials that referenced a “15% or its [sic]
free” campaign (“15% Promotion”).37 These television commercials promise to beat “anyone’s
price by 15% or it’s free.”38
Plaintiff alleged that NFD was not providing the discount advertised in its
15% Promotion.39 Plaintiff pointed to (1) a customer order filled out by a sales representative
that contained a discount of less than 15% and (2) customer orders in which NFD, namely Dan
Rosenberg, reduced the prices by only 13%, despite claiming that he was offering a 15%
discount.40
In both instances, however, customers were only entitled to receive 15% off of their
orders if certain conditions were met. Customers, for instance, had to present a written quote
from another company for the same quality and quantity of flooring that they were seeking from

36

See NFD’s Trial Ex. AA (e-mail from one of Plaintiff’s office managers discussing
paying a former NFD sales representative for NFD’s par sheet).
37

NFD’s Trial Ex. BBB [#297] (introduced by Plaintiff); see also Trial Tr. vol. 6,
135:13–36:5 [#262]; Trial Tr. vol. 7, 170 [#268].
38

Pl.’s Trial Ex. 111 [#297] (CD containing .wmv files).

39

Trial Tr. vol. 12, 96:19–101:21, Oct. 14, 2010 (Plaintiff’s closing statement) [#301].

40

Pl.’s Trial Ex. 1, NFD 00273, 00274 (wherein Dan Rosenberg, after a customer’s
complaint, then reduced the price by 15%). Dan Rosenberg is NFD’s official treasurer and works
as the director of sales for NFD. Trial Tr. vol. 6, 72:16–25 [#262]. He is also likely the sole
officer of Tower Management. Trial Tr. vol. 6, 100:1–4 [#262]. Tower Management
compensates Sam Rosenberg—Dan and Aaron Rosenberg’s father—for his consulting work with
NFD. See Trial Tr. vol. 6, 99:10–21 [#262].
7

NFD.41 The aforementioned order filled out by the sales representative did not receive 15% off
because it did not demonstrate the necessary prerequisites.42
As for the second point, Dan Rosenberg explained that he sometimes took 15% off a
competitor’s price by dividing the competitor’s price by 1.15.43 This price calculation indeed
results in only 13% off of the competitor’s price, whereas multiplying by 0.85 would result in a
15% price reduction. Of the 10% of NFD’s orders that beat competitor’s prices, this calculation
by Dan Rosenberg was used in about 10% of those orders.44 Otherwise, NFD beat its
competitors’ prices by 15%.45 Moreover, when the conditions of the 15% Promotion were met,

41

Trial Tr. vol. 10, 110:14–25 [#308] (Sam Rosenberg’s direct); Trial Tr. vol. 6,
142:22–143:10, 147:4–11 [#262] (Dan Rosenberg’s testimony); Trial Tr. vol. 7, 187:18–20
[#301] (Aaron Rosenberg testifying about disclaimers on commercials regarding qualifying
terms); see also Trial Tr. vol. 10, 151:4–6 [#308] (Sam Rosenberg explaining that the conditions
include that the order specify the same area, padding, rip-up, and cart-away).
42

Trial Tr. vol. 10, 149:18–150:7 [#308] (Sam Rosenberg). Only an estimated ten
percent of NFD’s orders beat competitor’s prices. Trial Tr. vol. 10, 109:10–111:7 [#308] (Sam
Rosenberg).
43

Trial Tr. vol. 6, 155:7–8 [#262]. Sale representatives were required to call NFD’s
office to have a deal approved only if they needed to drop below the lowest price on their price
list to meet the 15% guarantee. Trial Tr. vol. 6, 146:15–24, 157:23–25 [#262]; Trial Tr. vol. 11,
44:16–25 [#309] (Donald Plouff saying he had never heard of Dan Rosenberg’s calculations
before trial).
44

Trial Tr. vol. 10, 109:10–111:7 [#308] (Sam Rosenberg). Given that Dan did not join
NFD until late 2008, this mode of calculation may not have begun until then. See Trial Tr. vol.
10, 153:20–25 [#308]. But see Trial Tr. vol. 7, 171:5–11 [#268] (“The way we discount the
price is the same way that our computer discounts the price and discounts the percent off the
order, which is, to divide it by 1.15, which is the same computer that all the other, you know,
thousands of flooring retailers use across the country, and that’s the way that a percent discount is
taken off a price.”).
45

See, e.g., Pl.’s Trial Ex. EEEE (NFD order of Joyce Dore); Trial Tr. vol. 10,
109:10–111:7 [#308].
8

the sales representatives calculated the 15% discount in the field by multiplying by 0.85.46 NFD
also cast Dan Rosenberg’s calculations both as an issue of internal disagreement47 and a method
used by NFD’s own management software.48
NFD asserted various counterclaims against Plaintiff. The only two relevant here are
Count IV, abuse of process,49 and Count V, Chapter 93A.50 A chronicling of the evidence paints
the following story. Plaintiff had identified NFD as an aggressive challenger in the Boston market
by April 2007.51 By September of 2007, Plaintiff expressed that its most significant challenge
came from NFD.52 As a marketing tactic, Plaintiff performed at least eight “secret shops.”53
46

E.g., Trial Tr. vol. 10, 109:10–111:7 [#308] (Sam Rosenberg); Trial Tr. vol. 11,
80:24–81:2 [#309] (Jack Danhof testifying that “[NFD] multipl[es] it by .85 and that would be
your price and there was no if, ands, but, questions about it.”); Trial Tr. vol. 11, 43:17–44:15
[#309] (Donald Plouff testifying that all the sales representatives gave an accurate 15% and did
not follow Dan Rosenberg’s method).
47

Trial Tr. vol. 7, 173:22–174:3 [#268] (Aaron Rosenberg testifying “I don’t think that
we’re only beating them by 13%; I think we’re beating them by 15% . . . so the math’s the math;
you, there’s no argument about that.”); Trial Tr. vol. 10, 115:1–8 [#308] (Sam Rosenberg
testifying as to his own lack of awareness and never hearing any complaints); Trial Tr. vol. 11,
44:5 [#309].
48

See Trial Tr. vol. 7, 171:5–11 (Aaron Rosenberg) [#268]; Trial Tr. vol. 10, 114:2–25
[#308] (Sam Rosenberg).
49

50

Ans. & Countercl. 3d Am. Compl., 40–41 [#160].
Ans. & Countercl. 3d Am. Compl., 41–42 [#160].

51

NFD’s Trial Ex. CC (explaining that NFD drops its price “well below the low to gain
market share” and conjecturing that NFD was recruiting Plaintiff’s best closers).
52

53

NFD’s Trial Ex. BB. (Month End Market Report, prepared by Robert Carter).

NFD’s Trial Ex. BB. In one form of a “secret shop,” an employee or manager of a
business pretends to be a customer of a competitor so that the employee or manager may learn
more about the competitor, including its pricing. See Trial Tr. vol. 2, 88:11–89:5, 91:19–92:22
[#256] (Steve Silvers discussing Plaintiff’s secret shops); NFD’s Trial Ex. HH (discussing the
commission structure at NFD in an e-mail sent to Steve Silvers).
9

Plaintiff’s fortunes worsened as NFD’s market share grew and Plaintiff’s market share
decreased.54 The causes behind the Parties’ changes in market positions were hotly contested at
trial. NFD’s growing market share in Boston was, at least in large part, attributable to NFD’s low
prices.55
Although some of Plaintiff’s employees were calling for Plaintiff to lower its prices by
October 30, 2007 (and likely by June 2007),56 Plaintiff did not decide to cut its prices until April
14, 2008.57 Meanwhile, from 2006 to 2009, Plaintiff cut its spending on advertising in the Boston
market in half,58 which was more than it had reduced its spending on advertising in other
markets.59
Plaintiff also had management problems in its Boston office.60 Plaintiff had planned to
close its Boston office in spring of 2008.61 But Plaintiff eventually cancelled this plan partly
54

See, e.g., Trial Tr. vol. 1, 101:9–18 [#255] (Plaintiff, in opening, saying that “NFD took
over in 2008 as the leader in Boston as compared to Empire”); Trial Tr. vol. 10, 32:20–33:8
[#308] (Defendant’s expert Zito explaining that NFD was able to take leads that were going to
Plaintiff because of lower prices); Trial Tr. vol. 9, 109:1–2, 134:18–25, Oct. 8, 2010 [#294].
55

Even Plaintiff appeared to admit this fact. See Trial Tr. vol. 2, 159:2–6 [#256]; Pl.’s
Trial Ex. CC (Monthly End Market Report in April 2007, prepared by Rob Carter; stating that
NFD was “dropping well below the low to gain market share and our reps are feeling frustrated”);
Pl.’s Trial Ex. W (e-mail from Rob Carter to Steve Silvers and others on October 30, 2007,
stating NFD was beating Plaintiff’s prices and Plaintiff needed to be “aggressive with [its] pricing
to combat [NFD’s] strategies”).
56

See supra note 55.

57

See Trial Tr. vol. 2, 150:3–157:2 [#256] (mentioning NFD’s Trial Ex. G).

58

Trial Tr. vol. 2, 147:15–19 [#256].

59

Trial Tr. vol. 9, 105:20–21 [#294].

60

See Trial Tr. vol. 2, 101:25–102:1 [#256].

61

See Trial Tr. vol. 2, 189:24–190:7 [#256].
10

because it did not want to leave NFD without direct competition, which would ease NFD’s
expansion into other areas.62
Plaintiff also felt that NFD was poaching Plaintiff’s representatives.63 In response, Plaintiff
began sending cease-and-desist letters to NFD.64
Additionally, two e-mail chains exist that could imply that Plaintiff viewed legal action
against NFD as a tactical means of burying its competitor. First, a March 2008 e-mail from Todd
Dickson65 to David Elenowitz66 and Steve Silvers67 discussed potential strategies to deal with
difficulties in Plaintiff’s Boston market. One of the strategies mentioned was: “We should
aggressively work on the legal front. (non-competes and potentially their
advertising/disclosures/disclaimers) [sic] This could be an expensive distraction at a time where
[NFD is] investing in a new facility and heavy advertising.”68 Meanwhile, Plaintiff’s sales

62

See Trial Tr. vol. 2, 190:8–191:3 [#256]; NFD’s Trial Ex. R (March 25, 2009 e-mail
from Steve Silvers to David Elenowitz containing Steve Silvers’ draft letter to Bank of America);
infra notes 75–78 and accompanying text.
63

See, e.g., NFD’s Trial Ex. CC; Trial Tr. vol. 1, 107:1–5 [#255].

64

Trial Tr. vol. 2, 32:21–33:4 [#256]; Trial Tr. vol. 7, 151:18–23 [#268].

65

Todd Dickson is Plaintiff’s chief marketing officer. Trial Tr. vol. 2, 77:7–12 [#256].

66

By 2001, David Elenowitz had retained ownership and control over Plaintiff (through
Mercury Capital Management (“Mercury”)). See, e.g., Trial Tr. vol. 2, 70:18–22, 72:11–21,
Sept. 28, 2010 [#256] (Steve Silvers explaining that Elenowitz is chairman of the board and
owner of Mercury, which acquired Plaintiff, and Elenowitz is the “ultimate decision maker”);
David Elenowitz Dep., Feb. 24, 2010, 9:15 a.m. (saying that Mercury owned Empire and
Elenowitz was chairman of the board and “final decision maker” of Plaintiff) (not marked as
exhibit but played to jury on Trial Tr. vol. 11, 5:16–17 [#309]).
67

Steve Silvers is the CEO of Plaintiff. Trial Tr. vol. 1, 130:6–7 [#255].

68

NFD’s Trial Ex. L.
11

continued to suffer, and it reduced its prices by April 14, 2008.69
Second, in an October 2008 e-mail, Elenowitz wrote to Silvers and Dickson that he would
like to see if it would be feasible to get a “large amount” of damages and take the “most
aggressive” legal position, including “appropriate suing individuals [sic].”70 Silvers replied to
Elenowitz (and Dickson) that:
[If Plaintiff] truly want[ed] to hurt [a competitor in Chicago] and NFD (including in this
conversation at this point as to looking to expand the legal actions to them) we should
leverage the profit in other markets to offset loses in Chicago and Boston. The
competitors do not have this advantage and [in] losing money they will need to continue
to dig into their own pockets versus leveraging other profitable markets. . . . If we do start
to make some progress and get back market share via more leads and higher closing,
eventually the sale people side will take care of itself.71
These e-mails revealed Plaintiff’s top management discussing legal action not merely to right
NFD’s wrongs, but also seemingly as a tactical means of competition against NFD and as a tool
to force NFD to incur legal fees.
Meanwhile, by May 2008, Plaintiff filed at least one complaint with the Better Business
Bureau (“BBB”) regarding NFD’s 15% Promotion.72 On December 2, 2008, Plaintiff filed its
initial lawsuit against NFD.73 Plaintiff also named as Defendants Sam Rosenberg and fourteen of

69

See NFD’s Trial Ex. GG; NFD’s Trial Ex. O; Trial Tr. vol. 2, 156:24–157:2 [#256].

70

NFD’s Trial Ex. U.

71

NFD’s Trial Ex. U. Plaintiff emphasized that (a) these e-mails were merely about a
financing program and (b) Plaintiff had already started the process of putting together its legal
work. Trial Tr. vol. 3, 66:15–67:5 [#260].
72

Pl’s Trial Ex. EEEE.

73

Compl. Injunctive & Other Relief [#1].
12

Plaintiff’s former employees or sales representatives who allegedly began working for NFD.74
By March 2009, Silvers wrote that Plaintiff’s Boston office was going to close.75 The
poor performance of Plaintiff’s Boston office was credited in particular to being beaten on price
by NFD, but also to the absence of effective leadership at Plaintiff’s Boston office and generally
poor economic conditions.76 A sales representative from the Boston office pointed out that after
Plaintiff left Boston, NFD would have “free reign.”77 Moreover, Plaintiff would only be able to
get back into the Boston market by underselling NFD and the sales representative wondered
whether Plaintiff would next have to pull out of the Hartford market.78 Plaintiff decided to not
close its Boston office.
III.

Discussion
This court will consider first Plaintiff’s Rule 50(b) Motion, followed by the Parties’

Chapter 93A claims.
A.

Plaintiff’s Motion for Judgment as Matter of Law

Plaintiff moves for judgment as a matter of law pursuant to Rule 50 on Count IV of
NFD’s abuse of process counterclaim, asking for the jury’s verdict to be set aside. Plaintiff claims
that NFD fell short of its burden to provide the jury with an evidentiary basis on which to award

74

Compl. Injunctive & Other Relief [#1].

75

NFD’s Trial Ex. OOOO.

76

See, e.g., Trial Ex. OOOO.

77

NFD’s Trial Ex. OOOO.

78

NFD’s Trial Ex. OOOO.
13

any fees.79 Plaintiff argues that NFD mentioned its legal fees incurred in the lawsuit only twice at
trial, and in merely general and unsubstantiated ways.80 This evidence, Plaintiff argues, does not
provide the specificity regarding attorney hours, charges, and rates that is necessary to determine
the reasonableness of the attorneys’ fees sought.81 Moreover, none of NFD’s attorneys testified
or offered any affidavits as to the reasonableness of their bills.82 NFD instead argues that the
jury’s award for abuse of process was based not merely on attorneys’ fees and costs incurred in
defending against Plaintiff’s claims, but on the financial harm caused to NFD’s business as a result
of Plaintiff’s lawsuit.83 Plaintiff rebuts NFD’s assertion by arguing that the testimony at trial
about the financial harm to NFD was never quantified by documentary or expert evidence.84
Upon a Rule 50 motion, a court may (1) let the verdict stand, (2) enter judgment as a
matter of law for the moving party, or (3) order a new trial.85 In ruling on a motion for judgment
as a matter of law, a court considers the facts and evidence in a light most favorable to the jury’s
verdict.86 But Rule 50 authorizes a court to grant a motion for a judgment as a matter of law only
79

See Pl. Empire Today, LLC’s Mem. Supp. Rule 50(b) Mot. J. Matter Law Def.’s Abuse
Process Countercl., 1 [#304] [hereinafter Pl.’s Rule 50(b) Mot.].
80

Pl.’s Rule 50(b) Mot., 2–3 [#304].

81

Pl.’s Rule 50(b) Mot., 3–6 [#304].

82

Pl.’s Rule 50(b) Mot., 3 [#304].

83

Nat’l Floor Direct, Inc.’s Opp’n Pl.’s Rule 50(B) Mot. J. Matter Law, 1 [#314].

84

Pl.’s Reply Supp. Rule 50(b) Mot., 3 [#348]. Plaintiff, however, does not cite to any
case law requiring such evidence.
85

86

Fed. R. Civ. P. 50(b).

See, e.g., Rodriguez-Garcia v. Miranda-Marin, 610 F.3d 756, 765 (1st Cir. 2010). But
see Morrison v. Carleton Woolen Mills, Inc., 108 F.3d 429, 436 (1st Cir. 1997) (“In making this
determination, the court examines the evidence adduced at trial in the light most favorable to the
14

if a court finds that a “reasonable jury would not have a legally sufficient evidentiary basis to find
for” the non-moving party.87 Additionally, a court “may not set aside the jury verdict and direct
the entry of a contrary verdict, unless no reasonable jury could have returned a verdict adverse to
the moving party.”88 Finally, it is worth noting that credibility “determinations, the weighing of
the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those
of a judge.”89
The jury had a sufficient evidentiary basis upon which to award $500,000 to NFD for its
abuse of process counterclaim. First, contrary to Plaintiff’s claims, the jury had evidence of
specific financial harm caused by Plaintiff’s lawsuit against NFD. Aaron Rosenberg, NFD’s
president,90 testified that NFD incurred more than $1.5 million in defense costs.91 Moreover,
Aaron Rosenberg testified that the diversion of those funds from advertising resulted in lost

nonmoving party, drawing all reasonable inferences in its favor.” (internal citation omitted)).
87

Fed R. Civ. P. 50(a)(1).

88

Morrison, 108 F.3d at 436 (internal citation omitted); see also Mercado-Berrios v.
Cancel-Alegria, 611 F.3d 18, 22 (1st Cir. 2010) (“[A] Rule 50 motion is properly granted when
the facts and inferences viewed in the light most favorable to the verdict point so strongly and
overwhelmingly in favor of the movant that a reasonable jury could not have returned the
verdict.” (internal citations and quotation marks omitted)).
89

Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150–51 (2000) (internal
citations omitted) (“Thus, although the court should review the record as a whole, it must
disregard all evidence favorable to the moving party that the jury is not required to believe. That
is, the court should give credence to the evidence favoring the nonmovant as well as that
‘evidence supporting the moving party that is uncontradicted and unimpeached, at least to the
extent that that evidence comes from disinterested witnesses.’” (internal citations omitted)).
90

Trial Tr. vol. 7, 157:5–7 [#268].

91

Trial Tr. vol. 7, 192:18 [#268].
15

revenue and, in turn, lost profits of more than $2.7 million.92 This testimony was corroborated by
Sam Rosenberg, NFD’s consultant with over forty years of experience in the carpet business.93
Specifically, diverting NFD’s legal fees of $1.5 million to advertising would have translated into
approximately 6 million dollars in sales and 3 million dollars in profits.94 Second, various excerpts
of testimony throughout the trial provided an abundant basis for the jury to decide that NFD had
suffered general harm to its business.95 In sum, the testimony explained how the Rosenbergs’
diversion of time, attention, and financial resources was a result of Plaintiff’s suit.
Plaintiff offers two replies. First, the Rosenbergs’ estimation of lost profits (or revenue or
potential advertising) is based on their underlying estimate of legal fees at trial, which is not
supported by credible evidence and, therefore, none of their estimates can support the jury award

92

Trial Tr. vol. 7, 193:7–15 [#268] (Aaron Rosenberg explaining that for every dollar
NFD spent in defending against Plaintiff’s lawsuit, NFD lost approximately four dollars); see also
Trial Tr. vol. 7, 209:23–210:2 [#268] (same).
93

See Trial Tr. vol. 10, 142:6 [#308] (testifying as to forty years of experience); Trial Tr.
vol. 7, 147:7–12, 195:24–195:1 [#268] (providing testimony of others who saw Samuel
Rosenberg’s role as a professional consultant).
94

95

Trial Tr. vol. 10, 118:7 –119:14 [#308].

See Trial Tr. vol. 7, 28:24–29:12 [#268] (discussing “devastating impact on [NFD’s]
ability to do business” and resulting layoffs); Trial Tr. vol. 7, 29:7–12 [#268] (testifying that
lawsuit has forced NFD to “lay off approximately 45 sales reps, approximately 40 employees” and
“dramatically” diminish its advertising budget); Trial Tr. vol. 7, 30:10–31:12 [#268] (explaining
how the lawsuit prevented the Rosenbergs from running NFD’s business, where they would
otherwise have spent “every waking hour”); Trial Tr. vol. 7, 56:12–57:5 [#268] (mentioning how
the lawsuit diverted money from advertising and NFD went through a “total standstill in our new
market as a result of this case”); Trial Tr. vol. 7, 189:9–21 [#268] (discussing how NFD was
forced to take out a $1 million loan to keep business going because of the lawsuit); Trial Tr. vol.
7, 190:22–192:7 [#268] (demonstrating NFD’s inability to operate during and because of trial,
including temporarily closing offices).
16

of $500,000 as NFD’s harm.96 Second, Plaintiff argues, much of NFD’s evidence of financial
harm is not quantified.97 But, for the reasons explained below, both replies are insufficient to
overturn the jury’s verdict on an abuse of process counterclaim for overall financial damage to
NFD.
Plaintiff’s first reply falls short for three reasons. First, although it is true that the legal
costs incurred in defending against Plaintiff’s suit are specific damages and such damages must be
affirmatively proved,98 Plaintiff does not provide any authority that the testimony of a company’s
president is an insufficient basis for a jury to determine damage to a company resulting from
defending against a lawsuit.99 Second, Plaintiff did not provide any evidence contradicting NFD’s
calculations on the matter. Third, Plaintiff’s attempt to invalidate the jury’s award based upon
NFD’s estimated legal fees ignores the other grounds for the jury’s award. Specifically, NFD’s
estimate of financial harm was not based solely on its estimated legal fees. NFD’s estimated
financial harm was instead grounded in various considerations, such as NFD’s inability to operate
certain offices and the Rosenberg’s inability to operate NFD during trial.100 And so, even if
NFD’s estimate of legal fees is not supported by credible evidence, the jury nonetheless had other

96

Pl.’s Reply Supp. Rule 50(b) Mot., 2 [#348].

97

Pl.’s Reply Supp. Rule 50(b) Mot., 3 [#348].

98

Millennium Equity Holdings, LLC v. Mahlowitz, 456 Mass. 627, 645 (2010).

99

Similarly, all of the cases relied upon by Plaintiff involved parties who were seeking
attorneys’ fees rather than economic harm arising from an abuse of process. For instance, Pride
Hyundai, Inc. v. Chrysler Financial Co., 355 F. Supp. 2d 600 (D.R.I. 2005), involved a party
attempting to enforce a contract provision for recovery of attorneys’ fees and had nothing to do
with abuse of process or recovery of harm to a company’s business.
100

See supra note 95.
17

sufficient, independent support for its abuse of process award.
Plaintiff’s second reply falters for a few reasons. First, it is contradicted by the record:
NFD did in fact provide specific damages in some instances.101 Second, Plaintiff does not cite to
any authority that (more) quantification of general financial harm to NFD was necessary to
support the jury’s finding for abuse of process. Finally, Plaintiff’s two supporting points here,
regarding this court’s exclusion of Dan Rosenberg’s testimony of specific damages and NFD’s
improved financial condition, are insufficient to support overturning the jury’s verdict. First, this
court’s act of preventing Dan Rosenberg from testifying at one point about NFD’s costs102 does
not change the fact that the jury repeatedly heard testimony about NFD’s specific and general
damages.103 Second, the fact that NFD’s financial condition improved after it was sued is an
insufficient basis to undermine the jury’s determination that NFD suffered damages that prevented
it from an even more profitable financial condition. The jury could have, for instance, also
considered that NFD experienced disproportionately large monetary losses before Plaintiff’s
lawsuit because, while in its infancy, NFD aggressively spent a large amount of money to open
new markets, and that NFD perhaps only began to realize the revenue from this spending after
Plaintiff’s suit.104
Given the above, a reasonable jury had a legally sufficient evidentiary basis upon which to

101

See supra notes 91–94 and accompanying text.

102

See Trial Tr. vol. 7, 29:7–30:17 [#268].

103

See supra notes 91–95 and accompanying text.

104

See Trial Tr. vol. 7, 56:16–25, 56:19–21 [#268]; cf. Trial Tr. vol. 1, 135:17–23 [#255]
(Steve Silvers testifying that “it takes 18 to 24 months before” a “new market gets to the point
where the revenue are at the levels where you want them to be at” and that it is a “slow” and
“very expensive process”).
18

determine that NFD was owed $500,000 as a result of Plaintiff’s abuse of process. This court
therefore holds that it is inappropriate to disturb the jury’s verdict.
B.

Chapter 93A
1.

NFD’s Chapter 93A Request

NFD, in its Motion for Judgment on its Counterclaim Under M.G.L. Chapter 93A [#312],
requests entry of judgment on Count V of its counterclaim against Plaintiff for violation of
M.G.L. chapter 93A.105 First, NFD argues that Plaintiff engaged in unfair and deceptive conduct
in violation of Chapter 93A.106 The unfair and deceptive conduct was Plaintiff’s abuse of the legal
process by filing suit against NFD, which was intended to hurt NFD’s business.107 NFD also
points to the manner in which Plaintiff conducted the lawsuit, such as waiting two years to file
suit, refraining from seeking injunctive relief, and suing employees individually.108 Second, NFD
argues that Plaintiff’s conduct was undertaken willfully and knowingly to harm NFD’s business
and, therefore, multiple damages are justified under Chapter 93A, Section 11.109
Plaintiff argues, inter alia, that NFD’s Chapter 93A counterclaim should be stricken

105

NFD also requests a trebling of the jury’s award of $500,000 (to $1.5 million),
reasonable attorneys’ fees and costs, and pre-judgment interest. Nat’l Floor Direct, Inc’s Mot. J.
Countercl. Under M.G.L. Chapter 93A, 1–2 [#312].
106

Nat’l Floor Direct, Inc.’s Mem. Law Supp. Mot. J. Countercl. Under M.G.L. Chapter
93A, 1–3 [#313] [hereinafter NFD’s Mem. Supp. 93A].
107

NFD’s Mem. Supp. 93A, 1–2 [#313]. NFD also argues that Plaintiff’s motive was to
hurt NFD because, as the evidence showed, Plaintiff lost revenue due to Plaintiff’s refusal to
compete with NFD on price (rather than any alleged wrongful conduct by NFD). Id. at 3.
108

109

NFD’s Mem. Supp. 93A, 2 [#313].

NFD’s Mem. Supp. 93A, 3–4 [#313]. This court need not consider NFD’s other
arguments for attorneys’ fees and costs as well as pre-judgment interest under Chapter 93A given
its disposition of NFD’s Chapter 93A claim.
19

because NFD, when it asserted its Chapter 93A claim, expressly mentioned only Plaintiff’s alleged
false advertising, defamation, and tortious interference but did not explicitly reference abuse of
process.110 NFD replies that its Chapter 93A counterclaim incorporated by reference all of the
previous paragraphs of NFD’s Answer and Counterclaim [#160], including those that set forth the
facts surrounding the alleged abuse of process and the abuse of process count itself.111
First Circuit law provides that a party may satisfy its pleading requirements by
incorporating by reference other paragraphs within the same complaint or counterclaim.112
This court assumes, for the purposes of deciding NFD’s Chapter 93A counterclaim, that
NFD’s abuse of process counterclaim was incorporated by reference into NFD’s Chapter 93A
counterclaim. NFD satisfied its pleading requirements because its Chapter 93A counterclaim
explicitly incorporated all the previous paragraphs, including its abuse of process counterclaim.
NFD’s Chapter 93A counterclaim contained at least two incorporating statements. First, NFD’s
counterclaim explicitly “incorporated by reference Paragraphs 1 through 82 of this counterclaim

110

Pl. Empire Today, LLC’s Combined Mem. Law Supp. Mot. Strike & Opp’n Def.’s
Mot. J. Chapter 93 Countercl., 2–4 [#324].
111

Nat’l Floor Direct, Inc.’s: (1) Opp’n Empire’s Mot. Strike NFD’s Chapter 93A
Countercl.; (2) Opp’n Empire’s Mot. Strike NFD’s Fee Pet., or, Alternative, (3) NFD’s Mot.
Amend Countercl., 2–3 [#333] [hereinafter NFD’s Opp’n Mot. Strike].
112

Simas v. First Citizens’ Fed. Credit Union, 170 F.3d 37, 47 (1st Cir. 1999) (holding
that a count for violation of the Federal Credit Union Act included an adverse employment claim
because it incorporated by reference other portions of complaint setting forth facts supporting
such a claim); Pujol v. Shearson Am. Express, Inc., 877 F.2d 132, 138 (1st Cir. 1989) (reversing
a dismissal for failure to state a claim for conversion where the cause of action for malicious
prosecution incorporated by reference allegations that would support a conversion claim);
Chaabouni v. City of Boston, 133 F. Supp. 2d 93, 95 (D. Mass. 2001) (holding that a
two-sentence negligence count that incorporated by reference previous paragraphs of the
complaint met the notice pleading requirement for negligence).
20

as through fully set forth herein.”113 This reference was meant to include the material that was not
explicitly included in the Chapter 93A counterclaim, such as the abuse of process counterclaim.
This conclusion is reinforced by another part of NFD’s counterclaim, the second incorporating
statement, which provided that Plaintiff’s “interference with [NFD’s] business relationships
described herein constitute ‘unfair or deceptive acts or practices in the conduct of any trade or
commerce . . . .’”114 This reference was not necessarily limited to NFD’s tortious interference
counterclaim. Rather, this statement reinforced that NFD’s Chapter 93A counterclaim was
incorporating NFD’s abuse of process, especially because NFD’s abuse of process claim included
allegations that Plaintiff was impeding NFD from operating its business.115
Insofar as Plaintiff argues that NFD’s pre-trial memorandum or its initial jury instructions
can somehow change the scope of NFD’s counterclaim,116 these claims are without merit. First,
and most importantly, the argument is unsupported by the case law. In fact, the counterclaim
governs.117 Second, the record indicates that Plaintiff knew NFD’s Chapter 93A counterclaim

113

Ans. & Countercl. 3d Am. Compl. ¶ 82 [#160]; see also Nat’l Floor Direct Inc.’s Am.
Ans. & Countercl. ¶ 68 [#91] [hereinafter Am. Ans. & Countercl.].
114

Ans. & Countercl. 3d Am. Compl. ¶ 86 [#160]; see also Am. Ans. & Countercl. ¶ 71

[#91].
115

Ans. & Countercl. 3d Am. Compl. ¶¶ 56–57 [#160] (alleging that Plaintiff was
attempting to put NFD “out of business” and NFD has suffered harm to its business as a result);
Ans. & Countercl. 3d Am. Compl. ¶ 79 [#160] (alleging that Plaintiff was “hindering [NFD’s]
ability to conduct its business”).
116

See Pl. Empire Today, LLC’s Combined Mem. Law Supp. Mot. Strike & Opp’n Def.’s
Mot. J. Chapter 93 Countercl., 4–5 [#325].
117

See Bonneau v. Guidance Fishing Corp., 919 F. Supp. 46, 47 (D. Mass. 1996) (holding
that a statement in a joint pre-trial memorandum that a claim should be dismissed did not amount
to dismissal or waiver of that claim by the plaintiff where it was asserted at trial).
21

encompassed NFD’s abuse of process counterclaim. After only three days of evidence and long
before Plaintiff had rested, NFD sent Plaintiff a condensed set of jury instructions that included an
instruction on NFD’s Chapter 93A claim based on abuse of process.118 On October 8, 2010, the
ninth day of trial, Plaintiff provided this court with draft jury instructions that included this same
instruction.119
This court now turns to the merits of NFD’s Chapter 93A counterclaim. Although it is
true that abuse of process can constitute a violation of Chapter 93A,120 this court, in its
determination of the Parties’ 93A claims, is not bound by the jury’s finding on abuse of process.121

Chapter 93A, Section 2(a) makes unlawful any “[u]nfair . . . acts or practices in the

118

NFD’s Opp’n Mot. Strike, Ex. A, 18 [#333].

119

NFD’s Opp’n Mot. Strike, Ex. B, 23 [#333]. Plaintiff points out that it in fact objected
to this jury instruction by marking it as disputed. Pl. Empire Today, LLC’s Opp’n Def.’s Mot.
Amend Countercl., 5, Ex. A [#340] (affidavit of Plaintiff’s lawyer who objected to the jury
instruction). After this court indicated that it did not want to submit any Chapter 93A claims to
the jury, see Trial Tr. vol. 9, 15:1–7, Oct. 8, 2010 [#294], Plaintiff did not object again or bring
the objection to the court’s attention until these motions. Insofar as Plaintiff objects now or
reaffirms its objection, Plaintiff’s objection is overruled.
120

See, e.g., N. Shore Pharm. Serv., Inc. v. Breslin Assocs. Consulting, LLC, 491 F.
Supp. 2d 111, 131–32 (D. Mass. 2007).
121

See, e.g., Perdoni Bros. v. Concrete Sys., Inc., 35 F.3d 1, 5 (1st Cir. 1994)
(“Moreover, in the Chapter 93A context, the court has recognized that judge and jury, sitting as
independent triers of fact, may reach conflicting conclusions.” (internal citation omitted)); Prof’l
Servs. Group, Inc. v. Town of Rockland, 515 F. Supp. 2d 179, 196 (D. Mass. 2007) (‘“[A] judge
may make independent and, therefore, different, findings on the c.93A aspect of a case that arises
from the same facts which gave rise to parallel common law claims.’” (alteration in original)
(quoting Poly v. Moylan, 423 Mass. 141, 151 (1996))).
22

conduct of any trade or commerce.”122 The Massachusetts Supreme Judicial Court (“SJC”) has
instructed that “‘a practice or act [is] unfair under G. L. c. 93A, § 2, if it is (1) within the
penumbra of a common law, statutory, or other established concept of unfairness; (2) immoral,
unethical, oppressive, or unscrupulous; or (3) causes substantial injury to competitors or other
business people.’”123 In assessing claims of unfairness, Massachusetts courts have applied what is
commonly known as the “rascality” test: the “‘objectionable conduct must attain a level of
rascality that would raise an eyebrow of someone inured to the rough and tumble world of
commerce.’”124 Additionally, although “‘whether a particular set of acts, in their factual setting, is
unfair or deceptive is a question of fact . . . the boundaries of what may qualify for consideration
as a c. 93A violation is a question of law.”125

122

Datacomm Interface, Inc. v. Computerworld, Inc., 396 Mass. 760, 778 (1986) (internal
quotation marks omitted). Chapter 93A, Section 11, states, in relevant part:
Any person who engages in the conduct of any trade or commerce and who suffers any
loss of money or property, real or personal, as a result of the use or employment by
another person who engages in any trade or commerce of an unfair method of competition
or an unfair or deceptive act or practice . . . may . . . bring an action in the superior
court . . . for damages and such equitable relief . . . as the court deems to be necessary and
proper.
123

Milliken & Co. v. Duro Textiles, LLC, 451 Mass. 547, 562–63 (2008) (alteration in
original) (quoting Morrison v. Toys “R” Us, Inc., 441 Mass. 451, 457 (2004)). But see
Datacomm., 396 Mass. at 778 (quoting PMP Assocs., Inc. v. Globe Newspaper Co., 366 Mass.
593, 596 (1975)) (framing the three requirements as conjunctive considerations to be considered
together); Lane v. First Nat’l Bank, 737 F. Supp. 118, 119 (D. Mass. 1989).
124

Quaker State Oil Refining Corp. v. Garrity Oil Co., Inc., 884 F.2d 1510, 1513 (1st Cir.
1989) (quoting Levings v. Forbes & Wallace, 8 Mass. App. Ct. 498, 504 (1979)). But see Mass.
Emp’s Ins. Exch. v. Propac-Mass, Inc., 420 Mass. 39, 43 (1995) (noting that the rhetoric of
“rascality” is “uninstructive”).
125

Milliken, 451 Mass. at 562 (alteration in original) (quoting Schwanbeck v. Fed.-Mogul
Corp., 31 Mass. App. Ct. 390, 414 (1991)).
23

The elements of an abuse of process claim are that “‘[1] process was used, [2] for an
ulterior or illegitimate purpose, [3] resulting in damage.’”126 As the SJC has reaffirmed, the
process must be used “to accomplish some ulterior purpose for which it was not designed or
intended, or which was not the legitimate purpose of the particular process employed.”127 Filing a
groundless claim or having an improper motive of “vexation, harassment, or annoyance” is
relevant but does not alone suffice to demonstrate ulterior purpose.128 An ulterior purpose “is not
simply the intent to harm the other party directly by bringing the suit.”129 In particular, merely
intending to “cause a party to expend substantial time and money to defend against the claim in a
suit” does not prove abuse of process.130 Rather, “there must be [an] intention to use process for
coercion or harassment to obtain something not properly part of the suit.”131
The record does not support that NFD is entitled to judgment on its Chapter 93A claim
for abuse of process.
First, NFD has not shown that Plaintiff’s acts were unfair or deceptive such that NFD

126

Psy-ed Corp. v. Klein, SJC-10722, 2011 Mass. LEXIS 254, at *32 (Mass. May 12,
2011) (quoting Mahlowitz, 456 Mass. at 636).
127

Id. (internal citations and quotation marks omitted). The “ulterior purpose must be to
gain some collateral advantage” indirectly that is not properly involved in the proceeding, such as
the surrender of property or payment of money. Id. at *33–34 & n.35 (citations omitted).
128

Id. at *32–33.

129

Id. at *34 n.35 (citations omitted).

130

N. Shore, 491 F. Supp. 2d at 130 (quoting Broadway Mgmt. Servs., Ltd. v. Cullinet
Software, Inc., 652 F. Supp. 1501, 1503 (D. Mass. 1987)).
131

Id. (internal citation and quotation marks omitted); see also Broadway Mgmt., 652 F.
Supp. at 1504 (“In cases involving actionable abuse of process, the collateral benefits sought were
well-defined and clearly outside the interests properly pursued in the proceeding.” (citations
omitted)).
24

would be entitled to judgment on its Chapter 93A claim. NFD relies on two e-mails that reveal a
discussion by Plaintiff’s top management of using a lawsuit as a means of hurting NFD’s
business.132 The two e-mails, however, are not enough to convince this court that Plaintiff
engaged in abusive litigation unfair so as to violate Chapter 93A.133 NFD relies on a “conclusory
allegation”134 that (1) Plaintiff’s discussions of using its deep pockets to compete aggressively and
also possibly sue NFD for allegedly wrongful conduct means that (2) the lawsuit was motivated
by a desire to injure NFD’s business. But NFD has failed to prove a casual connection between
(1) and (2). As for the first e-mail, NFD has shown no casual connection between the March
2008 e-mail sent by Dickson and Plaintiff’s (not Dickson’s) decision to bring suit about eight
months later.135 The second e-mail reflected a conversation among interested parties who were
discussing various legitimate business practices, including leveraging profits in other markets and

132

See supra notes 65–71 and accompanying text.

133

See Broadway Mgmt., 652 F. Supp. at 1504 (explaining that litigating with concurrent
intent to burden defendant with cost is not abuse of process without collateral motive or design to
coerce).
134

Amcel Corp. v. Int’l Executive Sales, Inc., No. 93-11128-RCL, 1997 U.S. Dist. LEXIS
23543, at *39 (D. Mass. Sept. 26, 1997) (“The defendants thus make an argument for their abuse
of process claim that is a variation of the faulty inductive reasoning expressed by the Latin phrase
post hoc ergo propter hoc, after this therefore because of this.”).
135

Silvers, not Dickson, had the ultimate decision regarding whether to sue NFD. See
Trial Tr. vol. 3, 88:21–89:5 [#260]. This same point applies to the other exhibits that NFD cites.
NFD’s Mem. Supp. 93A, 2 [#313]. The monthly reports prepared by Robert Carter do not prove
improper motive because there is no evidence that he had any involvement in Plaintiff’s decision
to sue. See NFD’s Trial Exs. BB, CC, and GG. Similarly, the e-mails or letters in which
Plaintiff’s employees or sales representatives sometimes blame Plaintiff’s struggling Boston
market on NFD do not address Plaintiff’s motive of filing suit. See NFD’s Trial Exs. OOOO, R,
and W.
25

recovering market share by generating and closing more leads.136 Insofar as Silvers adverted to a
speculative desire to “hurt” NFD, there is no showing that Plaintiff sued to hurt NFD’s finances or
to drive it out of business. Rather, as far as the context indicates and this court’s Chapter 93A
decision is concerned, this language of hurting NFD refers to (1) the legal fees that NFD would
incur as a result of a legal action and (2) beating NFD by various legitimate practices, including
providing different financing offers. In fact, Plaintiff’s primary investor and ultimate decision
maker replied to Silvers’s e-mail by endorsing only the improvement of financing offers and
increase in advertising.137 In sum, mere conversation among interested individuals about a
possible lawsuit does not constitute abuse of process.
The other conduct upon which NFD relies, even in conjunction with Plaintiff’s two
e-mails, is also insufficient to entitle NFD to judgment on its Chapter 93A counterclaim. Parties
have been held liable under Chapter 93A for abusive litigation or conduct that was factually
different from that of Plaintiff’s, such as racing to litigate claims (that clearly lacked merit)
without knowing all the facts,138 or failing to make a reasonable settlement offer in the face of a
meritorious claim.139 NFD does not point to evidence revealing such conduct by Plaintiff. To the
contrary, Plaintiff pursued a course of conduct that outlined the path a litigant not seeking to
abuse the legal process might follow. Plaintiff waited two years to initiate its suit and attempted

136

See NFD’s Trial Ex. U.

137

NFD’s Trial Ex. U (“[W]e should be prepared to gear up spending/actions as much as
necessary to counter these competitors, in terms of better financing offers (as noted below), and
more aggressive adversting.”).
138

Fed. Ins. Co. v. HPSC, Inc., 480 F.3d 26, 26 (1st Cir. 2007); see also Heller v.
Silverbranch Constr. Corp., 376 Mass. 621, 628 (1978).
139

Int’l Fid. Ins. Co. v. Wilson, 387 Mass. 841, 857–58 (1983).
26

to resolve its issues outside of court. Plaintiff sent multiple cease-and-desist letters to NFD.140
Plaintiff also attempted to reach an administrative resolution through the BBB and only sued after
that avenue proved fruitless.141 In fact, NFD may not have always engaged Plaintiff in good faith
during this process.142 This fact further supports that Plaintiff’s conduct was not unfair.143
Moreover, Plaintiff engaged in settlement discussions.144 There is no allegation that Plaintiff
refused to discuss a settlement.145
Plaintiff’s conduct also did not violate any established concepts of unfairness because
Plaintiff did not engage in a level of rascality that would raise an eyebrow of someone inured to
the rough and tumble world of commerce. NFD has not shown that other corporations do not
discuss pursuing legal claims as one of many means of competing against companies that they
believe are engaging in illegal conduct.

140

See supra note 64 and accompanying text.

141

See Trial Tr. vol. 3, 88:3–89:14 [#260] (Silvers testifying that Plaintiff sued NFD
because the BBB could not help them and the BBB “indicated litigation might be the best option”
and Plaintiff felt it “had no more choices left”).
142

See Trial Tr. vol. 7, 112–114 [#268] (NFD refused to comply with the BBB because
they felt complaints should go through the National Advertising Board). Compare, e.g., Trial Ex.
56 (NFD denying it used Plaintiff’s purchase order to create NFD’s purchase order), with Trial
Tr. vol. 7, 119–120, 159–162 [#268] (Aaron Rosenberg admitting that NFD did use Plaintiff’s
purchase order);
143

See Incase Inc. v. Timex Corp., 488 F.3d 46, 57 (1st Cir. 2007) (“‘In determining
whether an act or practice is unfair, as opposed to deceptive, we must evaluate the equities
between the parties. What a defendant knew or should have known may be relevant in
determining unfairness.’” (quoting Swanson v. Bankers Life Co., 389 Mass. 345, 349 (1980)).
144

145

See, e.g., Trial Tr. vol. 5, 11:15–12:22, Oct. 1, 2010 [#272].

See Amcel, 1997 U.S. Dist. LEXIS 23543, at *40 (“A party wishing to drive another
to business ruin, through the vehicle of litigation, might well be expected to abjure settlement
efforts.”).
27

Second, NFD has also not shown how Plaintiff’s conduct was immoral or otherwise
unscrupulous. Finally, the cases that NFD cites to support its Chapter 93A Motion are all
factually distinguishable.146
2.

Plaintiff’s Chapter 93A Request

Plaintiff requests judgment on Count IX of its Third Amended Complaint on its Chapter
93A claim, $1.6 million in compensatory damages, $3.2 million in multiple damages, attorneys’
fees and costs, and pre-judgment interest.147 Plaintiff argues that NFD’s false advertising violates
Chapter 93A.148 Plaintiff argues that NFD’s 15% Promotion149 was literally false in several ways,
including: (a) Aaron Rosenberg’s confirmation that NFD, at most, only provides a 13% discount;
and (b) NFD has never given a free carpet or flooring job.150 Plaintiff also pointed to various
inconsistencies between the testimony of the Rosenbergs’, such as at one time alleging that the

146

NFD points to four cases in particular, none of which resemble Plaintiff’s conduct.
First, the SJC dealt with a party that had instituted a lawsuit as a marketing tool and obtained an
injunction by making knowing misrepresentations in its complaint. Datacomm, 396 Mass. at 776.
Second, Fafard Real Estate & Development Corp. v. Metro-Boston Broadcasting, Inc., 345 F.
Supp. 2d 147, 154 (D. Mass. 2004), discussed a plaintiff who brought suit maliciously for the
purpose of gaining unfair leverage over the defendant in the midst of negotiations to acquire the
defendant’s property. Third, North Shore, 491 F. Supp. 2d at 131–32, found that a jury could
conclude that a suit was vindictive because a party had sued based on preliminary reports that
were subject to final revision and had refused to engaged in any further dealings with the
opposition. Fourth, in Refuse & Environmental Systems, Inc. v. Industrial Services of America,
Inc., 932 F.2d 37, 43 (1st Cir. 1993), the First Circuit agreed that bringing a lawsuit in spite of the
evidence may indeed constitute an unfair and deceptive practice under 93A.
147

Pl. Empire Today, LLC’s Mot. Strike Def.’s Mot. J. Chapter 93 Claim, 1–2 [#327].

148

Pl. Empire Today, LLC’s Mem. Law Supp. Mot. J. Chapter 93A Claim, 2–6 [#328]
[hereinafter Pl.’s Mem. Supp. Mot. 93A].
149

See supra notes 37–39 and accompanying text.

150

Pl.’s Mem. Supp. Mot. 93A, 3–6 [#328].
28

promotion accounted for very little business and at other times claiming that the promotion was
used “all day long” and “on every single customer.”151
To establish a false advertising claim under Chapter 93A, a plaintiff must prove all of the
elements of a false advertising claim under Section 43(a) of the Lanham Act.152 As the First
Circuit has explained:
[T]o prove a false advertising claim under the Lanham Act, a plaintiff must demonstrate
that (1) the defendant made a false or misleading description of fact or representation of
fact in a commercial advertisement about his own or another’s product; (2) the
misrepresentation is material, in that it is likely to influence the purchasing decision; (3)
the misrepresentation actually deceives or has the tendency to deceive a substantial
segment of its audience; (4) the defendant placed the false or misleading statement in
interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of
the misrepresentation, either by direct diversion of sales or by a lessening of goodwill
associated with its products.153
A plaintiff can succeed on a false advertising claim by proving either that the defendant’s
advertisement is literally false or proving that it is implicitly false (i.e., true or ambiguous yet
misleading).154 If an advertisement is literally false, a violation can be established without
evidence of consumer deception.155 If the advertisement is implicitly false, the plaintiff has an
additional burden to show that the advertisement conveys a misleading message to the viewing

151

Pl.’s Mem. Supp. Mot. 93A, 4–6 [#328]. Given this court’s disposition of Plaintiff’s
Chapter 93A claim, it need not consider Plaintiff’s request for attorneys’ fees, costs and prejudgment interests under Chapter 93A. See Pl.’s Mem. Supp. Mot. 93A, 7 [#328].
152

Gillette Co. v. Norelco Consumer Prods. Co., 946 F. Supp. 115, 120 n.3 (D. Mass.

1995).
153

Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave., 284 F.3d 302, 310–11 (1st Cir.
2002) (citing Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 33 n.6 (1st
Cir. 2000)).
154

Id. at 311 (internal citation omitted).

155

Id. (internal citations omitted).
29

public.156 Additionally, a plaintiff seeking damages must show actual harm to its business.157
NFD’s conduct did not rise to the level of unfair or deceptive conduct required under
Chapter 93A. In particular, Plaintiff has failed to establish at least three elements under Section
43(a) of the Lanham Act.
a.

Falsity

Plaintiff has not demonstrated that NFD’s 15% Promotion was literally false. In this
respect, this court agrees with the jury’s finding regarding Plaintiff’s Chapter 93A claim.158 This
court’s agreement with the jury may well be sufficient to deny Plaintiff’s 93A Motion.159 But this
court will nonetheless address Plaintiff’s arguments.
First, Plaintiff’s argument that NFD did not honor the 15% discount as a standard practice
and therefore engaged in false or misleading advertising is not supported by the record. All of
Plaintiff’s examples of alleged falsity of NFD’s 15% Promotion are defeated by the fact that
NFD’s 15% Promotion was subject to certain conditions.160 For instance, an exhibit in which a
sales representative provided a 10% discount to a customer only demonstrated an instance of the

156

Id. (internal citation and quotation marks omitted).

157

Id. Such a plaintiff must also show that consumers were actually deceived by the
misrepresentations unless the plaintiff can avail itself of a “presumption to that effect.” Id. at 311
n.9 (internal citation omitted).
158

See Verdict Form, 4 [#269] (finding that Plaintiff did not prove NFD’s advertisements
made false representations or that that NFD’s advertisements were likely to mislead consumers).
159

See, e.g., Cahill v. TIG Premier Ins. Co., 20 F. Supp. 2d 141, 143 (D. Mass. 1998)
(denying a Chapter 93A claim where the jury denied all but the plaintiff’s breach of contract claim,
which did not rise to the level of a Chapter 93A violation on its own).
160

See Trial Tr. vol. 10, 110:14–24 [#24] (Sam explaining terms); Trial Tr. vol. 7,
187:18–20 [#268] (Aaron testifying about disclaimers on commercials regarding qualifying
terms); see supra note 41 and accompanying text.
30

15% Promotion’s conditions not being satisfied, not of the 15% Promotion being dishonored.161
Likewise, of the various NFD purchase orders where less than 15% was given to customers, none
were established as matching the conditions of the 15% Promotion.162 Also, even if sales
representatives earned higher commissions for providing discounts under 15% and it was within
their discretion to offer certain discounts,163 no evidence indicates that NFD encouraged sales
representatives to give less than 15% to customers who qualified for the 15% Promotion. And
even the customer orders showing Dan Rosenberg’s alleged miscalculations of 15% (and other
percentages)164 were not definitively established as qualifying for the 15% Promotion.165
Second, and separately, the different ways that Dan Rosenberg calculated 15% and the
testimony surrounding the issue does not reflect literally false advertising. Instead, the testimony
reveals that NFD and the Rosenbergs generally thought that they were consistently providing 15%
to customers when the customers qualified for the 15% Promotion.166 At worst, the 15%

161

See Trial Tr. vol. 10, 149:18–150:7 [#308] (Sam Rosenberg explaining that the
document reflected a situation in which the customer received something different from NFD than
she had been quoted from the competitor).
162

See Pl.’s Trial Ex. 1.

163

See Pl.’s Mem. Supp. Mot. 93A, 3–4 [#327].

164

See Pl.’s Ex. C.

165

The record only established that they were evidence of NFD beating competitor’s

prices:
Q: And Exhibit C was produced to show price beats, correct?
A: I’m not sure why it was produced, but I think it shows that.
Trial Tr. vol. 6, 151:23–152:1 [#262].
166

Plaintiff claims that Dan and Aaron Rosenberg were unequivocal that NFD has always
beat competitors prices by 13% and not 15%. See Pl.’s Mem. Supp. Mot. 93A, 4–5 [#327]. But
this assertion crumbles upon closer inspection of the record, which reveals, at most, an internal
31

Promotion more likely suggested an internal disagreement at NFD over a mathematical
calculation.167 It was a disagreement that was only used in a small percentage of instances,168
none of which were clearly established as qualifying for the 15% Promotion.169 Such a reasonable
but incorrect interpretation of a matter does not alone constitute unfair and deceptive conduct.170
Even if, arguendo, NFD or the Rosenbergs’ behavior was negligent, negligence alone does not
support Chapter 93A liability.171 The internal disagreement, therefore, did not indicate that NFD
did not intend to honors its intentions or that its 15% Promotion was literally false.
Third, Plaintiff’s attempt to paint the Rosenbergs’ testimony as contradictory or not
credible is not supported when viewing the record as a whole. For instance, Sam Rosenberg’s

disagreement. Plaintiff, for instance, points to Dan Rosenberg’s (out of context) statement that
the math is “consistent throughout the whole period of time.” Pl.’s Mem. Supp. Mot. 93A, 5
[#327]. But Dan Rosenberg says in the next sentence, “It’s a discount of 15 percent.” Trial Tr.
vol. 6, 156:16–17 [#262].
167

Compare Trial Tr. vol. 6, 154:6–155:9 [#262] (Dan Rosenberg explaining his method
of calculation), with Trial Tr. vol. 7, 173:22–174:3 [#268] (Aaron Rosenberg testifying “I don’t
think we’re only beating them by 13%; I think we’re beating them by 15% . . .so the math’s the
math; you know, there’s no argument about that”), and Trial Tr. vol. 10, 115:1–8 [#308] (Sam
Rosenberg testifying that he was unaware of Dan’s method).
168

Dan Rosenberg appeared to stand alone in his mistaken interpretation. See, e.g., Trial
Tr. vol. 8, 122:21–123:9 [#291]; see supra notes 42–44 and accompanying text.
169

That is, his behavior was therefore not definitively linked to the 15% Promotion.

170

See, e.g., Aquino v. Pacesetter Adjustment Co., 416 F. Supp. 2d 181, 191, 200 (D.
Mass. 2005) (holding that an insurer’s statements regarding coverage that were based on a
reasonable but incorrect interpretation of the policy did not rise to a violation of 93A).
171

See, e.g., Darviris v. Petros, 442 Mass. 274, 278 (2004) (“A negligent act standing by
itself does not give rise to a claim under [G. L.] c. 93A. There must in addition be evidence that
the negligence was or resulted in an unfair or deceptive act or practice.” (internal citation and
quotation marks omitted)); Moylan, 423 Mass. at 151 (affirming a finding that no 93A violation
occurred even where jury had found that the defendant was negligent because the defendant did
not engage in dishonesty, fraud, deceit, or misrepresentation).
32

statements regarding the small share of total orders calculated by this 13% method is not
contradicted by the Rosenbergs’ statements about providing 15% “every single day” or “all day
long.”172 That is, NFD could beat competitor’s quotes every day without this practice
constituting a substantial portion of NFD’s total business.173 Plaintiff’s claim that Sam
Rosenberg’s testimony is not credible because he was not involved in the day-to-day 15%
calculation is irrelevant.174 Sam Rosenberg was merely pointing out that the sales representatives
primarily apply the 15% Promotion in the field “by themselves.”175 The 15% Promotion was
nonetheless created by Sam or Aaron.176 Moreover, this is a curious argument given that Plaintiff,
through an alter ego claim against Sam Rosenberg, repeatedly claimed that Sam Rosenberg was
an integral component of NFD.177 It is therefore reasonable to not immediately discard Sam
Rosenberg’s statements regarding NFD’s operations.
Additionally, NFD told the BBB its method of calculating 15%,178 and nothing suggests

172

Pl.’s Mem. Supp. Mot. 93A, 5 [#327].

173

These statements were in fact often uttered in the same sentence or breath. See, e.g.,
Trial Tr. vol. 10., 109:12–18 [#308] (“We beat the price by 15 percent. It’s, you know, probably
10 percent of our business every day involves price beats.”). Moreover, Sam Rosenberg’s
statement that NFD gives “15% on every single customer” was also not contradictory. Trial Tr.
vol. 10, 147:4–5 [#308]. Given the context of his testimony, this statement reasonably meant that
NFD would attempt to offer the 15% Promotion to every customer, and only those customers
whose orders met the 15% Promotion’s conditions would be entitled to a 15% discount.
174

See Pl.’s Mem. Supp. Mot. 93A, 5 [#327].

175

Trial Tr. vol. 10, 111:19–23 [#308].

176

Trial Tr. vol. 10, 108:9–10 [#308].

177

See, e.g., 3d Am. Compl., 46–47 [#148]; Trial Tr. vol. 12, 63:7–64:16, 65:11–17

178

Pl.’s Trial Ex. EEEE, NFD005110.

[#301].
33

that the BBB accused NFD of making false statements specifically about its “15% or its free
guarantee.”179 Accordingly, Dan Rosenberg’s instances of dividing by 1.15 fall into this pattern of
internal disagreement.
Also, Plaintiff’s argument that the 15% Promotion is literally false because NFD has never
given away carpet or flooring for free180 is flawed. Just because NFD has never been in a position
to give away anything for free does not mean that it would not readily do so if it were unable to
lower the price by 15% on a qualifying offer.
In sum, there clearly was no practice that would make the 15% Promotion literally false.
There is insufficient evidence to conclude that NFD was not providing consumers 15% on
qualifying offers or providing products for free when it failed to do so.
b.

Consumer Deception

Plaintiff does not argue that the alleged misrepresentation deceived a substantial portion of
the consuming public. Plaintiff has not shown through consumer surveys, for instance, that
consumers were misled by the alleged misrepresentations.181 Plaintiff presumably relies on its

179

NFD’s communication may reveal the same sort of internal disagreement regarding
NFD’s calculation. See Trial Tr. vol. 6, 155:15–156:7 [#262] (Dan Rosenberg explaining that
letter to BBB contains a “typo that instead” of saying NFD multiplies by 1.15, should have said
NFD divided by 1.15). Regardless, this court is not compelled to follow the BBB’s views of an
organization. See, e.g., Timothy Noah, Busted Watchdog: Is the Better Business Bureau a
Protection Racket?, Slate (December 7, 2010, 7:38 PM), http://www.slate.com/id/2277100/;
David Lazarus, Better Business Bureau Grades Companies on a Peculiar Curve, L.A. Times, Jan.
21, 2009, http://articles.latimes.com/2009/jan/21/business/fi-lazarus21.
180

See Pl.’s Mem. Supp. Mot. 93A, 6 [#327].

181

See Cashmere, 284 F.3d at 310 n.6.
34

view that NFD’s advertisements were literally false.182 Given this court’s conclusion that NFD’s
claims were not literally false, Plaintiff has also not satisfied this element.
c.

Causation and Damages

Plaintiff calculates $1.6 million in damages based upon $20 on every $1000 of revenue
generated since NFD’s inception.183
The First Circuit has explained that “[i]n order to prove causation under § 1125(a) of the
Lanham Act, the aggrieved party must demonstrate that the false advertisement actually harmed
its business.”184 A “precise showing is not required” and a diversion of sales, for example, may
suffice.185 But a plaintiff must prove a casual connection between the alleged misrepresentations
and the harm sustained.186
Plaintiff fails to provide sufficient evidence of how it has been harmed by NFD’s alleged
conduct in the 15% Promotion. The evidence does not demonstrate a casual connection between
NFD’s representations and the alleged harm that Plaintiff sustained. Contrary to Plaintiff’s
understanding, the money that NFD “saved” would not automatically be Plaintiff’s damages.
Rather, the evidence provided a bounty of reasons for Plaintiff’s suffering sales, most of which

182

See Id. at 314–15 (discussing a presumption of consumer deception for literally falsity

claims).
183

Pl.’s Mem. Supp. Mot. 93A, 8 [#327].

184

Cashmere, 284 F.3d at 318.

185

Id. (internal citation and quotation marks omitted).

186

Id. at 318 n.16; see also Heller Fin. v. Ins. Co. of N. Am., 410 Mass. 400, 409 (1991)
(“[T]he evidence must warrant a finding that a causal relationship existed between the [alleged]
misrepresentation and the injury.” (internal citations omitted)).
35

focused on Plaintiff’s management issues and NFD’s generally low prices.187 Plaintiff’s reliance
on the fact that an increase in NFD’s sales corresponded to a decrease with Plaintiff’s sales188 only
proves a correlation, not a causation. Plaintiff may argue that the evidence supported a finding
that advertising affected leads and leads affected sales. But, first, Plaintiff has not in fact
presented a causal relationship between NFD’s 15% Promotion itself and a decrease in Plaintiff’s
sales. Plaintiff, for instance, has not presented evidence of any consumers who chose to purchase
NFD’s products instead of Plaintiff’s products because of the 15% Promotion.189 Second, there is
a paucity of evidence supporting Plaintiff’s argument and an abundance of evidence pointing to
causes that are not the 15% Promotion. If there is evidence presenting “inconsistent positions on
a crucial issue of fact,” it is appropriate to agree with the jury, which is “best suited to resolve”
such a dispute.190 Plaintiff’s claim therefore fails on the fifth element.
C.

Additional Motions
1.

NFD’s Motion for Attorneys’ Fees Pursuant to 15 U.S.C. § 1117(a)

A Lanham Act defendant is entitled to an award of its attorneys’ fees in “exceptional
cases” if it succeeds on its defense.191 The “party requesting attorneys’ fees must prove the

187

See supra notes 54–60 and accompanying text.

188

See supra note 54 and accompanying text.

189

Cf. Am. Med. Sys., Inc. v. Biolitec, Inc., No. 08-30061-MAP, 2011 U.S. Dist. LEXIS
33604, at *43 (D. Mass. Mar. 30, 2011) (explaining that the plaintiffs had failed to demonstrate
any injury caused by the alleged falsity because there was no evidence of any consumer who
choose the other product over plaintiff’s due to the alleged misrepresentation).
190

191

Cashmere, 294 F.3d at 320.

See 15 U.S.C. § 1117(a); Yankee Candle Co. v. Bridgewater Candle Co., 140 F. Supp.
2d 111, 119 (D. Mass. 2001) (recognizing the defendant as a “prevailing party”), abrogated on
other grounds, 259 F.3d 25 (1st Cir. 2001); Ting Ji v. Bose Corp., 647 F. Supp. 2d 80, 83 (D.
36

exceptional circumstances by clear and convincing evidence.”192 The determination of whether to
award attorneys’ fees in an “exceptional case” lies within a court’s discretion.193
NFD requests an award of attorneys’ fees pursuant to the Lanham Act. NFD argues that
attorney fees should be awarded to it, the prevailing defendant, because Plaintiff engaged in
abusive and expensive litigation and brought unfounded claims.194 Moreover, Defendant relies on
a Seventh Circuit decision, Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC,195
which recently held that a plaintiff’s abuse of process constitutes an “exceptional case” warranting
the award of attorneys’ fees to a successful Lanham Act defendant.196 Because, NFD argues, the
jury found that Plaintiff engaged in an abuse of process by bringing this suit, including presumably
its Lanham Act claim, this is an exceptional case warranting an award of attorneys’ fees.
NFD’s request for attorney’ fees here fails. First, NFD has not met the more relevant
standard for attorneys’ fees in the First Circuit under the Lanham Act.197 The First Circuit has

Mass. 2009) (same). See generally Nightingale Home Healthcare, Inc. v. Anodyne Therapy,
LLC, 626 F.3d 958 (7th Cir. 2010) (noting a general agreement among courts that “prevailing
party” includes defendants).
192

Gillette Co. v. Norelco Consumer Prods. Co., 69 F. Supp. 2d 246, 267 (D. Mass.
1999) (citing Seven-Up Co. v Coca-Cola Co., 86 F.3d 1379, 1390 (5th Cir. 1996)).
193

Gillette, 69 F. Supp. 2d at 267 (citing BASF Corp. v. Old World Trading Co., 41 F.3d
1081, 1099 (7th Cir. 1994); Seven-Up, 86 F.3d at 1390).
194

Nat’l Floor Direct, Inc.’s Mem. Supp. Mot. Att’y’s Fees Pursuant 15 U.S.C.
§ 1117(A), 2–3 [#322] [hereinafter NFD Mem. Supp. Mot. Fees § 1117(A)].
195

626 F.3d 958 (7th Cir. 2010).

196

See NFD Mem. Supp. Mot. Fees § 1117(A), 2–4 [#322].

197

See Ting Ji v. Bose Corp., 626 F.3d 116, 129 (1st Cir. 2010). The Seventh Circuit’s
Nightingale decision is not binding on this court. See, e.g., Diaz v. Metro. Life Ins. Co., 688 F.
Supp. 2d 49, 61 n.18 (D.P.R. 2010); cf. Eulitt v. Me. Dep’t of Educ., 386 F.3d 344, 349 (1st Cir.
37

approved (or at least not disapproved of) a standard that requires that NFD, as a defendant, show
something less than bad faith, such as a plaintiff’s use of groundless arguments, failure to use
controlling law, and generally oppressive nature of the case.198 Here, NFD has not pointed to the
use of any groundless arguments or Plaintiff’s failure to use controlling law. NFD has not argued
here (nor demonstrated) that the suit is generally oppressive.199 Plaintiff’s suit was not, for
instance, completely lacking in merit.200 In fact, Plaintiff presented a substantial amount of
evidence on its false advertising and trademark infringement claims. Both claims went to the
jury201 and there was seemingly no dispute regarding two of the three elements of the trademark
infringement claim.202

2004) (“Until a court of appeals revokes a binding precedent, a district court within the circuit is
hard put to ignore that precedent unless it has unmistakably been cast into disrepute by
supervening authority.” (internal citations omitted)).
198

Ting Ji, 626 F.3d at 129 (acknowledging that is has never determined the appropriate
standard to apply to requested for attorneys fees by prevailing defendants under Section 1117(a)
but deciding it need not reach the issue because the parties had agreed to apply the district court’s
standard).
199

See Eagles, Ltd. v. Am. Eagle Found., 356 F.3d 724, 728–29 (6th Cir. 2004)
(explaining that a prevailing defendant may show that a suit was oppressive if “it lacked merit, had
elements of an abuse of process claim, and plaintiff’s conduct unreasonably increased the cost of
defending against the suit” (emphasis added) (quoting S Indus., Inc. v. Centra 2000, Inc., 249
F.3d 625, 627 (7th Cir. 2001))).
200

Cf. Ferraris Med., Inc. v. Azimuth Corp., No. 99-66-M, 2002 U.S. Dist. LEXIS 13589,
at *6 (D.N.H. July 24, 2002).
201

202

See Verdict Form, 3–4 [#296].

See Venture Tape Corp. v. McGills Glass Warehouse, 540 F.3d 56, 60 (1st Cir. 2008).
That is, there was no dispute that Plaintiff owned a valid trademark, see Pl.’s Trial Ex. 103, and
little to no dispute that NFD had used Plaintiff’s mark without permission, see Trial Tr., vol. 6,
111:17–25 [#262]; Pl.’s Trial Ex. 39, 40; see also Verdict Form, 3–4 [#296] (focusing on whether
NFD’s purchase of Plaintiff’s trademarks intended to deceive consumers and whether there was a
likelihood of consumer confusion).
38

Second, even if this court were to consider the Seventh Circuit’s Nightingale decision,
would not be entitled to attorneys’ fees. Nightingale is factually distinguishable from this case. In
Nightingale, the district court had granted summary judgment in favor of defendant on the
plaintiff’s Lanham Act false advertising claim early in the litigation because the claim lacked “any
merit” and was “disingenuous.”203 Here, however, Plaintiff’s claim was meritorious enough to go
to the jury and falter on perhaps only one of three statutory elements.204 Moreover, the Seventh
Circuit’s vision of a typical “exceptional” case was far removed from this case. NFD is correct
that Nightingale held that a case is “exceptional” if a plaintiff is guilty of abuse of process. But
the Seventh Circuit described the conditions sufficient to make a case “exceptional” as when the
party’s claim is “objectively unreasonable”—that is, a claim that a rational litigant would pursue
“only because it was extortionate in character if not necessarily in provable intention.”205 As this
court has already found in denying NFD’s Chapter 93A claim, however, Plaintiff’s conduct did
not signify an unfair or unscrupulous,206 or similarly, extortionate, character. NFD fails to fit this
case within the facts or the spirit of the Seventh Circuit’s decision.
IV.

Conclusion

This court has chosen not to disturb the jury’s verdict. Plaintiff’s Motion for Judgment as
a Matter of Law, Pursuant to Fed. R. Civ. P. 50(b) [#303] is therefore DENIED. The various

203

Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC, No. 1:06-cv-1435-SEBWTL, 2010 U.S. Dist. LEXIS 32195, at *5–6 (S.D. Ind. Mar. 31, 2010) (granting summary
judgment in part because the two misrepresentations did not constitute “commercial advertising
or promotion” actionable under the Lanham Act (internal citations omitted)).
204

See supra note 202 and accompanying text.

205

Nightingale, 626 F.3d at 965.

206

See supra notes 132–46 and accompanying text.
39

motions asserting claims under Chapter 93A—NFD’s Motion for Judgment on Its Counterclaim
Under M.G.L. Chapter 93A [#312], Plaintiff’s Motion to Strike Defendant’s Motion for
Judgment on Its Chapter 93A Counterclaim [#324], Plaintiff’s Motion for Judgment on Its
Chapter 93A Claim [#327], and NFD’s (1) Opposition to Empire’s Motion to Strike NFD’s
Chapter 93A Counterclaim; (2) Opposition to Empire’s Motion to Strike NFD’s Fee Petition, or
in the Alternative, (3) NFD’s Motion to Amend Counterclaim [#333]—are also DENIED for the
reasons detailed above. Moreover, NFD’s Application for Attorney’s Fees and Costs Under
Mass. Gen. L. Ch. 93A [#316], for the foregoing reasons, is DENIED. Lastly, NFD’s Motion for
Attorneys’ Fees Pursuant to 15 U.S.C. § 1117(A) [#321] and Plaintiff’s Motion to Strike
Defendant’s Application for Attorney’s Fees and Costs Under Mass. Gen. L. Ch. 93A [#331] are
DENIED.207
AN ORDER HAS ISSUED.

/s/ Joseph L. Tauro
United States District Judge

207

Plaintiff’s Assented to Motion to Redact Portions of Trial Record [#320] and NFD’s
Assented to Motion to Redact Portion of Trial Record [#337] are ALLOWED.
40