Bobrick Washroom Equipment, Inc. v Scranton Products, Inc.

Filing 355

MEMORANDUM OPINION - For the foregoing reasons, the Court will deny SP's Motion in its entirety. A separate Order follows.Signed by Honorable Robert D. Mariani on 5/16/17. (jfg)

THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

BOBRICK WASHROOM
EQUIPMENT, INC.
Plaintiff,

v.

3: 14-CV-00853
(JUDGE MARIANI)

SCRANTON PRODUCTS, INC.
Defendant.
MEMORANDUM OPINION
Presently before the Court is Defendant Scranton Products, Inc.'s (liSP" or "Scranton
Products") Partial Motion to Dismiss with Prejudice. (Doc. 324). For the reasons that
follow, SP's Motion will be denied in its entirety.
I.

INTRODUCTION AND PROCEDURAL HISTORY

In May 2014 SP filed a complaint against Bobrick Washroom Equipment Inc. ("Bobrick")
alleging, among other things, that Bobrick "carefully orchestrated a campaign to scare
architects, product specifiers, procurement representatives, building owners, and others in
the construction industry into believing that Scranton Products' toilet partitions are fire
hazards, are unsafe and pose health and safety risks if used in building projects across the
country." (Doc. 1at 1f 1). SP asserted two claims under the Lanham Act, 15 U.S.C. §
1125(a), alleging "literally false advertising," and "deceptive and misleading advertising" and
sought both monetary damages and equitable relief. (ld. at mr 61-76). SP also brought
claims under Pennsylvania law, alleging common law unfair competition, commercial

disparagement, and tortious interference with existing or prospective business relations.

(Id. at mr 77-92). Bobrick filed its Answer on June 25, 2014. (Doc. 21).
On November 10, 2016, Bobrick filed a Motion for Leave to file an Amended Answer
with Counterclaims. 1 (Doc. 213). The day before Bobrick's Motion was fully briefed SP filed
a Motion for Voluntary Dismissal. (Doc. 233). The Court subsequently granted both
Motions. (Docs. 240, 287). In the Complaint, Bobrick asserts a claim against SP under the
Lanham Act, aclaim for wrongful use of civil proceedings under Pennsylvania's Dragonetti
Act, as well as common law unfair cornpetition and abuse of process claims. (Doc. 318).
On April 3, 2017, SP filed a Motion to Dismiss Bobrick's common law unfair competition and
abuse of process claims, and also sought dismissal of Bobrick's request for punitive
damages. (Doc. 324). The Court held oral argument on SP's Motion on May 12,2017.
II.

STATEMENT OF FACTS

Bobrick's Complaint alleges the following facts, which the Court accepts as true for the
purpose of this Motion:
A. Bobrick's Lanham Act and Unfair Competition Claims

Bobrick's Lanham Act and unfair competition claims "arise from Scranton Products
systematic misrepresentation of its own products in the marketplace." (Doc. 318, at ~ 2).
Specifically, SP "has falsely represented thousands of its high density polyethylene
('HDPE') toilet partitions sold for installation in schools and other public and private buildings
1 For

ease of reference, the Court will refer to Bobrick's Amended Answer with Counterclaims as the
"Complaint."
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as being compliant with applicable fire, life safety, and building code requirements." (ld.).

More specifically, SP has falsely represented that its HOPE toilet partitions comply with the
requirements of the NFPA 286 room-corner test ("NFPA 286"), a fire performance test
promulgated by the National Fire Protection Association. (ld. at ~ 3).
According to the Complaint, SP's claims that certain of its HOPE toilet partitions comply
with NFPA 286 are false for three reasons:
(a) Scranton Products, acting through Western Fire Center, Inc. ('Western Fire'), the
testing laboratory that conducted NFPA 286 testing on its behalf, improperly modified
and manipulated the test methodology to produce a favorable result, thereby
invalidating the test;
(b) Neither Scranton Products nor Western Fire has any primary documentation or
actual knowledge of the chemical composition of the Scranton Products HOPE
materials that were actually tested, nor were any of the tested materials preserved
by Scranton Products or Western Fire, thereby making it impossible for Scranton P
roducts to show that any of the HOPE toilet partitions it has sold as NFPA 286­
compliant are made of the same material that Scranton Products actually tested
under NFPA 286; and
(c) Scranton Products' own manufacturing records show that the chemical composition
and physical structure of the HOPE toilet partitions that Scranton Products has sold
as NFPA 286-compliant are substantially different from the chemical composition
and physical structure of the HOPE materials that Scranton Products claims to have
successfully tested under NFPA 286.
(Id. at ~ 4(a)-(c)).
SP has alleged, both in the marketplace and throughout this litigation, that its HOPE
toilet partition materials have passed the unmodified NFPA 286 test on two separate
occasions: (1) on May 3,2011 (the "2011 Test"); and (2) on August 7,2013 (the "2013

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Test").2 (Id. at ~ 12). The NFPA 286 testing protocols require "the tested material to be
attached to the walls of the test chamber in the manner that best simulates actual
installation conditions in the field." (Id. at ~ 14). However, in both the 2011 Test and 2013
Test, Western Fire, with SP's knowledge and authorization, attached SP's HOPE material
as an interior finish to the walls of the test chamber "using metal 'furring strips' (also called
'hat channels') with screws, which allowed the HOPE material to be affixed to the chamber
wall while still being slightly displaced from the chamber wall, creating a one-inch air cavity."
(Id. at ~ 15). Rather than placing the furring strips vertically "which would have more

appropriately simulated actual installation conditions by allowing heat, 'name, and hot gases
to rise behind the HOPE panel as well as in front of the panel," Western Fire placed the
furring strips horizontally. (Id. at ~ 16). When installed horizontally, "the furring strips
effectively served as a 'fire-stopping, fire blocking, or draft-stopping mechanism that blocked
or restricted heat, flame, and hot gases from reaching the full height of the side of the HOPE
panel that faced the test chamber well."3 (Id.).

the 2011 Test and the 2013 Test were performed on behalf of Scranton Products, and with the
attendance and participation of one or more Scranton Products employees" by Western Fire. (Doc. 318, at
~ 13).
2 "80th

3 Howard Stacy, a former Western Fire employee who was involved in various NFPA 286 tests carried
out on behalf of SP testified as follows:

I've had a great deal of experience with the NFPA 286 standard and-as I've been experienced in
developing test standards. This particular standard did not seem to me to be well suited to test a
toilet partition because of the-well, it just didn't seem to represent a realistic fire-potential fire
exposure that it might see. So I put a test together where we had a partial-we just had the comer
populated, and we had steel hat channels that were placed vertically so we would simulate
potential for the fire to get underneath the partition and burn both sides. And, in my view, there are
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The text of the NFPA 286 standards include a section entitled "Specimen Mounting."
(ld. at ~ 18). That section provides, in relevant part:

5.1.1

Test specimens shall be mounted on a framing or support system that is
comparable to that intended for their actual field use, using substrates,
backing materials, insulation, or air gaps as appropriate to the intended
application, and representing a typical value of thermal resistant for the wall
system....

5.1.7

A detailed description of the mounting method used shall be given in the test
report.

5.1.8

If a special mounting technique is used in order to improve the physical
behavior of the specimen during the test, it shall be clearly stated in the
report.

(/d.). According to the Complaint, the horizontal placement of the metal furring strips to

create afire block "was an intentional manipulation by Scranton Products of the NFPA 286
test methodology to produce a more favorable result by enabling Scranton Products' HOPE
material to barely pass the modified NFPA 286 test." (ld. at ~ 19). Indeed, "[m]ounting the
HOPE toilet partition using non-combustible, horizontal metal furring strips to create afire
block below the resulting air gap was not 'appropriate to the intended application,' because
a HOPE toilet partition is not mounted in the field in a manner that blocks access by heat,
flame, and hot gases to one side of the panel." (ld. at ~ 20). In addition, Western Fire did
two things. I thought that was a more adverse condition than testing just the surface of the product
because the fire actually-the burner was actually underneath the 55-inch tall partition, that's the
only way I could think of that would get the partition burning in a manner that I thought was
representative of real life, so we ran those tests. Now, NFPA 286 provides for I think-I don't have
the document in front of me, but . . . it's the laboratory's responsibility to test the product in a
manner that most closely represents its actually installation.
(Doc. 318, at1J 17).
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not include in its test reports for the 2011 Test and 2013 Test a "'detailed description of the

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mounting method used' that revealed how it installed the horizontal furring strips, and,

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although Western Fire-at Scranton Products' behest-used a 'special mounting technique

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· .. in order to improve the physical behavior of the specimen during the test,' it did not so

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state in any form in its test report." (ld. at 1f 21). Accordingly, this "modification and
manipulation of the NFPA 286 test methodology rendered the results inaccurate, invalidated
Scranton Products' NFPA 286 testing for all purposes, and made it improper for Scranton
Products to rely on the doctored test results to represent to the public ... that any of its
HOPE toilet partitions are NFPA 286-compliant based on an unmodified NFPA 286 test."
(ld. at 1f 23).
SP has alleged, both in the marketplace and this litigation, that two different formulations
of its HOPE toilet partition material have passed the unmodi'fied NFPA 286 test. (ld. at 1f
24), SP, either through its parent company CPG International, or its sister company VYCOnl,
"produced both formulations of HOPE material in-house, using the company's own extrusion
eqUipment, for NFPA 286 testing at Western Fire." (ld. at 1f 25). Oespite the in-house
production of the materials at issue, SP "has never produced any primary documentationsuch as awork order or bill of materials listing the ingredients and their weightsestablishing the chemical composition of the HOPE materials actually used in the 2011 Test

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or the 2013 Test."4 (Id. at 1f 26). According to Bobrick, SP "never maintained primary

documentation of the chemical composition of the HOPE materials tested in May 2011 and
August 2013, or it destroyed any such documentation when it was already contemplating
litigation against Bobrick over the compliance of Scranton Products' toilet partitions with
NFPA 286."5 (ld. at 1f 29). Therefore, "there is no Scranton Products officer or employee
who has actual knowledge of the chemical composition of the HOPE material used in the
2011 Test or the 2013 Test." (ld. at 1f 31). "Because authentic and credible evidence of the
chemical composition of the tested HOPE material does not exist, Scranton Products has no

4 On September 15,2015, this Court ordered SP to produce, among other things, "contemporaneous
production documents that demonstrate the composition of the materials tested on May 3, 2011 and August
7,2013 in at least the same level of detail that is contained in the 'work order' documents submitted to the
Court on August 17, 2015-that is, showing the specific ingredients and their weights." (Doc. 318, at 1f 27).
Through its former counsel, SP admitted (by letter dated March 9, 2016) "that it was unable to comply with
the quoted portion of the Court's order, stating, 'Scranton Products does not have 'contemporaneous
production documents' for the HOPE toilet materials subjected to full or modified NFPA 286 fire
performance test akin to the 'work order' documentation submitted to the Court on August 17, 2015,
because these documents were not generated for the 'prototype' HOPE materials produced for the purpose
of fire testing.'" (ld. at 1f 28).
5 Bobrick notes that SP "has stated that it is relying solely on certain spreadsheets as proof of the
chemical composition of the HOPE materials used in the 2011 Test and 2013 Test" and that the
"spreadsheets in question are of unknown authorship, date, and provenance, contain manually entered
data of unknown origin, and lack any indicia of authenticity or reliability." (Doc. 318, at 1f 30). In addition,
Western Fire was never informed of the chemical composition of the HOPE materials used in the 2011 Test
or the 2013 Test. (Id. at 1f 32). Moreover, "the remnants of the actual Scranton Products HOPE materials
tested by Western Fire in May 2011 and August 2013 were not returned to Scranton Products or preserved
by Scranton Products or Western Fire, making it impossible to confirm their chemical composition by direct
sampling." (Id. at 1f 33). And "Scranton Products has at various times served conflicting verified
interrogatory answers concerning the alleged chemical composition of the HOPE material tested in August
2013." (Id. at 1f 34). Bobrick then goes into more specific details about SP's alleged inconsistent and
contradictory statements submitted to this Court about the chemical cornposition of the HOPE material
tested, (Id. at 1f1f 35-44), which it represents "demonstrate that Scranton Products does not have actual
knowledge or reliable records of the chemical composition and other physical properties of the HOPE
materials actually tested by Western Fire in May 2011 and August 2013." (Id. at 1f 45).

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basis to claim that any of the HOPE toilet partitions it has sold to the public as NFPA 286­
complaint are, in fact, made of the same material that was tested in May 2011 or August
2013." (Id. at ~ 48). Thus, according to the Complaint, "when Scranton Products filed its
Complaint, it knew that it had no basis to allege that any HOPE toilet partitions it sold to the
public as NFPA 286-compliant were made of the same material that was tested in May 2011
or August 2013." (Id. at ~ 49). Thus, Bobrick asserts that:
[T]he only plausible explanation for the nonexistence of such evidence are that Scranton

Products never generated the relevant documentation in the first place, or that Scranton

Products destroyed the relevant documentation. In either case, Scranton Products

presumably acted as it did to conceal the fact that the HOPE toilet partitions it planned to

(and did) market as NFPA 286-compliant are substantially different from the HOPE

material that it purportedly tested under NFPA 286.

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(Id. at ~ 50).

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Putting aside the issue of whether the HOPE material tested by Western Fire in May
2011 and August 2013 in fact had the chemical composition and characteristics that SP
claims, SP's "own manufacturing records show that the HOPE toilet partitions that Scranton
Products has actually sold to the public as NFPA 286-compliant have chemical
compositions and physical characteristics that are substantially different from the alleged

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chemical compositions and physical characteristics of the Scranton Products HOPE

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materials purportedly tested successfully under NFPA 286." (Id. at ~ 51). Specifically, SP

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has claimed that the HOPE material tested by Western Fire in the 2011 Test "formed the

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basis of Scranton Products' 'first generation' of NFPA 286-compliant HOPE toilet partitions,

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which Scranton Products claims to have offered for sale from rnid-2011 until May 2014."
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(Id. at ~ 52). However, "analysis of Scranton Products' manufacturing records show that the

chemical composition and physical properties" of these toilet partitions "do not match the
alleged chemical composition and physical properties of the toilet partitions tested by
Western Fire in May 2011." (Id. at ~ 57).
SP has also claimed that the HOPE material tested by Western Fire in August 2013
"formed the basis of Scranton Products' 'second generation' of NFPA 286-compliant HOPE
toilet partitions, which Scranton Products purports to have offered for sale from 'Iate 2013'
through the present." (Id. at ~ 58). But "analysis of Scranton Products' manufacturing
records show that the chemical composition and physical properties" of these toilet
partitions materials "do not match the alleged chemical composition and physical properties
of the toilet partitions tested by Western Fire in August 2013." (Id. at ~ 62). Scranton
Products has represented "that it has marketed and sold two, and only two, formulations of
allegedly NFPA 286-compliant HOPE toilet partitions." (Id. at ~ 64). "However, Scranton
Products' manufacturing records reveal that, out of 557 orders for NFPA 286-compliant
HOPE toilet partitions for which Scranton Products quoted prices between March 1,2012
and November 4, 2015, 218 of those orders involved HOPE toilet partitions whose structure
and composition bear no relationship to the HOPE materials allegedly tested in May 2011
and August 2013." (Id. at ~ 65). Therefore, "as to asignificant proportion of its sales of
purportedly NFPA 286-compliant HOPE toilet partitions nationwide, Scranton Products sold

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its customers partitions that were substantially different from any HDPE material it claims to

have tested under NFPA 286."6 (Id. at ~ 67).
Because SP's toilet partitions allegedly do not comply with NFPA 286, SP "has
repeatedly made literally false and/or false and misleading representations to purchasers
and other market participants nationwide concerning its allegedly NFPA 286-compliant
HDPE toilet partitions." (Id. at ~ 74). In support, Bobrick points to the multiple statements in
the Complaint, including:
• On November 29, 2012, counsel for Scranton Products, Wendelynne J.
Newton, Esq. of Buchanan Ingersoll &Rooney P.C., sent a letter on behalf of
Scranton Products to Tom Becraft of Engineered Concepts, an independent
sales representative for Bobrick and other manufacturers of bathroom
hardware and accessories. In the letter, Ms. Newtown represented, on behalf
of Scranton Products and with Scranton Products' authorization, 'Scranton
Products manufactures and sells HDPE bathroom partitions that comply with
the unmodified NFPA 286 room-corner test, and any suggestion to the
contrary by Bobrick or its sales representatives is incorrect.' (ld. at ~ 76).
• Ms. Newtown sent identically worded letters to numerous other independent
sales representatives for Bobrick in late November and early December 2012.
(ld. at ~ 77).
• Further, in those same letters, and based on the same representations, Ms.
Newtown threatened Bobrick's independent sales representatives that if they
made any statements to the contrary, they would face legal action by
Scranton Products: 'Scranton Products is serious about clearing up any
confusion that may exist in the industry regarding the characteristics and
6 "Moreover, within this untested third category of HDPE toilet partitions" that SP sold as NFPA-286
compliant, SP's "manufacturing records show wide variations in the chemical components used from batch
to batch, including variability in the relative weights of the different components, changes in the pigments
used, and fluctuating weights per cubic foot." (Doc. 318, at ~ 68). Accordingly, Bobrick alleges that SP
"has also changed key ingredients and vendors of key ingredients without ever retesting the successive
formulations of HDPE materiaL" (Jd. at ~ 69).

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performance of its products, and will not tolerate misrepresentation about its
products and will seek legal remedies if needed.' (Id. at ~ 78).
According to Bobrick, these statements were false, and Scranton Products knew them to be
false at the time they were made. (ld. at ~ 76).
Next, Bobrick alleges that in a December 1,2012 letter printed on SP's letterhead and
signed by SP's director of national sales and marketing David Casal, Mr. Casal noted "[t]his
letter is in response to your request for information on the fire ratings for Scranton Product's
HOPE Bathroom Partitions." (Id. at ~ 79). The letter contained the following statements:
(1) "Scranton Products manufactures HOPE bathroom partitions that conform with the
requirements of the NFPA 286 fire test, including the International Building Code," (ld.); (2)
"Independent fire testing centers have tested our material, including with respect to NFPA
286 (2011)," (ld.); and (3) "Our Hiny Hinders solid plastic bathroom partitions conform to
NFPA 286." (ld.). Bobrick alleges that the above-quoted statements in Mr. Casal's letter
were false, and both Mr. Casal and Scranton Products knew them to be false at the time
they were made.? (Id. at ~ 80).
Bobrick next points to a June 27,2013 statement by Kelly Oester, a Scranton Products
sales employee, sent to Stumbaugh &Associates, an independent dealer of bathroom
hardware and accessories, to be passed on to the architect and general contractor for a

7 "Upon

information and belief, Scranton Products has widely disseminated copies of Mr. Casal's letter
of December 1, 2012, or other letters substantially identical thereto, to numerous participants in the market
for toilet partitions." (Doc. 318, at ~ 81).
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project to renovate Dodger Stadium in Los Angeles. B (Id. at 1f 82). The one-page
information sheet includes the statement "Scranton Products manufactures HDPE bathroom
partitions that conform with the requirements of the NFPA fire test, including in the
International Building Code. Independent fire testing centers have tested our material,
including with respect to NFPA 286 (2011). We have bathroom partitions that conform to
NFPA 286." (ld. at 1f 84). Bobrick alleges that the quoted statement was false, and that SP
knew it to be false at the time. 9 (Id. at 1f 85).
On July 3, 2013, in response to a request from the general contractor for the Dodger
Stadium renovation project, Ms. Oester forwarded a written confirmation from SP's David
Casal, attesting to the NFPA 286 compliance of the specific toilet partitions being supplied
by SP for the project. (Id. at 1f 87). Mr. Casal's written confirmation, dated June 27, 2013
and printed on SP's letterhead, stated the following with respect to SP's sales orders

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848923 and 850511 :
This will confirm that the material that shipped on SO#848923 on 2/19/13, as well as
S0#850511 on 2/16/13, was our NFPA 286 material as indicated on your Sales Order
Acknowledgement and Invoice from Scranton Products. We have provided you with our
3rd party NFPA 286 test reports which shows that our material passes the NFPA 286
8 The "NFPA 286 material that Ms. Oester sent to Stumbaugh & Associates on June 27,2013 included
"(a) a one-page information sheet headed 'Scranton Products HOPE Bathroom Partitions Fire
Ratings/NFPA 286,' and (b) a copy of a six-page May 11, 2011 'summary letter report' by Western Fire
concerning 'NFPA 286 Room Fire Testing of a HOPE Toilet Partition Panel- Gray.'" (Doc. 318, at ~ 83).

9 "Because the one-page information sheet that Ms. Oester sent to Stumbaugh & Associate appears to
be a standard form provided by Scranton Products to its sales representatives for distribution to the public,
Bobrick believes and therefore avers that Scranton Products has furnished the same false statement to
numerous other persons nationwide who have inquired about NFPA 286 compliance of Scranton Products'
HOPE toilet partitions." (Doc. 318, at ~ 86).

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test. All of our NFPA 286 material is made using the same formula as used in the
product tested. We do not test each lot. Color is not afactor in the test criteria.
(Id. at ~ 88). According to Bobrick, all of the above-quoted statements (with the exception of

the statement "We do not test each lot") were false, and both SP and Mr. Casal knew them
to be false at the time they were made. (Id. at ~ 89).
The false statements alleged by Bobrick do not end there. On October 18, 2013, Mr.
Casal sent an email to recipients, including Randy Abercrombie, a representative of New
South Specialties, LLC. (Id. at ~ 90). In the e-mail.Mr. Casal stated, among other things:
• Scranton Products makes material to meet any fire rating you need
including: standard, B, A, NFPA 286.
• We expect to actually start selling more NFPA 286 over the next 5 years.
Anytime is fine with us as we have it fully tested, approved, and ready to
ship so no worries on your end. We have the full test for your use readily
available if you ever need it.
• We have been ready with NFPA 286 materials for two years, and have
recently had a major improvement to the formulation that will allow us to
sell it at 5% above standard material. This will put us significantly below
the cost of Bobrick's SCRC [i.e., Bobrick's competing solid color
reinforced composite toilet partitions].
• NFPA 286 testing supersedes other testing. Thus, our NFPA 286 material
meets and achieves all other fire ratings so over time, it will make our
inventory management easier.
• Rest assured, we have material ready to meet all requirements and have
been prepared for NFPA 286 for years. On a final note, we are the only
HDPE manufacturer with a fully approved test. Thus, if the demand ever
increases, we are the only manufacturer that can supply it today.

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(/d.). According to Bobrick, all of the above-quoted statements in Mr. Casal's e-mail were
false, and both SP and Mr. Casal knew them to be false at the time. 1o

B. Wrongful Use of Civil Proceedings and Abuse of Process Claims
Bobrick's claims for wrongful use of civil proceedings and abuse of legal process "arise
from Scranton Products' predatory conduct in initiating and subsequently using proceedings
before this Court." (Id. at 1f 9). More specifically, the Complaint alleges that:
When Scranton Products initiated these proceedings, it knew, or would have learned
from a cursory pre-filing investigation, that its central allegation-that Scranton
Products' HDPE toilet partitions complied with NFPA 286-was false. Scranton
Products nevertheless initiated this action, and continued to engage in misconduct
throughout the litigation, for the improper purpose of sti'l1ing legitimate competition by
Bobrick, silencing Bobrick's efforts to educate market participants about code
requirements in the interest of public safety, and inflicting financial harm on Bobrick
for unfair competitive advantage by increasing Bobrick's costs and otherwise.
(Id. at 1f 10).

After Bobrick had raised concerns within the marketplace "about Scranton Products'
false claims that its HDPE toilet partitions complied with NFPA 286, Scranton Products
initiated these proceedings by filing its Complaint on May 2,2014." (Id. at 1f 116).
According to the Complaint:
Even a cursory pre-filing investigation by Scranton Products would have revealed that
(1) the May 2011 and August 2013 tests by Western Fire were modified improperly and
could not support the claims asserted in Scranton Products' Complaint; (2) Scranton
Products lacked any direct evidence, either through material samples, contemporaneous
documents, or witnesses with direct knowledge, of the chemical composition of the
matenals tested in May 2011 or August 2013; and (3) the chemical composition and
Bobrick's Complaint then goes on to detail numerous additional statements made by SP and its
representatives that Bobrick alleges were false, and that SP knew to be false at the time they were made.
(Doc. 318, at mr 92-115). The Court need not repeat all of them here.
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physical structure of the HDPE toilet partitions that Scranton Products actually sold are
different from the chemical compositions and physical structure that Scranton Products
now claims comprised the materials tested in May 2011 and August 2013.
(ld.). "Despite knowing that it could not prove its asserted claims, Scranton Products filed

its Complaint against Bobrick because Scranton Products intended to use this litigation to
exert financial pressure on Bobrick so that Bobrick would stop questioning Scranton
Products' false statements in the marketplace." (Id. at ~ 117).
Nearly three years of costly and time-consuming litigation ensued and "Bobrick
eventually learned through discovery the facts demonstrating the fatal flaws in Scranton
Products' Complaint" and subsequently filed a Motion to Amend its Answer and to assert
counterclaims. (Id. at 1f 118). SP promptly moved to volu ntary dismiss its complaint with
prejudice "because Bobrick had discovered what Scranton Products knew, but had misused
the proceedings in an attempt to conceal: that its HDPE toilet partitions did not comply with
the NFPA 286 testing standard." (Id. at ~ 119). After the Court granted SP's Motion for
Voluntary Dismissal, SP initiated a "commercial action," writing to its customers "to inform
them that Scranton Products 'can no longer maintain with 100% assurance that all of the
current generation of 286 HDPE bathroom partitions [it] sold were NFPA 286 compliant and
[it] will provide replacement options. (Id. at ~ 121). Bobrick alleges that SP's voluntary
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dismissal of its complaint and commencement of the commercial action "demonstrate that
Scranton Products knows it cannot credibly assert, as it did in its complaint for nearly three
years during this litigation, that all of its HDPE toilet partitions sold as NFPA 286-compliant
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actually comply with NFPA 286." (Id. at 1f 122). Because SP knew that its claims against

Bobrick were baseless, Bobrick alleges that throughout the pendency of this litigation SP
"has improperly used the legal process for predatory purposes for which it was not
intended-namely, to inflict financial harm on Bobrick and to prevent Bobrick from
competing fairly and effectively in the marketplace by making truthful statements of facts
and legitimate statements of opinion." (Id. at 1f 123).
Bobrick next points to certain conduct engaged in by SP throughout the course of this
litigation that it alleges demonstrate SP's abuse of legal process, including:
• Scranton Products destroyed numerous documents concerning its allegedly NFPA
286-compliant HDPE toilet partitions after it was already contemplating litigation
against Bobrick over Bobrick's statements concerning those same toilet partitions.
Scranton Products' spoliation has frustrated Bobrick's ability to discover facts
material to its defense against Scranton Products' claim and unreasonably increased
Bobrick's costs. (Id. at 1f 125).
• Scranton Products has obstructed and resisted Bobrick's legitimate discovery
requests at every turn, and has intentionally conducted discovery so as to increase
Bobrick's cost. (Id. at 1f 126). For example, Scranton Products refused to provide
Bobrick with a list of construction projects it claimed Bobrick had interfered with, and
it provided such a list only after expensive motion practice and multiple Court orders.
(Id. at 1f 127). When Scranton Products did finally serve the required list of allegedly
interfered-with construction projects, it performed no investigation whatsoever and
merely served a list of every construction project with respect to which Bobrick had
sent a letter to the project owner or project architect, resulting in a list of 58 projects.
(Id. at 1f 128). Indeed, to the extent that Bobrick sent a letter to a project owner or
project architect during this litigation, Scranton Products arbitrarily added that project
to its list without analysis or investigation, clearly intending to use this lawsuit as a
predatory means of silencing Bobrick and preventing Bobrick from fairly competing in
the marketplace. (Id. at 1f 129). That list forced Bobrick to take expensive and
burdensome third-party discovery to determine the true facts concerning each of the
listed construction projects. As a result of that lengthy process-to which Scranton
Products contributed nothing-Bobrick presented Scranton Products with evidence
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that compelled Scranton Products to reduce the list of 'lost jobs' from 58 projects to
seven projects-and of the remaining seven, two have not yet been built, and no
subcontracts for toilet partitions have been awarded in connection with those two
projects as of the date of filing of this Counterclaim. (Id. at ~ 130). If Scranton
Products had performed even a rudimentary investigation-as it had a duty to do­
before serving its original list of 58 projects, Bobrick need not have spent several
months incurring the burden and expense of conducting the third-party discovery
described above. The only plausible explanation of Scranton Products' failure to
perform any investigation to support its Court-ordered interrogatory answer is that
Scranton Products was deliberately prolonging this litigation and forcing Bobrick to
shoulder ever-greater legal costS. 11 (Id. at~ 131).
In sum, Bobrick alleges that "it is evident that Scranton Products initiated these
proceedings, then misused them, for purposes other than those for which the legal
process is intended: namely, to try to silence Bobrick in the marketplace and to in'mct
financial harm on Bobrick by driving up its litigation costs, and to drag out the litigation
as long as possible to achieve both of those improper goals." (Id. at ~ 133).

III.

STANDARD OF REVIEW

Acomplaint must be dismissed under FED. R. CIV. P. 12(b)(6), if it does not allege

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"enough facts to state a claim to relief that is plausible on its face." Bell At!. Corp. v.

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Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). The plaintiff must

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11

Bobrick notes, that "as this Court has already found," before SP commenced this litigation:
It had already begun to engage in predatory and unethical litigation-related conduct against Bobrick
by having its in-house general counsel secretly participate in a July 2013 telephone call between
Scranton Products' president Don Wharton and Bobrick's chief executive officer Mark Louchheim,
in part for the purpose of soliciting admission to be used-and that were, in fact. used-in
preparing Scranton Products' Complaint in this matter.

(Doc. 318, at ~ 124). Bobrick also notes that SP "redacted numerous documents based on its unilateral
decisions about relevance, in spite of clear authority in this judicial district prohibiting such redactions and in
spite of the fact that the redacted information was plainly relevant and discoverable." (Id. at 1f 132).
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aver "factual content that allows the court to draw the reasonable inference that the

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defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct.

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1937,1949,173 L. Ed. 2d 868 (2009).
"Though a complaint 'does not need detailed factual allegations, ... aformulaic
recitation of the elements of a cause of action will not do.'" DelRio-Mocci v. Connolly Prop.
Inc., 672 F.3d 241,245 (3d Cir. 2012) (citing Twombly, 550 U.S. at 555). In other words,
"[nactual allegations must be enough to raise a right to relief above the speculative level."

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Covington v. Int'l Ass'n ofApproved Basketball Officials, 710 F.3d 114, 118 (3d Cir. 2013)
(internal citations and quotation marks omitted). Acourt "take[s] as true all the factual
allegations in the Complaint and the reasonable inferences that can be drawn from those
facts, but ... disregard[s] legal conclusions and threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements." Ethypharm S.A. France v.
Abbott Laboratories, 707 F.3d 223, 231, n.14 (3d Cir. 2013) (internal citations and quotation
marks omitted).
Twombly and Iqbal require [a district court] to take the following three steps to
determine the sufficiency of a complaint: First, the court must take note of the
elements a plaintiff must plead to state a claim. Second, the court should
identify allegations that, because they are no more than conclusions, are not
entitled to the assumption of truth. Finally, where there are well-pleaded
factual allegations, a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement for relief.
Connelly v. Steel Valley Sch. Dist., 706 F.3d 209,212 (3d Cir. 2013).

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"[W]here the well-pleaded facts do not permit the court to infer more than the mere

possibility of misconduct, the complaint has alleged - but it has not show[n] - that the
pleader is entitled to relief." Iqbal, 556 U.S. at 679 (internal citations and quotation marks
omitted). This "plausibility" determination will be a "context-specific task that requires the
reviewing court to draw on its judicial experience and common sense." Id.
IV.

ANALYSIS

In its Motion to Dismiss, SP asks this Court to dismiss with prejudice Bobrick's common
law unfair competition and abuse of process claims, as well as Bobrick's request for punitive
damages. The Court will address each in turn.
A. The Complaint Plausibly Alleges That Scranton Products Engaged in
Unfair Competition Under Pennsylvania Law
SP asks this Court to dismiss Bobrick's unfair competition claim with prejudice. The crux
of SP's Motion is that the conduct alleged in the Complaint-in essence false advertisingis not cognizable under Pennsylvania unfair competition law. Specifically, SP argues that
"[i]n light of longstanding Pennsylvania authority supporting a narrow interpretation of unfair
competition ... this Court should decline to expand the scope of the tort, and should
dismiss with prejudice Bobrick's unfair competition claim accordingly."12 (Doc. 325, at 25).
The Court disagrees with SP and declines to dismiss Bobrick's unfair competition claim at
this stage of the proceeding.
12 The Court notes that SP brought and prosecuted the very same claim premised on the same
underlying facts for nearly three years before this Court. Now, it argues that such a claim is not, and was
never, cognizable under Pennsylvania law.

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,
"Pennsylvania law defines unfair competition as the passing off of rivals' goods as one's
own, which creates confusion as to the authenticity of the goods in question." Elsevier, Inc.
v. Comprehensive Microfilm &Scanning Servs., Inc., No. 3:10-cv-2513, 2013 WL 1497946,

at *12 (M.D. Pa. Apr. 10,2013) (internal citation and quotation marks omitted). However,
"Pennsylvania courts have also recognized unfair competition 'where there is evidence of,
among other things, trademark, trade name, and patent rights infringement,
misrepresentation, tortious interference with contract, improper inducement of another's

employees, and unlawful use of confidential information.'" Id. (emphasis added) (quoting
Synthes (U.S.A.) v. Globus Med. Inc., No. 04-1235, 2005 WL 2233441, at *8 (E.D. Pa. Sept.

14,2005)). More recently, Courts in this Circuit "have examined unfair competition in light
of the Restatement (Third) of Unfair Competition § 1 (1995)." Baier v. Jersey Shore State
Bank, No. 4:07-CV-2236, 2009 WL 2843325, at *13 (M.D. Pa. Aug. 31,2009).

The Restatement (Third) of Unfair Competition § 1does not limit the tort of unfair
competition merely to the passing off of rivals' goods as one's own. 13 Rather, the

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The Restatement provides:
One who causes harm to the commercial relations of another by engaging in a business or trade is

not subject to liability to the other for such harm unless:

(a) the harm results from acts or practices of the actor actionable by the other under the
rules of this Restatement relating to:
(1) deceptive marketing, as specified in Chapter Two;
(2) infringement of trademarks and other indicia of identification, as specified in
Chapter Three;
(3) appropriation of intangible trade values including trade secrets and the right of
publicity, as specified in Chapter Four; or
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Restatement defines the tort broadly to include, among other things, false and deceptive

marketing and advertising. As such, Courts in this Circuit have recognized that allegations
of false advertising-such as those alleged by Bobrick-may in certain circumstances
properly state a claim for unfair competition under Pennsylvania law. See, e.g., Larry Pitt &
Assocs. v. Lundy Law, LLP, 57 F. Supp. 3d 445, 456 (E.D. Pa. 2014) ("[T]he Court will also
allow [plaintiff] to pursue its unfair competition claim with regard to its false or misleading
advertising allegations."); Peek v. Whittaker, No. 2:13-cv-01188, 2014 WL 2154965, at *10
(W.D. Pa. May 22,2014) ("Pennsylvania courts have included misrepresentation and
resulting injury to reputation and manner of doing business in the definition of unfair
competition."). The Third Circuit has also recognized that Pennsylvania Courts would
permit a cause of action for unfair competition in circumstances similar to those at issue in
this litigation, noting:
The common law tort of unfair competition is generally thought to be synonymous
with the act of passing off one's good as those of another. Nevertheless, the
Supreme Court of Pennsylvania has held that other types of conduct can constitute
unfair cornpetition actionable at common law. See Carl A. Colteryahn Dairy, Inc. v.
Schneider Dairy, 415 Pa. 276, 203 A.2d 469, 473 (1964) (finding it illegal to make
false or misleading statements about the circumstances under which an employee
left an employer). Therefore, it is not so easy to conclude that there is one narrow
and clear category of common law tort.
from other acts or practices of the actor determined to be actionable as an unfair
method of competition, taking into account the nature of the conduct and its likely
effect on both the person seeking relief and the public; or
(b) the acts or practices of the actor are actionable by the other under federal or state
statutes, international agreements, or general principles of common law apart from those
considered in this Restatement.
Restatement (Third) Unfair Competition § 1 (1995).
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Granite State Ins. Co. v. Aamco Transmissions, Inc., 57 F.3d 316,319 (3d Cir. 1995).
Accordingly, where a competitor plausibly alleges it has been harmed as a direct result of
an intentional misrepresentation contained in a false advertisement, it has stated a claim for
unfair competition under Pennsylvania law. For these reasons, the Court concludes that
Bobrick's Complaint states a plausible claim for unfair competition under Pennsylvania law
and will thus deny SP's Motion to Dismiss in this respect.

B. Bobrick's Abuse of Process Claim Will Not Be Dismissed
In its Motion, SP also seeks dismissal of Bobrick's abuse of process claim on the theory
that permitting Bobrick's claim to proceed "raises a dangerous specter" because, under
Bobrick's theory, "discovery disputes can be transformed into abuse of process simply by
adding aconclusory allegation that litigation positions were taken for 'improper purposes.'"
(Doc. 325, at 6). The Court rejects SP's arguments. 14
"The Supreme Court of Pennsylvania has said that '[t]he gist of an action for abuse of
process is the improper use of process after it has been issued, that is, a perversion of it.'"

Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 304 (3d Cir. 2003) (quoting
At oral argument, counsel for SP directed the Court to three cases to support its assertions that
Bobrick's abuse of process claim must be dismissed with prejudice: Giordano v. Murano-Nix, Civil Action
No. 12-7034,2014 WL 62459 (E.D. Pa. Jan. 8, 2014); Schwartz v. OneWest Bank, FSB, Civil Action No.
13-0113,2013 WL 6037078 (E.O. Pa. Nov. 13,2013); and Ickes v. Flanagan, Civil Action No. 3:2007-143,
2008 WL 859183 (W.O. Pa. Mar. 31,2008). The Court finds that Giordano and Ickes are factually
distinguishable, and that applying the legal reasoning of Schwartz to the Complaint demonstrates that
Bobrick has properly pleaded an abuse of process claim. See Schwartz, 2013 WL 6037078, at * 6 (lilt is
not enough that the defendant had bad or malicious intentions or that the defendant acted from spite or with
an ulterior motive.... Rather, there must be an act or threat not authorized by the process, or the process
must be used for an illegitimate aim such as extortion, blackmail or to coerce or compel the plaintiff to take
some collateral action.") (emphasis added).
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McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1023 (1987)). "A 'perversion' of legal
process occurs when a party uses the process 'primarily to accomplish a purpose for which
the process was not designed.'" Id. (quoting Dumont Television & Radio Corp. v. Franklin

Elec. Co. of Philadelphia, 397 Pa. 274, 154 A.2d 585, 587 (1959)). "Generally speaking, to
recover under a theory of abuse of process, a plaintiff must show that the defendant used
legal process against the plaintiff in a way that constituted a perversion of that process and
caused harm to the plaintiff." Id. Courts must "look at the legal process used and decide
whether it was primarily to benefit someone in achieving a purpose which is not the
authorized goal of the procedure in question." Id. at 305 (internal citation and quotation
marks omitted). As the Third Circuit has recognized, the Supreme Court of Pennsylvania
"has interpreted the tort broadly, making it clear that it 'will not countenance the use of the
legal process as a tactical weapon to coerce a desired result that is not the legitimate object
of the process.'" Id. (quoting McGee, 535 A.2d at 1026).
The Court finds that Bobrick has alleged sufficient facts raising a plausible inference that
SP engaged in an abuse of process by knowingly continuing to prosecute a baseless
lawsuit for the purpose of stifling competition, increasing Bobrick's legal costs, and silencing
Bobrick's legitimate activities in the marketplace. The Complaint further alleges that SP
engaged in deliberate and continuous discovery misconduct, including the filing of false
affidavits, destruction of documents, and affirmatively misleading Bobrick and the Court, all
for the specific purpose of harming Bobrick by driving up its legal costs. Although the Court
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agrees with SP that run-of-the-mill discovery disputes cannot constitute an abuse of process

under Pennsylvania law, Bobrick alleges facts far more detailed and nefarious: that SP
knew that some or all of its HOPE toilet partitions did not actually comply with NFPA 286
(i.e., its claims were baseless) yet SP nevertheless continued to prosecute this lawsuit for

nearly three years, all while stifling Bobrick's legitimate discovery efforts for the specific
purpose of finanCially harming Bobrick and gaining a competitive advantage in the
marketplace. These allegations are sufficient to state a plausible claim for abuse of process
under Pennsylvania law. See e.g., Peek, 2014 WL 2154965, at *7 ("In alleging Defendants
obtained a [preliminary injunction] with knowingly false evidence for the purpose of
hampering Plaintiffs' ability to compete ... which caused harm to Plaintiffs' reputation and
future business prospects, Plaintiffs have made out a valid claim for abuse of process.");

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Lease v. Fishel, Civil Action No.1 :07-CV-0003, 2009 WL 922486, at *6 (M.D. Pa. Apr. 3,

2009) (recognizing that, in certain circumstances, a party may state a claim for abuse of
process against persons "who employ legal process primarily intending to burden or cause
litigation expense to their adversaries"); Gen. Refractories, 337 F.3d at 307 ("Quite simply, a

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court should ask whether there has been a perversion of the process, or, whether a legal

legitimate object of the process.... [W]e believe that using a legal process primarily to

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harass and cause direct injury to an adversary similar to what occurred here could

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process has been used as a tactical weapon to coerce a desired result that is not the

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constitute a perversion of that process.") (emphasis in original) (internal citation and

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quotation marks omitted). Because the facts alleged by Bobrick could plausibly constitute
an abuse of process, SP's Motion to Dismiss Bobrick's abuse of process claim will be
denied. 15

V.

CONCLUSION

For the foregoing reasons, the Court will deny SP's Motion in its entirety. Aseparate
Order follows.

RobertD.- ariani
United States District Judge

SP's Motion to Dismiss also asks the Court to dismiss Bobrick's request for punitive damages
because the Complaint "fails to plead any facts that could establish a level of outrageous conduct sufficient
to satisfy Pennsylvania law." (Doc. 325, at 7). Again, the Court disagrees with SP. Bobrick's Complaint
alleges sufficient facts that could support an award of punitive damages. For example, Bobrick alleges
facts from which one could infer that SP knew that some or all of its HOPE toilet partitions did not actually
comply with NFPA 286 yet nevertheless brought and prosecuted this lawsuit for nearly three years for the
specific purpose of harming Bobrick and gaining a competitive advantage in the marketplace. The Court is
satisfied that such allegations (among others), if proven, may support an award of punitive damages, and
that "[d]ismissing plaintiffs' punitive damages claim now at the pleading stage would be premature." Young
v. Westfall, No. 4:06-CV-2325, 2007 WL 675182, at *2 (M.D. Pa. Mar. 1,2007). Accordingly, the Court will
deny SP's Motion in this respect.
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