author: ROVNER, District Judge.

text:
    MARATHON PETROLEUM COMPANY, (formerly known as Marathon Oil Company), an Ohio corporation, Plaintiff-counterdefendant, v. Sam S. LoBOSCO, Defendant-counterplaintiff.
    No. 82 C 4573.
    United States District Court, N.D. Illinois, E.D.
    May 6, 1985.
   MEMORANDUM OPINION AND ORDER.

ROVNER, District Judge.

This case is before the Court on a motion by the plaintiff, Marathon Petroleum Company (“Marathon”), for summary judgment on the counterclaim. On June 4, 1980, Marathon and the defendant, Sam S. LoBosco (“LoBosco”), executed a written lease for a service station located in Elk Grove Village, Illinois, Pursuant to the lease, LoBosco became a distributor of Marathon products in the Elk Grove area. Under the lease terms, LoBosco agreed not to contaminate, misbrand or otherwise impair products with Marathon’s trademark.

In the counterclaim, LoBosco alleges that Marathon agents instructed him to sell Marathon gas, which allegedly contained a special additive, at less than cost in order to compete with nearby Cheker and Speedway gas stations. LoBosco also asserts that Marathon threatened to terminate his lease if he did not sell its product at prices offered by the nearby competitors. Furthermore, LoBosco claims that Marathon wholly or partially owns these competitors.

After September, 1981, LoBosco purchased gasoline, which did not contain the Marathon additive, from an independent supplier. Marathon alleges that LoBosco did not properly debrand the service station in light of the consideration that he was not selling the Marathon gasoline with the additive.

Consequently, on April 12, 1982, Marathon informed LoBosco that it was terminating their lease agreement pursuant to the Petroleum Marketing Practices Act, 15 U.S.C. § 2801, et seq. (“PMPA”). Approximately three months later, Marathon filed its complaint in the instant case. Marathon alleged that it was entitled to damages under: (1) the Lanham Act, 15 U.S.C. § 1051, et seq.; (2) the Illinois Uniform Deceptive Trade Practices Act, Ill.Rev. Stat., ch. 121V2, § 311, et seq.; and (3) a claim for breach of contract based on the allegation that LoBosco misbranded Marathon gasoline. Marathon also sought a court order permitting it to repossess the service station.

Judge Aspen ordered an evidentiary hearing on Marathon’s motion to evict LoBosco. The hearing was conducted by Magistrate Sussman on October 14, 1982; Findings of Fact and Conclusions of Law were entered on November 29, 1982. The Magistrate found that when LoBosco sold gas that was not Marathon-branded gas, LoBosco failed to properly cover up Marathon's logos; when LoBosco later did attempt to debrand his station, he used methods which did not completely conceal Marathon’s trademark. The Magistrate further found that Marathon gave proper notice to terminate the lease pursuant to the PMPA; based on that finding and of LoBosco’s breach of the lease due to misbranding, the Magistrate concluded that LoBosco should be evicted. On December 14, 1982, Judge Aspen accordingly adopted Magistrate Sussman’s Findings of Fact and Conclusions of Law and entered an order for eviction.

On January 3, 1983, LoBosco filed an amended answer and counterclaim seeking: (1) damages pursuant to the Clayton Act, 15 U.S.C. § 15, for Marathon’s alleged violation of the Sherman Antitrust Act, 15 U.S.C. §§ 1 and 2; (2) a declaration that Marathon misused its trademarks and was not entitled to possession of the station until May 31, 1983, the end of the lease period; (3) a preliminary and permanent injunction to enjoin Marathon from violating the Sherman Act; (4) a declaration that Marathon violated the Illinois Franchise Disclosure Act, Ill.Rev.Stat. ch. 121V2, § 701, et seq., for failing to file a franchise disclosure statement; and (5) for rescission of the lease and franchise agreement.

Marathon then filed a motion to dismiss the counterclaim or, in the alternative, to strike portions of it and of LoBosco’s amended answer, arguing in part that the doctrine of law of the case required the court to accept Magistrate Sussman’s Findings of Fact and Conclusions of Law and thus barred LoBosco’s counterclaim. On November 2, 1983, Judge Paul Plunkett, before whom this case was then pending, denied the motion to dismiss the counterclaim and granted in part and denied in part the motion to strike. After further discovery, Marathon filed its motion for summary judgment on the counterclaim on August 22, 1984. On November 1, 1984, this case was transferred to this Court when Judge liana Diamond Rovner assumed the duties of office as Judge of the United States District Court for the Northern District of Illinois. On December 27, 1984, this Court denied Marathon’s motion for summary judgment except as to the antitrust claims as to Cheker. This opinion sets forth the basis for that decision.

I. Application of the Law of the Case Doctrine.

Marathon contends again, as it did on its previously filed motion to dismiss, that the “law of the case” doctrine, which precludes parties from relitigating the same issues on which the court has already ruled, likewise precludes LoBosco’s counterclaim from being considered. Judge Aspen’s order of eviction, however, was based on evidence concerning whether LoBosco failed to properly debrand in a manner which terminated the lease and violated the PMPA. The evidentiary hearing in no way litigated the counterclaim’s assertions that Marathon violated the Sherman Act, just as it never adjudicated Marathon’s Lanham Act claim. The general rule regarding the judicially created law of the case doctrine is that “it is not an inexorable command, and must not be utilized to accomplish an obvious injustice.” Velsicol Chemical Corporation v. Mansanto Company, 579 F.2d 1038, 1050 (7th Cir.1978), quoting Cochran v. M & M Transportation Co., 110 F.2d 519, 521 (1st Cir.1940).

Although the Magistrate’s findings set forth the reasons why the lease in question could be terminated, the evidentiary hearing in no way adjudicated defendant’s allegation that Marathon coerced him into selling Marathon gas below cost but at a price competitive with non-Marathon branded stations which were nonetheless owned by Marathon. This allegation of Sherman Act liability is not determined by a prior finding that the lease was breached. Compare, Itin v. Mobil Oil Corporation, 527 F.Supp. 898 (E.D.Mich., S.D.1981).

Moreover, “[t]he decision of a trial or appellate court whether to grant or deny a preliminary injunction does not constitute law of the case for the purposes of further proceedings and does not limit or preclude the parties from litigating the merits____” Berrigan v. Sigler, 499 F.2d 514, 518 (D.C. Cir.1974) (footnote omitted). See also 18 Wright & Miller, Federal Practice and Procedure: Jurisdiction, § 4478 at 798-99 (1981). Because the hearing before the Magistrate to determine whether LoBosco should be evicted from the service station was in the nature of a hearing for a preliminary injunction, this Court is not bound by the law of the case doctrine to accept the Magistrate’s Findings of Fact as conclusively established. Because the instant motion for summary judgment filed by Marathon in large part relies upon those Findings of Fact, and because LoBosco’s evidentiary material submitted in opposition sets up material disputes of fact with respect to those findings, Marathon’s motion for summary judgment must be denied.

The facts as presented by LoBosco are as follows. Before entering into the lease/franchise agreement with Marathon, LoBosco had conversations with Marathon representatives which led him to understand that Marathon would actively assist him in succeeding in his Marathon branded service station business. He understood that upon entering into the relationship with Marathon, he would receive the right to sell automotive equipment and services and petroleum products bearing the Marathon trademark and would benefit from various Marathon programs and services such as advertising, dealer training, credit card service, maintenance of the station, and 30 day credit terms upon the purchase of gasoline and other products. At no time during these conversations was he informed that Marathon had an ownership interest in Cheker and that Marathon wholly owned Speedway. He did not know that Marathon planned a new Cheker and a new Speedway station within a year of his entering into the lease/franchise agreement, that Marathon sells 85% of its gasoline to non-branded direct competitors such as Cheker and Speedway, and that such competitors would purchase gas at a price significantly less than his price. He was assured by Marathon representatives during the negotiations, who referred to his initial lease as a “trial franchise,” that he would be able to purchase Marathon gasoline for resale to the public at a profit, that the average station made a resale profit of 13.59%, and that he could not purchase gasoline from any other source because of the non-contamination clause in his lease.

Needless to say, LoBosco’s expectations of a profitable business did not come to pass, primarily because, as he contends, Marathon opened up a Cheker and a Speedway station, to which Marathon sold gasoline at much lower prices, in close proximity to his station. LoBosco states that during the summer of 1980 he informed Ken Dainton, his Marathon sales representative, that he could not compete with the Cheker and Speedway stations because of the difference in price, but that Dainton responded as follows:

Dainton told me that I should sell my gas at a price lower than the Cheker and Speedway price, in order to sell higher volumes of gasoline at the station, and that I should not look to make a profit on the sale of my gasoline. He told me that I should sell my gasoline at a loss in order to keep my service station franchise and make a profit in other areas of the business.

(LoBosco Affidavit, 1124.) Dainton also insisted that he should purchase 100,000 gallons of gasoline per month and sell it below cost.

Although he initially refused to sell below cost, he ultimately did so for an unspecified length of time because Dainton refused to provide necessary services and maintenance for his station and refused to allow him to convert his station to a self-service station unless he did so. In the spring and summer of 1981, LoBosco sold gasoline at or below cost but still could not compete with the Cheker or Speedway stations in his vicinity.

Finally, in the fall of 1981, LoBosco decided to purchase gasoline from other sources and put signs in his window indicating that the gasoline sold in his station was not necessarily Marathon gasoline. He also ordered that the Marathon logos on the pumps be covered and the Marathon sign be removed. In response, Marathon representatives informed him that he was violating his lease, refused to allow him to cover the logos and take down the signs, threatened him with terminating his lease and ruining his business unless he purchased more gasoline and cut his prices, and insisted that he could purchase gasoline only from Marathon.

LoBosco apparently continued to purchase gasoline from other sources, and in April, 1982 he received a letter from Marathon terminating his franchise. Marathon then filed its complaint in this Court, and on December 15, 1982, following the hearing by Magistrate Sussman, LoBosco was evicted from the station. LoBosco was dissatisfied with the representation of his attorney at that hearing, and thus consulted his present attorneys. From them he claims he learned for the first time of the existence of the Illinois Franchise Disclosure Act, and he first sought recision of his lease/franchise under that Act on November 30, 1982.

Not surprisingly, Marathon’s version of the facts, and the findings entered by Magistrate Sussman, differ substantially from LoBosco’s version. Those findings need not be repeated here. Suffice it to state that Marathon relies heavily on Magistrate Sussman’s finding that the difference in the price of gasoline Marathon charged LoBosco and Speedway and Cheker was justified:

A wholesale customer of Marathon receives just gasoline and no services from Marathon. The wholesale customer has to pay for the gasoline within ten days of its pick up and pays itself for the hauling of the gasoline. On the other hand, a Marathon branded dealer receives the benefit of Marathon’s promotion of its branded gasoline, the benefit of the additive to the gasoline, the benefit of not paying separately for hauling charges, the benefit of Marathon’s providing credit card services to the dealer’s customers, the benefit of Marathon’s maintenance of the station, and the benefit of dealer training programs conducted by Marathon.

(Magistrate’s Findings of Fact and Conclusions of Law, ¶ 45.) This finding clearly conflicts with LoBosco’s contention that Marathon’s price differential was unreasonably designed to drive him out of business and that this conduct constitutes resale price maintenance in violation of the antitrust laws. Any express or implied vertical agreement which has the effect of establishing prices is a substantial threat to free competition which was the basis for the Sherman Act; consequently an illegal combination to fix prices results whenever a seller suggests a resale price and obtains compliance by doing more than just refusing to deal if that price is not followed. Swettlen v. Wagoner Gas and Oil, Inc., 369 F.Supp. 893, 899 (W.D.Pa.1974).

Marathon has also submitted affidavits which deny that it has ever had any anticompetitive intent or that it has ever entered into any agreements with any competitors of LoBosco to the end of driving him out of business. As the Seventh Circuit noted in a case cited by Marathon, Havoco of America, Ltd. v. Shell Oil Co., 626 F.2d 549, 553 (7th Cir.1980), “where some claim under the antitrust laws has been stated, the factual, subjective questions of intent and purpose are properly resolved only after discovery and trial.” Although LoBosco may have some difficulty in overcoming Marathon’s proof on the antitrust issues at trial, this Court finds that material disputed issues of fact exist, the resolution of which will involve a determination of the credibility of witnesses. Accordingly, Marathon’s motion for summary judgment on the antitrust and contract issues is denied. -

II. Claims Under The Illinois Franchise Disclosure Act.

Marathon also contends that its agreement with LoBosco for the lease of his service station is not a “franchise” within the meaning of the Illinois Franchise Disclosure Act. Marathon asserts that it did not require LoBosco to pay a direct franchise fee and that LoBosco’s monthly rental payment of $1,200 does not constitute an indirect franchise fee within the meaning of the Act because that amount merely reflects the economic value of the property as opposed to a payment wholly or partly for the right to sell, resell, or distribute goods and services. Instead of challenging this evidence, LoBosco contends that because Marathon required him to buy 100,000 gallons of gasoline per month during the summer of 1981 without regard to his ability to resell this amount, that requirement constituted a “franchise fee” within the meaning of the Illinois Franchise Act. Section 200.108 of the Rules and Regulations adopted by the Administrator of the Illinois Franchise Disclosure Act provides:

An indirect franchise fee within the meaning of Section 3(14) of the Act is present despite the bona fide wholesale or retail price exceptions if the buyer is required to purchase a quantity of goods so unreasonably large that such goods may not be resold within a reasonable time. What constitutes a reasonable time is determined by the price, markup, consumer demand, location of product suppliers and seasonal demand variations.

14 Ill.Adm.Code, Ch. II, § 200.108.

Marathon responds by citing evidence that suggests that LoBosco in fact never purchased 100,000 gallons of gasoline per month. The problem with Marathon’s evidence, however, is that it demonstrates only that for the twelve month period from January to December, 1981, Mr. LoBosco purchased 280,847 gallons of gasoline from Marathon. This evidence does not preclude the possibility that LoBosco purchased 100,000 gallons in any one month during that year. Nor does it preclude the possibility that Marathon required LoBosco to purchase an unreasonable volume of gasoline, but that he could not or did not meet that requirement. The fact that he did not meet the requirement does not prove that no indirect “franchise fee” was involved.

Finally, Marathon argues that LoBosco’s claim is barred by the statute of limitations of Section 21(2)(b) and Section 22 of the Illinois Franchise Disclosure Act. Marathon contends that because LoBosco testified that he was aware of the relationship between Marathon and Cheker since 1980 or 1981, both his attempted rescission of the franchise agreement demanded on November 30, 1982 by letter and the counterclaim filed January 3, 1983 were time-barred. As Marathon acknowledges, in the case of Port City Leasing v. Loffredo, 114 Ill.App.3d 775, 70 Ill.Dec. 560, 449 N.E.2d 907 (3d Dist.1983), the Illinois Appellate Court held that knowledge of Franchise Disclosure Act violations presents “mixed questions of law and fact on which laymen are entitled to acquire their first knowledge from an attorney.” LoBosco’s affidavit indicates he did not acquire knowledge of Marathon’s violations until after he consulted his present attorneys and that he sought to rescind the agreement thereafter within the statutory period. Although Marathon argues that the court’s decision in Port Leasing is not well-reasoned, a federal court exercising pendent jurisdiction over a claim based on state law must apply state substantive law to the pendent claim. United Mine Workers of America v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966). This Court is not persuaded by Marathon’s argument to follow a course different from that charted by the Illinois Appellate Court in interpreting its own law. Accordingly, Marathon’s motion for summary judgment is denied on the claim under the Illinois Franchise Disclosure Act.

CONCLUSION

For the reasons stated herein, Marathon’s motion for summary judgment on LoBosco’s counterclaim is denied except as to LoBosco’s allegations of antitrust violations between Marathon and its wholly-owned subsidiary, Speedway, which allegations are hereby dismissed.

      . Nonetheless, although Judge Aspen’s order adopting the Magistrate’s findings does not preclude LoBosco's counterclaim and the issues raised therein, it has resolved the issues as to whether LoBosco misbranded Marathon's gas and whether Marathon sent LoBosco proper notice of termination under the PMPA. Particularly in light of the fact that defendant testified at the evidentiary hearing and presented witnesses on his behalf, Judge Aspen’s order resolved the issues stated in paragraphs 5, 8, 14 and 21 of LoBosco’s amended answer, paragraphs 9(b), 12, 14, 16 and 21 of the counterclaim, and paragraph 5(b) of the prayer for relief. Marathon’s motion to strike, therefore, was granted by Judge Plunkett as to the above paragraphs. This Court declines LoBosco’s request to disturb Judge Plunkett’s order striking certain paragraphs of his amended answer and counterclaim.

      . Marathon’s motion for summary judgment is granted only with respect to LoBosco’s allegations of antitrust violations between Marathon and its wholly-owned subsidiary, Speedway. As LoBosco concedes, under the Supreme Court’s decision in Copperweld Corp. v. Independent Tube Corp., 467 U.S. 752, 104 S.Ct. 2731, 2742, 81 L.Ed.2d 628 (1984), Marathon is incapable of conspiring with Speedway as a matter of law.

      . LoBosco also asserts that his loss of the promised 13.5% profits on sales of gasoline constituted an indirect franchise fee. This argument is meritless in light of the obvious point that if LoBosco did not profit from his sales, Marathon could not realize a franchise fee from that lack of profit.


source: Caselaw Access Project

author: DONALD E. O’BRIEN, Chief Judge.

license: Public Domain

text:
    David W. CHILDS, Plaintiff, v. W.W. REYNOLDSON, et al., Defendants.
    Civ. No. 84-887-E.
    United States District Court, S.D. Iowa, C.D.
    May 8, 1985.
    David W. Childs, Omaha, Neb., pro se.
    John R. Perkins, Asst. Atty. Gen., Des Moines, Iowa, for defendants.
   ORDER

DONALD E. O’BRIEN, Chief Judge.

This matter comes before the Court on defendants’ resisted motion to dismiss filed January 21, 1985. A hearing was held in Des Moines, Iowa on April 16, 1985. For the reasons stated below, the motion to dismiss is granted.

Plaintiff brings this diversity action for damages against the members of the Supreme Court of Iowa and Iowa Board of Law Examiners alleging that their wrongful conduct prevented him from being licensed as a lawyer in Iowa. Specifically, plaintiff alleges that the Board of Law Examiners (Board) violated Rule 102 of the Rules Governing Admission to the Bar. Appendix to Ch. 610, Code of Iowa (1983). Rule 102 states that the bar examination shall contain two questions of each of twelve “basic subjects” and one question on ethics and professional responsibility. Also, Rule 102 sets forth ten “additional subjects” which the Board may, in its discretion, include on the test. During argument, plaintiff indicated that the June 1984 exam included only one question on the following “basic subjects”: Civil Procedure, Constitutional Law, Federal Income Tax. Also, plaintiff felt that the examination included four questions on Evidence and three questions on Basic Real Property. Plaintiff further stated that the exam included one question on accounting, a subject not included in either the “basic” or “additional” subject list.

Plaintiffs brief states that he “agrees with the rules and administration as set up by the Supreme Court of Iowa, Plaintiff only wishes the defendants in this case had abided by those rules.” Plaintiff argues that the individuals are the real parties in interest because their action was not lawfully authorized and, thus, was not action of the State. Plaintiff emphasized that his primary concern was in pursuing his claim against the members of the Board and that he was not particularly interested in suing the State of Iowa.

A. Real Party in Interest.

The defendants argue that the State of Iowa is the real party in interest and, therefore, no diversity of citizenship exists because states are not “citizens.” The Court does not agree that the State of Iowa is the real party in interest. The Court in Ronwin v. Shapiro, 657 F.2d 1071, 1073 (9th Cir.1981), set forth the following test:

Although a number of factors may be considered, the crucial question in determining whether the suit should be regarded as one against the state is whether the named defendant has such independent status that a judgment against the defendant would not impact the state treasury.

That court, when addressing the claim against the individual defendants, stated:

Ronwin is suing the defendants individually, however; he is not suing the Law Review. Dickinson arid Shapiro are not like the Board of Regents in that the state will have to pay the judgment if it is to be paid at all. Ronwin might attempt to satisfy any judgment from Dickinson and Shapiro personally. Funds from the State of Arizona are potentially involved in this case only if the State has voluntarily assumed the obligation of covering such risks under its indemnification program. We agree with Professor Tribe that “a state should not be able to turn a purely intramural arrangement with its officers into an extension of sovereign immunity.” L. Tribe, American Constitutional Law 132-33 n. 22 (1978). In rejecting an eleventh amendment claim similar to this one, the court in Palmer v. Penn-Ohio Road Materials, Inc., 470 F.Supp. 1199, 1203 (W.D.Pa. 1979), noted the “incongruous” result that would follow if “the state, by creating a fund to compensate victims, has somehow extended immunity [to state employees] so as to deny payment to the class of intended beneficiaries.” We conclude that Dickinson and Shapiro are not protected by eleventh amendment immunity because the claim against them does not constitute a suit against the State of Arizona.

Ronwin v. Shapiro, 657 F.2d, at 1074-75. Similarly, plaintiff here has sued the defendants as individuals and might seek to satisfy any judgment against them personally. As the quote above indicates, the fact that Iowa has established the “Iowa Tort Claims Act,” Ch. 25A, Code of Iowa, does not necessarily convert the State of Iowa into the real party in interest in this litigation. Furthermore, plaintiff seeks to recover for the harm caused by the failure of the individual members of the Board to follow Rule 102 in conducting the bar examination.

Accordingly, the Court holds that the named defendants are not simply nominal defendants and that they have a sufficient independent status that a judgment against them would not have to be paid by the State in order to be satisfied. Therefore, the State of Iowa is not the real party in interest.

B. Eleventh Amendment.

Having held that this suit against the individual defendants does not constitute a suit against the State of Iowa, it follows that the individual defendants are not protected by Eleventh Amendment immunity. Ronwin v. Shapiro, 657 F.2d, at 1075.

C. Judicial Immunity.

With respect to the defendants who are members of the Supreme Court of Iowa, the contention advocated is that they are entitled to absolute immunity. This position has two steps. First, defendants argue that regulating admission to the state bar is judicial action. Second, defendants assert that “judicial action”, i.e., acts taken within a judge’s judicial capacity, is protected by absolute immunity. In view of Gh. 610, Code of Iowa, the rules contained in the Appendix thereto, and In re Summer, 325 U.S. 561, 565 n. 6, 65 S.Ct. 1307, 1310 n. 6, 89 L.Ed. 1795 (1945), this Court concludes that the action taken by the justices of the Supreme Court of Iowa with respect to denying plaintiff admission to the bar was within the exercise of their judicial power, and as such, is protected by the absolute immunity set forth in Stump v. Sparkman, 435 U.S. 349, 98 S.Ct. 1099, 55 L.Ed.2d 331 (1978). Accordingly, plaintiff cannot maintain an action for damages against these defendants and they shall be dismissed.

D. Quasi Judicial Immunity.

Next, the Court must consider whether absolute quasi judicial immunity should be extended to the other named defendants who acted in various roles in administering the bar examination. In Feldman v. State Bar of Law Examiners, 438 F.2d 699, 705 (1971), the Eighth Circuit had occasion to recognize this issue but did not decide it.

What has been said above renders unnecessary a decision on the contention raised by defendants and which might well have some merit, that the Board of Law Examiners acts in a quasi judicial capacity as an integral part of the judicial process and as such enjoys judicial immunity from suit.

Defendants analogize the present case to those cases where courts have extended judicial immunity to protect the individuals involved in conducting disciplinary proceedings of the bar. Simons v. Bellinger, 643 F.2d 774 (D.C.Cir.1980); Clarke v. State of Washington, 366 F.2d 678, 681 n. 4 (9th Cir.1966). See Rhodes v. Meyer, 334 F.2d 709, 718 (8th Cir.1964). In Simons v. Bellinger, the court held that the members of a disciplinary committee were entitled to absolute immunity and, in so holding, stated:

The [District of Columbia Court of Appeals Committee on Unauthorized Practice of Law] members’ work is functionally comparable to the work of judges in a second respect. They serve as an arm of the court and perform a function which traditionally belongs to the judiciary. In this sense, the Committee’s efforts to ascertain those practicing law without proper authority are judicial efforts.
* * * * * *
Thus, the Committee acts as a surrogate for those who sit on the bench. Indeed, were it not for the Committee, judges themselves might be forced to engage in the sort of inquiries which the plaintiffs have put in issue. In sum, the Committee members, as a bona fide arm of the Court of Appeals of the District of Columbia, must almost by definition make decisions comparable to those of a judge.

Simons v. Bellinger, 643 F.2d, at 780-81.

In the present case the Court finds that the Board acted as an arm of or surrogate for the Supreme Court of Iowa. As such, the Court holds that the individuals involved in various roles in administering the bar examination are entitled to absolute quasi judicial immunity. The Court does not agree with plaintiff’s position that granting absolute immunity would mean that he has no remedy. First, there exists an internal appeal procedure which is set forth in Rule 117.1 entitled “Review and Appeal.” While the time limits set forth in that rule may be viewed by the plaintiff as harsh, the procedure exists nonetheless. Second, this Court’s holding does not preclude the possibility of injunctive relief as a remedy to an individual aggrieved by misconduct of the Board. Third, plaintiff may be able to collect money damages by bringing a claim under the Iowa Tort Claims Act. The Court makes no comment on the merits of plaintiff’s state tort claim action and the Court’s holding is intended to have no impact on that proceeding.

IT IS THEREFORE ORDERED that the defendants’ motion to dismiss filed January 21, 1985 is hereby granted.

      . Granting absolute immunity to the individuals who administered the bar examination does not necessarily mean that the State of Iowa is not liable for their misconduct or negligence in administering the bar examination. Plaintiff indicated that he filed a claim with the state appeal board in September or October of 1984; that he received a form from the State requesting additional information; that he provided the additional information; and that he has yet to hear back from them. Plaintiff further indicated that he thought the procedure of submitting a claim was futile but that he did it in order to exhaust his remedies. As of the date this motion was argued, plaintiff had not filed a lawsuit in state district court.


author: McLAUGHLIN, District Judge.

text:
    DELLA PALMA ICE CREAM OF ROME, INC., Plaintiff, v. CAFFE DELLE PALME and John Does 1 and 2, Defendants.
    No. 85 CV 1273.
    United States District Court, E.D. New York.
    May 10, 1985.

      Fish & Neave, New York City by Herbert F. Schwartz, and Susan Progoff, for plaintiff.
    John Santospirito, Long Island City, N.Y., for defendants.
   MEMORANDUM AND ORDER

McLAUGHLIN, District Judge.

This is an action under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and under the common law of the State of New York for trademark infringement and unfair competition. Plaintiff, which operates restaurants and gelaterias using the name CAFE DELLA PALMA and a distinctive palm tree design, seeks a preliminary injunction prohibiting defendants from operating a restaurant and gelateria using the name CAFFE DELLE PALME and a similar design. For the reasons set forth below, plaintiffs motion is granted.

Facts

Plaintiff is the exclusive United States licensee of Gellateria Della Palma, a well-known gelateria in Rome, Italy. Since 1973, Gelateria Della Palma has used the mark and name DELLA PALMA in connection with its restaurant and gelateria. In 1983, plaintiffs predecessor in interest, Darvart Global Marketing Group, Inc., acquired the exclusive right to use the mark DELLA PALMA in the United States and Canada in connection with restaurants and gelaterias, ice cream, gelato and other frozen desserts, and Italian pastries. This exclusive right was assigned to plaintiff in 1984, and was recently confirmed by a license running directly from Gelateria Della Palma to plaintiff.

Plaintiffs first CAFE DELLA PALMA restaurant and gelateria opened in June 1984 on Columbus Avenue in New York City. A second restaurant opened shortly thereafter in Westhampton, New York. Since opening, these restaurants have received a substantial amount of favorable media publicity. The name CAFE DELLA PALMA and the palm tree design are prominently displayed on the window of each restaurant and on a flag located outside the restaurant. In addition, the name and design are used on menus, ice cream cups and other take-out containers, as well as on street vending carts. Plaintiff also uses the name and palm design in connection with its business of selling DELLA PALMA gelato to restaurants, gourmet stores, caterers and offices in and around New York.

Plaintiff expects that within the next few months, at least two additional CAFE DELLA PALMA restaurants will open in New York City, along with one restaurant in Beverly Hills, California. In addition, negotiations are currently underway regarding locations in Texas and North Carolina. Plaintiff is currently attempting to secure financing for a production facility that would enable it to open a number of new retail outlets throughout the United States. Finally, plaintiff is exploring the possibility of franchising the CAFE DELLA PALMA mark and name for restaurants and for frozen and other Italian desserts.

Defendants opened their restaurant in Maspeth, Queens on March 16, 1985 (less than two months ago), using the name CAFFE [with 2 f s] DELLE PALME [the Italian plural of Della Palma]. The name CAFFE DELLE PALME and a palm tree design prominently appear on the restaurant awning, a neon sign, and defendants’ business cards. The restaurant awning also displays the words “gelati,” “espresso,” and “cappuccino,” emphasizing the restaurant’s specialties.

On March 14, 1985, plaintiff learned of defendants’ plan to open their restaurant. Plaintiff’s attorney wrote to defendant the next day — one day before defendants’ restaurant opened — informing them that their use of the CAFFE DELLE PALME mark and palm tree design infringed on plaintiff’s trademark, CAFE DELLA PALMA, and requesting that defendants change the name of their restaurant. This action was instituted upon defendants’ refusal to comply-

Discussion

In this Circuit, a party seeking preliminary injunctive relief must show “(a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief.” Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979).

The Second Circuit has recently emphasized the requirement that a district court make explicit findings regarding irreparable harm in trademark cases. Citibank, N.A. v. Citytrust and Citytrust Bancorp, Inc., 756 F.2d 278 (1985). In addition to the harm that plaintiff will suffer because of the inevitable consumer confusion resulting from defendants’ use of the name CAFFE DELLE PALME and the palm tree design, I find that defendants’ unauthorized use of a substantially similar mark will seriously jeopardize plaintiff’s ongoing negotiations regarding expansion and/or franchising. Clearly, the success of plaintiff’s efforts depends upon the exclusivity of its name. Accordingly, I find that plaintiff has established that it will be irreparably harmed by the failure to grant injunctive relief.

Likewise, I find that plaintiff has demonstrated a substantial likelihood that it will succeed on the merits of its trademark claim. Plaintiff has clearly established its ownership of the mark in that (a) it is the exclusive licensee of the mark’s originator, and (b) it was the first party to use the mark in this country in connection with the relevant products. Markel v. Scovill Manufacturing Co., 471 F.Supp. 1244, 1249-50 (W.D.N.Y.1979), aff'd 610 F.2d 807 (2d Cir.1979). Although plaintiff apparently has failed to register its mark, it must be noted that registration is not a prerequisite for protection under § 1125(a). Warner Bros., Inc. v. Gay Toys, Inc., 724 F.2d 327, 329 (2d Cir.1983); G’s Bottoms Up Social Club v. F.P.M. Industries, Inc., 574 F.Supp. 1490, 1495 (S.D.N.Y.1983). A mark which is arbitrary or suggestive with respect to the goods or services in connection with which it is used, and which has acquired a secondary meaning, is entitled to a high degree of protection despite the lack of registration. See Market, 471 F.Supp. at 1249.

The marks CAFE DELLA PAL-MA, DELLA PALMA and the palm tree design are arbitrary and fanciful, or at the very least suggestive, when used in connection with restaurants, gelato, ice cream products, and similar goods and services. Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 11 (1976). The DELLA PALMA mark and name has been used since 1973, first in Italy by Gelateria Della Palma, and more recently in the United States by plaintiff. Over that period, plaintiff and its predecessors-in-interest have achieved a reputation for quality, as evidenced by the extensive, unsolicited publicity that plaintiff’s restaurants have received. Accordingly, I find that the DELLA PALMA name has acquired a secondary meaning among the gelato-buying public. See Harlequin Enterprises Ltd. v. Gulf & Western Corp., 644 F.2d 946, 949-50 (2d Cir.1981); Parrot Jungle, Inc. v. Parrot Jungle, Inc., 512 F.Supp. 266, 269 (S.D.N.Y.1981).

The remaining consideration is whether the relevant public is likely to confuse CAFE DELLA PALMA with CAFFE DELLE PALME. Playboy Enterprises, Inc. v. Chuckleberry Pub. Inc., 687 F.2d 563, 566 (2d Cir.1982). The factors relevant to an assessment of likelihood of confusion include “(1) the strength of the mark, (2) the relatedness of the goods, (3) the similarity of the marks, (4) evidence of actual confusion, (5) marketing channels used, (6) likely degree of purchaser care, (7) the defendants’ intent in selecting the mark, and (8) the likelihood of expansion of the product lines.” G’s Bottoms Up Social Club, 574 F.Supp. at 1496.

I have already determined that plaintiff’s DELLA PALMA mark is a strong mark, in that it is arbitrary and fanciful when used in the restaurant business and has acquired a secondary meaning among gelato buyers. Clearly, the marks in question are virtually identical, particularly when spoken. Poly lok Corporation v. Valley Forge Fabrics, Inc., 566 F.Supp. 263, 265 (S.D.N.Y.1983). Moreover, plaintiff and defendant sell primarily the same product, i.e., gelato and related Italian confections, and thus, appeal to roughly the same consumer group. Finally, plaintiff has presented evidence regarding its plans to expand its business and its product lines.

Although plaintiff has not produced evidence of actual confusion or of defendants’ bad faith, it is clear that these elements are not prerequisites to a finding of likelihood of confusion. See Playboy Enterprises, 687 F.2d at 569. Accordingly, I find that defendants’ use of the name CAFFE DELLE PALME will lead to an unavoidable likelihood of confusion among the relevant public.

Thus, plaintiff has sustained its burden of proving irreparable harm and a likelihood of success on the merits. In contrast, any harm to defendants will be slight since their business has been open less than two months. Accordingly, and for the reasons set forth above, plaintiff’s motion for a preliminary injunction is granted.

SO ORDERED.

      . The Second Circuit defines a "suggestive” mark as one which "requires imagination, thought and perception to reach a conclusion as to the nature of goods.” Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 11 (2d Cir.1976) (quoting Stix Products, Inc. v. United Merchants & Manufacturers, Inc., 295 F.Supp. 479, 488 (S.D.N.Y.1968)).


author: HAMILTON, District Judge.

text:
    CONSOLIDATED SYSTEMS, INC., Plaintiff, v. Raymond M.L. TING, Defendant.
    Civ. A. No. 84-3064-15.
    United States District Court, D. South Carolina, Columbia Division.
    June 6, 1985.
    Hoover C. Blanton, Columbia, S.C., L. Lawton Rogers, ,111 and Joseph M. Killeen, Alexandria, Va., for plaintiff.
    James M. Brailsford, III, Columbia, S.C., and William G. Boyle' Pittsburgh, Pa., for defendant.
   ORDER GRANTING PLAINTIFF PARTIAL SUMMARY JUDGMENT

HAMILTON, District Judge.

Plaintiff Consolidated Systems, Inc. (“CSI”), a South Carolina corporation, initiated this civil action against defendant Raymond M.L. Ting dba Advanced Engineering Services (“Ting”), a citizen of Pennsylvania, seeking, inter alia, a declaration that two steel decks it intends to manufacture do not infringe the U.S. Patent No. 4,453,364 dated June 12, 1984 for “Corrugated Steel Decking Section” (“Ting Patent”).

Subject matter jurisdiction is not contested and arises under the patent laws, 35 U.S.C. §§ 1 et seq. A substantial case or controversy exists satisfying 28 U.S.C. § 2201, and venue is proper under 28 U.S.C. § 1391.

CSI contests the validity of the Ting Patent on several grounds, but has conceded validity for the limited purpose of its motion for a partial summary judgment of non-infringement. Accordingly, the Court considers the Ting Patent to be valid in considering this motion as to non-infringement.

The Ting Patent is directed to a steel decking section for use in composite steel and concrete floors. Such floors include a layer of concrete poured over a corrugated steel deck formed by a series of raised flutes. The concrete and steel must resist separation under stress to obtain the benefits of the composite. Such resistance to separation is termed “composite action” and is the result of a chemical bond between the steel and the concrete as well as any structural interlock provided by the shape of the steel. Grooves and embossments of various configurations are often provided in the steel deck to increase the composite action by increasing both the surface area for chemical bonding and the structural interlocks.

The Ting Patent is directed particularly to the configuration of grooves located adjacent the crests in the sloping sidewalls between the alternating crests and valleys of the corrugated deck. According to the Ting Patent, there is a critical relationship between the location of the groove and the adjacent crest.

As stated in the patent (4,453,364), the Court finds that patentability of the Ting Patent is based on the following advantages in the location of the groove adjacent the crest:

(1) provides impact resistance to construction traffic over the deck before the concrete is poured (col. 2, lines 46-50 and col. 5, lines 31-37);

(2) decreases the flat length of the deck, i.e., the length of the straight portion of the sloping sidewall or web, and thus provides increased resistance to “web crippling” (col. 2, lines 51-54 and col. 5, line 59, et seq.);

(3) stiffens the crest and thus permits cutting access openings in the crest surface without reducing the structural properties of the deck (col. 2, lines 61, et seq. and col. 5, lines 48-58);

(4) greatly increases surface bonding between the steel and concrete in the region where maximum separation stress can be anticipated (col. 5, lines 38-43). While not described in the Ting Patent, the extension of the groove beneath the crest allows concrete poured over the steel deck to flow into the groove under the crest to provide a structural interlock or “hold-down.”

The Ting Patent defines this critical relationship in two ways. Claim 1, and thus claims 2-6 dependent therefrom, recites:

1. In a steel floor decking section comprising a profiled steel sheet having plural crest surfaces in a common crest plane, plural valley surfaces in a common valley plane and sloping web surfaces connecting each said crest surface to the adjoining valley surface, ...
the improvement comprising a lengthwise groove (26) which is uninterrupted for the length of the decking section and enters beneath the said crest surface (21) in each of the said sloping web surfaces (23) adjacent the top (21) of said raised flute, wherein a flat plane (46) which includes the said sloping surface (23) intersects the said crest plane (21) at or outside the adjacent side edge (27) of the crest (21).

FIGURE 7

This language was incorporated by reference into claim 7, and thus claim 8 dependent therefrom, as a result of an amendment and the remarks made by Ting during the prosecution of the application.

From the specification and claims of the Ting Patent, it is clear that the “sloping web surface” is the entire structure between the “crest surface” and the “valley surface,” and that the “groove” extends into the “sloping web surface,” i.e., the “groove” is defined as the depression of the sloping web surface out of the plane of the sloping web surface towards the flute.

This interpretation of the claim language is entirely consistent with the representation made by Ting in distinguishing over the prior art French patent to Wendel, when Ting stated:

In the embodiment of Figures 3, 4, 5, and 6 [of Wendel], there is an inward groove 13 combined with an outward bead 6. (Amendment 8/24/83)

As may be seen from the drawings of both the CSI “A” deck and the CSI “B” deck, the flat plane of the sloping sidewall or web of the CSI decks intersects the plane of the crest surface inside rather than “at or outside” the extreme side edge of the flute. Thus, neither CSI’s “A” deck nor its “B” deck infringe any claim of the Ting Patent.

At the oral argument on CSI’s motion, Ting conceded non-infringement of claims 1-6 which contained the express language regarding the point of intersection of the planes of the crest and the sloping sidewall, but continued to argue infringement of Claims 7 and 8. Ting’s arguments regarding claims 7 and 8 are without merit, not only for the reason set out above, but also because Claims 7 and 8 contain language additionally defining the alleged critical relationship between crest and groove.

7. In a steel floor decking section comprising a profiled steel sheet having plural crest surfaces in a common crest plane, plural valley surfaces in a common valley plane and sloping web surfaces connecting each said crest surface to the adjoining valley surface, ...
the improvement comprising a lengthwise groove (26) which is uninterrupted for the length of the decking section in each of the said sloping web surfaces adjacent the top (21) of said raised flute, the said groove (26) being inwardly disposed beneath the said crest surface (21) such that a plane (42) normal to the said crest surface (21) at the edge (27) of said crest surface (21) will intersect the said groove (26) and will not intersect the said sloping wall surface (23).

FIGURE 7

Ting contends that the “groove” of the CSI “B” deck includes the entirety of the generally horizontal portion of the deformation of the sidewall without regard to the plane of the sloping sidewall, and that the vertical plane through the lateral edge of the flute therefore passes through the “groove.” As stated above, the Court finds that a “groove” is that portion of a deformation of the sloping sidewall which extends into the plane of the sloping sidewall, and that a “bump” is any portion of a deformation of the sloping sidewall which protrudes out of the plane of the sloping sidewall. In view of the arguments made by Ting in order to distinguish over Wendel and obtain the patent, Ting is estopped to argue otherwise. Exhibit Supply Co. v. Patents Corp., 315 U.S. 126, 62 S.Ct. 513, 86 L.Ed. 736 (1942); Duplan Corp. v. Peering Milliken, Inc., 181 U.S.P.Q. 621, 627, 379 F.Supp. 388 (D.S.C.1974).

There is no dispute as to the wording of the claims of the Ting Patent nor as to the structure of the two decks which CSI intends to manufacture, and the interpretation of claims is a matter of law. Roberts v. Sears Roebuck & Co., 723 F.2d 1324 (7th Cir., 1983); Ebeling v. Pak-Mor Mfg. Co., 683 F.2d 909 (5th Cir., 1982). There being no genuine issue of material fact, summary judgment is appropriate under Rule 56, even in patent cases where summary judgment is not generally favored. Butler v. Helms, 550 F.2d 954 (4th Cir., 1977).

As shown by the drawings of CSI’s “A” deck and the “B” deck, the vertical plane passing through the lateral edge of the flute does not intersect any portion of the deformation of the sloping sidewall which can be called a groove. Hence, claims 7 and 8 are not infringed by CSI’s “A” deck or “B” deck.

CSI’s motion for a declaration of non-infringement is accordingly granted and the Court declares that neither the CSI “A” deck nor the CSI “B” deck as shown in the exhibits attached to the Complaint infringe any claim of the Ting U.S. Patent No. 4,453,364 dated June 12, 1984 for “Corrugated Steel Decking Section.”

IT IS SO ORDERED.

      . In an amendment filed August 24, 1983, the. applicant stated:
      Applicant pointed out to the Examiner in the course of the interview that the WEBB groove is not inwardly depressed beneath the crest surface. The Examiner asserted that the WEBB indentation was "inwardly depressed,” but agreed that the inward depression did not extend beneath the crest surface.
      Accordingly independent claims 1 and 7 have been amended to recite that the claimed lengthwise uninterrupted groove enters beneath the said crest surface. Support for this language appears in the specification as filed at page 4, lines 4-5.
      Applicant has also amended Claim 1 to delete the last phrase which appears to be a duplication of the added phrase "which enters beneath the said crest surface." The deleted material from Claim 1 (Three Times Amended) is as follows:
      "... wherein a flat plane which includes the said sloping surface intersects the said crest plane at or outside the adjacent side edge of the crest____”


author: CAHILL, District Judge.

text:
    STAUFFER CHEMICAL COMPANY, Plaintiff, v. MONSANTO COMPANY, Defendant.
    No. 84-1660-C(4).
    United States District Court, E.D. Missouri, E.D.
    June 18, 1985.
    Order July 18, 1985.

      Rudolf Hutz, Connolly, Bove, Lodge & Hutz, Wilmington, Del., John H. Quinn, Armstrong, Teasdale, Kramer & Vaughn, St. Louis, Mo., Howard Kothe, Westport, Conn., for Stauffer Chemical Co.
    Phillip I. Morse, Coburn, Croft & Putzell, St. Louis, Mo., Wm. D. Harris, Richards, Harris, Medlock & Andrews, Dallas, Tex., Jean E. Jones, St. Louis, Mo., Tom Arnold, Arnold, White & Durkee, Houston, Tex., Howard Stanley, St. Louis, Mo., for Monsanto Co.
   MEMORANDUM AND ORDER

CAHILL, District Judge.

This matter comes before the Court on plaintiffs motion to compel discovery.

The discovery which plaintiff seeks to undertake deals specifically with the statutory requirements for obtaining a retroactive foreign license. See 35 U.S.C. § 184. Section 184 requires that a license be obtained prior to the filing of a patent application in any foreign country. If, inadvertently, a patent application is filed overseas without the necessary license, the statute provides for the issuance of a retroactive license.

Stouffer has challenged the validity of Monsanto’s patent based on Monsanto’s alleged violation of § 184. Specifically, Stouffer argues that Monsanto obtained its retroactive foreign filing license by committing fraud on the Patent Office. According to Stouffer, Monsanto withheld vital information from the Patent Office which, if disclosed, would have resulted in the denial of Monsanto’s license request. The discovery requests made by Stouffer for the most part relate to the alleged fraudulent conduct of Monsanto.

Monsanto has resisted all discovery requests dealing with its procurement of the foreign filing license. It is Monsanto’s position that Stauffer has no standing to challenge the Commissioner’s discretionary decision to grant Monsanto a retroactive foreign license. Monsanto further argues that the Patent Code does not make invalidity under § 185 a defense to an infringement action. In the alternative, Monsanto argues that if it is determined that Stouffer does in fact have standing to challenge the validity of its patent, pursuant to §§ 184 and 185, the information that Stouffer seeks is still nondiscoverable by virtue of the attorney/client work-product privilege exceptions.

This Court, upon careful consideration of all the documents and memoranda presented by both parties, comes to the following conclusion with respect to Stouffer’s discovery requests.

Standing.

In order for this Court to haye jurisdiction to proceed on a particular matter, the Court must first have before it a plaintiff with standing. See Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 758, 70 L.Ed.2d 700 (1982); Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962); see also Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968). In order for a plaintiff to have standing, the individual must present the Court with a live case or controversy. Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 151-52, 90 S.Ct. 827, 829, 25 L.Ed.2d 184 (1970). The plaintiff must demonstrate to the Court that it has suffered “a distinct and palpable injury, that is fairly traceable to the challenged conduct.” See Duke Power Company v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 72, 98 S.Ct. 2620, 2629-30, 57 L.Ed.2d 595 (1978); Worth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 2204-05, 45 L.Ed.2d 343 (1975). The plaintiff must allege a personal stake in the outcome of the litigation, so as to assure that the issues will be presented in an adversarial posture, which will in turn result in a sharp presentation of the issues being brought before a particular court. See Baker v. Carr, 369 U.S. at 204, 82 S.Ct. at 703; Flast v. Cohen, 392 U.S. at 99, 88 S.Ct. at 1952.

In addition to the Article III standing requirements that are imposed upon a particular plaintiff, the courts themselves have placed prudential limits on standing, requiring that a plaintiff who seeks to redress statutory violations demonstrate that the interests sought to be protected fall within the zone of interests to be protected or regulated by the statute. See Association of Data Processing Service Organizations, Inc., 397 U.S. at 153, 90 S.Ct. at 829 (1970); Taylor v. Jones, 653 F.2d 1193, 1207 (8th Cir.1981). When determining the zone of interests that a particular statute protects or regulates, the Court is mindful of the fact that the purpose of the zone of interest test was to expand the number of individuals who could challenge alleged violations of a statute. See Autolog Corporation v. Regan, 731 F.2d 25, 30 (D.C.Cir.1984).

In support of its argument that the plaintiff lacks standing to challenge the discretionary decision of the Commissioner, the defendant directs the Court’s attention to Torin Corp. v. Philips Industries, Inc., 89 F.R.D. 346, 350 (S.D.Oh.1981). In Torin, the Ohio district court ruled that the determination of inadvertence is “legislatively delegated to the Commissioner.” Torin, 89 F.R.D. at 350. The court in Torin further stated that the most appropriate method for challenging the validity of the issuance of a foreign license would be an independent action against the Commissioner. See Torin, 89 F.R.D. at 351. While the Court agrees that normally due deference should be accorded to the Commissioner’s determination of inadvertence, it is the opinion of the Court that a party need not be restricted to bringing a direct action against the Commissioner when seeking to challenge the validity of a foreign filing license. A review of § 282 of the Patent Code leads the Court to come to this conclusion. Section 282 specifically provides that unenforceability is a defense in an action involving the validity or infringement of a patent. See 35 U.S.C. § 282. The statute further provides that invalidity due to noncompliance with Part II of the Patent Code can be asserted as a defense in a patent infringement cause of action. Plaintiff in the instant case has asserted the very defenses enumerated in § 282 of the Patent Code. Specifically, plaintiff argues that the defendant obtained its foreign filing license through inequitable conduct. It is well settled that inequitable conduct on the part of a patent applicant renders the patent obtained unenforceable. See Walker Process v. Food Machinery, 382 U.S. 172, 176, 86 S.Ct. 347, 349, 15 L.Ed.2d 247 (1950); Precision Instruments Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 65 S.Ct. 993, 89 L.Ed. 1381 (1945); J.P. Stevens & Co., Inc. v. Lex Tex Ltd., Inc., 747 F.2d 1553, 1560 (Fed.Cir.1984). “Once a court concludes that inequitable conduct occurred all the claims — not just the particular claims to which the inequitable conduct is directly connected — are unenforceable.” See J.P. Stevens & Co., Inc. v. Lex Tex Ltd., Inc., 747 F.2d at 1561. See also cases collected in 4 Chisum Patents, Ch. 1903[6] at 1985 n. 10 (1984). This is so because of “the strong public interest in guaranteeing that patent monopolies spring from backgrounds free from fraud or other inequitable conduct and that such monopolies are kept within their legitimate scope.” See Precision Instruments, 324 U.S. at 818, 65 S.Ct. at 999.

Since inequitable conduct in the procurement of a patent renders the patent obtained invalid, it seems perfectly obvious that the procurement of a foreign filing license through the use of fraud should likewise render the entire patent invalid and thus make the patent incapable of being infringed. See 35 U.S.C. § 185; In Re Application of Gaertner, 604 F.2d 1348, 1351 (D.C.Pa.1979); Reinke Mfg. Co., Inc. v. Sidney Mfg. Corp., 594 F.2d 644, 645 (8th Cir.1979); Greening Nursery Co. v. J. & R. Tool & Mfg. Co., 376 F.2d 738, 742 (8th Cir.1967). Obtaining a license from the Patent Office prior to the filing of a patent application abroad is a condition of patentability as specified in Part II of the Patent Code. Section 282 specifically makes non compliance with Part II of the Patent Code a defense to an infringement action. Thus, it would appear obvious that plaintiff does and should have standing to challenge the validity of Monsanto’s patent pursuant to §§ 184 and 185.

The Court notes that Monsanto has asserted other grounds in support of its position that Stauffer has no standing. Specifically, Monsanto argues that Stauffer failed to show that it relied upon or suffered injury as a result of Monsanto’s alleged inequitable conduct. Monsanto further argues that the interests that Stauffer wishes to protect fall outside the zone of interests sought to be protected under §§ 184 and 185. These arguments, as well as the previous arguments submitted by the defendant, still fail to convince the Court that plaintiff does not have standing.

Stauffer has alleged that it was the target of Monsanto’s inequitable conduct. Stauffer argues that Monsanto knew that its patent was invalid under § 185 and therefore obtained a retroactive foreign filing license for the purpose of enforcing its patent against Stauffer. Thus, it is the opinion of the Court that Stauffer has, in fact, demonstrated that it was injured by Monsanto’s alleged fraudulent activities.

In regard to Monsanto’s assertion that Stauffer’s interests fall outside the zone of interests of §§ 184-185, the Court again is of the opinion that Stauffer has shown that its interests do in fact fall within the zone of interests protected and/or regulated by the statute. The zone of interests test was designed to expand the number of persons “able to assert their rights in [federal] court.” See Autolog Corporation v. Regan, 731 F.2d 25, 30 (D.C.Cir.1984). “[T]he zone of interest test requires some indicia, however slight, that the litigant before the court was intended to be protected, benefited, or regulated by the statute under which suit is brought.” See Autolog Corporation, 731 F.2d at 29; see also Taylor v. Jones, 653 F.2d 1193, 1207 (8th Cir.1981); Churchill Truck Lines, Inc. v. U.S., 533 F.2d 411, 416 (8th Cir.1976). In the instant case, Monsanto argues that the interests which §§ 184-185 seek to protect are those of a national security nature. While it is certainly true that Congress sought to protect the national interests of this country by preventing the release of information that could prove to be detrimental, this is not to say that the violation of the statute can only be brought to the Court’s attention when the national security of this country is involved.

Congress thought it so important that § 184 be complied with that the price for noncompliance was unenforceability of the patent. Compliance with § 184 for all individuals and companies seeking to file a patent application in a foreign land is mandatory. Thus, it would seem quite logical that those companies that are regulated by the Patent Code would arguably have an interest in seeing to it that other companies, especially their competitors, comply with the provisions of the Patent Code.

The most compelling reason supporting the Court’s finding of standing is grounded in public policy. The grant of a patent confers upon the patentee a virtual monopoly with respect to the items covered by the patent. In order to insure that patents are issued free of any inequitable conduct, it would seem completely logical to allow an alleged infringer to bring inequitable conduct to the court’s attention. Therefore, based on the foregoing, this Court concludes that plaintiff has met both the constitutional and prudential requirements for standing.

Attorney/Client Work Product Privilege.

It is Monsanto’s position that even if the Court finds that Stauffer has standing, the information Stauffer seeks to obtain is protected by the attorney/client work product privilege. Stauffer argues that Monsanto’s alleged fraudulent activities obviate any claim of privilege that Monsanto may have had. This Court, upon careful consideration, comes to the following conclusion with respect to the attorney/client work product privilege.

The purpose behind the attorney/client privilege is to promote candor and full disclosure of pertinent information. See Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 682, 66 L.Ed.2d 584 (1981). The communications between attorney and client must in some way relate to the request for legal advice and assistance. Hercules, Inc. v. Exxon Corp., 434 F.Supp. 136, 144 (D.Del.1977). Thus, merely communicating information to an attorney does not in and of itself render the information privileged. See Diversified Industries, Inc. v. Meredith, 572 F.2d 596, 602 (8th Cir.1977). In order to negate the attorney/client privilege, the party seeking to obtain information which may arguably be privileged must establish that the client seeking to invoke the privilege consulted and obtained the advice of counsel for the purpose of carrying out fraudulent activities. See In re International Systems & Controls Corp., 693 F.2d 1235, 1242 (5th Cir.1982); Hercules, Inc. v. Exxon Corp., 434 F.Supp. 136, 155 (D.Del. 1977). The person seeking to negate the privilege must make out a prima facie case of fraud. See In re International Systems & Controls Corp., 693 F.2d at 1242. The alleged fraudulent activities must be of such a serious nature so as to warrant the obviation of the privilege. Id. at 1242.

To bolster its argument, Stauffer has submitted to the Court the affidavit of C. Donald Quarforth, which, according to Stauffer, establishes the import of the information allegedly withheld from the Patent Office. It is the opinion of this Court, however, that Stauffer’s allegations and the Quarforth affidavit are not enough to negate the attorney/client privilege. Just as there exists evidence which supports Stauffer’s allegations of fraud, there also exists substantial evidence that no fraudulent activities occurred. Also, at this point in time, plaintiff has failed to convince the Court that the alleged fraudulent activities of Monsanto rise to the level of criminal conduct, thus necessitating piercing of the attorney/client privilege. See In re International Systems & Controls Corp., 693 F.2d at 1242; Research Corporation v. Gourmet’s Delight Mushroom Co., 560 F.Supp. 811, 819 (E.D.Pa.1983). Therefore, this Court concludes that the defendant should and will be allowed to assert the attorney/client privilege with respect to certain of the discovery requests made by Stauffer.

Work Product Privilege.

The work product privilege protects materials prepared in anticipation of litigation from discovery. See Fontaine v. Sunflower Beef Carrier, Inc., 87 F.R.D. 89 (E.D.Mo.1980). The mere liklihood of litigation in the future is insufficient for invoking the privilege. Rather, the probability of litigation must be substantial and the commencement of the litigation imminent. See Hercules, Inc. v. Exxon Corp., 434 F.Supp. at 150-51. Materials which are prepared in the ordinary course of business do not fall within the work product exception. See Fontaine v. Sunflower Beef Carrier, Inc., 87 F.R.D. 89 (E.D.Mo.1980).

Some courts have held that documents which relate to the patent application process do not fall within the ambit of the attorney/client work product privilege. See Choat v. Rome Industries, Inc., 462 F.Supp. 728, 732 (N.D.Ga.1978); Sperry Rand Corp. v. International Business Machine Corp., 45 F.R.D. 287 (D.Del.1968). While the Court is of the opinion that not all of the documents generated in the patent application process are protected from discovery, in any given situation there can be documents which do in fact fall within the work product privilege. Therefore, the Court will not require the defendant to furnish all of the information requested by plaintiff. However, plaintiff is entitled to obtain the documents listed below, as they are not protected by the work product privilege. Accordingly,

IT IS HEREBY ORDERED that plaintiff’s motion to compel is GRANTED IN PART. Defendant must submit the following information: (1) Interrogatory No. 45. Defendant need only identify foreign licenses obtained from September, 1978 through June, 1982.

(2) Interrogatory No. 46, with the exception of subsection C.

(3) Interrogatory Nos. 47, 49, and 50. Defendant need only supply information from September, 1978 to June, 1982.

(4) Request to produce No. 12. Defendant need only produce the documents and things that relate to the Franz patent and the Franz patent application. (The Court notes that defendant has already agreed to submit this information.)

(5) Requests to produce Nos. 105 through 107. Defendant need only supply the documents requested from September, 1978 to June, 1982.

IT IS FURTHER ORDERED that defendants answer the following questions asked at depositions, which can be found on the following pages:

( 1) page 127, line 7
( 2) " 135, " 12
( 3) " 136, " 1
( 4) " 138, " 6
( 5) ' 208, " 25
( 6) " 209, " 16
( 7) " 216, " 4
( 8) " 223, " 10
( 9) " 223, " 18
(10) " 226, " 11
(11) " 226, " 25
(12) " 229, " 11
(13) " 229, " 20
(14) " 238, " 9
(15) " 242, " 19
(16) " 246, " 11
(17) " 250, " 4
(18) " 251, " 11
(19) " 252, " 14
(20) " 257, " 18
(21) " 259, " 4
(22) " 266, " 7

ORDER

This matter comes before the Court on Monsanto’s motion for reconsideration of the Court’s Order granting the nominal plaintiff, Stauffer, the right to present evidence first at trial.

Upon carefully reviewing the relevant case law cited by the defendant, the Court finds the arguments proffered by the defendant as to why it should be allowed to proceed first with the evidence to be highly persuasive. Under normal circumstances the plaintiff, having the burden of proof, should be allowed to present its case first. But since this is a patent infringement case, the general rules may not apply. Therefore, the Court will now hold in abeyance its previous decision allowing plaintiff to go forward with the evidence first. The Court notes motions for reconsideration ought to be rarely granted; but the Court is of the opinion that in this instance reconsideration is warranted, especially in view of the fact that the authorities cited by defendant appear to be unanimous in holding that patent infringement cases are unique and that a chronological history of the case might best be presented by hearing the defendant’s evidence first.

The Court will give Stauffer an opportunity to respond to Monsanto’s motion, but all memoranda must be submitted to the Court no later than August 5th, 1985.

SO ORDERED.


author: SHAPIRO, District Judge.

text:
    RELIABLE TIRE DISTRIBUTORS, INC. v. The KELLY SPRINGFIELD TIRE COMPANY and Bobby Unser and the Barnes Tire Company, Inc.
    Civ. A. No. 74-3283.
    United States District Court, E.D. Pennsylvania.
    June 18, 1985.

      Francis P. Devine, III, Richard D. Adam-son, Guy A. Williams, White & Williams, Philadelphia, Pa., for plaintiff.
    Michael M. Baylson, Duane, Morris & Heckscher, Philadelphia, Pa., for Kelly Springfield Tire Co.
    Samuel L. Spear, Spear, Wilderman, Sigmond, Borish, Endy and Silverstein, Philadelphia, Pa., for Unser.
    Walter M. Phillips, Jr., Phillips & Phelan, Philadelphia, Pa., for Barnes Tire Co.
   MEMORANDUM AND ORDER

SHAPIRO, District Judge.

Pending before this court is the motion of The Barnes Tire Company, Inc. (“Barnes”) for judgment notwithstanding the verdict. Plaintiff Reliable Tire Company, Inc. (“Reliable”), a corporation engaged in wholesale tire distribution, brought suit in the Eastern District of Pennsylvania against defendants The Kelly Springfield Tire Company (“Kelly”), Bobby Unser (“Unser”) and Barnes for alleged antitrust violations, breach of contract, and tortious interference with contract, arising out of two agreements for the sale of tires.

The court held separate trials on liability and damages. On March 9, 1984, the court’s Findings of Fact and Conclusions of Law determined, inter alia, that Barnes tortiously interfered with the Reliable-Kelly contract by inducing Kelly to manufacture additional Unser tires for Barnes’ customers. Following the trial on damages, the court’s Findings of Fact and Conclusions of Law of April 1, 1985, 607 F.Supp. 361, determined that Barnes was liable in the amount of $76,149.80 ($28,685.28 compensatory damages plus prejudgment interest of $32,454.52 plus punitive damages of $15,000). Defendant Barnes contends that this court improperly held that it had waived the defenses of lack of personal jurisdiction and improper venue.

Lack of personal jurisdiction is a privileged defense that can be waived “by failure [to] assert [it] reasonably, by formal submission in a cause, or by submission through conduct.” Neirbo Co. v. Bethle hem Corp., 308 U.S. 165, 168, 60 S.Ct. 153, 155, 84 L.Ed. 167 (1939); see Neifeld v. Steinberg, 438 F.2d 423 (3d Cir.1971).

Rule 12(a) of the Federal Rules of Civil Procedure requires a responsive pleading to be served within twenty (20) days after the service of the summons and complaint. Rule 12(h)(1) does not require the assertion of the defenses of lack of personal jurisdiction or improper venue within the time provided in Rule 12(a) but provides that these defenses will be waived if neither made by motion nor included in a responsive pleading. If an omnibus motion is made under Rule 12(g), defenses of lack of personal jurisdiction and venue must be made at that time.

The objective of Rule 12 is to eliminate unnecessary delay at the pleading stage by requiring the presentation of an omnibus pre-answer motion in which defendant advances every available Rule 12 defense.

Marcial UCIN v. S.S. Galicia, 723 F.2d 994, 997 (1st Cir.1983). Contesting the court’s jurisdiction over the person must be done in a timely manner. Wyrough & Loser, Inc. v. Pelmor Laboratories, Inc., 376 F.2d 543 (3d Cir.1967).

Barnes asserted its defenses of lack of jurisdiction and improper venue on August 3, 1976 in its answer to Reliable’s complaint. In that same answer, Barnes asserted a counterclaim against Reliable, claiming that it would have been entitled to receive 20% of the profits Reliable owed Unser. On June 15, 1978, almost two years after Barnes raised the defenses of lack of jurisdiction and improper venue, Barnes filed a motion for summary judgment, in which it argued that under the undisputed facts of the case, Barnes neither violated the anti-trust laws nor interfered with Reliable’s contract. Barnes did not indicate that its motion was an alternative to the defense of lack of jurisdiction.

The court denied this motion on the merits on January 30, 1981. At a conference on January 6, 1982, when Barnes reasserted its defense of lack of personal jurisdiction to the surprise of the court, it was ordered to file any motion to dismiss within ten days. Barnes then filed a motion to dismiss for lack of jurisdiction and venue on January 12, 1982. By Order dated February 18, 1982, the court determined that the asserted defenses of lack of jurisdiction and improper venue had been waived. In the same Order, the court also dismissed Barnes’ counterclaim with prejudice.

In a motion for judgment notwithstanding the verdict, Barnes now reasserts the lack of in personam jurisdiction, claiming it does not have sufficient contacts with Pennsylvania. The question this court must address is whether the conduct here, that is, the filing of a counterclaim and a motion for summary judgment, constitutes a waiver of the defenses of lack of personal jurisdiction and improper venue.

In Neifeld v. Steinberg, 438 F.2d 423 (3d Cir.1971), the court held that filing a counterclaim with an answer asserting lack of jurisdiction did not constitute a waiver where the defendant later abandoned the counterclaim. However, the court specifically left open the question whether asserting a counterclaim would constitute a waiver if the defendant were actively to press his claim. Unlike Neifeld, where defendant dismissed his counterclaim only a month after it was filed and before plaintiff had answered, Barnes did not request leave to dismiss its counterclaim until over five years after filing it.

There are limits in the extent to which a defendant can actively litigate a case without waiving defenses of personal jurisdiction and improper venue. See Hoffman v. Blaski, 363 U.S. 335, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960); Marcial UCIN v. S.S. Galicia, 723 F.2d 994 (1st Cir.1983). In UCIN, for example, the court held that entering an appearance, taking depositions and waiting four years to present the defense of lack of jurisdiction constituted a waiver. The court found that to hold otherwise would be to obtain the delay which Rule 12 was designed to prevent.

The holding in UCIN is applicable here. Barnes asserted a counterclaim in 1976 and filed a motion for summary judgment on the merits in 1978, almost two years later. At no time did Barnes state that this motion was in the alternative to the defenses of lack of jurisdiction and improper venue asserted in its answer. Barnes did not file a motion to dismiss for lack of jurisdiction and venue until January, 1982 when ordered by the court to present the issue for decision, five and one-half years after it first asserted the defenses and over a year after the court had decided its summary judgment motion on the merits. In view of Barnes’ dilatory behavior and the prejudice that would result to plaintiff from granting Barnes’ motion, this court reaffirms its finding that Barnes waived these defenses by its conduct. To hold otherwise would contravene the policies underlying Rule 12 and result in prejudice to the other parties.

For the foregoing reasons, Barnes’ motion for a judgment notwithstanding the verdict is denied.

      . Federal Rule of Civil Procedure 12(h)(1) provides:
      A defense of lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of service of process is waived (A) if omitted from a motion in the circumstances described in subdivision (g), or (B) if it is neither made by motion under this rule nor included- in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course.

      . Of course, in a non-jury case there was no "verdict" but the court considers the motion as one to amend the Findings of Fact and Conclusions of Law under Fed.R.Civ.P. 52(b).

      . Although this case was filed in 1974, it was not transferred to this court’s docket until October 12, 1978.


author: HOLSCHUH, District Judge.

text:
    Raymond Albert KLAUSING, Plaintiff, v. WHIRLPOOL CORPORATION, Defendant.
    No. C-2-82-100.
    United States District Court, S.D. Ohio, E.D.
    June 25, 1985.

      Thomas Twyford and Paul Bodycomb, Columbus, Ohio, for plaintiff.
    G. Roger King of Bricker & Eckler, Columbus, Ohio, for defendant.
   MEMORANDUM AND ORDER

HOLSCHUH, District Judge.

This case is before the Court on defendant’s motion for partial summary judgment on count one of the complaint.

I.

On January 28, 1982, plaintiff Raymond Albert Klausing filed this suit against defendant Whirlpool Corporation. The complaint alleged two violations of the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.

On February 19, 1982, defendant Whirlpool filed a timely answer to count two of the complaint and a motion to dismiss count one of the complaint. Plaintiff filed a memorandum contra the motion to dismiss on March 19, 1982. Defendant obtained an extension of time to file a reply memorandum on April 15, 1982. Shortly thereafter, on April 22, 1982, plaintiff filed the affidavit of Raymond Klausing. On May 26, 1982, defendant filed a reply memorandum in support of the motion to dismiss.

On October 15, 1982, plaintiff filed a “motion” requesting leave of Court to file a memorandum “supplementing and clarifying” the previously filed memorandum contra defendant’s motion to dismiss. On the same date, plaintiff filed a first amended complaint.

On November 10, 1982, defendant filed a “response to ‘plaintiff’s supplemental memorandum contra’ and attempt to file an amended complaint.” In that response, defendant vigorously challenged the propriety of both of plaintiff’s filings on October 15, 1982. Plaintiff filed an untimely “reply to defendant’s response” to the motion to supplement on November 24, 1982.

On November 24, 1982, plaintiff filed a motion for a default judgment on count one of the first amended complaint pursuant to Fed.R.Civ.P. 55. Plaintiff argued that default was appropriate because defendant failed to file a responsive pleading to the first amended complaint. On December 6, 1982, defendant filed a timely memorandum contra plaintiff’s motion for default that again challenged the filing of the first amended complaint. On December 23, 1982, plaintiff filed a reply memorandum in support of the motion for default judgment.

In a Memorandum and Order issued March 18, 1983, the Court found that plaintiff’s first amended complaint was properly before the Court, however, the Court denied plaintiff's motion for a default judgment. Defendant was ordered to plead or otherwise respond to the first amended complaint within ten days from the date of the Memorandum and Order. The Court’s March 18, 1983 decision effectively mooted defendant’s motion to dismiss and plaintiff’s motion to supplement and clarify the memorandum contra defendant’s motion to dismiss.

On March 28, 1983, defendants filed an answer to the first amended complaint.

On April 4, 2983, plaintiff filed a motion to permit Paul A. Bodycombe to appear and participate as counsel pro haec vice [sic].

On May 23, 1983, defendant filed a motion for partial summary judgment pursuant to Fed.R.Civ.P. 56 on count one of the first amended complaint. On July 6, 1983, plaintiff filed an untimely memorandum contra the motion for summary judgment. After obtaining an extension of time from the Court, defendant filed a reply memorandum on August 5, 1983.

II.

Plaintiff’s unopposed motion to permit Paul A. Bodycombe to appear and participate as counsel pro hac vice is GRANTED.

III.

Defendant moves for partial summary judgment on count one of the complaint on the ground that plaintiff’s cause of action under the Age Discrimination Employment Act, 29 U.S.C. § 621 et seq. (“ADEA”), for a demotion that occurred on April 1, 1977, is barred by the applicable limitations period. Defendant contends that plaintiff failed to comply with 29 U.S.C. § 626(d)(1) by not filing a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) within 180 days of the alleged act of discrimination, so that this court does not have jurisdiction of the claim set forth in count one. Defendant also contends that this action is barred by the statutes of limitations for ADEA actions, which are two years for non-willful violations and three years for willful violations. 29 U.S.C. §§ 626, 255(a). Since plaintiff’s suit was not filed until January 28, 1982, nearly five years after the allegedly discriminatory demotion, defendant contends it is time-barred by the statute of limitations.

In response to defendant’s motion for summary judgment, plaintiff concedes that the charge was not filed with the EEOC within 180 days of the allegedly discriminatory demotion of April 1, 1977. Plaintiff also concedes that the suit filed on January 18, 1982, is beyond either the two or three year statute of limitations applicable to ADEA actions. (Plaintiff’s memorandum contra defendant’s motion for partial summary judgment at p. 4.) Plaintiff argues, however, that the 180 day requirement of section 626(d)(1) is tolled by equitable considerations, as are the applicable limitations periods.

A.

Rule 56(c) of the Federal Rules of Civil Procedure provides in part:,

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

The purpose of the summary judgment procedure is not to resolve factual issues, but to determine if there are genuine issues of fact to be tried. Lashlee v. Sumner, 570 F.2d 107, 111 (6th Cir.1978); Felix v. Young, 536 F.2d 1126, 1130 (6th Cir.1976); United States v. Articles of Device, Consisting of Three Devices ... “Diapulse”, 527 F.2d 1008, 1011 (6th Cir.1976); Bohn Aluminum & Brass Corp. v. Storm King Corp., 303 F.2d 425, 427 (6th Cir.1962). Therefore, summary judgment should be granted “only where the moving party is entitled to judgment as a matter of law, where it is quite clear what the truth is, [and where] no genuine issue remains for trial, [for] the purpose of the rule is not to cut litigants off from their right of trial by jury if they really have issues to try.” Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 728, 88 L.Ed. 967 (1944). Accord Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 488, 7 L.Ed.2d 458 (1962); Associated Press v. United States, 326 U.S. 1, 6, 65 S.Ct. 1416, 1418, 89 L.Ed. 2013 (1945); Rogers v. Peabody Coal Co., 342 F.2d 749, 751 (6th Cir.1965).

Although summary judgment should be cautiously invoked, nonetheless it is often proper. “Summary judgment is a useful procedure for reaching the merits of a case short of conducting a full-blown trial.” Felix v. Young, 536 F.2d 1126, 1130 (6th Cir.1976). “If the record evidence is not disputed as to any material fact, the case should be decided as a matter of law rather than submitted to the jury.” Bouldis v. U.S. Suzuki Motor Corp., 711 F.2d 1319, 1324 (6th Cir.1983). When the facts are undisputed, when pure questions of law are at issue, and when the plaintiff has had full opportunity to be heard on those legal issues, summary judgment is proper even though the legal issues are difficult. Kentucky Rural Elec. Coop. Corp. v. Moloney Elec. Co., 282 F.2d 481, 483-84 (6th Cir.), cert. denied, 365 U.S. 812, 81 S.Ct. 692, 5 L.Ed.2d 691 (1960). When the moving party has met its burden, summary judgment should be granted. Rogers v. Peabody Coal Co., 342 F.2d 749, 751 (6th Cir.1965).

“[T]he question whether summary judgment is appropriate in any case is one to be decided upon the particular facts of that case____” First National Bank v. Cities Service Co., 391 U.S. 253, 259, 88 S.Ct. 1575, 1577, 20 L.Ed.2d 569 (1968). The moving party bears the “burden of showing the absence of a genuine issue as to any material fact, and for these purposes the material it lodged will be viewed in the light most favorable to the opposing party.” Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970) (footnote omitted). Accord Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 472, 82 S.Ct. 486, 490, 7 L.Ed.2d 458 (1962); Smith v. Hudson, 600 F.2d 60, 63 (6th Cir.), cert. dismissed, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979); Rogers v. Peabody Coal Co., 342 F.2d 749, 751 (6th Cir.1965). Similarly, “inferences to be drawn from the underlying facts contained in such materials must be viewed in the light most favorable to the party opposing the motion.” United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). Accord Watkins v. Northwestern Ohio Tractor Pullers Assoc., Inc., 630 F.2d 1155, 1158 (6th Cir.1980); United States v. Articles of Device Consisting of Three Devices ... “Diapulse”, 527 F.2d 1008, 1011 (6th Cir.1976); Rogers v. Peabody Coal Co., 342 F.2d 749, 751 (6th Cir.1965). “Further, the papers supporting the movant are closely scrutinized, whereas the opponent’s are indulgently treated.” Bohn Aluminum & Brass Corp. v. Storm King Corp., 303 F.2d 425, 427 (6th Cir.1962). Accord Smith v. Hudson, 600 F.2d 60, 63 (6th Cir.), cert. dismissed, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979).

Additionally, Rule 56(e) of the Federal Rules of Civil Procedure provides in part:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

Under Rule 56(e), “a party cannot rest on the allegations contained in his complaint in opposition to a properly supported motion for summary judgment against him.” First National Bank v. Cities Service Co., 391 U.S. 253, 259, 88 S.Ct. 1575, 1577, 20 L.Ed.2d 569 (1968) (footnote omitted). The Sixth Circuit has held that

where a moving party supports his motion for summary judgment by affidavit or other appropriate means, which are uncontroverted, a trial court is fully justified, within the purview of Rule 56 of the Federal Rules of Civil Procedure in granting relief thereon.

Williams v. Baltimore & O.R.R., 303 F.2d 323, 324 (6th Cir.1962). Accord R.E. Cruise, Inc. v. Bruggeman, 508 F.2d 415, 416 (6th Cir.1975); Daily Press, Inc. v. United Press International, 412 F.2d 126, 134 (6th Cir.), cert. denied, 396 U.S. 990, 90 S.Ct. 480, 24 L.Ed.2d 453 (1969).

The uncontroverted facts, however, must conclusively negate the existence of a genuine issue of material fact and establish the moving party’s entitlement to judgment. If evidence in support of a motion for summary judgment does not establish a lack of á genuine issue of material fact and conclusively support the moving party’s entitlement to judgment, summary judgment is not proper even if no opposing material is presented; “unexplained gaps” in material submitted by the moving party, if pertinent to material issues of fact, justify denial of . a motion for summary judgment. Adickes v. S.H. Kress Co., 398 U.S. 144, 157-60, 90 S.Ct. 1598, 1608-10, 26 L.Ed.2d 142 (1970); Smith v. Hudson, 600 F.2d 60, 65 (6th Cir.), cert. dismissed, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979); Fitzke v. Shappell, 468 F.2d 1072, 1077-78 (6th Cir.1972).

B.

In the case at bar, plaintiff contends that he was unable to comply with the 180 day charging requirement set forth in section 626(d) of the ADEA because the defendant fraudulently concealed the reasons for plaintiff’s demotion. It is clear under the Sixth Circuit’s decisions in Wright v. State of Tennessee, 628 F.2d 949 (6th Cir.1980) (en banc), and Ott v. Midland-Ross Corp., 600 F.2d 24 (6th Cir.1979), that the 180 day charging requirement is subject to equitable tolling. Of course, statutes of limitations, such as the three year limitations period for willful violations of the ADEA, 29 U.S.C. § 255, are also subject to equitable tolling. Kazanzas v. Walt Disney World Co., 704 F.2d 1527 (11th Cir.), cert. denied, 464 U.S. 982, 104 S.Ct. 425, 78 L.Ed.2d 360 (1983); Ott v. Midland-Ross, supra.

In the present case, plaintiff alleges that Whirlpool fraudulently refused to inform him of the reasons for his demotion so that the statute of limitations and the 180 day charging requirement are tolled until he obtained actual knowledge sufficient to prove his suspicion of age discrimination. Plaintiff also introduces evidence that Whirlpool failed to post the notice required by the ADEA at its Detroit plant. Plaintiff contends that his cause of action for the April 1, 1977 demotion did not accrue until he was informed by another Whirlpool employee who had prevailed on an ADEA claim against Whirlpool of actual evidence of age discrimination against Klausing. Thus, plaintiff argues that these facts at least create a jury question concerning when his cause of action accrued, or at most show that Whirlpool engaged in a pattern of fraudulent conduct that estops defendant from asserting the limitations period as a defense.

The present state of the record reveals a genuine issue of material fact exists with regard to when the 180 day charging period began to run for the April 1, 1977 demotion. There is an issue of fact with regard to this period only because of plaintiff’s testimony that no notices were posted in the Detroit plant as required by section 627 of the ADEA. While mere ignorance of the requirements of section 626(d) will not by itself justify tolling the 180 day charging period, see Bonham v. Dresser Industries, Inc., 569 F.2d 187, 193 (3d Cir.), cert. denied, 439 U.S. 821, 99 S.Ct. 87, 58 L.Ed.2d 113 (1978), ignorance that is partly attributable to the employer’s failure to comply with its statutory obligation to post conspicuous notice mandates tolling of the charging requirement until the plaintiff acquires actual knowledge of the 180 day charging requirement. Pirone v. Home Ins. Co., 507 F.Supp. 1281 (S.D.N.Y.1981), aff'd, 742 F.2d 1430 (2d Cir.1983). Although the relevance of lack of the posting of a notice in the Detroit plant to a suit involving a Columbus based employee who worked from his home is tenuous, the Court finds that it is sufficient to create a genuine issue of material fact concerning plaintiff’s knowledge of the 180 day charging requirement.

Although the 180 day charging requirement may be tolled because of defendant’s alleged failure to post the section 627 notices in the Detroit plant, whether the statute of limitations for a cause of action under the ADEA should be tolled presents a different question. Taking as true plaintiff’s allegation that defendant engaged in a willful violation of the ADEA so that the three year limitations period is the appropriate statute, plaintiff’s cause of action filed on January 28, 1982, comes almost five years after the April 1, 1977 demotion that is the focus of count one of the complaint. Plaintiff alleges that the 1977 demotion is merely part of a “continuing violation,” however, the Court is convinced that it is not the type of continuing violation contemplated by United Air Lines, Inc. v. Evans, 431 U.S. 553, 97 S.Ct. 1885, 52 L.Ed.2d 571 (1977). As Judge Kennedy held in Marshall v. American Motors Corp., 475 F.Supp. 875 (E.D.Mich.1979), “... although some effects may still exist as the result of discriminatory discharges or demotions, if there is a reasonably ascertainable date on which the act occurred, that is the day on which the statute began to run.” Marshall, 475 F.Supp. at 884. Consequently, the Court finds that for the purposes of the statute of limitations, plaintiff’s cause of action accrued on April 1, 1977.

Given that plaintiff’s cause of action for count one arose on April 1, 1977, the Court must determine whether the facts alleged by plaintiff mandate equitable tolling of the statute of limitations. Even though the Court found that a genuine issue existed as to when plaintiff became aware of the 180 day charging requirement of the ADEA, different considerations are implicated when considering whether equity mandates tolling of a statute of limitations. See Kazanzas v. Walt Disney World, 704 F.2d 1527. The Kazanzas court recognized that as a general rule ignorance of legal rights or a failure to seek legal advice does not toll a statute of limitations. Kazanzas, 704 F.2d at 1530 (quoting Quina v. Owens-Coming Fiberglas Corp., 575 F.2d 1115, 1118 (5th Cir. 1978)). Thus, in Kazanzas the court of appeals found that the statute of limitations is not tolled by an employer’s failure to post the notices required by section 627 since the notice does not mention the two or three year limitations period.

Plaintiff claims that Whirlpool fraudulently deceived him concerning the grounds for his demotion by not providing him with the specific reason for his demotion in 1977 when he doggedly pursued an answer to that question. It is clear from the record, and plaintiff candidly admits, that he at least suspected that he was demoted because of his age. (See plaintiff’s memorandum contra to defendant Whirlpool Corporation [sic] motion for partial summary judgment at p. 4.) Furthermore, the failure to tell plaintiff that he was demoted because of his age is not the type of deception or fraud that operates to toll the limitations period. Plaintiff's reliance on cases like Ott v. Midland-Ross and Marshall v. American Motors is misplaced. Those cases involve active fraud and blatant misrepresentation by defendant employers to induce the plaintiff not to file a claim for age discrimination. There is no evidence, and no question of fact is raised on the present state of the record, that defendant Whirlpool engaged in any kind of misrepresentation sufficient to toll the limitations period. Accordingly, the court finds that the three year limitations period for charges of willful violations of the ADEA is not tolled in the present case, so that plaintiff’s action on count one is barred by the statute of limitations.

WHEREUPON, defendant’s motion for partial summary judgment on count one of the complaint is GRANTED.

IT IS SO ORDERED.


author: O’NEILL, District Judge.

text:
    S. KANE & SON, INC. v. W.R. GRACE & CO.; David Nicholson; James Shay; James McKay; Joseph Gracie and City of Philadelphia. GRAVELY ROOFING CO. v. W.R. GRACE & CO., David Nicholson, James Shay, James McKay and Joseph Gracie.
    Nos. Civ. A. 84-4266, Civ. A. 84-4575.
    United States District Court, E.D. Pennsylvania.
    July 16, 1985.
    Michael R. Needle, Philadelphia, Pa., for Kane.

      Susanna E. Lachs, Philadelphia, Pa., for Grace.
    Carl Oxholm, III, Linda Berman, Philadelphia, Pa., for City.
   MEMORANDUM

O’NEILL, District Judge.

In the first of these cases, plaintiff S. Kane & Son, Inc. filed an eight-count complaint against W.R. Grace & Son, Inc., a manufacturer and distributor of a synthetic membrane roofing material, David Nicholson, a salesman formerly employed by Grace, James Shay, a former employee of Kulzer Roofing Company, James McKay, a former employee of the City of Philadelphia’s Department of Public Property, Joseph Gracie, a current City employee, and the City of Philadelphia, alleging that all defendants combined and conspired “to restrain trade in and/or monopolize the provision of commercial roofing services to the City of Philadelphia” (Complaint, ¶ 1). In the second case, plaintiff Gravely Roofing Co. filed a complaint which is identical except that it does not name the City of Philadelphia as a defendant. Defendants City of Philadelphia and Gracie move to dismiss in Kane and Gracie moves to dismiss in Gravely.

Kane was filed on September 6, 1984, and Gravely was filed on September 24, 1984, the same date the Local Government Antitrust Act of 1984 became effective. Section 3(a) of the Act provides:

“No damages, interest on damages, costs or attorney’s fees may be recoverable under Section 4, 4A or 4C of the Clayton Act ... from any local government or employee thereof acting in an official capacity.”

Section 3(b) of the Act contains a retroactivity clause stating:

“Subsection (a) shall not apply to cases commenced before the effective date of this act unless the defendant establishes and the court determines, in light of all the circumstances, including the stage of litigation and the availability of alternative relief under the Clayton Act, that it would be inequitable not to apply this subsection to a pending case. In consideration of this section, existence of a jury verdict, district court judgment, or any stage of litigation subsequent thereto, shall be deemed to be prima facie evidence that subsection (a) shall not apply.”

As Kane was filed before the effective date of the Act, the City of Philadelphia and Gracie argue that § 3(a) should be retroactively applied to them pursuant to § 3(b). The Court concludes that, in light of all the circumstances, it would be inequitable not to apply § 3(a) to the City in Kane: (1) plaintiff may obtain relief from defendants other than the City and Gracie; and (2) little, if any, discovery has taken place. See TCI Cable Television, Inc. v. City of Jefferson, 604 F.Supp. 845 (C.D.Mo.1984) ; Jefferson Disposal Co. v. Parish of Jefferson, L.A., 603 F.Supp. 1125 (E.D.La.1985) . Therefore, the Court will grant the City’s motion to dismiss the Kane complaint insofar as it states claims for damages, costs or attorney’s fees. The claim for injunctive relief will not be dismissed.

Gracie, defendant in both Kane and Gravely, argues that he is immunized from damage liability pursuant to § 3(a) because he was a local government employee “acting in an official capacity” as a City engineer. Plaintiffs respond that Gracie could not have been acting in his official capacity because he had no authority to engage in the alleged bid rigging conspiracy and his conduct, if proven, would violate the City Home Rule Charter and Pennsylvania state law. At this stage of the litigation, the Court will deny Gracie’s motions to dismiss, without prejudice to their renewal at the close of the discovery pertaining to his involvement in the alleged conspiracy.

Finally, given the difference between the legal and factual issues in these actions and those in the prior state court proceedings, the doctrines of collateral estoppel and res judicata do not justify dismissal.