Scrappost LLC v. Peony Online, Inc.
OPINION and ORDER Granting 52 MOTION for Summary Judgment. Signed by District Judge Sean F. Cox. (JMcC)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
Case No. 14-14761
Hon. Sean F. Cox
Peony Online, Inc.,
OPINION & ORDER
GRANTING SCRAPPOST’S MOTION FOR SUMMARY JUDGMENT (Doc. # 52)
RE: PEONY’S COUNTER-CLAIM
This case involves a dispute between two companies that publish pricing information
relating to the scrap metal industry. Defendant/Counter-Plaintiff Peony Online Inc. (“Peony”)
alleges that Plaintiff/Counter-Defendant Scrappost, LLC (“Scrappost”) wrongfully obtained
Peony’s publications and subsequently solicited Peony’s subscribers to also become subscribers
of Scrappost. Peony’s counter-claim includes claims for tortious interference, unfair
competition, unjust enrichment and misappropriation of hot news.
Currently before the Court is Scrappost’s Motion for Summary Judgment. The motion
has been fully briefed by the parties. The Court finds that oral argument would not significantly
aid in the decisional process and therefore orders that the instant motion will be decided upon the
briefs. See E.D. Mich. LR 7.1(f). The Court shall GRANT Scrappost’s Motion for Summary
Judgment for the reasons that follow.
Peony is in the business of publishing pricing information relating to the scrap metal
industry. Since 1993, Peony has offered its customers a Consumer Broker Exporter’s (“CBE”)
report. (Scrappost’s Stmt. ¶ 11; Peony’s Stmt. ¶ 11). The CBE report is a single-page, daily
report that contains 70 price quotes for several scrap metal varieties. (Scrappost’s Stmt. ¶ 11;
Peony’s Stmt. ¶ 11).
The CBE report’s format has not changed since its creation. (Scrappost’s Stmt. ¶ 13;
Peony’s Stmt. ¶ 13). The CBE report is not interactive and Peony subscribers do not directly
contribute to the report. (Scrappost’s Stmt. ¶ 14; Peony’s Stmt. ¶ 14). Peony publishes data
from a subscriber if it deems the metal trader suitable for the service. (Scrappost’s Stmt. ¶ 17;
Peony’s Stmt. ¶ 17). The purpose of the CBE report is to provide buyers and sellers of scrap
metal with price information. (Scrappost’s Stmt. ¶ 16; Peony’s Stmt. ¶ 16).
The CBE report can be accessed by Peony subscribers through fax or email. (Scrappost’s
Stmt. ¶ 12; Peony’s Stmt. ¶ 12). In 2009, Peony began providing the CBE report on its website.
(Scrappost’s Stmt. ¶ 18; Peony’s Stmt. ¶ 18).
Scrappost operates a website that provides “an online marketplace for scrap [metal]
dealers, brokers and consumers – offering a single destination to easily get scrap market news,
commodity pricing and real time offers to buy/sell scrap materials.” (Scrappost’s Stmt. ¶ 1;
Peony’s Stmt. ¶ 1). Scrappost considers itself to be a “Craigslist” type of business for the scrap
metal industry. (Scrappost’s Stmt. ¶ 2; Ex. B to Scrappost’s Stmt., at 25).
The purpose of the Scrappost business is to connect scrap metal buyers and sellers in
order to enable the direct transaction of business in one forum. (Scrappost’s Stmt. ¶ 3; Peony’s
Stmt. ¶ 3). Scrappost’s business model is “software as a subscription,” wherein Scrappost
derives revenue from the annual or monthly subscription fees it charges to users of its website.
(Scrappost’s Stmt. ¶ 4; Ex. D to Scrappost’s Stmt., at 163).
Peony’s co-presidents acknowledged that the pricing services provided by both Scrappost
and Peony are not unique and that other pricing services exist in the scrap metal industry. (Ex. G
to Scrappost’s Stmt., at 229; Ex. I to Scrappost’s Stmt., at 34).
Scrappost’s website went live in early September 2013. (Scrappost’s Stmt. ¶ 5; Peony’s
Stmt. ¶ 5). Matthew Newman runs Scrappost’s day-to-day operations. (Scrappost’s Stmt. ¶ 6;
Peony’s Stmt. ¶ 6). According to Scrappost, its employees sought to obtain new subscribers by:
(1) searching for scrap metal companies on the internet and cold-calling them or emailing them;
(2) networking with scrap traders at conventions; (3) contacting scrap traders in Scrappost owner
Michael Bassirpour’s rolodex; and (4) contacting members of trade associations. (Scrappost’s
Stmt. ¶ 7).
Newman solicits postings to the Scrappost website from subscribers by contacting
Scrappost subscribers throughout the day and asking if they wish to post materials for sale on the
Scrappost website. (Scrappost Stmt. ¶ 8; Peony Stmt. ¶ 8). In June 2015, Scrappost began to
broker scrap metal transactions directly. (Scrappost’s Stmt. ¶ 10; Peony’s Stmt. ¶ 10).
Events Giving Rise To Instant Action
According to Peony, Scrappost obtained its subscribers by having access to Peony
reports. Newman testified that during the time frame that he was soliciting subscribers, he
periodically received email attachments containing Peony reports from Mike Comisso (a former
owner of Scrappost), Mike Bassirpour (Scrappost owner) and Dale Turken (of Scrapgo). (Ex. 1
to Peony Resp., at 125). The reports were not sent on a regular basis and there is no evidence as
to how the information in the reports was used.
On October 2, 2013, Peony sent a letter to Scrappost asking Scrappost to “stop
immediately receiving the Peony report, using in any manner the Peony report or any
information contained within the report.” (Ex. 7 to Doc. #55). The letter further asked
Scrappost to stop targeting or soliciting Peony’s contributors.
In 2014, Peony created the Instant Quote (“IQ”) service. (Scrappost’s Stmt. ¶19). IQ
provided customers with the ability to directly post scrap metal for sale. (Scrappost’s Stmt. ¶
19). In order to subscribe to the IQ service, subscribers were required to sign an exclusivity
provision contained within IQ’s subscriber agreement. The exclusivity provision reads:
Subscriber agrees to list his or her materials and prices on Peony Instant Quote
exclusively. Subscriber agrees not to list any prices in a similar fashion (i.e.,
along with his or her name, company name and contact information) on any other
web sites or price reports, except on Peony.s [sic] CBE and subscriber.s [sic] own
web site, during his or her subscription to Peony.s [sic] CBE/Instant Quote.”
(Ex. L to Scrappost Br.).
Peony’s co-president, Ganru Ge, testified that Scrappost coming into existence was one
reason IQ was created, however, the main reason was to better serve Peony’s subscribers. (Ex.
G to Scrappost’s Stmt. at 194). Ganru Ge also testified that one of the reasons for the exclusivity
provision was to prevent third-parties from trying to enter into relationships with Peony
customers. (Id. at 211). Peony co-president Vivian Ge testified that Peony has never taken any
action against Peony subscribers for violating its exclusive listing provision and that Peony
would never take such action. (Scrappost’s Stmt. ¶ 21; Peony Stmt. ¶ 22).
Matthew Newman was first made aware of the exclusivity provision Peony had with its
subscribers in April 2014. (Ex. 6 to Peony’s Resp. at 12-13). Scrappost claims that its
subscribers complained that Peony called them advising that they were not allowed to advertise
on both Scrappost and Peony’s sites. (Ex. B. to Scrappost’s Stmt. at 135-36). Once made aware
of the exclusivity provision, Scrappost continued to run its business as it normally did. (Ex. 1 to
Peony Resp. at 101). Specifically, Newman testified as to the following:
Okay. After that date, did you continue soliciting price information from your
subscribers who had told you that Peony told them that they couldn’t list with
Yes, they were my subscribers. Their agreements with Peony have nothing to do
with me. Or the Scrappost.
(Id. at 134).
One such conversation took place on February 16, 2015, when Jeff Zhai, of Three Win
Metal (a subscriber of both Peony and Scrappost), initiated an email chat with Newman
regarding his listing on the Scrappost site. (Ex. 7 to Peony Resp., Feb. 16, 2015 Email Chat).
Zhai advised that he wanted to change the contact name on his Scrappost listing per Peony’s
request that he either delete all materials listed on Scrappost or change the contact name. Zhai
further stated that he was violating his agreement with Peony by listing on Scrappost. Newman
initially responded that there is nothing Peony can do and assured Zhai not to worry about it.
Zhai responded that he no longer wanted to receive calls from Peony. Newman concluded by
asking for clarity as to what Peony was advising so that he could mark down the reason for the
change in his notes.
Scrappost originally filed this action on December 17, 2014, based upon diversity of
citizenship. (Doc. #1). Scrappost filed an amended complaint on January 14, 2015. (Doc. #5,
Scrappost Am. Compl.). Peony is the only named Defendant in the complaint. Scrappost alleges
the following claims against Peony: (1) Count I - Business Defamation; (2) Count II - Injurious
Falsehood; and (3) Count III - Intentional Interference With Business Expectancy. Scrappost
seeks monetary relief for damages allegedly sustained.
Peony’s position is that Scrappost entered the marketplace in 2013 and began to mimic
Peony’s reports and target Peony’s subscriber and contributor base. Peony filed a counter-claim
on March 6, 2015. (Doc. #14, Peony Counterclaim). Scrappost is the only named Defendant.
Peony alleges the following claims against Scrappost: (1) Count I - Tortious Interference with
Contract and Prospective Economic Advantage; (2) Count II - Unfair Competition; (3) Count III
- Unjust Enrichment; and (4) Count IV - Misappropriation of Hot News. Peony seeks monetary
and injunctive relief.
Scrappost’s Motion For Summary Judgment
The parties have each filed motions for summary judgment. The parties’ motions will be
addressed in separate Opinions & Orders. The instant Opinion & Order addresses Scrappost’s
motion, which seeks dismissal of Peony’s counter-claim. (Doc. #52, Scrappost Br.). Peony
opposes the motion. (Doc. #64, Peony Resp.).
Under Fed. R. Civ. P. 56(c), summary judgment is proper “if the pleadings, depositions,
answers to interrogatories, and 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 a
judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1984), quoting FED.
R. CIV. P. 56(c).
“The party that moves for summary judgment has the burden of showing that there are no
genuine issues of material fact in the case.” LaPointe v. United Autoworkers Local 600, 8 F.3d
376, 378 (6th Cir. 1993). “The moving party may meet its burden by showing that the
nonmoving party lacks evidence to support an essential element of its case.” Barnhart v.
Pickrel, Schaeffer & Ebeling Co., 12 F.3d 1382, 1389 (6th Cir. 1993). The plaintiff must come
forth with more than a “mere scintilla of evidence” in support of his or her position in order to
survive summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). “The
court must view the evidence, all facts, and any inferences that may permissibly be drawn from
the facts in the light most favorable to the nonmoving party.” Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Peony asserts four causes of action in its counter-claim: (1) tortious interference with
contract and prospective economic advantage; (2) unfair competition; (3) unjust enrichment; and
(4) misappropriation of “hot news.” (Peony Counterclaim). Scrappost challenges each. The
Court concludes that each of Peony’s claims fail for the reasons outlined below.
Tortious Interference With Contract & Prospective Economic Advantage
In Michigan, tortious interference with a contract is a distinct cause of action from
tortious interference with a business relationship or expectancy. Health Call of Detroit v. Atrium
Home & Health Care Servs., Inc., 268 Mich. App. 83, 89 (2005). Here, Peony’s Count I
(“Tortious Interference with Contract and Prospective Economic Advantage”) appears to
conflate the two claims as one. Regardless of which claim Peony intends to bring, both claims
Tortious Interference with Contract
The elements of tortious interference with a contract under Michigan law are: “(1) the
existence of a contract, (2) a breach of the contract, and (3) an unjustified instigation of the
breach by the defendant.” Bailey v. Scoutware, LLC, 2012 WL 2711458, at *7 (E.D. Mich. July
9, 2012) (quoting Health Call of Detroit, 268 Mich. App. at 89-90). “Tortious interference with
contract exists when a third party to a contract, knowing of the contract, intentionally and
wrongfully induces a breach of the contract which results in damage to a non-breaching party.”
Fidelity Nat. Title Ins. Co. v. Title First Agency, Inc., 2008 WL 4371838, at *7 (E.D. Mich. Sept.
22, 2008) (citing Mino v. Clio School District, 255 Mich. App. 60, 78 (2003)).
Scrappost argues that Peony’s claim fails because it cannot establish an unjustified
instigation of a breach of contract and because Peony cannot establish damages resulting from
Scrappost’s alleged tortious interference. The Court agrees.
Unjustified Instigation of Breach
“‘One who alleges tortious interference with a contractual or business relationship must
allege the intentional doing of a per se wrongful act or the doing of a lawful act with malice and
unjustified in law for the purpose of invading the contractual rights or business relationship of
another.’” CMI Int’l., Inc. v. Internet Int’l. Corp., 251 Mich. App. 125, 131 (2002) (quoting
Feldman v. Green, 138 Mich. App. 360, 378 (1984)). “A wrongful act per se is an act that is
inherently wrongful or an act that can never be justified under any circumstances.” Prysak v.
R.L. Polk Co., 193 Mich. App. 1, 12-13 (1992).
“If the defendant’s conduct was not wrongful per se, the plaintiff must demonstrate
specific, affirmative acts that corroborate the unlawful purpose of the interference.” CMI Int’l.,
251 Mich. App. at 131. “Mere interference for the purpose of competition is not enough.”
Trepel v. Pontiac Osteopathic Hosp., 135 Mich. App. 361, 377 (1984). Rather, the defendant
must have done something illegal, unethical, or fraudulent. Dalley v. Dykema Gossett, PLLC,
287 Mich. App. 296, 324 (2010).
Here, Peony argues that Scrappost tortiously interfered with Peony’s contracts by
soliciting “Peony contributors who had entered into the exclusive listing agreement to list
information on the Scrappost website with knowledge of the exclusivity provision and telling
them to ignore the exclusivity agreements.” (Peony Resp. at 5). As evidence of Scrappost’s
tortious interference, Peony points to the transcript of the February 16, 2015 email chat between
Matthew Newman, of Scrappost, and Jeff Zhai, of Three Win Metal. Peony’s argument is
without merit for several reasons.
First, the February 16, 2015 email chat does nothing to bolster Peony’s point. Instead,
the chat illustrates that Three Win Metal was already listing on both sites and was therefore
already in breach of the exclusivity provision at the time that Zhai reached out to Newman.
This brings the Court to its next point: Peony’s entire argument presumes that it is
Scrappost that instigated the breach of the exclusivity provision. Most fatal to Peony’s claim,
however, is the undisputed fact that Peony created its IQ service and the exclusivity provision
months after Scrappost had gone live and after Scrappost had acquired subscribers. Even
Peony’s own co-president testified that Scrappost’s coming into existence was one of the reasons
why Peony IQ was created. (Ex. G to Pl.’s Br., at 194). In essence, the breach of contract that
Peony complains of is a result of Peony’s own doing.
Further, Peony has not pointed to any admissible evidence1 establishing that Scrappost
did anything that was illegal, unethical or fraudulent to induce or coerce Peony subscribers to
breach their exclusivity provision with Peony. Scrappost’s continued solicitation of its
subscribers, without more, is not illegal, unethical or fraudulent. As such, there is no evidence
that Scrappost engaged in any actions that could be construed as wrongful per se or as lawful
acts undertaken with malice.
Even if Peony could establish tortious interference, Peony fails to establish that it has
suffered damages as a result of Scrappost’s interference. Peony advances only one argument in
support of its claim that it has been damaged as a result of Scrappost: “[a] review of Peony’s
financial records shows a decrease in revenue from year to year after Scrappost entered the
marketplace.” (Peony’s Resp. at 7). This argument is not supported by any substantive analysis
and is without merit.
First, there is absolutely no evidence that Peony’s decrease in revenue is a result of
To the extent that Peony relies upon exhibit 10 (which is identified as “Peony notes of
conversations with contributors”) as evidence of Scrappost listing pricing information without
permission, it may not do so. These unsworn, handwritten notes are hearsay and Peony has not
argued that this exhibit satisfies any exception to the general proscription against the admission
of hearsay. Furthermore, even if such an exception applied, these unsworn handwritten notes are
still inadmissible as they are not properly authenticated. The Sixth Circuit has long held that to
be considered in support of a motion for summary judgment, evidence must be properly
authenticated. See e.g., David A. Flynn, Inc. v. General Motors Acceptances Corp., 345 Fed.
App’x 974, 978-79 (6th Cir. 2009). The Federal Rules of Evidence provide that “[t]he
requirement of authentication or identification as a condition precedent to admissibility is
satisfied by evidence sufficient to support a finding that the matter in question is what its
proponent claims.” Fed. R. Civ. P. 901(a). Here, Peony has submitted no such evidence.
Scrappost’s alleged misconduct. It is undisputed that Peony and Scrappost are not the only
companies in the scrap metal industry publishing price information. The mere fact that Peony’s
revenue has decreased since Scrappost went live in 2013 is coincidental, at best. Even Peony’s
co-president, Ganru Ge, testified that the scrap metal market has become less robust and that he
did not know why there was a decline in Peony’s subscription revenue.
Nor has Peony pointed to any evidence establishing that it has lost subscribers as a result
of Scrappost’s conduct. In fact, Peony has admitted that it will not enforce the exclusivity
provision against its subscribers.
Tortious Interference With Economic Advantage
To prevail on a tortious interference with economic advantage claim (i.e. business
relationship or expectancy), Peony must establish that: “(1) the existence of a valid business
relationship or expectancy that is not necessarily predicated on an enforceable contract, (2)
knowledge of the relationship or expectancy on the part of the defendant interferer, (3) an
intentional inference by the defendant inducing or causing a breach or termination of the
relationship or expectancy, and (4) resulting damage to the party whose relationship or
expectancy was disrupted.” Health Call of Detroit v. Atrium Home & Health Care Services,
Inc., 268 Mich. App. 83, 89-90 (Mich. Ct. App. 2005) (internal citations omitted).
Here, Scrappost argues that Peony’s claim fails for the same reasons its tortious
interference with a contract claim fails: Peony is unable to establish that Scrappost induced or
caused a breach or termination and Peony is unable to establish resulting damage. The Court
Intentional Interference Inducing Breach
Peony’s argument–that Scrappost intentionally interfered and induced a breach of the
exclusivity provision by soliciting Peony IQ subscribers–is without merit for the same reasons
advanced above. Namely, Peony has not established that Scrappost induced a breach of Peony’s
contracts with its IQ subscribers.
Peony’s claim also fails because Peony has not established damages resulting from
Scrappost’s alleged interference. Again, as explained above, the mere fact that Peony’s revenues
decreased after Scrappost entered the marketplace is insufficient to establish that Peony has been
damaged as a result of Scrappost. This argument is speculative and coincidental, at best.
In Michigan, unfair competition “prohibits unfair and unethical trade practices that are
harmful to one’s competitors or to the general public.” ATCO Indus., Ins. v. Sentek Corp., 2003
WL 21582962, at *3 (Mich. Ct. App. July 10, 2003). Unfair competition “ordinarily consists in
the simulation by one person, for the purpose of deceiving the public, of the name, symbols, or
devices employed by a business rival, or the substitution of the goods or wares and thereby
obtaining for himself the benefits properly belonging to his competitor.” Clipper Belt Lacer Co.
v. Detroit Belt Lacer Co., 223 Mich. 399, 406 (1923).
The “gist of [an] ... unfair competition case ... is that the public is so misled that the
plaintiff loses some trade by reason of the defendant’s deception.” Revlon, Inc. v. Regal
Pharmacy, Inc., 29 F.R.D. 169, 174 (E.D. Mich. 1961). “Each unfair competition case ... is
based upon the principles of common business integrity. The term unfair competition may
encompass any conduct that is fraudulent or deceptive and tends to mislead the public.” ATCO,
2003 WL 21582962, at *3 (internal quotation marks and citation omitted).
Here, Peony claims that Scrappost’s conduct has violated fair business practices.
Specifically, Peony argues that:
The record facts show that Scrappost entered a business after having its founders
subscribe to Peony’s publications for years and that when it learned of the
exclusive agreement between Peony and its contributors it chose to simply ignore
those agreements. This conduct is not the type of fair competition contemplated
by Michigan law and gives rise to an unfair competition claim.”
(Peony’s Resp. at 8). First, the Court notes that Peony’s argument is lacking in substantive
analysis. Peony has not cited any authority that would support a finding of unfair competition
under the facts alleged here.
Moreover, in making this argument, Peony mischaracterizes the facts. At the time that
Scrappost entered the marketplace, an exclusive agreement between Peony and its contributors
did not exist. In fact, the record establishes that Peony created the exclusivity provision, at least
in part, as a response to Scrappost. As such, Peony has not established any wrongful
interference or inducement on Scrappost’s part.
Nor has Peony pointed to any evidence establishing that Scrappost engaged in deceptive
or fraudulent activity resulting in harm to the general public or Peony. In fact, Peony fails to
identify any harm that it suffered as a result of Scrappost’s alleged misconduct. As such,
Peony’s unfair competition claim fails.
In order to sustain an unjust enrichment claim under Michigan law, a plaintiff must
establish: “(1) the receipt of a benefit by the defendant from the plaintiff and (2) and inequity
resulting to the plaintiff because of the retention of the benefit by the defendant.” Morris Pumps
v. Centerline Piping, Inc., 273 Mich. App. 187, 195 (2006); see also First Presbyterian Church
of Ypsilanti v. H.A. Howell Pipe Organs, Inc., 2010 WL 419972, at *9 (E.D. Mich. Feb. 1,
2010). “Whether a claim for unjust enrichment can be maintained is a question of law.” Morris
Pumps, 273 Mich. App. at 193.
Here, Peony’s unjust enrichment claim is premised upon the fact that Scrappost had
access to Peony’s CBE and IQ reports. With such access, Peony argues that “a jury could
conclude that Scrappost then sought to obtain price listings from the companies identified in the
Peony reports or simply took the pricing information from Peony’s reports.” (Peony’s Resp. at
9). Peony concludes that “Scrappost got a head start by having access to the information
published by Peony.” (Id). Peony’s argument is not persuasive.
While it is true that Scrappost had occasionally received Peony’s reports, there is no
evidence establishing how Scrappost used the information contained in the reports. Namely,
there is no evidence that Scrappost copied the price information from Peony’s reports. Nor is
there any evidence that Scrappost obtained contributors by having access to Peony’s reports. To
this end, Scrappost correctly points out that the identities of Peony’s subscribers were not
confidential. (See Ex. M to Doc. # 52). Peony has therefore failed to establish any benefit
conferred by Scrappost as a result of Peony’s efforts. Additionally, Peony has failed to establish
how it has suffered an inequity as a result of any alleged benefit. For these reasons, Peony’s
unjust enrichment claim fails.
Misappropriation of Hot News
In Count IV of its counter-claim, Peony asserts a claim for “Misappropriation of Hot
News.” At the outset, the Court notes that it has located no authority to support a “hot news”
misappropriation claim in Michigan. Peony similarly fails to cite a single case indicating that
Michigan courts have adopted “hot news” misappropriation causes of action. The Court could
therefore dismiss Peony’s claim on this basis. However, even assuming that Peony has alleged a
viable claim under Michigan law, Peony’s misappropriation claim still fails.
In support of its misappropriation claim, Peony cites the Second Circuit’s decision in
NBA v. Motorola, Inc., 105 F.3d 841, 845 (2nd Cir. 1997), which sets forth the “hot news”
doctrine’s five-part test: “(i) a plaintiff generates or gathers information at a case; (ii) the
information is time-sensitive; (iii) a defendant’s use of the information constitutes free riding on
the plaintiff’s efforts; (iv) the defendant is in direct competition with a product or service offered
by the plaintiffs; (v) the ability of other parties to free-ride on the efforts of the plaintiff or others
would so reduce the incentive to produce the product or service that its existence or quality
would be substantially threatened.” Id.
Measured against the five factors outlined in NBA, Peony concludes that its “hot news
claim” withstands summary judgment because: (1) Peony gathers price information at a cost; (2)
the price information is time-sensitive; (3) Scrappost appears to have obtained price information
from Peony’s reports because Scrappost did not have permission from companies to list their
pricing information; (4) Peony and Scrappost are in direct competition; and (5) allowing
Scrappost to “free-ride” on the efforts of Peony would take away Peony’s incentive to produce
its report. (Peony Resp. at 10).
At the heart of Peony’s claim is the allegation that Scrappost copied price information
from Peony’s publications and misappropriated this information for its own commercial gain.
First, Peony disregards the fact that it is Scrappost’s subscribers, not Scrappost itself, that list
price information on the Scrappost website. And to the extent that Peony suggests that Scrappost
must have copied price information from Peony reports because the information on Scrappost’s
website was listed without the consent of Peony’s subscribers, this argument is not supported by
any admissible evidence.2 In sum, Peony has not offered evidence to support the allegation that
Scrappost was “free-riding” on the efforts of Peony.
Second, as Scrappost persuasively points out, the data allegedly misappropriated by
Scrappost was already published by the time Scrappost obtained it. As such, the information that
Scrappost obtained was stale – not time-sensitive. Third, Peony has not established how it was
damaged as a result of Scrappost’s alleged “free-riding.”
For the foregoing reasons, the Court shall GRANT Scrappost’s Motion for Summary
Judgment as to Peony’s counter-claim.
IT IS SO ORDERED.
s/Sean F. Cox
Sean F. Cox
United States District Judge
Dated: February 22, 2017
I hereby certify that a copy of the foregoing document was served upon counsel of record on
February 22, 2017, by electronic and/or ordinary mail.
Peony relies on the unsworn, handwritten notes of a Peony employee detailing
conversations that the employee allegedly had with Peony subscribers about the price
information on Scrappost’s site. These unsworn notes have not been properly authenticated.
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