Mun. Revenue Serv. Inc v. Xspand Inc

700 F.Supp.2d 692

MUNICIPAL REVENUE SERVICE, INC., Plaintiff,v.XSPAND, INC. and Bear Stearns & Co., Inc., Defendants.

No. 4:05-cv-671.

United States District Court M.D. Pennsylvania.

March 31, 2010.

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John G. Dean, Elliott Greenleaf & Siedzikowski, P.C., Scranton, PA, John M. Elliott, John P. Elliott, Mark J. Schwemler, Elliott, Greenleaf & Siedzikowski PC, Blue Bell, PA, Bruce W. Kauffman, Elliott Greenleaf, Philadelphia, PA, for Plaintiff.

C. Grainger Bowman, Kirkpatrick & Lockhart Preston Gates Ellis LLP, Harrisburg, PA, David R. Fine, K & L Gates LLP, Harrisburg, PA, Craig E. Ziegler, Montgomery, McCracken, Walker & Rhoads, Thomas W. Dymek, Stradley Ronon Stevens & Young, LLP, Philadelphia, PA, James G. Mann, Rodney A. Corey, PA House of Representatives, Harrisburg, PA, Philip W. Newcomer, Norristown, PA, Robert L. Knupp, Knupp, Kodak & Imblum, P.C., Harrisburg, PA, for Defendants.

MEMORANDUM and ORDER

JOHN E. JONES III, District Judge.

Currently pending before the Court are three motions for summary judgment. The first was filed by Defendant Xspand, Inc. (“Xspand”). (Doc. 445). The second is a partial motion for summary judgment filed by Plaintiff Municipal Revenue Service, Inc. (“Plaintiff” or “MRS”). (Doc. 449). The third was filed by Defendant Bear Stearns & Co., Inc. (“Bear”). (Doc. 451). For the reasons that follow, all three motions shall be granted in part and denied in part.

I. PROCEDURAL HISTORY

Plaintiff initiated the instant action on April 1, 2005 by filing a five count complaint against Xspand containing the following claims: (i) violation of the Lanham Act, 15 U.S.C. § 1051 et seq. ; (ii) unfair competition; (iii) defamation; (iv) commercial disparagement; and (v) tortious interference with prospective contractual relations. ( See Doc. 1). On October 17, 2005, Plaintiff filed an amended complaint that added Bear as a Defendant and asserted against it all five of the above-referenced claims. ( See Doc. 69). On March 4, 2009, Xspand filed its motion for summary judgment, (Doc. 445) (the “Xspand Motion”), MRS filed its partial summary judgment motion, (Doc. 449) (the “MRS Motion”), and Bear filed its summary judgment motion, (Doc. 451) (the “Bear Motion”). Since all three motions have been fully briefed, they are ripe for disposition.

II. STANDARD OF REVIEW

Summary judgment is appropriate if the record establishes “that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The movant meets this burden by pointing to an absence of evidence supporting an essential element as to which the non-moving party will bear the burden of proof at trial. Id. at 325, 106 S.Ct. 2548. Once the moving party meets its burden, the burden then shifts to the non-moving party to show that there is a genuine issue for trial. Fed.R.Civ.P. 56(e)(2). An issue is “genuine” only if there is a sufficient evidentiary basis for a reasonable jury to find for the non-moving party, and a factual dispute is “material” only if it might affect the outcome of the action under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In opposing summary judgment, the non-moving party “may not rely merely on allegations of denials in its own pleadings; rather, its response must ... set out specific facts showing a genuine issue for trial.” Fed.R.Civ.P. 56(e)(2). The non-moving party “cannot rely on unsupported allegations, but must go beyond pleadings and provide some evidence that would show that there exists a genuine issue for trial.” Jones v. United Parcel Serv., 214 F.3d 402, 407 (3d Cir.2000). Arguments made in briefs “are not evidence and cannot by themselves create a factual dispute sufficient to defeat a summary judgment motion.” Jersey Cent. Power & Light Co. v. Twp. of Lacey, 772 F.2d 1103, 1109-10 (3d Cir.1985). However, the facts and all reasonable inferences drawn therefrom must be viewed in the light most favorable to the nonmoving party. P.N. v. Clementon Bd. of Educ., 442 F.3d 848, 852 (3d Cir.2006).

Summary judgment should not be granted when there is a disagreement about the facts or the proper inferences that a fact finder could draw from them. Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d Cir.1982). Still, “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; there must be a genuine issue of material fact to preclude summary judgment.” Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505.

III. FACTUAL BACKGROUND

The parties and the Court are all too intimately familiar with the facts undergirding this case. Therefore, for the purposes of disposing the various motions, we shall simply make a generalized statement of fact.¹ We shall refer to or address specific facts in our discussion only as they become necessary for the resolution of the pending motions.

At all times pertinent to the instant litigation, MRS was in the business of purchasing delinquent tax liens from municipalities and school districts in the Commonwealth of Pennsylvania. ( See Compl. ¶¶ 7). At all relevant times, Xspand was a competitor of MRS in Pennsylvania. ( Id. ¶ 10). MRS alleges that Xspand has used false and misleading advertising to unfairly compete against it. ( Id. ¶ 17). Specifically, MRS claims that Xspand has disseminated misinformation regarding the nature of its services, in that Xspand has inter alia, informed potential MRS customers that MRS-facilitated transactions produced debt, not revenue, for the taxing entity. ( See id. ¶¶ 18-49). MRS alleges that Xspand's conduct has caused it to lose a substantial part of its business in the form of both current and prospective customers. ( See id. ¶¶ 24-25, 32, 43). Plaintiff contends that Bear may be held liable for Xspand's conduct because a joint venture or agency relationship exists between Bear and Xspand, and because the former endorses the conduct of the latter. ( See id. ¶¶ 10-12, 27). These allegations form the basic foundation of the five causes of action asserted by MRS against Xspand and Bear.

IV. DISCUSSION

As stated, all three parties to the instant litigation have filed summary judgment motions. We shall address these motions in turn, beginning with the motions of Defendants Xspand and Bear and concluding with the MRS Motion.

A. The Xspand Motion

The Xspand Motion lodges numerous grounds for dismissal of Plaintiff's claims, including global infirmities afflicting the complaint as a whole and discrete infirmities associated with each count specifically. We shall address these in turn, beginning with the former.

i. Global Infirmities

The first global defect involves the Noerr Pennington Doctrine, which Xspand asserts bars each count of the complaint. This doctrine, which emanated from the cases Eastern R.R. Presidents Conference v. Noerr Motor Freight Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961), and United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965), initially immunized private parties against liability for antitrust violations stemming from valid petitioning activities. See A.D. Bedell Wholesale Co., Inc. v. Philip Morris Inc., 263 F.3d 239, 251 (3d Cir.2001). However, some courts have held that its application extends beyond the realm of antitrust law see, e.g., Cheminor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119, 128-29 (3d Cir.1999) (construing New Jersey law and extending Noerr Pennington immunity to state tort claims); Brownsville Golden Age Nursing Home, Inc. v. Wells, 839 F.2d 155 (3d Cir.1988) (invoking the Noerr Pennington Doctrine to uphold dismissal of civil conspiracy and tortious interference with business relations claims); Caixa Geral de Depositos, S.A. v. Rodrigues, 2005 WL 1541055 *11 (D.N.J.2005) (applying the Noerr Pennington Doctrine to defamation claims); Santana Prods. v. Bobrick Washroom Equipment, Inc., 249 F.Supp.2d 463 (M.D.Pa.2003) (Vanaskie, J.) (dismissing Lanham Act claims pursuant to the Noerr Pennington Doctrine); ² Bristol-Myers Squibb Co. v. Immunex Corp., 84 F.Supp.2d 574, 578 (D.N.J.2000) (invoking the Noerr Pennington Doctrine to deny as futile a motion to amend seeking to assert a claim for unfair competition). Accordingly, and as stated, Xspand asserts that the doctrine should be extended to all of Plaintiff's claims and that its application serves to bar the same.

In resolving this issue, it is well to note that the Noerr Pennington Doctrine has its foundations in the First Amendment right to petition the government for a redress of grievances. See Santana Prods. v. Bobrick Washroom Equipment, Inc., 401 F.3d 123, 131 n. 13 (3d Cir.2005) (citing U.S. CONST. amend. I). Accordingly, as intimated above, in order for the doctrine to apply there must be some sort of valid “petitioning activity.” See Hill v. Borough of Kutztown, 455 F.3d 225, 243 (3d Cir.2006) (“We further hold that [Defendant] is not entitled to petitioning immunity under the Noerr Pennington doctrine because the conduct with which he is charged cannot be construed as ‘petitioning activity’ under any reasonable interpretation of that term.”); see also Bedell, 263 F.3d at 251 (“[I]f its conduct constitutes valid petitioning, the petitioner is immune from antitrust liability whether or not the injuries are caused by the act of petitioning or are caused by government action which results from the petitioning.”).

In defining the contours of “petitioning activity,” the Third Circuit has determined that the concept “extends beyond attempts to influence the passage and enforcement of laws and applies equally to efforts to...