Thermal Design, Inc. v. Guardian Bldg. Prods., Inc.

THERMAL DESIGN, INC., Plaintiff,

v. GUARDIAN BUILDING PRODUCTS, INC.,GUARDIAN BUILDING PRODUCTS DISTRIBUTION, INC.,and GUARDIAN FIBERGLASS, INC., Defendants.

Case No. 08-C-828

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

Dated: June 15, 2012

DECISION AND ORDER

Thermal Design competes in the sale of ceiling and wall insulation systems for large non-residential metal buildings. So do the remaining defendants in this case - Guardian Building Products, Guardian Building Products Distribution, and Guardian Fiberglass. For simplicity, the Court will generally refer to this group of entities as "Guardian" or the "Guardian Defendants." Thermal Design and Guardian accuse each other of false advertising in violation of the Lanham Act. There are other claims and counterclaims, most of which are implicated by the parties' cross-motions for summary judgment. These motions are discussed herein.

Background

Thermal Design sells a product called the "Simple Saver System," an insulation system that can be installed in roofs and walls of non-residential buildings. With respect to a roof, through the use of a steel trap grid support system, a custom sized polymer liner fabricand fasteners, it isolates the highly conductive steel roof purlins in a metal building from the conditioned space, creating a strong platform to allow unfaced insulation to be installed under, between and/or over the purlins with minimal insulation compression. The Simple Saver System mimics a suspended ceiling, which serves aesthetic and interior lighting distribution functions.

In 2000, Thermal Design added alternative fall protection to the Simple Saver System as a standard feature for worker protection. Dan Harkins, Thermal Design's Vice President of Research and Development, consulted with OSHA on test and safety requirements. In response, Harkins received the following letter:

Dear Mr. Harkins:

This is in response to your September 11 letter requesting a letter of compliance from the Occupational Safety and Health Administration (OSHA) for your Simple Saver Plus System.

As you know, OSHA does not endorse products nor issue formal letters of approval for products or work procedures. However, when provided with sufficient information, OSHA can offer an opinion as to whether or not they afford compliance with certain regulations. We have reviewed the Simple Saver Plus fall protection information and test data and it appears that if the flexible fabric is installed as described in your specifications for materials and installation documents, the user would be in compliance with OSHA's fall protection requirements for falls to the interior of the structure. As we have discussed previously, employees exposed to falls to the exterior may (depending on the activity and fall height) have to be protected by a guard rail or other effective system.

If we can be of any further assistance, please contact me or Mr. Dale Cavanaugh of my staff at (202) 219-8136.

Sincerely,

Roy F. Gurnham, P.E., J.D.

Director

Office of Construction and Maritime

Compliance Assistance

From approximately 1992 until 2007, Thermal Design bought nearly its entire supply of fiberglass insulation from Guardian for use in Thermal Design's ceiling and wall insulation systems. In 2001, Thermal Design's largest competitor at the time, CGI (n/k/a CGI/Silvercote), began selling a fabric liner system which it named the Energy Saver System. In March of 2006, Guardian purchased CGI and began selling a product dubbed the Energy Saver FP ("ESFP") System. The Energy Saver is a fabric liner system. Like the Simple Saver System, the Energy Saver components include the use of a fabric liner, steel support straps and fasteners under the bottom of the purlins. It consists of metal banding, a fabric liner placed onto the banding, and insulation placed over the top of the fabric.

For a period of time after the acquisition of CGI, Guardian sold both the Simple Saver System and the Energy Saver. Guardian's distribution relationship with Thermal Design ended soon after Guardian decided to add fall protection to the Energy Saver System. In September of 2007, Dan Harkins wrote that "Guardian is now offering fall protection with the Energy Saver System. That is quite a slap in the face. . . . I have instructed no more orders to Guardian until we reach some mutually acceptable business relationship. Failing that I will give them a few things to spend their time and money on, other than targeting our company."

On October 22, 2007, Guardian issued a press release announcing that its "Energy Saver insulation system has been enhanced to include OSHA-compliant leading edge fallprotection." The press release is entitled "ENERGY SAVER FPTM SYSTEM OFFERS LEADING EDGE FALL PROTECTION." It states in part as follows:

SOLON, Ohio - (October 22, 2007) - Larry Zupon, Vice President of Guardian Building Products Distribution, Inc.'s Silvercote business unit, announced today that its Energy Saver insulation system has been enhanced to include OSHA-compliant leading edge fall protection. This insulation system protects the installation crew while the building is insulated and roofed.

"The Energy Saver FP System offers metal building contractors a reliable, safe and efficient OSHA-compliant fall protection system to insulate the roofs of pre-engineered metal buildings. The system also includes GreenGuard certified Guardian fiberglass insulation as well as all other components needed," stated Zupon.

Consisting of a network of white galvanized banding and white support fabric, the system restrains and supports up to 400 pounds dropped from at least 42" above the system, therefore meeting OSHA guidelines as defined in Title 29 C.F.R. 1926.502.

To insure quality and worker safety, GBP Silvercote provides training on how to properly install the system. An online contractor certification program will be available by the end of the year. Leading edge fall protection is certified by GBP Silvercote when installed by Guardian certified installation contractors.

ECF Nos. 204-1, 204-2, C. Harkins Aff., Exs. A and B.

Guardian also distributed an advertisement entitled "ENERGY SAVER FPTM - YOUR SAFEST BET." This document states in part as follows:

▶ OSHA COMPLIANCE - The Energy Saver FPTM System meets the requirements for leading edge fall protection as presented in Title 29 C.F.R. 1926.502. To meet OSHA guidelines an insulation support and fall protection system mustrestrain and support 400 pounds dropped from at least 42" above the system. The Energy Saver FPTM System passes this rigorous test!

The second page of this advertisement shows a bag labeled "400 pounds," with a statement "WE DROP EVERYTHING FOR SAFETY!" ECF Nos. 217-6, 217-7, Conta Aff., Exs. F and G.

Another advertisement was entitled "ENERGY SAVER FP SYSTEM FEATURES AND BENEFITS." This advertisement states, in part, as follows:

WHY CHOOSE ENERGY SAVER FPTM?

▶ FALL PROTECTION

Protects the installation crew while the building is insulated and roofed by providing OSHA-compliant leading edge fall protection.

The ad further states: "the Energy Saver FPTM System is designed for only single use leading edge fall protection. It is not intended to be stepped into or walked upon. In the event of a fall, Energy Saver FPTM cannot be relied upon to provide leading edge fall protection until the fabric and banding are replaced with new components." ECF Nos. 217-8, 217-9, Conta Aff., Exs. H and I.

Guardian also offers the Purlin Glide system, an insulation system using wide rolls of vapor retarder fabric on cores up to 27 feet long spanning perpendicular over-the-top of multi-purlin spaces. Through the use of mechanical dispensing devices, the Purlin Glide fabric is incrementally unrolled parallel to the purlins, down the length of the building with one or more layers of unfaced insulation installed on top of the fabric sheeting, with themetal exterior roof panels installed on top of that insulation, then compressed and structurally fastened through the purlins. Like the Simple Saver System and the Energy Saver, the Purlin Glide is a type of insulation system that can be used in metal buildings.

One way to determine how insulation performs with respect to thermal performance in a representative building assembly is to test the installed thermal conductance, which yields the assembly U-value. The mathematical inverse of the conductance, 1/U-value, then yields the resistance value to the measured conductance and is referred to as the installed assembly R-value. The higher the assembly R-value the better it is by resisting the heat transfer, so the easier it is to maintain the difference in temperature across it per unit of time. The higher the installed R-value the better or more efficient a building is to heat and cool.

With respect to the Purlin Glide system, Guardian circulated an advertisement entitled "Purlin Glide FPTM Insulation & Leading Edge Fall Prevention System." This advertisement included the following table:

+---------------------------------------+
¦Tested Thermal Values Per ASTM C 1363  ¦
¦                                       ¦
¦(Hot Box Test) Installed R-Values      ¦
+---------------------------------------¦
¦Thickness      ¦R-Value    ¦U-Value    ¦
+---------------+-----------+-----------¦
¦R-30* 9 ½"     ¦R-22.44    ¦.045       ¦
+---------------+-----------+-----------¦
¦R-19 6"        ¦R-17.00    ¦.059       ¦
+---------------+-----------+-----------¦
¦R-10 3"        ¦R-11.11    ¦.090       ¦
+---------------------------------------+

*Double Layer R-11

ECF Nos. 217-12, 217-13, Conta Aff., Exs. L and M.

Starting in September of 2009, Guardian circulated a document entitled "PURLIN GLIDE FP Features and Benefits." This advertisement included the following box, with R-values and U-values that differ from its previous ads:

+------------------------------------------------------+
¦Tested Thermal Values Per ASTM C 1363       ¦         ¦
+--------------------------------------------+---------¦

...