PBM Products, LLC v. Mead Johnson Nutrition Company et al

Filing 241

MEMORANDUM OPINION ( Re: Order entered 10/27/2009 188 ). Signed by District Judge James R. Spencer on 12/22/2009. (cgar)

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION PBM PRODUCTS, LLC Plaintiff, v. MEAD JOHNSON NUTRITION COMPANY and MEAD JOHNSON & COMPANY, Defendants. MEMORANDUM OPINION THIS MATTER is before the Court on PBM's Motion for Partial Summary Judgment, (Docket No. 96), which seeks judgment as a matter of law on Counts 2, 3, and 4 of Mead Johnson's counterclaims. Mead Johnson has also filed a Motion f o r P a r t i a l S u m m a r y Judgment (Docket No. 95), which seeks judgment as a matter of l a w o n C o u n t s 1 , 2 , a n d 4 o f its counterclaims. For the reasons stated below, PBM's Motion is GRANTED as to Counts 2 and 4 and DENIED as to Count 3. Mead Johnson's Motion is DENIED as to Counts 1, 2, and 4 of its counterclaims. I. BACKGROUND Plaintiff, PBM Products, LLC ("PBM") produces storebrand infant formula. Defendant Mead Johnson & Co. ("Mead Johnson") produces "namebrand" infant formula. Although each party maintains a s i g n i f i c a n t m a r k e t s h a r e w i t h i n t h e i r r e s p e c t i v e n i c h e s , they are direct competitors in several product categories. A. The Parties' Products Action No. 3:09­CV­269

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Under the brand name Enfamil, Mead Johnson markets a variety of products i n c l u d i n g a s t a n d a r d f o r m u l a , a formula with broken down protei n s , a n d a f o r m u l a w i t h added rice starch. PBM also produces a standard formula, a formula with broken down proteins, and a formula with added rice starch. Both companies use the supplier Martek to get two nutrients--docosahexainoic acid ("DHA") and archidonic acid ("ARA")--which are important to an infant's brain and eye development. Mead Johnson labels these two n u t r i e n t s u s i n g t h e b r a n d n a m e L i p i l . P B M u s e s t h e g e n e r i c t e r m "lipids." PBM often i n c l u d e s a c o m p a r a t i v e a d v e r t i s i n g l a b e l o n t h e i r f o r m u l a w h i c h s t a t e s , " C o m p a r e t o Enfamil Lipil." (PBM Mot. Partial Summ. J., Ex. 19, at Ex. D.) The parties dispute when PBM began using the comparative advertising claims on its formulas. (Mead Johnson Resp. to PBM Mot. Partial Summ. J. 2; PBM Mot. Partial Summ. J. 16.) B. Litigation History Between PBM and Mead Johnson These parties are no strangers in the courtroom. In less than a decade, they have been involved in four Lanham Act actions, not to mention various other claims and counterclaims. In 2001, PBM obtained a restraining order prohi biting Mead Johnson from disseminating further false information about PBM's products. See PBM Products, Inc. v. Mead Johnson & Co., 03:01cv199 (E.D. Va. 2001). Mead Johnson was held in contempt during that litigation for not retrieving all of its false ads as directed by a court order. The parties eventually settled that dispute. In 2002, PBM initiated another Lan ham Act false advertising sui t a g a i n s t M e a d Johnson, this time based on Mead Johnson promotional materials t h a t s t a t e d P B M ' s products did not include the beneficial nucleotide contained in Mead Johnson's formulas.

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See PBM Products, Inc. v. Mead Johnson & Co., 03:02cv944 (E.D. Va. 2002). This Court entered a temporary restraining order on consent of the parties that prevented Mead Johnson from disseminating those ads. In 2003, the parties settled that dispute as well. The Agreement the parties entered into stated that (1) Mead Johnson denied any wrongdoing; (2) neither party was to disclose the fact of the second lawsuit, the entry of the Consent TRO, or the existence or terms of the 2003 Agreement; and (3) the parties would jointly request the Court seal all the pleadings in the case. (Mead Johnson Mot. for Summ. J. 3.) This Court entered an order sealing the pleadings filed in that case, including the Complaint and the Consent TRO. In 2006, Mead Johnson sued PBM for trade dress infringement and unfair competition under the Lanham Act. See Mead Johnson & Co. v. PBM Nutritionals, LLC, PBM Products, Inc.,1:06cv1246 (S.D. Ind. 2006). The parties settled the dispute in August of 2007. Part of that agreement stated that Mead Johnson promise d that it "agrees to the use b y t h e P B M P a r t i e s o f t h e p a c k a g i n g s h o w n i n E x h i b i t D . " ( P B M Mot. for Partial Summ. J., E x . 1 9 , ¶ 1 . ) E x h i b i t D c o n t a i n e d a label that included the com p a r a t i v e a d v e r t i s i n g statement "Compare to Enfamil Lipil." (Id. , Ex. D.) The Agreement also stated: Notwithstanding the foregoing, should the PBM Parties breach this agreement by continuing to sell or resuming sales of products i n the packaging shown in Exhibits B and C or in packaging that otherw i s e i n f r i n g e s t h e E N F A M I L L I P I L p a c k a g i n g , s u c h b r e a c h w i l l c o n s t i tu t e a n e w i n f r i n g e m e n t a n d M e a d J o h n s o n w i ll be entitled to file suit or t o a d d r e s s such infringement under the law in any way it sees fit. (Id., Ex. D.) PBM initiated the current suit in 2009, alleging Mead Johnson's advertisements are false and misleading under the Lanham Act. The Complaint was not filed under seal and 3

made specific references to the 2002 dispute between these two parties. In connection with this suit, PBM, through its Chief Executive Officer, Paul Manning, issued a press release with the headline "Mead Johnson Lies About Baby Formula . . . Again; PBM Products Sues Mead Johnson for Third False Advertising Campaign." (PBM Mot. for Partial Sum. J., Ex. 22.) Mead Johnson subsequently filed amended counterclaims, alleging breach of contract (Count 1), defamation (Count 2), Lanham Act violations (Count 3), and civil contempt (Count 4). PBM has now f i l e d a M o t i o n s e e k i n g s u m m a r y j u d g m e n t o n C o u n t s 2 , 3, and 4 of Mead Johnson's amended counterclaims. Mead Johnson has also filed a Motion seeking summary judgment on Counts 1, 2, and 4 of its amended counterclaims. Thus, there are crossmotions for summary judgment on Mead Johnson's defamation and civil contempt claims. II. DISCUSSION A. Legal Standard A m o t i o n f o r s u m m a r y j u d g m e n t l i e s o n l y w h e r e " t h e r e i s n o g e n ui n e i s s u e a s t o a n y material fact" and where "the moving party is entitled to judgm ent as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). All "factual disputes and any competing, rational inferences [are resolved] in the light most favorable to the party opposing that motion." Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (internal quotations marks and citations omitted). In its decision, courts look to the affidavits or other specific facts pled to determine whether a triable issue exists. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where no genuine issue of material fact

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e x i s t s , i t i s t h e " a f f i r m a t i v e o bl i g a t i o n o f t h e t r i a l j u d g e t o p r e v e n t f a c t u a l l y u n s u p p o r t e d claims and defenses from proceeding to trial." Drewitt v. Pratt, 999 F.2d 774, 778­79 (4th C i r . 1 9 9 3 ) ( i n t e r n a l q u o t a t i o n m arks omitted). Mere unsupporte d speculation is not sufficient if the undisputed evidence indicates the other party should win as a matter of law. Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008). However, summary judgment should not be granted if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. When faced with crossmotions for summary judgment, the standard is the same as that applied to individual motions for summary judgment. The court must consider each party's motion "separately on its own merits to determine whether either of the parties deserves judgment as a matter of law." Rossignol , 316 F.3d at 523 (internal quotation marks omitted). If the court finds that there is a genuine issue of material fact, both motions must be denied. 10A Wri g h t , M i l l e r & K a n e , F e d e r a l P r a c t i c e & P r o c e d u r e : C i v i l 3 d § 2720. However, "if there is no genuine issue and one or the other party is entitled to prevail as a matter of law, the court will render judgment." I d. B. Choice of Law V i r g i n i a ' s c h o i c e o f l a w r u l e s g o v e r n t h i s d i v e r s i t y d e f a m a t i o n a c t i o n . S e e Klaxon v. S t e n t o r , 3 1 3 U . S . 4 8 7 , 4 9 7 ( 1 9 4 1 ) . V i r g i n i a a p p l i e s t h e l e x l o c i d e l i cti rule, that is, the law of the place of the wrong, to d e f a m a t i o n a c t i o n s . S e e , e . g . , H e i s h m a n , I n c . v . F o x T e l e v i s i o n Stations, Inc., 217 F. Supp. 2d 690, 694 n.5 (E.D. Va. 2002). Because Mead Johnson alleges that the defamatory Press Release was issued in Virginia, Virginia law applies. (See Mead

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Johnson Mot. Summ. J. 1112); see also Katz v. Odin, Feldman & Pittleman, P.C., 332 F. Supp. 2d 909, 915 n.4 (E.D. Va. 2004). C. Breach of Contract (Count 1)1 Mead Johnson seeks partial summary judgment on Count 1 of its a m e n d e d c o u n t e r c l a i m s , a s s e r t i n g t h a t l i a bility can be established as a m a t t e r o f l a w . A c c o r d i n g t o Mead Johnson, the 2003 Agreement b e t w e e n i t a n d P B M w a s a n e n f o r c e a b l e c o n f i d e n t i a l i t y agreement and the breach of the Agreement has resulted in damages. (Mead Johnson Mot. Partial Summ. J. 9.) In Virginia, the elements of a breach of contract action are (1) a legally enforceable o b l i g a t i o n o f a d e f e n d a n t t o a p l a i n t i f f ; ( 2 ) t h e d e f e n d a n t ' s v iolation or breach of that o b l i g a t i o n ; a n d ( 3 ) i n j u r y o r d a m a g e t o t h e p l a i n t i f f c a u s e d b y the breach of obligation. S u n r i s e C o n t i n u i n g C a r e , L L C v . W r i g h t , 671 S.E.2d 132, 134 (Va. 2009). To be actionable, t h e p l a i n t i f f m u s t e s t a b l i s h t h a t t h e b r e a c h w a s m a t e r i a l . H o r t o n v . H o r t o n, 4 8 7 S . E . 2 d 2 0 0 , 204 (Va. 1997). A material breach is a failure to do something that is so fundamental to the c o n t r a c t t h a t t h e f a i l u r e t o p e r f o r m t h a t o b l i g a t i o n d e f e a t s a n essential purpose of the c o n t r a c t . I d . T h e p l a i n t i f f a l s o b e a r s t h e b u r d e n t o e s t a b l i s h t h e e l e m e n t o f d a m a g e s w i t h reasonable certainty. Nichols Construction Corp. v. Virginia Machine Tool Co., LLC, 661 S.E.2d 467, 472 (Va. 2008). Damages that are contingent, speculative, and uncertain are

Prior to discovery, Mead Johnson filed a Motion for Partial Summary Judgment on Count 1. (Docket No. 55.) PBM's Response is Docket No. 67 and Mead Johnson's Reply is Docket No. 72. After discovery and with leave of court, Mead Johnson filed another Motion for Summary Judgment on Counts 1, 2, and 4 (Docket No. 95), but this later Motion relies on the earlier summary judgment motion for substance as to Count 1. 6

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not recoverable because they cannot be established with reasona ble certainty. Shepherd v. Davis, 574 S.E.2d 514, 524 (Va. 2003). Here, Mead Johnson's main obstacle to summary judgment is that it has not established as a matter of law that PBM's Press Release has cau sed Mead Johnson damages. One email Mead Johnson provided concerns someone requesting the "scoop" on the P B M / M e a d J o h n s o n d i s p u t e a f t e r h a v i n g s e e n t h e P r e s s R e l e a s e . (Mead Johnson Mot. Summ. J., Ex. 9.) This does not come close to establishing that Mead Johnson was damaged by the Press Release. The DeGuzman Deposition testimony offered does not establish damages either, only that one customer heard about the lawsuit in the abstract. (Mead Johnson Mot. Summ. J., Ex. 13.) And as PBM points out, the email from a healthcare p r o f e s s i o n a l s t a t i n g t h a t h e h a d w r i t t e n a l e t t e r o f d i s a p p r o v a l r e g a r d i n g t h e " f u z z y d u c k " a d v e r t i s i n g c a m p a i g n h a s n o t b e e n t i e d t o t h e P r e s s R e l e a s e a t issue here. (Mead Johnson Mot. Summ. J., Ex. 10.) Although case law supports finding that one's reputation is an asset that can be damaged, see, e.g. , Ayyildiz v. Kidd , 266 S.E.2d 108, 111 (Va. 1985), Mead Johnson has not proven as a matter of law that the Press Releas e r e s u l t e d i n m o n e t a r y o r reputational damages to Mead Johnson. Thus, Mead Johnson's Mot ion for Summary Judgment as to liability on Count 1 of its amended counterclaims is DENIED. D. Defamation (Count 2) I n i t s a m e n d e d c o u n t e r c l a i m , M e a d Johnson alleges that four sta t e m e n t s c o n t a i n e d in the Press Release were defamatory. Specifically, those statements are as follows: (1) "Mead Johnson Lies About Baby Formula...Again; PBM Products S u e s M e a d Johnson for Third False Advertising Campaign" ("Statement 1");

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(2) "Mead Johnson has ignored the court's two prior injunctions by launching yet another false and misleading advertising campaign designed to undermine public confidence in PBM's storebrand infant formulas." ("Statement 2"); (3) "`Incredibly, this marks the third time Mead Johnson has en g a g e d i n f a l s e advertising campaigns against PBM's competing storebrand infant formulas by distributing literally false advertising to doctors and mothers,' said PBM CEO Paul B. Manning.2 `The two previous times we sued Mead Johnson for false and misleading advertisements, the court ruled in favor of PBM and Mead Johnson's senior e x e c u t i v e s a n d s c i e n t i s t s a d m i t t e d that Mead Johnson's statements were literally false. . . .'" ("Statement 3"); 3 (4) "Additionally, Mead Johnson i n t e n t i o n a l l y m a i n t a i n s i t s f a l s e a d v e r t i s i n g c a m p a i g n a n d t h e b l u r r y e y e d b a b y g r a p h i c , d e s p i t e a d v e r s e r u l i ngs from the National Advertising Division of the Council of Better Business Bureaus (NAD)." ("Statement 4"). (Mead Johnson Amended Counterclaims ¶ 54.) Under Virginia law, the elements of a claim for defamation are (1) the publication of (2) a false and defamatory statement (3) with the necessary intent. Jackson v. Hartig, 645

Mead Johnson also seeks to hold Defendant Paul Manning personally liable for defamation. (Mead Johnson Mot. Summ. J. 2627.)
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The omitted portion states "After three strikes, we believe Mead Johnson should be out of the false advertisement business when it comes to baby formula." Mead Johnson concedes t h a t t h i s i s a n o p i n i o n s t a t e m e n t that cannot be the basis of a defamation claim. (Mead Johnson Reply Mot. Summ. J. 3 n.7.) 8

S.E.2d 303, 308 (Va. 2007).4 Hence, to be actionable as defamatory, a plaintiff must prove by a preponderance of the evidence that the statement at issue is actually and provably f a l s e . S e e Food Lion, Inc. v. Melton , 4 5 8 S . E . 2 d 5 8 0 , 5 8 4 ( V a . 1 9 9 5 ) . T h u s , t r u t h f u l s t a t e m e n t s a n d e x p r e s s i o n s o f o p i n i o n r a t h e r t h a n d e c l a r a t i o n s of fact both operate as a b s o l u t e d e f e n s e s t o a n y d e f a m a t i o n c l a i m . S e e Chapin v. KnightRidder, Inc. , 993 F.2d 1087, 1093 (4th Cir. 1993); Goodard v. Protective Life Corp., 82 F. Supp. 2d 545, 560 (E.D. Va. 2000). The statement must be not only false, but also defa matory, that is, it must "tend [ ] so to harm the reputation of a n o t h e r a s t o l o w e r h i m i n t h e e s t i m a t i o n o f t h e c o m m u n i t y o r t o d e t e r t h i r d p e r s o n s f r o m a s s o c i a t i n g o r d e a l i n g w i t h h i m . " Chapin , 9 9 3 F . 2 d a t 1 0 9 2 (quoting Restatement (Second) of Torts § 559). A defamatory charge may be made e x p r e s s l y o r b y " i n f e r e n c e , i m p l i c a t i o n o r i n s i n u a t i o n . " H a t f il l v . N . Y . T i m e s C o . , 4 1 6 F . 3 d 320, 331 (4th Cir. 2005) (quoting Carwile v. Richmond Newspapers, Inc., 82 S.E.2d 588, 592 (Va. 1954)). Thus, the meaning of a defamatory statement may come, not only from the actual words used, but also from any "inferences fairly attributed to them." Wells v. Liddy, 186 F.3d 505, 523 (4th Cir. 1999) (quoting Yeagle v. Collegiate Times, 497 S.E.2d 136, 138 (Va. 1998) (internal quotations and alteration omitted)). A "plaintiff may not rely on minor or irrelevant inaccuracies," however, to state a claim. Jordan v. Kollman, 612 S.E.2d 203, 207 (Va. 2005) (citation omitted). Whether a statement is actionable is a matter of law to be determined by the court. Id. at 20607. In the parties' CrossMotions for Summary Judgement, their arguments predictably and diametrically conflict. PBM argues that the defamation claim should be dismissed

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There is no dispute here that the statements at issue were published. 9

because the Press Release contained only true, opinionladen, privileged statements that were not made with actual malice . Mead Johnson disagrees, alle g i n g t h a t t h e P r e s s R e l e a s e contained false, unprivileged st atements of fact that were made with the requisite intent. Each alleged defamatory sta tement is addressed below. 1. Statement 1: "Mead Johnson Lies About Baby Formula...Again; PBM Products Sues Mead Johnson for Third False Advertising Campaign" As described above, PBM says thi s s t a t e m e n t i s t r u e a n d p r i v i l e g e d a n d w a s n o t made with actual malice. Mead Jo h n s o n , i n c o n t r a s t , d e c l a r e s t h e s t a t e m e n t i s v e r i f i a b l y false, one of fact, and made with a sufficient state of mind to constitute defamation. a. True or False T r u t h i s a c o m p l e t e d e f e n s e t o a d e f a m a t i o n c l a i m . G o d d a r d , 82 F. Supp. 2d at 560. A s t a t e m e n t i s n o t f a l s e i f i t s content or "imputation is `subs t a n t i a l l y ' t r u e . " J o r d a n , 6 1 2 S.E.2d at 206 (quoting Saleeby v. Free Press, Inc. , 9 1 S . E . 2 d 4 0 5 , 4 0 7 ( V a . 1 9 5 6 ) ( i n t e r n a l quotations omitted)). "Substantially true" means that the stat e m e n t i s a f a i r a n d a c c u r a t e description of the event in question. Weist v. EFense, Inc., 356 F. Supp. 2d 604, 611 (E.D. Va. 2005). Although truth is often referred to as a defense, i n V i r g i n i a , i t i s n o t a n affirmative defense, rather the plaintiff must prove falsity. Gazette, Inc. v. Harris, 325 S.E.2d 713, 725 (Va. 1985). Statement 1 raises two questions. First, can the Court determine as a matter of law that the portion of Statement 1 "Mead Johnson Lies About Baby Formula . . . Again" is substantially true or false? Given that this Court has previously enjoined Mead Johnson from distributing advertisements because of their inaccuracies, the Court finds that this p o r t i o n o f S t a t e m e n t 1 i s s u b s t a ntially true. Although it is u n d e n i a b l e t h a t b e i n g a c c u s e d o f 10

lying is a harsh accusation, it i s also beyond dispute that fals e a d v e r t i s i n g i s s u b s t a n t i a l l y synonymous with lying. The second question this Court must address as to Statement 1 is whether PBM's description of Mead Johnson's advertisements as the "Third False Advertising Campaign" is substantially true or false. Mead Johnson argues that this phr a s e " i g n o r e [ s ] t h e uncontested testimony and eviden ce that the statement at issue in the 2002 Litigation was not advertising, much less a "campaign," and that both parties d e n i e d a n y l i a b i l i t y a s p a r t o f the suit's resolution." (Mead Johnson Reply in Supp. of Mot. Summ. J. 5.) For its part, PBM maintains that "this Court has previously entered two orders enjoining Mead Johnson's false advertising." (PBM's Mot. for Summ. J. 9 (emphasis added).) The 2002 dispute between these parties involved promotional mat e r i a l s M e a d Johnson sent to medical doctors stating that PBM's formula did not have a nucleotide that is highly beneficial to infants. (Mead Johnson's Mot. for Summ . J., Ex. 6, ¶ 27.) Apparently, Mead Johnson is trying to argue that because the promotional materials sent to doctors was not a large effort and was not distributed to the public, t hat it cannot be accurate to call it an "advertising campaign." Mead Johnson's argument is u n c o n v i n c i n g . O n e dictionary defines an "advertisement" as "an announcement, desc ription, or presentation of something . . . ." Random House College Dictionary 2 2 ( 1 9 8 0 ) . T h e 2 0 0 2 d i s p u t e involved the presentation, i.e. advertisement, of information regarding the nucleotide content of PBM and Mead Johnson's formulas. Although Mead John s o n ' s a c t i o n s m a y n o t have been on par with a GEICO advertising campaign, it was an a dvertising campaign nonetheless. That portion of Sta tement 1 is substantially true .

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b. Opinion or Fact An opinion may constitute action able defamation only if the opi nion can be reasonably interpreted to declare or imply untrue facts. Milkovich v. Lorain Journal Co., 497 U.S. 1, 20 (1990). When making this determination, a court may look to whether the challenged statement can be objectively characterized as true or false, the author or speaker's choice of words, the context of the challenged statement within the writing or speech as a whole, and the broader social context into which the statement fits. Biospherics, Inc. v. Forbes, Inc., 151 F.3d 180, 18384 (4th Cir. 1998). H a v i n g c o n c l u d e d t h a t t h e m a j o r i t y o f S t a t e m e n t 1 i s s u b s t a n t i a lly true, the Court notes that only the "[a]gain" portion of Statement 1 and the mention of the "[t]hird false" advertising campaign need to be considered under the Fourth Circuit's opinion analysis. Common sense dictates, however, that neither of these portions can be reasonably interpreted to declare or imply untrue facts. See id. at 184. Rather these were standard p o s t u r i n g s t a t e m e n t s o f o p i n i o n b y P B M r e l a t e d t o t h e t h i r d l a w s u i t i t h a d j u s t f i l e d a g a i n s t Mead Johnson. See Karp v. Hill & Knowlton, Inc., 631 F. Supp. 360, 365 (S.D.N.Y. 1986) ("On i t s f a c e , t h e s e n t e n c e i n i s s u e i s a n e x p r e s s i o n o f o p i n i o n , a comment on an ongoing court battle."). 5 c. Summation of Statement 1

At the outset, the Court notes that each of the statements contain some opinion to the e x t e n t t h a t t h e P r e s s R e l e a s e d i scussed the alleged false adver t i s e m e n t s t h a t f o r m e d t h e basis for the most recent lawsuit. This analysis, though not r epeated below, also applies to each of the statements to follow. 12

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T h e C o u r t f i n d s t h a t t h e m a j o r i ty o f S t a t e m e n t 1 i s s u b s t a n t i a l ly true and the remaining portions are opinion. Therefore, Statement 1 is not actionable. That holding obviates the need to reach the parties arguments on privilege a nd intent and the Court therefore declines to do so.6 2. Statement 2: " Mead Johnson has ignored the court's two prior injunctions . . . ."7 Mead Johnson's main contention a s t o S t a t e m e n t 2 i s t h a t i t c a n not be true that Mead Johnson has "ignored" two p rior injunctions because the pr i o r i n j u n c t i o n s w e r e temporary and no longer in force. (Mead Johnson Mot. Summ. J. 1718.) To the extent that any part of Statement 2 can be labeled as true or false at the t i m e t h e P r e s s R e l e a s e w a s made, the Court disagrees. Despite Mead Johnson's assertions to the contrary, Statement 2 does not mean that Mead Johnson was, at the time of the Press Release, in violation of two injunctions. When v i e w e d i n t h e c o n t e x t o f a P r e s s Release that focuses on a then freshlyfiled lawsuit against Mead Johnson and that no where states PBM is suing Mead Johnson to enforce prior i n j u n c t i o n s , t h e s t a t e m e n t d o e s n o t l i t e r a l l y o r i m p l i e d l y c o m mu n i c a t e w h a t M e a d J o h n s o n alleges. Chapin v. KnightRidder, Inc. , 993 F.2d 1087, 1093 (4th Cir. 1993) (citing White v. Fraternal Order of Police, 909 F.2d 512, 520 (D.C. Cir. 1990)). The gist of the statement is that despite two prior instances where a court has found Mead Johnson engaged in false

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As detailed below, the Court finds that all of the allegedly defamatory statements are substantially true. Thus, the par t i e s ' a r g u m e n t s r e g a r d i n g p r i v i l e g e a n d i n t e n t a r e n o t addressed for the remaining statements either.

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The Court notes that only Statement 2 was the subject of argument at the hearing on these Motions. 13

advertising, Mead Johnson has failed to learn its lesson by aga i n e n g a g i n g i n a m i s l e a d i n g advertising campaign. See AIDS Counseling and Testing Ctrs. v. Group W Television, Inc., 903 F.2d 1000, 1004 (4th Cir. 1990) ("If the gist or `sting' of a statement is substantially t r u e , ` m i n o r i n a c c u r a c i e s w i l l n o t g i v e r i s e t o a d e f a m a t i o n c l aim.'") As a result, the sting of Statement 2, as communicated by a fair reading of the Press Release as a whole, is substantially true.8 Therefore, it cannot be the basis of a defamation claim. 3. Statement 3: "Incredibly, this marks the third time Mead Johnson has engaged in false advertising . . . ." There are two primary parts of Statement 3 at issue here. First, can this Court determine as a matter of law whe ther it is substantially true t hat there have been two prior instances in which Mead Johnson has distributed "literally false advertising"?9 Mead Johnson says the statement is false, pointing out that this Court's earlier ruling in this case (Docket No. 22) specifically noted that Mead Johnson's Mailer advertisements were not literally false. Mead Johnson also believes that the prior TROs entered against them cannot b e c h a r a c t e r i z e d a s " t h e c o u r t r u l [ i n g ] i n f a v o r o f P B M " a n d a g ainst Mead Johnson because there was never a final judgment. (Mead Johnson Mot. Summ. J. 1 8 . ) P B M r e j e c t s t h e i d e a t h a t s e e k i n g a n i n j u n c t i o n a g a i n s t M e a d J o h n s o n a n d g e t t i n g t h a t injunction cannot be described as the court ruling in PBM's favor. (PBM Resp. to Mead Johnson Mot. Summ. J. 1011.) PBM also argues that it can now, postdiscovery, prove that Mead Johnson's Mailer is literally false. (Id. a t 9 1 0 . ) P B M a s s e r t s t h a t a n y f o c u s o n a d i f f e r e n c e b e t w e e n a r g u i n g

8 9

Portions of the statement are also opinion. See n.5, supra. Portions of the statement are also opinion. See n.5, supra. 14

literal falsity or implied falsity must fail as there is no def amatory "sting" that results from such a distinction. (Id. 10.) The Court finds that this portion of Statement 3 is substantially true. Getting an injunction requiring Mead Johnson to stop using certain advertisements is a sufficient f a c t u a l b a s i s t o s t a t e t h a t t h e court ruled in PBM's favor. Me a d J o h n s o n ' s a t t e m p t t o leverage this Court's earlier denial of an injunction in the in stant dispute is unavailing, as PBM's comments in the Press Release on the merits of the current suit constituted opinion at the time they were made.10 The second main issue with State ment 3 is whether this Court ca n d e t e r m i n e a s a matter of law whether it is subst antially true that "Mead Johns o n ' s s e n i o r e x e c u t i v e s a n d scientists admitted that Mead Johnson's statements were literally false." PBM backs up this statement by citing to deposition testimony by Jack Schramm, wh o s a y s t h a t d u r i n g settlement negotiations with Mead Johnson that several individuals admitted that the advertisements were literally false. (PBM Resp. to Mead Johnson Mot. Summ. J. 11.) Schramm's testimony, PBM believes, is corroborated by the depos i t i o n t e s t i m o n y o f S a n d y Willet, a Senior Product Specialist with Mead Johnson. (Id. 12.) Mead Johnson alleges that there is no admissible evidence that could ever prove this statement and thus it is false. (Mead Johnson Mot. Summ. J. 18.) Schramm's deposition testimony is inadmissible, Mead Johnson says, because it is considered parole evidence in r e l a t i o n t o t h e 2 0 0 3 A g r e e m e n t , i n which Mead Johnson denied li a b i l i t y , a n d b e c a u s e i t

10

See n.5, supra. 15

occurred during settlement negotiations, which would be exlcuded by Rule 408 of the Federal Rules of Evidence. (Id.) T h e C o u r t d e c l i n e s t o a c c e p t e i t h e r o f t h e s e a r g u m e n t s a n d h o l ds t h a t t h i s p o r t i o n o f S t a t e m e n t 3 i s s u b s t a n t i a l l y t r u e . T h e p a r o l e e v i d e n c e r u l e i s not a barrier to Schramm's testimony because it is not being offered to contradict or add to the writing, but is instead b e i n g o f f e r e d t o e v a l u a t e a l l e g e d l y d e f a m a t o r y s t a t e m e n t s i n a P r e s s R e l e a s e . R u l e 4 0 8 i s not an obstacle here because the d e p o s i t i o n t e s t i m o n y i s n o t b e i n g o f f e r e d t o p r o v e l i a b i l i t y . A c c o r d i n g l y , S t a t e m e n t 3 i s s u b s t a n t i a l l y t r u e a n d cannot be the basis of a defamation claim against PBM or Paul Manning. 4. Statement 4: "Additionally, Mead Johnson intentionally maintains its false advertising campaign . . . ." Mead Johnson reports that Statement 4 is false because "the NAD has never prohibited Mead Johnson from making the claims at issue in this case or identified in the Press Release." (Mead Johnson Mot. Summ. J. at 20.) Mead John s o n a d d s t h a t " t h e c l e a r m e a n i n g o f t h i s s e n t e n c e i s t h a t Mead Johnson's ads have been t he direct subject of an NAD proceeding instituted by PBM, which is untrue." (Id. ) PBM points to the NAD ruling and the plain language of Statement 4 to argue that it is true. As with the previous statements in the Press Release, the Court finds that Statement 4 is substantially true. PBM co r r e c t l y n o t e s t h a t t h e N A D d e c i s i o n s p e c i f i c a l l y s t a t e s t h a t "NAD is incredulous that after two compliance proceedings, with the second compliance proceedings making explicit that any noncompliant advertising w ould result in a referral to the appropriate government agency, that [Mead Johnson] would di s s e m i n a t e a d v e r t i s i n g that clearly does not comply with NAD's decision." (PBM Mot. Summ. J., Ex. 24, at 2.) The 16

NAD decision supports the proposition in Statement 4 that Mead Johnson has been subjected to adverse rulings from the NAD before. Viewed in context, the gist of Statement 4 i s t h a t e v e n t h o u g h M e a d J o h n s o n h a s f a c e d p r i o r r e p r i m a n d b y N A D , i t h a s c o n t i n u e d t o e n g a g e i n f a l s e a d v e r t i s i n g . T h i s mix of truth and opinion is not actionable. H a v i n g f o u n d t h a t S t a t e m e n t s 1 t hrough 4 are substantially true , the Court accordingly GRANTS PBM's Motion and DENIES Mead Johnson's Motio n a s t o C o u n t 2 . E. Lanham Act Violation (Count 3) Mead Johnson has asserted a Lanham Act false advertising claim a g a i n s t P B M b a s e d on the "Compare to Enfamil" and " partially broken down whey pro t e i n " l a n g u a g e t h a t appears on PBM's store brand infant formula. PBM now seeks summary judgment on this claim, asserting that th e claim is barred by the statute of limitations, l aches, res judicata, and the pa r t i e s ' 2 0 0 7 S e t t l e m e n t Agreement. On the merits, PBM also alleges the claim is baseless and should be dismissed. 1. The Statute of Limitations and Laches As the Lanham Act provides no express statute of limitations fo r f i l i n g f a l s e advertising claims, it is proper to use the analogous state limitations period. See Reed v. United Transp. Union, 488 U.S. 319, 32324 (1989). The analogous state limitation period for this matter is the limitations period under Virginia's action for fraud, which has a two year limitations period. See Va. Code § 8.01243(A); Unlimited Screw Prods., Inc. v. Malm, 781 F. Supp. 1121, 112526 (E.D. Va. 1991). I n o r d e r t o p r e v a i l o n t h i s d e f e n s e , P B M h a s t h e b u r d e n o f p r o vi n g ( 1 ) l a c k o f d i l i g e n c e b y M e a d J o h n s o n i n p u r s u i n g i t s L a n h a m A c t c l a i m , a n d (2) prejudice to PBM

17

resulting from Mead Johnson's lack of diligence. Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 12122 (2002). Lack of diligence is demonstrated when "a plaintiff has unreasonably delayed in pursuing his claim." White v. Daniel , 909 F.2d 99, 102 (4th Cir. 1 9 9 0 ) . T h e r e i s n o p e r s e r u l e th a t d e f i n e s a n " u n r e a s o n a b l e " t i m e p e r i o d . U . S . E . E . O . C . v . Worthington, Moore & Jacobs, Inc. , 582 F. Supp. 2d 731, 735 (D. Md. 2008). Nor is there a bright line test for determining when a defendant has suffered substantial prejudice. Id. P r e j u d i c e c a n i n c l u d e t h e u n a v a i l a b i l i t y o f w i t n e s s e s , c h a n g e d circumstances, and the loss of pertinent records. Id. PBM first points out that this Lanham Act claim was filed on Ma y 18, 2009, and thus, a p p l y i n g t h e t w o y e a r s t a t u t e o f l i m i t a t i o n s , a l l c l a i m s m u s t ha v e a c c r u e d o n M a y 1 8 , 2 0 0 7 or later. With that starting point, PBM says that PBM first ma de its "Compare to Enfamil" claim for its routine formula in 2003 at the latest and it first made such a claim for its g e n t l e p r o d u c t i n 2 0 0 6 . C l a i m s i n v o l v i n g t h o s e t w o l i n e s a r e , according to PBM, now time barred under the statute of limitations. PBM also asserts that any argument of "continuing wrong" should be rejected using the doctrine of laches and thus Mead Johnson's claims should be dismissed. (PBM Mot. Summ. J. 16.) Mead Johnson rejects that any of its claims are time barred. I t b e g i n s b y e x p l a i n i n g that PBM has more than forty different labels and names for its products that it sells in a v a r i e t y o f r e t a i l s t o r e s . M e a d J o h n s o n n o t e s t h a t e v e n i f s o m e brands had the "compare to" l a n g u a g e p r i o r t o M a y 1 8 , 2 0 0 7 , t here are numerous other PBM br a n d s t h a t h a v e b e g u n using the "compare to" claim since that time. For example, Mead Johnson says PBM began placing the "compare to" claim for the first time on its addedrice formula just this year.

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For at least 11 stores, Mead Johnson states, PBM has started using the "compare to" claim o n i t s r o u t i n e f o r m u l a a s r e c e n t l y a s J u n e 2 0 0 9 . S i x t e e n s t o r e s began using the claim on PBM's gentle formula as recently as August 2009. (Mead Johnson Resp. PBM Mot. Summ. J. 18.) Lastly, Mead Johnson also notes that, as to the laches ar g u m e n t , P B M h a s f a i l e d t o show the prejudice required to receive the benefit of that defense. PBM's argument is not welltaken. P B M i s a t t e m p t i n g t o d r a w a highly technical blackandwhite distinction betw e e n i t s d i f f e r e n t l a b e l s a n d n a mes that it uses to market i t s f o r m u l a -- a d i s t i n c t i o n t h a t ha s n o b a s i s i n t h e w a y i t a c t u a lly operates its business. P B M h a s o v e r f o r t y l a b e l s a n d n a m e s a n d e a c h o n e h a s a l l e g e d l y begun using the "compare to" language at a different point in time, as such there was no t a single starting point when PBM began with this claim. Instead, as PBM would likely conced e , t h e r e a r e a s i g n i f i c a n t number of its brands that have on l y r e c e n t l y , i . e . w i t h i n t h e s t a t u t e o f l i m i t a t i o n s p e r i o d , started using the "compare to" claim. Moreover, PBM has failed to show that it would be prejudiced by hearing this claim on the merits. Therefore, PBM's statute of limitations and laches arguments are rejected. 2. Res Judicata PBM also claims that the Lanham Act claim is barred by res judicata because the parties' 2006 trade dress dispute involved the same transaction or occurrence as the current dispute. Thus, in PBM's v i e w , M e a d J o h n s o n w a s r e q u i r e d t o b r i n g i t s c u r r e n t claims at that time. PBM reasons that both actions involved th e labeling of its products under § 43(a) of the Lanham Act and, as a result, involved the same transaction for res judicata purposes. (PBM Mot. Summ. J. 1820.)

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Res judicata precludes the assertion of a claim after a judgment on the merits in a prior suit by the parties or their privies based on the same cause of action. Pueschel v. United States, 369 F.3d 345, 35455 (4th Cir. 2004). "For the doctrine of res judicata to be applicable, there must be: (1) a final judgment on the merits in a prior suit; (2) an identity o f t h e c a u s e o f a c t i o n i n b o t h t h e e a r l i e r a n d t h e l a t e r s u i t ; a n d ( 3 ) a n i d e n t i t y o f p a r t i e s o r their privies in the two suits." Id. Using similar reasoning to the above argument regarding the sta tute of limitations, the Court rejects the res judicata argument on the grounds that at least one viable false advertising claim for each of PBM's brands has arisen after the 2006 dispute between these parties. Res judicata s i m p l y c a n n o t b a r c l a i m s t h a t w e r e n o t i n e x i s t e n c e a t t h e t i me the first suit was brought. 3. Effect of the Parties' 2007 Agreement P B M c l a i m s t h a t t h e 2 0 0 7 A g r e e m e n t e n t e r e d i n t o b y i t s e l f a n d M ead Johnson bars the current Lanham Act claim unde r b a s i c c o n t r a c t l a w . T h e A g r e e m e n t , P B M e x p l a i n s , stated that the Mead Johnson "agrees to the use by the PBM Part ies of the packaging shown in Exhibit D." (PBM Mot. Summ. J. 1718.) As PBM notes, the packing in Exhibit D contains t h e l a n g u a g e " C o m p a r e t o E n f a m i l L I P I L . " I n P B M ' s v i e w , b y a g r eeing that PBM could use that packaging, Mead Johnson cannot now file suit based on lang u a g e c o n t a i n e d i n t h a t packaging. Mead Johnson maintains that the Agreement did not make any representations with r e g a r d t o t h e l a b e l o r p a c k a g i n g other than the product labels i n E x h i b i t s B a n d C a t t a c h e d to the Agreement. For support, Mead Johnson quotes from the Agreement, which states:

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N o t h i n g h e r e i n i s i n t e n d e d t o o r w i l l r e l e a s e t h e P B M P a r t i e s f rom any c l a i m s a r i s i n g o u t o f t h e m a n u f a c t u r e , d i s t r i b u t i o n , a d v e r t i s i n g, promotion, sale, or other use of (i) INFANT F O R M U L A c o n t a i n e d i n p a c k a g i n g t h a t i s confusingly similar to the ENFAMIL LIPIL packaging on or after December 31, 2007; or (ii) any products othe r than INFANT FORMULA in the packaging shown in Exhibits B and C. Notwithstanding the foregoing, should the PBM Parties breach this agreement by continuing to sell or resuming sales of products in the packaging shown in Exhibits B a n d C o r i n packaging that otherwise infringes the ENFAMIL LIPIL packaging, such breach will constitute a new infringement and Mead Johnson will be entitled to file suit or to address such infringement under the law in any way it sees fit. (Mead Johnson Resp. PBM Mot. Summ. J. 1920 (citing 2007 Agreement ¶ 3).) Thus, according to Mead Johnson, the Agreement can only prohibit clai ms on the labels contained in Exhibits B and C. (Id. a t 2 0 . ) Reading the Agreement as a whole, the Court agrees with Mead Johnson. Although PBM is correct that Mead Johnson agreed to PBM's use of the label in Exhibit D, the Agreement clearly addresses PBM packaging, not the advertising claims. Also, the Agreement could be read to be limited to PBM's Maker's Mark bra nd, which is the brand on each of the labels in the Agreement's exhibits. Therefore, the Court declines to accept PBM's argument regarding the 2007 Agreement. 4. Merits of the Lanham Act Claim The Lanham Act prohibits the "false or misleading description of fact, or false or misleading representation of fact, which . . . in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities." 15 U.S.C. § 1125(a)(1)(B). For liability to arise under the false advertising provisions of the Lanham Act, "the contested s t a t e m e n t o r r e p r e s e n t a t i o n m u s t b e e i t h e r f a l s e o n i t s f a c e o r , although literally true, likely 21

to mislead and to confuse consumers given the merchandising context." C.B. Fleet Co. v. SmithKline Beecham Consumer Healthcare, L.P., 131 F.3d 430, 434 (4th Cir. 1997) (internal quotation marks omitted). If the advertisement is literally false, a violation may be established without evidence of consumer deception. Scotts Co. v. United Indus. Corp., 315 F.3d 264, 272 (4th Cir. 2002). But if plaintiff's theory of recovery is premised upon a claim of implied falsehood, plaintiff must demonstrate, by extrinsic evidence, that the challenged advertisements tend to mislead or confuse consumers. Id. PBM claims, and Mead Johnson does not contest (Mead Johnson Resp. PBM Mot. Summ. J. 22), that there is no literal falsity in this case. As to implied falsity for the "compare to" claim, PBM rejects Mead Johnson's evidence for several reasons. First, as discussed more thoroughly in the memorandum for the Motion in Limine, PBM says that Mead Johnson's expert Dr. Ravi Dhar should be excluded under Daubert. PBM reasons that Dhar's survey only addressed the added starch and added iron formulas and thus cannot be used to extrapolate to other formulas. (PBM Mot. Summ. J. 23.) Second, as to the substance of the survey, PBM alleges that i t i s f l a w e d a n d i n c a p a b l e o f p roving that consumers perceive the claim "compare to En f a m i l " l a n g u a g e a s i n d i c a t i n g t h a t P B M i s c l a i m i n g t h a t i t s formula is identical to Mead Johnson's. (Id. at 24.) As to the implied falsity of the "partially broken down whey protein" claim, PBM a s s e r t s t h e c l a i m i s l i t e r a l l y t r u e b e c a u s e i t d o e s n o t , a s M e a d Johnson avows, have to mean that all the protein is broken down. (Id. a t 2 6 . ) P B M a l s o a d d s t h a t a n y d i f f e r e n c e i n c l a i m i n g a l l o r s o m e p r o t e i n i s b r o k e n d o w n i s n o t m a t e r i a l b e c ause "Mead Johnson's own e x p e r t a d m i t t e d t h a t t h e r e i s n o s c i e n t i f i c p r o o f t h a t t h e p r o d u c t s a r e d i f f e r e n t a s t o

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digestibility." (Id.) PBM, quoting the Fourth Circuit, reports that a claim must be material: "A plaintiff asserting a false advertising claim under the Lanham Act must establish that: . . . t h e m i s r e p r e s e n t a t i o n i s m a t e r i al , i n t h a t i t i s l i k e l y t o i n f l u e n c e t h e p u r c h a s i n g d e c i s i o n . " Scotts, 315 F.3d at 273. Because there is no proof that this claim is material, PBM states this claim is not actionable. Mead Johnson's response makes two main points. First, as to both of PBM's advertising claims, Mead Johnson believes that Dhar's survey evidence creates a triable issue because these two claims combined imply "to a not insigni ficant number of consumers that all of the whey protein in the formula is partia l l y b r o k e n d o w n a n d t h a t a s much or more of the whey protein in the PBM formula is partially broken down as in Enfamil Gentlease LIPIL." (Mead Johnson Resp. PBM Mot. Summ. J. 2223.) Second, Mead Johnson states that the amount of protein PBM's advertisement communicates is broken down is material to consumers and doctors and therefore can be the basis of a Lanham Act claim. (Id. at 23.) The Court finds that because Dr. Dhar's testimony is admissible and material factual issues remain in dispute, Mead Johnson has the better argument here. At this stage in the proceedings, the Court simply cannot conclude as a matter of law that no reasonable jury could find for Mead Johnson. Thus, PBM's Summary Judgment Motion as to Count 3 of Mead Johnson's counterclaims is DENIED. F. Civil Contempt (Count 4) T o e s t a b l i s h c i v i l c o n t e m p t , e a c h o f t h e f o l l o w i n g e l e m e n t s m u s t be shown by clear a n d c o n v i n c i n g e v i d e n c e : ( 1 ) t h e e x i s t e n c e o f a v a l i d d e c r e e o f which the alleged contemnor

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had actual or constructive knowledge; (2) that the decree was i n the movant's "favor"; (3) t h a t t h e a l l e g e d c o n t e m n o r b y i t s conduct violated the terms of t h e d e c r e e , a n d h a d knowledge (at least constructive knowledge) of such violations; and (4) that the movant suffered harm as a result. Ashcraft v. Conoco, Inc. , 218 F.3d 288, 301 (4th Cir. 2000). A district court's civil contempt order is reviewed for an abuse of discretion. Colonial Williamsburg Found. v. The Kittinger Co. , 38 F.3d 133, 136 (4th Cir. 1994). Furthermore, when a district court's decision i s b a s e d o n a n i n t e r p r e t a t i o n of its own order, the appellate court's standard of review is hi g h l y d e f e r e n t i a l b e c a u s e d i s t r i ct courts are in the best position to interpret their own orders. JTH Tax, Inc. v. H & R Block E. Tax Servs., Inc., 359 F.3d 699, 705 (4th Cir. 2004). The Fourth Circuit has stated that before a district court may seal any court documents, the court must (1) provide public notice of the request to seal and allow interested parties a reasonable opportunity to object, (2) consider less drastic alternatives t o s e a l i n g t h e d o c u m e n t s , a n d ( 3 ) p r o v i d e s p e c i f i c r e a s o n s a n d f a c t u a l f i n d i n g s s u p p o r t i n g its decision to seal the documents and for rejecting the alternatives. Ashcraft, 218 F.3d at 302 (4th Cir. 2000). These procedures "must be followed when a district court seals judicial records or documents." Id. Mead Johnson asserts that PBM should be held in civil contempt because PBM's 2009 Press Release violated this Court's 2003 Sealing Order. Mead Johnson observes that t h e O r d e r w a s a v a l i d , e n f o r c e a b l e d e c r e e t h a t w a s e n t e r e d i n M ead Johnson's favor and that it has now been violated causing harm to Mead Johnson. (Mead Johnson Mot. Summ. J. 2730.)

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In its crossmotion for summary judgment, PBM argues that there is no private independent right of action for civil contempt. Even if there was, PBM believes that the Order issued by this Court is invalid because the Court did not follow the procedures required by the Fourth Circuit's Aschcraft decision. PBM also states that even if the Sealing O r d e r r e m a i n s i n e f f e c t , i t w a s n o t a g a g o r d e r , a n d t h u s t h e r e was no violation in this case. (PBM Mot. Summ. J. 2729.) PBM's reliance on Finn v. Schiller , 72 F.3d 1182, 1187 (4th Cir. 1996), for the argument that there is not a private independent right of action for civil contempt is misplaced. First, Finn dealt with Federal Rule of Criminal Procedure 6, and whether it p r o v i d e s a c i v i l r e m e d y f o r i t s v i o l a t i o n . T h a t c a s e i s s i m p l y inapplicable here. Second, to t h e e x t e n t P B M i s s u g g e s t i n g t h a t any civil contempt claim must b e f i l e d u n d e r t h e s a m e docket number as the Order at issue, rather than the current docket number even though the same parties are before the same court on interrelated disputes, PBM is incorrect. This argument ignores the relationshi p between the prior Order and t he current litigation and promotes a waste of the parties' time and court resources. As a result, Mead Johnson may bring its claim for civil contempt. On the merits of the claim, howe v e r , t h e C o u r t f i n d s t h a t t h e r e h a s n o t b e e n a v i o l a t i o n o f t h e O r d e r . T h e e f f e c t o f t h e O r d e r w a s t o p r e v e n t the documents in the 2002 case from resting in the public domain. It did not, however, prohibit a party from r e f e r e n c i n g t h e d o c u m e n t s i n t h a t c a s e . M e a d J o h n s o n h a s n o t a lleged that PBM has made public the documents sealed by this Court, instead Mead Johnson alleges that "PBM clearly disclosed the key contents of the pleadings sealed in the 2002 Litigation by, in essence,

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paraphrasing them." (Mead Johnson Resp. to PBM Mot. Summ. J. 27 (emphasis added).) B e c a u s e t h e C o u r t f i n d s t h a t t h i s i s n o t a v i o l a t i o n o f t h e O r d er, summary judgment in favor of PBM is GRANTED. Mead Johnson's Motion as to Claim 4 is thus DENIED. III. CONCLUSION For the previously stated reasons, the Court (1) DENIES Mead Johnson's Motion as to Count 1 of its own counterclaims; (2) GRANTS PBM's Motion and DENIES Mead Johnson's Motion as to Count 2 of Mead Johnson's counterclaims; (3) DENIES PBM's Motion as to Count 3 of Mead Johnson's counterclaims; (4) GRANTS PBM's Motion and DENIES Mead Johnson's Motion as to Count 4 of Mead Johnson's counterclaims. Let the Clerk send a copy of this Memorandum to all counsel of record.

/s/ James R. Spencer Chief United States District Judge

ENTERED this 22nd d a y D e c e m b e r 2 0 0 9

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