SMART VENT PRODUCTS, INC. v. CRAWL SPACE DOOR SYSTEM INC.

Filing 165

MEMORANDUM OPINION. Signed by Judge Jerome B. Simandle on 3/11/2019. (tf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

SMART VENT PRODUCTS, INC.

HONORABLE JEROME B. SIMANDLE

Plaintiff,
Civil Action
No. 13-5691 (JBS/KMW)

v.
CRAWL SPACE DOOR SYSTEM, INC.

MEMORANDUM OPINION
Defendant.

SIMANDLE, District Judge:
1.
limine

This matter comes before the Court by way of a motion in
filed

(hereinafter,

by

Defendant

“Defendant”),

Crawl
in

order

Space

Door

System,

to

clarify

which

Inc.
issues

remain to be decided at trial. (See Def.’s Mot. [Docket Item 154].)1
Plaintiff Smart Vent Inc. (hereinafter, “Plaintiff”) opposes the
present motion and suggests its list of issues for trial. (See
Pl.’s Opp’n [Docket Item 155].) For the reasons that follow,
Defendant’s present motion will be denied and the remaining issues
for trial will be identified herein.
2.

Factual and Procedural History. The Court thoroughly

described the relevant background of this case in Smart Vent Prod.,
Inc. v. Crawl Space Door Sys., Inc., No. 13-5691 (JBS/KMW), 2016
WL 4408818, at *2-4 (D.N.J. Aug. 16, 2016), and need not repeat it

1

This motion is perhaps more accurately understood as a motion
for clarification with regards to the Court’s prior orders granting
partial summary judgment and partial judgment on the pleadings.

here. As relevant to the present motion, (1) on August 16, 2016,
with respect to Defendant’s motion for judgment on the pleadings,
the Court granted the motion to the extent it concerned Plaintiff’s
allegations of FEMA and NFIP compliance and patent protection, and
denied it to the extent it concerned Plaintiff’s allegations of
TB-1 compliance and trademark-related issues, (see Opinion [Docket
Item 94]; Order [Docket Item 95]); (2) on March 27, 2017, the Court
denied Plaintiff’s motion for reconsideration, (see Memorandum
Opinion [Docket Item 114]; Order [Docket Item 115]); (3) and on
November 1, 2017, the Court granted Plaintiff’s motion for partial
summary judgment on its unfair competition claims and for a
permanent

injunction.

(See

Opinion

[Docket

Item

119];

Order

[Docket Item 120].) On July 19, 2018, Magistrate Judge Williams
granted Defendant leave to file the present motion “to limit the
issues for trial,” after which Judge Williams shall set a date for
a Final Pretrial Conference in this case. (See Text Order [Docket
Item 148], July 18, 2018; Order [Docket Item 156], Aug. 14, 2018.)
3.

Defendant’s

Motion.

Defendant

requests

clarification

with regards to two separate issues. First, Defendant asserts that
the Court has dismissed Plaintiff’s unfair competition claims, as
part of Counts I, II, and III of the Amended Complaint, in their
entirety, with prejudice; alternatively, Defendant asserts that
these claims are precluded by the doctrines of the law of the case
or of judicial estoppel. (Def.’s Br. [Docket Item 154-1], 7-14.)

2

Second, Defendant asserts that the patent portions of Plaintiff’s
unfair competition claims should be dismissed because Plaintiff’s
allegations in the Amended Complaint are insufficient under Rule
8, Fed. R. Civ. P., and Iqbal to support an inference of bad faith.
(Id. at 16-17.)
4.

Plaintiff responds that whether Defendant overstated the

net open area of its vents is an undecided issue of liability on
Plaintiff’s existing federal and state unfair competition claims
(Counts I, II, and III) and its negligent misrepresentation claim
(Count IV). (Pl.’s Opp’n [Docket Item 155], 4-9.) Plaintiff further
asserts that the doctrines of the law of the case and judicial
estoppel are inapplicable in these circumstances. (Id. at 9-12.)
Finally, Plaintiff opposes Defendant’s request to dismiss the
patent protection portion of Plaintiff’s unfair competition claims
on the basis that the claims are sufficiently pled in the Amended
Complaint and that the present motion, seeking dispositive relief,
is not the appropriate vehicle for dismissing such claims. (Id. at
15-18.)2

2

Plaintiff also asserts that Defendant is in contempt of the
permanent injunction entered against it by this Court, and that
Plaintiff should therefore be allowed to introduce evidence of
this alleged contempt at trial. (Pl.’s Opp’n [Docket Item 155],
12-15.) However, an injunction is an equitable remedy, the breach
of which can only be determined by the Court, not by a jury.
Plaintiff is free to file a motion to enforce the present
injunction, but such an issue would not be presented to the jury
in this case. Insofar as Plaintiff intended this section of its
brief to serve as a request to have this matter of contempt or
3

5.

The Court shall first address Defendant’s arguments that

the Court has previously dismissed Plaintiff’s unfair competition
claims. (Def.’s Br. [Docket Item 154-1], 7-14.) Defendant contends
that by virtue of the Court’s prior rulings regarding Defendant’s
statements about their flood vents’ purported FEMA- and NFIPcompliance, Plaintiff is not permitted to present any evidence
regarding

Defendant’s

allegedly

false

or

misleading

claims

regarding Defendant’s vents’ net open area through which flood
waters may pass or the amount of coverage area in the enclosed
crawl space that its vents are capable of servicing. (Id. at 810.) Plaintiff responds that, while the Court has addressed and
rejected Plaintiff’s claims with regard to Defendant’s alleged
misstatements of FEMA- and NFIP-compliance, the Court has not
addressed Plaintiff’s broader allegation that Defendant made false
or misleading statements regarding the net open area of its flood
vents and the amount of coverage area that its vents are capable
of servicing; Plaintiff further contends that none of the Court’s
prior rulings have addressed any of the alleged misrepresentations

violation of the permanent injunction decided by the jury, the
request shall be denied. In other words, the Court denies
Plaintiff’s request to present a cause of action to the jury for
contempt or for enforcement of the permanent injunction. The Court
does not determine, because it has not been presented in a motion
and identified specifically by either party, whether particular
evidence relevant to breach of the permanent injunction may be
admissible as relevant to the trial of the causes of action that
remain.
4

related to compliance with industry standards such as those of the
American Society of Civil Engineers (“ASCE”) or the International
Building Code (“IBC”). (Pl.’s Opp’n [Docket Item 155], 5-8.) To
support its position, Plaintiff cites to the Court’s Opinion of
August 16, 2016, which clearly states that Plaintiff’s “unfair
competition claims (under the Lanham Act, New Jersey law, and the
common law) will be dismissed with prejudice” only to the extent
that

they

advertised

assert
its

that

product

Defendant
as

‘FEMA’

“falsely
and/or

or

misleadingly

‘NFIP’

compliant.”

(Opinion [Docket Item 94], Aug. 16, 2016, 17.)3 Plaintiff further
directs the Court’s attention to the Court’s Memorandum Opinion of
March 27, 2017, denying Plaintiff’s motion for reconsideration, in
which

the

Defendant

Court

states

improperly

that

Plaintiff’s

inflates

the

net

allegations
open

area

of

“that
its

vents . . . does not relate to Defendant’s compliance with 44
C.F.R. § 60.3(c)(5),” which was the issue adjudicated in the

3

This result is further emphasized by the Court’s comment in
footnote 8 of the Opinion, which states that at that Defendant
“does not, in the context of the pending motion, challenge
[Plaintiff’s] unfair competition claims to the extent they concern
the net [open] area requirements.” (Opinion [Docket Item 94], Aug.
16, 2016, 13 n.8 (citing Def.’s Br. [Docket Item 34-1]).) The “net
open area” requirement encompasses the coverage area capacity
since the latter depends upon the former by an algorithmic formula.
Thus, the issue whether Defendant has misrepresented its vents’
net open area necessarily includes whether Defendant has
misrepresented the coverage area that can be serviced by its vents.
5

Court’s August 16, 2016 Opinion. (Memorandum Opinion [Docket Item
114], 5-6.)
6.

The Court agrees with Plaintiff. Simply stated, the

Court has never dismissed or granted summary judgment as to
Plaintiff’s

claims

regarding

unfair

competition

or

negligent

misrepresentation as they pertain to Plaintiff’s allegations that
Defendant made false or misleading statements about the net open
area of Defendant’s vents, the coverage area that Defendant’s vents
can service, or Defendant’s vents’ compliance with professional
engineering standards, such as those published by the ASCE or the
IBC. Further, the Court has not been called upon to address
Plaintiff’s

allegations

of

false

statements

or

misstatements

concerning the patent status of Defendant’s vents.
7.

As the Court has not previously adjudicated the above-

described issues, Defendant’s reliance upon the doctrine of law of
the case is similarly unavailing. The Third Circuit has stated
that
The law of the case doctrine “posits that when
a court decides upon a rule of law, that
decision should continue to govern the same
issues in subsequent stages in the same case.”
Christianson v. Colt Indus. Operating Corp.,
486 U.S. 800, 816, [] (1988) (quoting Arizona
v. California, 460 U.S. 605, 618, [] (1983));
see also ACLU v. Mukasey, 534 F.3d 181, 187
(3d Cir. 2008). “Law of the case rules have
developed to maintain consistency and avoid
reconsideration of matters once decided during
the course of a single continuing lawsuit.”
Pub. Interest Research Group of N.J., Inc. v.

6

Magnesium Elektron, Inc., 123 F.3d 111, 116
(3d Cir. 1997) (quoting 18 Charles A. Wright,
Arthur R. Miller & Edward Cooper, Federal
Practice and Procedure § 4478, at 788 (1981));
see also Casey v. Planned Parenthood of Se.
Pa., 14 F.3d 848, 856 (3d Cir. 1994).
Daramy v. Attorney Gen. of U.S., 365 F. App’x 351, 354 (3d Cir.
2010). In this instance, the Court has not decided on any rule of
law pertaining to Plaintiff’s allegation that Defendant made false
or misleading statements regarding the net open area of its flood
vents and the amount of coverage area that its vents are capable
of servicing, or pertaining to Plaintiff’s additional allegation
that Defendant made false or misleading statements related to
Defendant’s vents’ compliance with industry standards such as
those of the American Society of Civil Engineers (“ASCE”) or the
International Building Code (“IBC”). Therefore, there is no prior
decision which should continue to govern in subsequent stages of
this case, except as it pertains to claims regarding Defendant’s
FEMA- or NFIP-compliance, as described, supra. That Defendant’s
vents have been determined to not be non-compliant with NFIP and
FEMA requirements hardly forecloses the claims that Defendant has
made

the

other

actionable

false

or

negligent

misstatements

alleged.
8.

Insofar as Defendant argues that Plaintiff’s net open

area claims should be barred by the doctrine of judicial estoppel,
the Court notes that in order for judicial estoppel to apply, the

7

party who is to be estopped must have succeeded in maintaining a
contrary legal position in a prior proceeding. New Hampshire v.
Maine, 532 U.S. 742, 749 (2001). Here, in fact, Plaintiff failed
in its prior arguments and is not estopped from asserting different
arguments now. Defendant has failed to direct the Court’s attention
to any instance where Plaintiff has succeeded in arguing a position
that is contrary to their current one regarding net open area.
(See generally Def.’s Br. [Docket Item 154-1].) The doctrine of
judicial estoppel does not require a party who has lost an argument
over a prior legal position to continue to argue for that losing
position

in

future

proceedings.

Therefore,

this

portion

of

Defendant’s motion will be denied.
9.
Court

With respect to Defendant’s further request that the
dismiss

the

patent

portions

of

Plaintiff’s

unfair

competition claims for failure to sufficiently allege bad faith,
the

Court

agrees

with

the

Plaintiff’s

position

that

such

a

dismissal is inappropriate in the context of the present motion in
limine (or motion for clarification). (Pl.’s Opp’n [Docket Item
155], 15-18.) Defendant’s have not directed the Court’s attention
to any prior Order which dismissed these claims or awarded summary
judgment on them in Defendant’s favor. (See generally Def.’s Br.
[Docket Item 154-1].) Nor was this request filed as a formal
dispositive motion. In addition, the Court finds that Plaintiff’s
Amended Complaint contains sufficient factual allegations, if

8

proven, to support an inference of bad faith on the part of
Defendant with respect to the patent portions of Plaintiff’s unfair
competition claims. Paragraphs 71-75 of the Amended Complaint
together allege that William G. Sykes is a licensed patent attorney
who understands the difference between a design patent and a
utility

patent,

that

Mr.

Sykes

serves

as

the

president

of

Defendant, and that he personally prepared an advertisement that
Plaintiff alleges misstates the type of patent that Defendant had
received. (Amended Complaint [Docket Item 96], ¶¶ 71-75; Exhibit
E [Docket Item 96-5].) These allegations, if proven, are sufficient
for a factfinder to infer that Defendant acted in bad faith in
making its patent claim. Therefore, this portion of Defendant’s
present motion will also be denied.
10.

In light of these determinations, it is this Court’s

understanding that the issues remaining for trial consist of:
a. The aspects of Plaintiff’s Counts I, II, and III4
alleging Defendant is liable for unfair competition
arising from Defendant’s alleged false or misleading
statements regarding Defendant’s vents’ net open area
and coverage area, and those vents’ compliance with

4

The Court previously determined that the operative tests for
liability for unfair competition under the Lanham Act, the N.J.
Unfair Competition Act, and New Jersey common law (Counts I, II,
and III, respectively) are the same and that the Lanham Act
standard is applied here. (See Opinion [Docket Item 94], Aug. 16,
2018, 14-15 n.10.)
9

industry standards other than NFIP and FEMA, as well
as Defendant’s alleged false or misleading statements
regarding the patent status of Defendant’s vents;
b. The aspects of Plaintiff’s Count IV alleging Defendant
is liable for negligent misrepresentation concerning
the matters in (a), above;
c. Plaintiff’s

Count

V,

asserting

that

Defendant

liable for misuse of Plaintiff’s trademark;
d. Defendant’s counterclaims.
11.

An accompanying Order will be entered.

March 11, 2019
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
U.S. District Judge

10

is