UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA BOBRICK WASHROOM EQUIPMENT, INC., Plaintiff v. SCRANTON PRODUCTS INC., Defendant Civil Action No. 3:14-CV-00853-RDM Hon. Robert D. Mariani Oral Argument: May 12, 2017 DEFENDANT SCRANTON PRODUCTS INC.’S BRIEF IN SUPPORT OF PARTIAL MOTION TO DISMISS WITH PREJUDICE PLAINTIFF BOBRICK WASHROOM EQUIPMENT, INC.’S AMENDED COUNTERCLAIM Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 1 of 30 TABLE OF CONTENTS Page i I. Introduction ...................................................................................................... 1 II. Procedural History ........................................................................................... 3 III. Statement of Facts ............................................................................................ 3 IV. Statement of Questions Involved ..................................................................... 6 V. Legal Standard ................................................................................................. 6 VI. Argument ......................................................................................................... 7 A. Bobrick Has Failed to State a Claim for Abuse of Process .................. 7 1. The Prelitigation Conduct Is Not Actionable ............................. 8 2. Bobrick’s Remaining Allegations Fall Short of Pleading a “Perversion” of Legal Process ............................................... 11 3. Bobrick Does Not Allege an Actionable “Use” of Process ...... 13 4. The Allegations of Improper Purpose Are Inadequate ............. 14 5. Bobrick’s Allegations of Improper Purpose Fail to Satisfy Twombly/Iqbal .............................................................. 17 B. Bobrick’s Unfair Competition Claim Should Be Dismissed .............. 18 C. Bobrick’s Punitive Damages Request Should Be Rejected ................ 21 VII. Conclusion ..................................................................................................... 22 Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 2 of 30 TABLE OF AUTHORITIES Page(s) ii FEDERAL CASES Andrews v. Fullington Trail Ways, LLC, No. 3:15-228, 2016 WL 3748579 (W.D. Pa. 2016) ........................................... 22 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ........................................................................................ 7, 18 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ...................................................................................... 17, 18 Bldg. Materials Corp. of Am. v. Rotter, 535 F. Supp. 2d 518 (E.D. Pa. 2008) .................................................................. 20 Boring v. Google Inc., 362 F. App’x 273 (3d Cir. 2010) ........................................................................ 22 Caesars World, Inc. v. Venus Lounge, Inc., 520 F.2d 269 (3d Cir. 1975) ............................................................................... 21 Connelly v. Lane Constr. Corp., 809 F.3d 780 (3d Cir. 2016) ............................................................................. 7, 9 Donsco, Inc. v. Casper Corp., 587 F.2d 602 (3d Cir. 1978) ............................................................................... 19 General Refractories Co. v. Fireman’s Fund Ins. Co., 337 F.3d 297 (3d Cir. 2003) ................................................................... 7, passim Granite State Insurance Co. v. Aamco Transmissions, Inc., 57 F.3d 316 (3d Cir. 1995) ................................................................................. 20 Ickes v. Flanagan, No. 3:2007-143, 2008 WL 859183 (W.D. Pa. Mar. 31, 2008) ........................... 15 Kauffman v. Barbagello, No. 1:13-cv-00659, 2013 WL 6388487 (M.D. Pa. Dec. 5, 2013) ...................... 11 Latuska v. Sethuraman, No. 3:15-208, 2016 WL 4082738 (W.D. Pa. July 29, 2016) ........................ 21, 22 Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 3 of 30 TABLE OF AUTHORITIES (Continued) Page(s) iii Lease v. Fishel, No. 1:07-CV-0003, 2009 WL 922486 (M.D. Pa. Apr. 3, 2009) ........................ 12 Orthovita, Inc. v. Erbe, No. 07-2395, 2008 WL 423446 (E.D. Pa. Feb. 14, 2008) .................................. 19 Peek v. Whittaker, No. 2:13-cv-01188, 2014 WL 2154965 (W.D. Pa. May 22, 2014) .................... 13 Pellegrino Food Prods. Co. v. City of Warren, 136 F. Supp. 2d 391 (W.D. Pa. 2000) ................................................................... 9 Perma-Liner Indus., Inc. v. U.S. Sewer & Drain, Inc., 630 F. Supp. 2d 516 (E.D. Pa. 2008) .................................................................. 18 Scanvec Amiable Ltd. v. Chang, 80 F. App’x 171 (3d Cir. 2003) .................................................................... 19, 20 Schwartz v. OneWest Bank, FSB, 614 F. App’x 80 (3d. Cir. 2015) ........................................................................... 9 Schwartz v. OneWest Bank, FSB, No. 13-0113, 2013 WL 6037078 (E.D. Pa. Nov. 13, 2013) ................................. 7 Sheare v. Borough of Olyphant, No. 3:11-CV-1639, 2012 WL 2527022 (M.D. Pa. June 29, 2012) ...................... 7 Synthes (U.S.A.) v. Globus Med., Inc., No. 04-1235, 2007 WL 1001587 (E.D. Pa. Mar. 29, 2007) ................................. 9 Vizant Techs., LLC v. Whitchurch, No. 15-431, 2016 WL 97923 (E.D. Pa. Jan. 8, 2016) ........................................ 15 Waris v. Mackey, No. 09-1103 (RBK), 2009 WL 4884204 (E.D. Pa. Dec. 15, 2009) ................... 15 Williams v. Borough of Olyphant, No. 3:13-CV-02945, 2016 WL 595394 (M.D. Pa. Feb. 12, 2016) ................... 7, 9 Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 4 of 30 TABLE OF AUTHORITIES (Continued) Page(s) iv York Grp., Inc., v. Pontone, No. 10-1078, 2013 WL 12142353 (W.D. Pa. May 22, 2013) ...................... 13, 14 STATE CASES Hardy v. Trs. of Univ. of Pa., No. 381 EDA 204, 2014 WL 10556361 (Pa. Super. Ct. Dec. 26, 2014) ................................................................................................................... 18 Harris v. Brill, 844 A.2d 567 (Pa. Super. Ct. 2004) ................................................................ 8, 14 Hart v. O’Malley, 647 A.2d 542 (Pa. Super. Ct. 1994) .................................................................... 13 Hutchison ex rel. Hutchison v. Luddy, 870 A.2d 766 (Pa. 2005) ..................................................................................... 21 McGee v. Feege, 535 A.2d 1020 (Pa. 1987) ............................................................................... 8, 11 Pennsylvania State University v. University Orthopedics, Ltd., 706 A.2d 863 (Pa. Super. Ct. 1998) .................................................................... 18 Rosen v. Am. Bank of Rolla, 627 A.2d 190 (Pa. Super. Ct. 1993) .................................................................... 12 FEDERAL RULES Rule 12(b)(6) ........................................................................................................ 6, 17 OTHER AUTHORITIES Penn. Jurisprudence 2D Comm. Law § 19:10 (2d ed. 2017) ................................... 19 Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 5 of 30 1 I. Introduction Scranton Products Inc. (“Scranton Products”) seeks to narrow this lawsuit to its proper scope by dismissing two of Bobrick Washroom Equipment, Inc.’s (“Bobrick”) counterclaims. Scranton Products has already voluntarily dismissed its own claims that no longer make sense to pursue. See Dkt. 233 (Dec. 9, 2016); Dkt. 287 (Feb. 10, 2017). Bobrick, on the other hand, has filed an operative Amended Counterclaim, see Dkt. 320 (Mar. 22, 2017) (“Amended Counterclaim”), that threatens to bog down the lawsuit with unviable claims. Bobrick’s abuse of process claim raises a dangerous specter. Under Bobrick’s theory, discovery disputes can be transformed into abuse of process simply by adding a conclusory allegation that litigation positions were taken for “improper purposes.” Amended Counterclaim ¶ 10. Should it survive, Bobrick’s abuse of process claim would force the parties and this Court to spend countless hours rehashing the instant lawsuit, taking discovery into the reasons for discovery, and sparring over material of the most sensitive and privileged nature. Fortunately, that is not the law. Abuse of process requires actual, non- conclusory allegations of a “perversion” of the legal process, which is far from the situation here. Indeed, Bobrick does not allege a “use” for purposes of abuse of process at all. The abuse of process claim additionally fails to the extent it relies on Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 6 of 30 2 allegations regarding Scranton Products’ prelitigation conduct. Under Pennsylvania law, the claim covers only affirmative uses of legal process undertaken with improper purpose, not activities occurring before the filing of litigation. That Bobrick has recently amended its Counterclaim to bring a claim under the Dragonetti Act only underscores this point. While Dragonetti Act claims deal explicitly with rationales for filing a lawsuit, such evidence has no bearing here. Bobrick’s common law unfair competition claim based on allegations of false advertising stretches the law inappropriately. Not content with a Lanham Act claim, Bobrick alleges a common law claim for unfair competition based on the same conduct. But Pennsylvania courts limit unfair competition to claims of a defendant “passing off” its products as those of another. Finally, Bobrick’s claim for punitive damages fails to plead any facts that could establish a level of outrageous conduct sufficient to satisfy Pennsylvania law. Following the briefing on the original counterclaim, Scranton Products consented to Bobrick’s filing an Amended Counterclaim. That Bobrick could not remedy the defects in these two claims confirms that dismissal with prejudice is appropriate. Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 7 of 30 3 II. Procedural History On May 2, 2014, Scranton Products filed its complaint initiating this lawsuit. See Dkt. 1 (“Complaint”). More than two years later, Bobrick moved for leave to file its Counterclaim on November 10, 2016, see Dkt. 213 (Nov. 10, 2016), which this Court granted one month later, see Dkt. 239 (Dec. 16, 2016). Bobrick filed its Counterclaim that same day. See Dkt. 242 (Dec. 16, 2016) (“Counterclaim”). While Bobrick’s motion for leave to file its Counterclaim was pending, Scranton Products, under new management, moved to dismiss its claims on December 9, 2016. See Dkt. 233. Scranton Products has since retained new counsel. See Dkt. 251 (Jan. 4, 2017); Dkt. 252 (Jan. 4, 2017); Dkt. 266 (Jan. 16, 2017); Dkt. 267 (Jan. 16, 2017). Scranton Products moved to dismiss Bobrick’s Counterclaim, and the parties fully briefed Scranton Products’ motion. See Dkt. 274 (Jan. 27, 2017); Dkt. 289 (Feb. 13, 2017); Dkt. 302 (Feb. 28, 2017). Bobrick requested Scranton Products’ consent to file an amended counterclaim, which Scranton Products granted. See Dkt. 311 (Mar. 17, 2017). Scranton Products now moves to dismiss two of the four counts, and the request for punitive damages, asserted in Bobrick’s Amended Counterclaim. III. Statement of Facts Bobrick’s Amended Counterclaim pleads four counts: (1) a Lanham Act claim; (2) a Pennsylvania common law unfair competition claim; (3) an abuse of Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 8 of 30 4 process claim; and (4) a Dragonetti Act claim for wrongful use of civil proceedings. See Amended Counterclaim ¶¶ 134-58. Bobrick requests declaratory relief; corrective advertising; injunctive relief; disgorgement of profits; fees and costs; consequential damages; and punitive damages. See id., Prayer for Relief ¶¶ (a)-(h). Bobrick’s abuse of process claim is based in part on allegations of prelitigation conduct: (1) alleged conduct relating to a pre-lawsuit July 2013 telephone call; (2) alleged conduct relating to document retention “after [Scranton Products] was already contemplating litigation against Bobrick,” but before the lawsuit had commenced; (3) alleged conduct relating to NFPA 286 testing conducted on Scranton Products’ partitions; and (4) alleged conduct relating to Scranton Products’ prelitigation investigation of its damages claim, see Amended Counterclaim ¶¶ 116, 124-25 (emphasis added). Bobrick also alleges that Scranton Products undertook a commercial action in January 2017 to tell customers that it “can no longer maintain with 100% assurance that all of the current generation of 286 HDPE bathroom partitions” were NFPA 286 compliant. Id. ¶ 121. Bobrick’s remaining allegations relate to Scranton Products’ discovery conduct. Specifically, Bobrick claims that: “Scranton Products has obstructed and resisted Bobrick’s legitimate Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 9 of 30 5 discovery requests at every turn, and has intentionally conducted discovery so as to increase Bobrick’s costs,” without otherwise listing specific examples of such “obstruct[ion]” or “resist[ance].” Id. ¶ 126. Scranton Products disputed the discoverability of, but then provided upon court order, “a list of construction projects it claimed Bobrick had interfered with.” Bobrick further alleges that Scranton Products did not perform adequate investigation in preparing that list, and that “[t]he only plausible explanation of Scranton Products’ failure to perform any investigation . . . is that [it] was deliberately prolonging this litigation and forcing Bobrick to shoulder ever-greater legal costs.” Id. ¶¶ 127-31. Scranton Products should not have redacted certain documents. These discovery disputes were ultimately resolved by this Court. Id. ¶ 132. Bobrick alleges in a conclusory fashion that there are “other instances of similar predatory conduct,” but does not list them. Id. ¶ 133. Bobrick does not allege, nor could it, that it ever sought or received sanctions for any of the post-Complaint conduct identified above; nor does it allege that Scranton Products violated any of this Court’s orders during litigation. As to its unfair competition claim, Bobrick’s allegations sound in false advertising, “aris[ing] from Scranton Products’ systematic misrepresentation of its Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 10 of 30 6 own products in the marketplace.” Amended Counterclaim ¶ 2; see generally id. ¶¶ 3-7, 12-115. IV. Statement of Questions Involved Whether Bobrick has failed to state an abuse of process claim, where (1) Bobrick relies in part on inactionable prelitigation conduct; (2) the remaining allegations relate only to discovery disputes over the course of over two years of litigation, without alleging any actual uses of process; and/or (3) its allegations regarding improper motivations fail to support a claim as a matter of law. Whether Bobrick’s unfair competition claim based on false advertising allegations fails, where Pennsylvania courts have narrowly interpreted unfair competition as applying only to claims of trademark infringement or passing off. Whether Bobrick’s request for punitive damages should be dismissed where its allegations are conclusory, and where none of the factual allegations in the counterclaim could qualify as outrageous or malicious as a matter of law. V. Legal Standard “To survive a motion to dismiss” under Federal Rule of Civil Procedure 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 11 of 30 7 state a claim to relief that is plausible on its face.” Connelly v. Lane Constr. Corp., 809 F.3d 780, 786 (3d Cir. 2016) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)) (internal quotation marks omitted). “[A] court reviewing the sufficiency of a complaint must take three steps.” Id. at 787. “First, it must ‘tak[e] note of the elements [the] plaintiff must plead to state a claim.’” Id. (alterations in original) (quoting Iqbal, 556 U.S. at 675). “Second, it should identify allegations that, ‘because they are no more than conclusions, are not entitled to the assumption of truth.’” Id. (quoting Iqbal, 556 U.S. at 679). “Finally, ‘[w]hen there are well- pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.’” Id. (alterations in original) (quoting Iqbal, 556 U.S. at 679). VI. Argument A. Bobrick Has Failed to State a Claim for Abuse of Process Bobrick’s abuse of process claim-based entirely on a combination of inactionable prelitigation conduct and discovery disputes-is exactly the sort of claim courts decline to entertain, and with good reason.1 Otherwise, “any party 1 Courts can and do dismiss abuse of process claims on the pleadings. See, e.g., Gen. Refractories Co. v. Fireman’s Fund Ins. Co., 337 F.3d 297, 303 (3d Cir. 2003) (affirming dismissal of abuse of process claims on pleadings); Williams v. Borough of Olyphant, No. 3:13-CV-02945, 2016 WL 595394, at *4-5 (M.D. Pa. Feb. 12, 2016) (same); Schwartz v. OneWest Bank, FSB, No. 13-0113, 2013 WL 6037078, at *7 (E.D. Pa. Nov. 13, 2013) (same); Sheare v. Borough of Olyphant, Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 12 of 30 8 who” lost a handful of discovery battles, or brought an unfair competition claim but did not prevail, “could be liable for abuse of process,” Gen. Refractories, 337 F.3d at 309-an outcome that would fill the courts with collateral litigation. Following these principles, Bobrick’s claim must be dismissed. 1. The Prelitigation Conduct Is Not Actionable Bobrick’s abuse of process claim must be dismissed insofar as it based upon Scranton Products’ prelitigation conduct. Abuse of process addresses only conduct occurring after the initiation of any legal process. The elements of a Pennsylvania abuse of process claim are: (1) the defendant used a legal process against the plaintiff, (2) that use was primarily to accomplish a purpose for which the process was not designed, and (3) harm was caused to the plaintiff. Harris v. Brill, 844 A.2d 567, 572 (Pa. Super. Ct. 2004). As these elements indicate, an abuse of process claim “is concerned with a perversion of a process after it is issued.” McGee v. Feege, 535 A.2d 1020, 1023 (Pa. 1987) (citation omitted). Bobrick bases its abuse of process claim in part on allegations of conduct predating the May 2014 complaint. See Amended Counterclaim ¶¶ 124-25. Even “assum[ing] the[] veracity” of such allegations, they cannot “give rise to an No. 3:11-CV-1639, 2012 WL 2527022, at *8 (M.D. Pa. June 29, 2012) (dismissing abuse of process claim based on prelitigation conduct and initiation, rather than use, of process). Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 13 of 30 9 entitlement to relief” under an abuse of process theory, Connelly, 809 F.3d at 787 (citation and internal quotation marks omitted). Scranton Products expects that Bobrick may argue that these allegations are relevant evidence of improper purpose after the litigation has begun. This argument has been raised and rejected. See Synthes (U.S.A.) v. Globus Med., Inc., No. 04-1235, 2007 WL 1001587, at *4 (E.D. Pa. Mar. 29, 2007) (dismissing abuse of process claim and holding that “statements made prior to the litigation. . . . are not demonstrative of an improper use of process after it has been issued”). Nor may Bobrick allege an improper purpose in the initial decision to bring the lawsuit as part of an abuse of process. The relevant inquiry is not whether Scranton Products initiated the litigation with an improper purpose, but whether Scranton Products took specific actions in the litigation with an improper purpose as to those actions. See, e.g., Schwartz v. OneWest Bank, FSB, 614 F. App’x 80, 83 (3d. Cir. 2015) (“Under Pennsylvania law, ‘abuse of process is the improper use of process after it has been issued’. . . . merely ‘initiati[ng] . . . litigation for a wrongful purpose’ alone is not actionable.”); Williams, 2016 WL 595394, at *4 (dismissing abuse of process claim “based on the alleged wrongful initiation of criminal proceedings . . . not on the perversion of a legal process already underway.”); Pellegrino Food Prods. Co. v. City of Warren, 136 F. Supp. 2d 391, 407 (W.D. Pa. 2000) (“none of the alleged bases for the claim indicate that any of Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 14 of 30 10 the procedures used by the City Defendants . . . were for a purpose other than that obtainable from the procedure itself.”). Without this limitation, “any party who defended [or initiated] a lawsuit, but eventually lost, could be liable for abuse of process,” Gen. Refractories, 337 F.3d at 309, based solely on allegations that it acted with improper motivations. Bobrick’s new factual allegations, including those relating to Scranton Products’ recent commercial action, are similarly irrelevant. Bobrick alleges that Scranton Products’ commercial action “demonstrate[s] that Scranton Products knows it cannot credibly assert, as it did in its Complaint and for nearly three years during this litigation,” that it makes an NFPA 286-compliant HDPE toilet partition. But the relevant inquiry is not whether Scranton Products had any basis for initiating the litigation-it is, rather, whether Scranton Products used specific litigation procedures primarily with an improper purpose. See, e.g., Gen. Refractories, 337 F.3d at 308-09 (noting the requirement of “pleading that a particular legal process was used for a purpose other than for which [it] was intended.”) (citation omitted). For that reason, it cannot support the abuse of process claim. Bobrick’s newly added Dragonetti Act claim demonstrates the point clearly. The “critical difference” between malicious prosecution and abuse of process is that “[m]alicious use of civil process has to do with the wrongful initiation of such Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 15 of 30 11 process, while abuse of civil process is concerned with a perversion of a process after it is issued.” Kauffman v. Barbagello, No. 1:13-cv-00659, 2013 WL 6388487, at *14 (M.D. Pa. Dec. 5, 2013) (alteration in original) (citation and internal quotation marks omitted). The new allegations all relate to Scranton Products’ motivations for bringing the lawsuit. See Amended Counterclaim ¶¶ 116-20 (“Scranton Products filed its Complaint against Bobrick because Scranton Products intended to use this litigation to exert financial pressure . . . .”). Whatever relevance those allegations may have, they have zero relevance to abuse of process. 2. Bobrick’s Remaining Allegations Fall Short of Pleading a “Perversion” of Legal Process Bobrick’s remaining allegations fall short of stating a claim for abuse of process. “The Supreme Court of Pennsylvania has said that ‘[t]he gist of an action for abuse of process is the improper use of process after it has been issued, that is, a perversion of it.’” Gen. Refractories, 337 F.3d at 304 (alteration in original) (quoting McGee, 535 A.2d at 1023). Critically, “the point of liability is [not] reached [until] the utilization of the procedure . . . becomes so lacking in justification as to lose its legitimate function as a reasonably justifiable litigation procedure.” Id. at 308 (emphasis added) (citation and internal quotation marks omitted). Such limitations are in place to ensure that disagreements rooted in litigation conduct, including discovery, do not regularly flood courts with abuse of Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 16 of 30 12 process claims. See Rosen v. Am. Bank of Rolla, 627 A.2d 190, 194 (Pa. Super. Ct. 1993) (“To permit a cause of action for abuse of process for service of a subpoena upon a witness to obtain relevant information possessed by the witness would wreak havoc with the judicial system.”). Bobrick’s claim fails to overcome this high bar. Excluding inactionable prelitigation conduct, the abuse of process claim rests solely on allegations regarding discovery disputes, including (1) an allegedly overbroad list of construction projects relevant to Scranton Products’ claims, see Amended Counterclaim ¶¶ 127-31; and (2) Scranton Products’ document redactions, id. ¶ 132. As Bobrick concedes, both disputes were resolved, and Scranton Products ultimately complied with the Court’s orders as to each. See id. ¶¶ 127, 132. The loss of a handful of discovery battles should not, and cannot, open a party up to liability premised on the perversion of legal process. Otherwise, court dockets would be overwhelmed with abuse of process claims weaponized for use any time litigation becomes contentious. See Gen. Refractories, 337 F.3d at 309 (“The purpose of avoiding payment to the adverse party . . . does not suffice to state an abuse of process claim. If it did, any party who defended a lawsuit, but eventually lost, could be liable for abuse of process.”); Lease v. Fishel, No. 1:07- CV-0003, 2009 WL 922486, *7 (M.D. Pa. Apr. 3, 2009) (Dismissal warranted when alleged abuses of process “at most show[ed] a violation of civil discovery Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 17 of 30 13 rules.”). This is especially true here, where the discovery battles at issue did not rise to the level of a request for or order of sanctions, and were ultimately resolved by Court order or through the parties’ own efforts. 3. Bobrick Does Not Allege an Actionable “Use” of Process In fact, none of Bobrick’s allegations constitutes a “use of process” by Scranton Products at all. “The term ‘use’, in the context of an abuse of process claim, requires that a party actively seek and employ a legal process primarily for the purpose of harming an adverse party.” Hart v. O’Malley, 647 A.2d 542, 551- 52 (Pa. Super. Ct. 1994) (emphasis added). Producing documents (even if the Bobrick objects to the timing), responding to discovery (even if the Bobrick objects to the content), and filing an affidavit requested by the Court2 are not “uses” of legal process under this standard. See, e.g., Gen. Refractories, 337 F.3d at 310-11 (failing to comply with court orders, failing to seek a stay, and failing to provide copies of subpoenaed documents do not qualify as “uses” for abuse of process); York Grp., Inc. v. Pontone, No. 10-1078, 2013 WL 12142353, at *11-12 (W.D. Pa. May 22, 2013) (alleged misrepresentations made to the court during litigation do not constitute a “use” of process). Classic examples of uses of process-see, e.g., Peek v. Whittaker, No. 2:13- 2 Scranton Products filed the affidavit in question not as an affirmative, offensive act-but in response to the court’s order of December 12, 2014, and Bobrick’s aggressive attempts to serve discovery on matters not relevant to the litigation. Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 18 of 30 14 cv-01188, 2014 WL 2154965 (W.D. Pa. May 22, 2014) (baseless petition for a preliminary injunction could support a claim for abuse of process when defendant admitting to fabricating evidence)-are different in kind from the alleged “uses” here, where Scranton Products was not affirmatively using legal process, but rather was responding to discovery requests by submitting written responses and producing documents. Although Bobrick challenged the adequacy and accuracy of these responses, Scranton Products’ actions were taken defensively. Such actions are not “uses” for abuse of process. 4. The Allegations of Improper Purpose Are Inadequate Bobrick’s abuse of process claim fails independently because its allegations of improper purpose are insufficient as a matter of law. To state a claim, Bobrick must plead sufficient facts to allege plausibly that Scranton Products’ actions were taken “primarily to accomplish a purpose for which the process was not designed,” Harris, 844 A.2d at 572 (citation and internal quotation marks omitted); see also, e.g., York Grp., 2013 WL 12142353, at *11 (“[t]he court must be satisfied that plaintiffs filed the motion for preliminary injunction primarily to drain Scott Pontone’s resources as opposed to achieving the legitimate legal purpose of such a motion . . . seeking the court’s intervention to prevent irreparable harm”) (citation omitted). Bobrick’s allegations of improper purpose fail for at least three reasons. Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 19 of 30 15 First, some relate to inactionable prelitigation conduct which, for reasons discussed supra at 8-9, cannot support allegations of improper purpose. Second, Bobrick’s other allegations are nothing more than conclusory statements of purpose, which cannot support a claim. Courts within this Circuit regularly dismiss abuse of process claims when the pleadings rely on vague, conclusory allegations of improper purpose. See, e.g., Waris v. Mackey, No. 09- 1103 (RBK), 2009 WL 4884204, at *10 (E.D. Pa. Dec. 15, 2009) (dismissing abuse of process claim alleging that defendants “engaged in improper litigation tactics ‘to extort the property value of Plaintiff’s employment claim’” because the plaintiff “did not plead any facts showing the Defendants had a purpose to extort. . . . extortion is a legal conclusion, not a fact”). Here, Bobrick merely concludes, for example, that Scranton Products’ purpose in its use of legal process was for “inflicting financial harm,” but does not plead facts showing that Scranton Products had this purpose. That is insufficient. See, e.g., Ickes v. Flanagan, No. 3:2007-143, 2008 WL 859183, at *5 (W.D. Pa. Mar. 31, 2008) (“Other than the bare assertion . . . that the ‘perverse purpose’ of the prosecution was for the benefit of Plaintiff's ‘meddlesome’ neighbor, Plaintiff alleges no facts sufficient” to allow the claim to move forward.); Vizant Techs., LLC v. Whitchurch, No. 15-431, 2016 WL 97923, at *23 (E.D. Pa. Jan. 8, 2016) (“Although plaintiffs appear to be suggesting that defendants persisted in filing Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 20 of 30 16 documents in order to extort money from Vizant, they do not direct our attention to anything in the record that would support this theory.”). Bobrick’s allegations of improper purpose are too conclusory to satisfy Pennsylvania law. Similarly, Bobrick alleges that Scranton Products’ “predatory conduct” in legal proceedings was for the purpose of “stifling legitimate competition,” “silencing Bobrick’s efforts to educate market participants,” and “inflicting financial harm on Bobrick for unfair competitive advantage by increasing Bobrick’s costs.” Amended Counterclaim ¶ 10. These are not factual allegations; they are conclusions tracking the language of Third Circuit opinions on the legal standard for abuse of process. See, e.g., Gen. Refractories, 337 F.3d at 308 (listing “harassment, draining resources, delaying payment, and delaying litigation” as improper purposes that could, if properly pled, satisfy an abuse of process claim). Third, Bobrick’s remaining allegations fail to show an actionable improper purpose because they state only that Scranton Products had the purpose of pursuing the underlying claims. For example, Bobrick’s assertion that Scranton Products was trying to “stifl[e] legitimate competition” simply amounts to a challenge to Scranton Products’ claims on the merits. Similarly, Bobrick’s allegation that Scranton Products sought to “silenc[e] Bobrick’s efforts to educate market participants” restates that Scranton Products sought to enjoin Bobrick from making misleading statements. Amended Counterclaim ¶¶ 10, 133. These allegations of Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 21 of 30 17 “improper purpose” reflect only Scranton Products’ desire to succeed in the litigation, and could be asserted against any plaintiff in a competition case. See Gen. Refractories, 337 F.3d at 309 (“Allowing a party to use the process in order to succeed in the litigation is an end contemplated by most legal processes, and, certainly, that goal does not pervert discovery and litigation process.”). Even if Scranton Products’ primary goal was to limit Bobrick’s conduct in the marketplace, such a goal would only reflect a desire to “carry[] out the process to its authorized conclusion,” which cannot generate liability for abuse of process. Gen. Refractories, 337 F.3d 313 n.6. “If it did, any party who defended [or initiated] a lawsuit, but eventually lost, could be liable for abuse of process,” id. at 309. 5. Bobrick’s Allegations of Improper Purpose Fail to Satisfy Twombly/Iqbal Bobrick’s allegations of improper purpose also fail to meet the Twombly/Iqbal standard for federal pleading generally. To survive a Rule 12(b)(6) motion, a plaintiff must provide “more than labels and conclusions,” and “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Bobrick insists that “the only plausible explanation” for why Scranton Products disagreed with Bobrick on the proper scope of discovery is that it was “deliberately prolonging this litigation”; it is precisely this type of pleading the Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 22 of 30 18 Supreme Court aimed to prevent. See, e.g., Ashcroft, 556 U.S. at 680 (conclusory allegations that “petitioners ‘knew of, condoned, and willfully and maliciously agreed to subject [him]’ to harsh conditions of confinement” are “not entitled to the assumption of truth”) (alteration in original). For the same reason, Bobrick’s allegations that Scranton Products’ used legal process “for predatory purposes” such as “inflict[ing] financial harm on Bobrick” are not entitled to a presumption of truth. Amended Counterclaim ¶ 123. Bobrick’s allegations of improper purpose at best “are ‘merely consistent with’ a defendant’s liability,” but “[they] ‘stop[] short of the line between possibility and plausibility of “entitlement to relief”’” and should be disregarded. Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 557). B. Bobrick’s Unfair Competition Claim Should Be Dismissed Pennsylvania state courts have limited unfair competition to claims involving allegations of misappropriation or passing off. As explained in Pennsylvania State University v. University Orthopedics, Ltd., 706 A.2d 863 (Pa. Super. Ct. 1998), “[t]he gist of [unfair competition] lies in the deception practiced in ‘passing off’ the goods of one for that of another.” Id. at 867, 870. See also Hardy v. Trs. of Univ. of Pa., No. 381 EDA 204, 2014 WL 10556361, at *6 (Pa. Super. Ct. Dec. 26, 2014) (defining unfair competition generally as “misappropriation”); Perma-Liner Indus., Inc. v. U.S. Sewer & Drain, Inc., 630 F. Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 23 of 30 19 Supp. 2d 516, 526 (E.D. Pa. 2008) (“Pennsylvania courts have narrowly construed a common law action for unfair competition to instances of trademark infringement or attempts to imitate a plaintiff's products or services”); Orthovita, Inc. v. Erbe, No. 07-2395, 2008 WL 423446, at *11 (E.D. Pa. Feb. 14, 2008) (dismissing unfair competition claim that lacked allegations of passing off or misappropriation). “Under Pennsylvania law, the common law action for unfair competition is narrowly construed to instances of trademark infringement or attempts to imitate the plaintiff’s products or services.” 18A Russell J. Davis, Summary of Pennsylvania Jurisprudence 2D Commercial Law § 19:10 (2d ed. 2017); see also, e.g., Donsco, Inc. v. Casper Corp., 587 F.2d 602, 605 (3d Cir. 1978) (identifying “the two central elements” of a Pennsylvania unfair competition claim as “secondary meaning . . . and likelihood of confusion”). Consistent with that state law, the Third Circuit noted in Scanvec that “[a] claim of unfair competition under Pennsylvania law requires proof that the defendant has ‘passed off’ the goods of one manufacturer or vendor as those of another, thus creating confusion between his own goods, and those of the rival.” Scanvec Amiable Ltd. v. Chang, 80 F. App’x 171, 180 (3d Cir. 2003) (emphasis added) (citation omitted). Bobrick, however, does not assert a “passing off” claim rooted in confusion between Bobrick’s offerings in the marketplace and those of Scranton Products. Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 24 of 30 20 Instead, Bobrick’s unfair competition claim alleges Scranton Products’ “systematic misrepresentation of its own products in the marketplace.” Amended Counterclaim ¶ 2. Under the traditional interpretation of unfair competition, Bobrick fails to state a claim. While Bobrick might point to a split in authority based on recent trial court decisions as to whether the tort extends more broadly than stated by the Third Circuit and the Pennsylvania Supreme Court, see Bldg. Materials Corp. of Am. v. Rotter, 535 F. Supp. 2d 518, 526 n.4 (E.D. Pa. 2008), Scranton Products has uncovered no Pennsylvania appellate decision, nor Third Circuit decision,3 supporting this expanded interpretation. Outlier trial court decisions to the contrary are not binding on this Court. In light of longstanding Pennsylvania authority supporting a narrow interpretation of unfair competition, Scranton Products respectfully submits that this Court should decline to expand the scope of the tort, and should dismiss with prejudice Bobrick’s unfair competition claim accordingly. Bobrick may seek relief based on its false advertising allegations under the Lanham Act. 3 Bobrick may argue that Granite State Insurance Co. v. Aamco Transmissions, Inc., 57 F.3d 316 (3d Cir. 1995), supports its expanded view of Pennsylvania unfair competition. But Granite State deals only with the question of how the term “unfair competition” should be interpreted within the context of a specific insurance contract and is therefore inapposite. Moreover, it precedes the more recent Scanvec decision. Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 25 of 30 21 C. Bobrick’s Punitive Damages Request Should Be Rejected To the extent that any claims are dismissed by this motion, those allegations can no longer support a claim of punitive damages.4 But Bobrick’s allegations in its Amended Counterclaim fall far short of alleging that Scranton Products’ “actions are so outrageous as to demonstrate willful, wanton or reckless conduct,” the standard for entitlement to punitive damages, such that they would fail regardless of the outcome of this motion. Hutchison ex rel. Hutchison v. Luddy, 870 A.2d 766, 770 (Pa. 2005). Bobrick’s abuse of process and Dragonetti Act claims, for example, essentially reduce to allegations that Scranton Products did not, in Bobrick’s view, have a basis for continuing the litigation, and pursued litigation with the goal of obtaining damages and injunctive relief. Similarly, Bobrick’s unfair competition claim is a standard false advertising action. These allegations do not rise to the level of outrageousness required under the standard. See Latuska v. Sethuraman, No. 3:15-208, 2016 WL 4082738, at *7 (W.D. Pa. July 29, 2016) (allegations that the defendant “intentionally overlooked or ignored” problems with a home sufficed to support claim for intentional misrepresentation, but “[did] not rise to the level of outrageous conduct required under Pennsylvania law to warrant punitive damages”). 4 Punitive damages are unavailable under the Lanham Act. See Caesars World, Inc. v. Venus Lounge, Inc., 520 F.2d 269, 274 (3d Cir. 1975). Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 26 of 30 22 In addition, the request for punitive damages fails as overly conclusory. See, e.g., Boring v. Google Inc., 362 F. App’x 273, 283 (3d Cir. 2010) (dismissing a request for punitive damages when the “complaint fails to allege conduct that is outrageous or malicious . . . courts do indeed dismiss claims for punitive damages in advance of trial”); Latuska, 2016 WL 4082738, at *7 (dismissing punitive damages where plaintiff’s “allegations regarding their request for punitive damages are conclusory statements and not factual averments sufficient to state a plausible claim”); Andrews v. Fullington Trail Ways, LLC, No. 3:15-228, 2016 WL 3748579, at *10 (W.D. Pa. 2016) (“the mere inclusion of words normally associated with the award of punitive damages, such as ‘outrageous,’ ‘wanton,’ and ‘reckless,’ is insufficient to state a claim for such damages when the facts alleged make no mention of conduct that rises above ordinary negligence”). VII. Conclusion Bobrick had the benefit of seeing Scranton Products’ arguments on the first round of briefing on these claims and still failed to correct them. The Motion should be granted. Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 27 of 30 23 DATED: April 3, 2017 Respectfully submitted, MUNGER, TOLLES & OLSON LLP By: /s/ Lisa J. Demsky BRAD D. BRIAN (CA 79001) brad.brian@mto.com (Admitted pro hac vice) LISA J. DEMSKY (CA 186006) lisa.demsky@mto.com (Admitted pro hac vice) 355 South Grand Avenue Thirty-Fifth Floor Los Angeles, California 90071-1560 Telephone: (213) 683-9100 Facsimile: (213) 687-3702 ELLIOTT GREENLEAF, P.C. JOHN G. DEAN (PA 76168) jgd@elliottgreenleaf.com MATTHEW G. BOYD (PA 207366) mgb@elliottgreenleaf.com 201 Penn Avenue, Suite 202 Scranton, Pennsylvania 18503 Telephone: (570) 346-7569 Facsimile: (570) 969-2890 Attorneys for Plaintiff Scranton Products Inc. Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 28 of 30 24 CERTIFICATE OF COMPLIANCE I hereby certify that this brief complies with the word-count limit set forth in Local Rule 7.8(b)(2) because it is 4,967 words long, including headings and footnotes but excluding the cover page, table of contents, table of authorities, signature block, certificate of service, and this certificate. In preparing this certificate, I relied on the word count generated by Microsoft Word 2010. DATED: April 3, 2017 /s/ Lisa J. Demsky LISA J. DEMSKY Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 29 of 30 25 CERTIFICATE OF SERVICE I, Lisa J. Demsky, hereby certify that the foregoing PLAINTIFF AND COUNTERCLAIM DEFENDANT SCRANTON PRODUCTS INC.’S BRIEF IN SUPPORT OF PARTIAL MOTION TO DISMISS WITH PREJUDICE DEFENDANT AND COUNTERCLAIM PLAINTIFF BOBRICK WASHROOM EQUIPMENT, INC.’S COUNTERCLAIM was served on all counsel of record on this date through the Court’s electronic filing system. Dated: April 3, 2017 /s/ Lisa J. Demsky LISA J. DEMSKY Case 3:14-cv-00853-RDM Document 325 Filed 04/03/17 Page 30 of 30 EXHIBIT A Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 1 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2016 WL 3748579 Only the Westlaw citation is currently available. United States District Court, W.D. Pennsylvania. Thomas B. Andrews & Wendy Andrews, His Wife, Plaintiffs, v. Fullington Trail Ways, LLC, d/b/a Fullington Bus Company and Fullington Tours, a Pennsylvania Limited Liability Company, Live Nation Worldwide Inc., and Matthew Jeffrey Plummer, individually, and James Brantner, individually, and Tom Brant, individually, and Clarence Florey, Jr., Individually and in his capacity as an employee of the Fullington Trailways, LLC and John Does, Defendants. CIVIL ACTION NO. 3:15-228 | Signed 07/08/2016 Attorneys and Law Firms Herman D. Lantz, Lantz Law Offices, Moundsville, WV, Quan S. Le, Le Law Offices, Wheeling, WV, for Plaintiffs. J. Eric Barchiesi, Export, PA, Donald H. Smith, Lewis, Brisbois, Bisgaard & Smith, LLP, Robert A. Loch, Bradley J. Linsenmeyer, Robb Leonard Mulvihill LLP, Kenneth T. Newman, Thomas, Thomas & Hafer, LLP, Lauren M. Despot, Michael F. Nerone, Pion, Nerone, Girman, Winslow & Smith, P.C., Pittsburgh, PA, for Defendants. Matthew Jeffrey Plummer, Altoona, PA, pro se. Clarence Florey, Jr., pro se. MEMORANDUM OPINION AND ORDER KIM R. GIBSON, UNITED STATES DISTRICT JUDGE I. Introduction *1 This negligence action arises from an altercation between Plaintiff Thomas B. Andrews and Defendants. Presently before the Court are Motions to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) filed by Defendants Brandt (ECF No. 22), Brantner (ECF No. 35), and Plummer (ECF No. 37). Also before the Court is Defendant Live Nation Worldwide Inc.'s Motion to Dismiss Punitive Damages pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 29.) For the reasons that follow, the pending motions to dismiss will be GRANTED. (See ECF Nos. 22, 35, 37, 29.) Plaintiffs' claims against Defendant Brandt and Defendant Brantner are DISMISSED WITH PREJUDICE. Plaintiffs' claims against Defendant Plummer and Plaintiffs' claim for punitive damages against Defendant Live Nation are DISMISSED with leave to file amended claims. Plaintiffs are therefore granted leave to amend the Complaint with regard to the claims against Defendant Plummer and the claim for punitive damages against Defendant Live Nation Worldwide Inc. II. Jurisdiction and Venue The Court exercises jurisdiction over Plaintiffs' claims pursuant to 28 U.S.C. § 1332, because there is complete diversity and the amount in controversy exceeds $75,000, exclusive of interest and costs. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b). III. Background Plaintiffs initiated this action by filing an eight-count Complaint on September 1, 2015. (ECF No. 1.) Plaintiffs allege the following facts in the Complaint, which the Court accepts as true for the sole purpose of deciding the pending motions. On or about September 7, 2013, Plaintiffs attended a concert for a musician known as “Kid Rock.” (Id. ¶ 14.) The concert took place at the First Niagara Pavilion in Burgettstown, Washington County, Pennsylvania (First Niagara), which is owned and operated by Defendant Live Nation Worldwide, Inc. (Live Nation). (Id. ¶¶ 15, 17.) Defendants Matthew Jeffery Plummer, James Brantner, Tom Brandt, 1 and unidentified John Does chartered a tour bus from Defendant Fullington Bus Company. (Id ¶ 15.) The bus, driven by Defendant Clarence Florey, Jr., served as the individual Defendants' transportation to the Kid Rock Concert. (Id.) After the concert, Plaintiffs, Thomas B. Andrews and his wife, Wendy Andrews, were waiting for traffic to clear in the “F Pole” areas of the parking lot at First Niagara. (Id. ¶ 19.) While they were waiting for the traffic to clear, Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 2 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 the bus in which Defendants Plummer, Brantner, Brandt, and Does were riding, and which was driven by Defendant Florey, traveled past Plaintiffs. (Id.) Plaintiffs allege that Defendants Plummer, Brantner, Brandt, and Does, were under the influence of alcohol sold by First Niagara. (Id. ¶ 24.) As the bus drove by Plaintiffs, individuals seated on the bus and members of the party with which Plaintiffs were associated “mooned” one another. (Id. ¶ 20.) During this interaction between Plaintiffs and Defendants, an individual on the bus caused damage to one of the bus's windows by placing pressure against the window. (Id. ¶ 21.) *2 At this time, the bus driver, Defendant Florey, stopped the bus and he and certain other of the Defendants exited the bus. (Id. ¶ 22.) Defendants Plummer, Brandt, Brantner, and Does confronted Mr. Andrews. (Id. ¶ 23.) Plaintiff Thomas Andrews was attacked and knocked to the ground, causing him to strike his head and become unconscious. (Id.) As a result of the altercation described above, Plaintiff Thomas B. Andrews suffered physical pain, severe physical injuries, emotional distress, and mental anguish and suffering. (Id. ¶ 26.) Plaintiff Thomas Andrews was transported to the Presbyterian Hospital in Pittsburgh for his injuries. (Id.) Plaintiff Wendy Andrews suffered emotional distress and mental suffering after having watched her husband be attacked and knocked unconscious. (Id. ¶ 27.) In Counts I, II, and III of the Complaint, Plaintiffs assert claims against Defendants Foley and Fullington Trail Ways, LLC. As the motions presently before the Court do not relate to these claims or Defendants, the Court will not address Counts I-III in this Memorandum Opinion and Order. (See id. ¶¶ 28-39.) In Count IV of the Complaint, Plaintiffs assert a claim of negligence against Defendant Live Nation. (See id. ¶¶ 40-43.) Plaintiffs assert that Live Nation owns First Niagara, and therefore owes a duty to its patrons to establish protocol and policies to ensure the safety and security of its patrons. (Id. ¶ 41.) Plaintiffs allege that Live Nation breached this duty by failing to establish rules, protocol, or policies to ensure Plaintiffs' safety. Alternatively, Plaintiffs allege that Defendant Live Nation failed to train its agents properly to adequately provide protection and security, or that its agents failed to follow established policies to ensure Plaintiffs' safety. (Id. ¶ 42.) Plaintiffs assert that as a direct and proximate result of Live Nation's failures, Plaintiffs sustained damages, including emotional distress, annoyance, inconvenience, physical injuries, medical bills, the costs of attorneys' fees, and other damages that may be proper and just. (Id. ¶ 43.) In Count V of the Complaint, Plaintiffs assert a claim of negligence against Defendant Plummer. (See id. ¶¶ 44-47.) Plaintiffs state that Defendant Plummer “owed a duty to ... Plaintiffs,” and that he breached that duty by “acting with excessive and unreasonable force, negligently and without due care.” (Id. ¶ 45.) Plaintiffs allege that Defendant Plummer was “unreasonable, negligent and breached his duty to exercise due care generally and in the following respects: (a) Failing to remain on the bus; (b) Confronting Thomas B. Andrews; (c) Failing to attempt to retreat from the altercation; (d) Using excessive, disproportionate, and unreasonable force; (e) Striking Thomas B. Andrews when physical force was neither required nor permitted; (f) Acting unreasonably throughout the altercation; and (g) Failing to exercise reasonable care.” (Id. ¶ 46.) Plaintiffs state that Defendant Plummer's negligence caused damages to Plaintiffs including, but not limited to emotional distress, annoyance, inconvenience, medical bills, costs, attorneys' fees, physical injuries, and other damages that may be proper and just. (Id. ¶ 47.) In Count VI of the Complaint, Plaintiffs assert a claim of negligence against Defendants Brandt, Brantner, and Does. (See id. ¶¶ 48-51.) Plaintiffs state that Defendants Brandt, Brantner, and Does “owed a duty to ... Plaintiffs,” and that they breached that duty by “acting with excessive and unreasonable force, negligently and without due care.” (Id. ¶ 49.) Plaintiffs allege that Defendants Brandt, Brantner, and Does were “unreasonable, negligent, and breached [their] duty to exercise due care generally and in the following respects: (a) Failing to remain on the bus; (b) Confronting Thomas B. Andrews; (c) Failing to attempt to retreat from the altercation; (d) Provoking or otherwise encouraging the attack on Mr. Andrews; (e) Failing to attempt to stop Defendant Plummer from striking Thomas B. Andrews; (f) Acting unreasonably throughout the altercation; and (g) Failing to exercise reasonable care.” (Id. ¶ 50.) Plaintiffs state that the conduct of Defendants Brandt, Brantner, and Does directly and proximately caused damages including, but not limited to emotional distress, annoyance, inconvenience, medical Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 3 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 bills, costs, attorneys' fees, physical injuries, and other damages that may be proper and just. (Id. ¶ 51.) *3 In Count VII of the Complaint, Plaintiffs assert a claim of loss of consortium against all Defendants. (See id. ¶¶ 52-53.) Plaintiffs allege that as a direct and proximate result of the acts described in the complaint, Plaintiff Wendy Andrews has suffered a loss of society, services, comfort, and consortium of her husband, Plaintiff Thomas Andrews. (Id. ¶ 53.) In Count VIII of the Complaint, Plaintiffs assert a claim for punitive damages against all Defendants. (See id. ¶¶ 54-55.) Plaintiffs allege that Defendants “are jointly and severally liable to ... Plaintiffs for punitive damages due to their respective conduct which was outrageous, grossly negligent, willful, wanton, reckless, and in utter disregard and/or with criminal indifference to civil obligations and for the safety of the public and patrons given the high degree of risk and peril caused by permitting the conditions” which Plaintiffs described in the Complaint. (Id. ¶ 55.) Defendants Brandt, Brantner, and Plummer filed individual motions to dismiss the claims against them pursuant to FRCP 12(b)(6). (See ECF Nos. 22, 35, 37.) Defendant Live Nation filed a motion to dismiss the punitive damages claim against it pursuant to FRCP 12(b) (6). (See ECF No. 29.) The parties fully briefed each of these motions, and they are now ripe for disposition. (See ECF Nos. 23, 30, 36, 38, 39, 41, 42, 45, 46, 47.) After reviewing the applicable law, the Court will address each pending motion separately in the Discussion section below. For the reasons that follow, the Court grants the motions to dismiss and the motion to dismiss punitive damages. Plaintiffs are granted leave to amend the Complaint only with respect to the claims against Defendant Plummer and the claim for punitive damages against Defendant Live Nation. IV. Applicable law The Federal Rules of Civil Procedure require that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2). Rule 12(b)(6) allows a party to seek dismissal of a complaint or any portion of a complaint for failure to state a claim upon which relief can be granted. Although the federal pleading standard has been “in the forefront of jurisprudence in recent years,” the standard of review for a Rule 12(b)(6) challenge is now well established. Fowler v. UPMC Shadyside, 578 F.3d 203, 209 (3d Cir. 2009). In determining the sufficiency of a complaint, a district court must conduct a two-part analysis. First, the court must separate the factual matters averred from the legal conclusions asserted. See id. at 210. Second, the court must determine whether the factual matters averred are sufficient to show that the plaintiff has a “ ‘plausible claim for relief.’ ” Id. at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). The complaint need not include “ ‘detailed factual allegations.’ ” Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Bell Atlantic Corp v. Twombly, 550 U.S. 544, 555 (2007)). Moreover, the court must construe the alleged facts, and draw all inferences gleaned therefrom, in the light most favorable to the non-moving party. See id. at 228 (citing Worldcom, Inc. v. Graphnet, Inc., 343 F.3d 651, 653 (3d Cir. 2003)). However, “legal conclusions” and “[t]hreadbare recitals of the elements of a cause of action ... do not suffice.” Iqbal, 556 U.S. at 678. Rather, the complaint must present sufficient “ ‘factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ ” Sheridan v. NGK Metals Corp. 609 F.3d 239, 262 n.27 (3d Cir. 2010) (quoting Iqbal, 556 U.S. at 678). *4 Ultimately, whether a plaintiff has pleaded a “plausible claim for relief is a “context-specific” inquiry that requires the district court to “draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. The relevant record under consideration includes the complaint and any “document integral to or explicitly relied upon in the complaint.” U.S. Express Lines, Ltd. V. Higgins, 281 F.3d 383, 388 (3d Cir. 2002) (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)). If a complaint is vulnerable to dismissal pursuant to Rule 12(b)(6), the district court must permit a curative amendment, irrespective of whether a plaintiff seeks leave to amend, unless such amendment would be inequitable or futile. Phillips, 515 F.3d at 236; see also Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000). V. Discussion Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 4 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 A. Defendant Brandt's Motion to Dismiss Defendant Brandt moves to dismiss the claims against him. (See ECF No. 22.) Defendant Brandt argues that Plaintiffs have failed to allege the existence of a duty owed to them by Defendant Brandt, and that they therefore cannot state a negligence claim against him. (ECF No. 23 at 3-5.) In the alternative, Defendant Brandt argues that Plaintiffs have failed to allege conduct on the part of Defendant Brandt which would support an award of punitive damages, and that their claim against him for punitive damages must therefore be dismissed. (Id. at 5-6.) In opposition to the motion, Plaintiffs state that the complaint adequately alleges that Defendant Brandt was “unreasonable, negligent, and breached the duty to exercise due care generally.” (ECF No. 39 at 4.) The Court disagrees and concludes that although the Complaint is littered with the terms “negligently” and “unreasonably,” the facts alleged do not state a claim for negligence against Defendant Brandt. The Court will therefore dismiss the claims against him on that basis, and need not address the issue of punitive damages with respect to Defendant Brandt. To state a claim for negligence under Pennsylvania law, the plaintiff must allege the following elements: (1) a legal duty; (2) a breach of that duty; (3) a causal relationship between the defendant's negligence and plaintiff's injuries; and (4) damages. City of Philadelphia v. Beretta U.S.A. Corp., 277 F.3d 415, 422 n. 9 (3d Cir. 2002) (citing Martin v. Evans, 551 Pa. 496 (1998)). The initial inquiry in a negligence action is whether the defendant owed to the plaintiff a duty of care. James v. Duquesne University, 936 F.Supp.2d 618, 628 (W.D. Pa. 2013) (citing R.W. v. Manzek, 585 Pa. 335 (2005)). Where there is no duty, there can be no negligence. Id. at 630 (citing Maxwell v. Keas, 433 Pa.Super. 70 (1994)). “In other words, before a person may be subject to liability for failing to act in a given situation, it must be established that the person has a duty to act; if no care is due, it is meaningless to assert that a person failed to act with due care.” Id. (internal citations omitted). Under Pennsylvania law, a defendant owes the plaintiff a duty if the defendant's actions are unreasonable, or if the defendant's actions expose the plaintiff to an elevated risk of foreseeable harm. Miller v. Group Voyagers Inc., 912 F.Supp. 164, 167 (E.D. Pa. 1996). However, “[u]nder the common law there is no duty to control the conduct of a third party to protect another from harm, except where a defendant stands in some special relationship with either the person whose conduct needs to be controlled or in a relationship with the intended victim of the conduct, which gives the victim a right to protection.” Brezenski v. World Truck Transfer, Inc., 755 A.2d 36, 40 (Pa. Super. 2000) (citing Emerich v. Philadelphia Center for Human Development, 554 Pa. 209 (1998)). Federal courts applying Pennsylvania law have held that such “special relationship” is limited to one of those found in §§ 316-319 of the Restatement (Second) of Torts. See Conroy v. JBJ Limousine, Inc., 2009 WL 4263348, at *3 (Nov. 25, 2009). Thus, to assert a claim against a third party for the acts of another, a plaintiff must allege that one of the following relationships and resulting duties exists: (1) a parent's duty to control a child; (2) a master's duty to control a servant; (3) a possessor of land's duty to control a licensee; and (4) the duty of those in charge of individuals with dangerous propensities to control those individuals. Id. *5 To establish causation in a negligence claim, the plaintiff must allege that the defendant's breach of his legal duty was both the actual and proximate cause of his injury. McCullough v. Peeples, 2015 U.S. Dist. LEXIS 27683, at *7, 2015 WL 1000223 (W.D. Pa. March 5, 2015) (citing Reilly v. Tiergarten Inc., 430 Pa. Super. 10, 633 A.2d 208, 210 (Pa. Super. 1993)). Actual causation is present when the “alleged injury would not have occurred but for a certain act or presence of a condition,” id. (internal quotations and citations omitted), while proximate causation requires that the defendant's wrongful act be a “substantial factor in bringing about the plaintiff's harm.” Id. (citing Dudley v. USX Corp., 414 Pa. Super. 160, 606 A.2d 916, 923 (Pa. Super. 1992)) (internal quotations omitted). Taking the facts alleged in the complaint as true, the Court concludes that Plaintiffs have failed to state a plausible cause of action for negligence against Defendant Brandt. Plaintiffs state that Defendant Brandt breached “his duty to exercise due care generally,” as well as in the following ways specifically: (1) failing to remain on the bus; (2) confronting Mr. Andrews; (3) failing to attempt to retreat from the altercation; (4) provoking or otherwise encouraging the attack on Mr. Andrews; (5) failing to attempt to stop Defendant Plummer from striking Mr. Andrews; (6) acting unreasonably throughout the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 5 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 altercation; and (7) failing to exercise reasonable care. (ECF No. 1 ¶ 50.) These allegations, taken as true, do not establish that Defendant Brandt owed to Plaintiffs any duty. Moreover, Plaintiffs' argument that Defendant Brandt breached a general duty of care is unavailing, as it is unsupported by the factual content in the Complaint. As noted above, there is no duty under Pennsylvania to control the conduct of a third party to protect another from harm, unless the defendant stands in a special relationship with either the victim or with the individual whose conduct must be controlled. Here, Plaintiffs have failed to allege that Defendant Brandt stood in any form of special relationship with either Mr. Plummer or with Plaintiffs themselves. Absent such special relationship, he owed no duty to control Mr. Plummer's actions or to protect Mr. Andrews from harm. Moreover, the remaining allegations related to Defendant Brandt's alleged negligence fail, because they do not indicate that Defendant Brandt acted unreasonably or in any way that would have foreseeably elevated Mr. Andrews' risk of harm. See Miller, 912 F.Supp. at 167. Therefore, even leaving aside the fact that Defendant Brandt did not have a duty to control Defendant Plummer's conduct, Plaintiffs have still failed to allege that Defendant Brandt owed them any duty apart from one related to Defendant Plummer. Plaintiffs argue that Defendant Brandt's conduct “amount[ed] to disorderly conduct and inciting a riot,” and suggest that Defendant Brandt's conduct constituted a violation of the criminal laws of the Commonwealth of Pennsylvania. (ECF No. 39 at 4-5.) These arguments, however, are not grounded in the supporting facts alleged in the Complaint, and are therefore unavailing. The complaint alleges that Defendant Brandt confronted Mr. Andrews and “encouraged the attack” on him, but these actions are neither negligent nor intentional torts, and fall short of establishing that Defendant Brandt owed Plaintiffs any duty. (ECF No. 1 at 10-11.) The allegations that Defendant Brandt acted “unreasonably throughout the altercation” and “fail[ed] to exercise reasonable care” are no more than the sort of “[t]hreadbare recitals of the elements” of negligence and “legal conclusions” that do not suffice to state a claim against Defendant Brandt. See Iqbal, 556 U.S. at 678. *6 Moreover, even if Plaintiffs had adequately alleged that Defendant Brandt owed Plaintiffs a duty, Plaintiffs have failed to allege that Defendant Brandt's conduct was either the actual or proximate cause of Mr. Andrew's injuries. Plaintiffs have included legal conclusions related to causation. (See ECF No. 1 ¶ 51.) Leaving those legal conclusions aside, however, the facts in the complaint, along with all inferences reasonably drawn therefrom, allege that Mr. Andrews' injuries were caused by the intentional actions taken by Defendant Plummer. The facts do not support any reasonable inference that Defendant Brandt's conduct was a “substantial factor” in bringing about Mr. Andrews' harm. See McCullough, 2015 U.S. Dist. LEXIS 27683, at *7,2015 WL 1000223. The facts as stated in the Complaint do not state a plausible claim for relief against Defendant Brandt, and the Court finds that amendment of the Complaint with regard to Defendant Brandt would be futile. Plaintiffs' claims against Defendant Brandt are therefore dismissed with prejudice. See Reckner v. County of Fayette, 2011 WL 3810264, at *6 (W.D. Pa. Aug. 29, 2011) (dismissing negligence claim with prejudice, in part because the plaintiff failed to allege that the defendant owed to plaintiff a legal duty, and finding amendment of the complaint would be futile). B. Defendant Brantner's Motion to Dismiss Defendant Brantner moves to dismiss the claims against him. (See ECF No. 35.) Defendant Brantner argues that Plaintiffs' Complaint fails to state a claim of negligence against him, because Plaintiffs have failed to allege that Defendant Brantner owed to Plaintiffs any duty of care. (See ECF No. 36 at 4-5.) In the alternative, Defendant Brantner argues that Plaintiffs improperly pleaded a claim for punitive damages as a separate cause of action, and that they failed to plead sufficient facts to support a claim for punitive damages against Defendant Brantner. (Id. at 5-6.) In opposition to Defendant Brantner's motion to dismiss, Plaintiffs argue that the Complaint sufficiently states a claim of negligence against Defendant Brantner. (See ECF No. 45 at 3-6.) Plaintiffs argue for the first time in this brief that they are “permitted to allege alternate liability and/or ‘group negligence.’ ” (Id. at 4-5.) Plaintiffs assert that the “allegations in the Complaint sufficiently Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 6 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 describe the conduct of Defendant, James Brantner, as what amounts to disorderly conduct and inciting a riot in participating in and provoking an attack on Plaintiff.” (Id. at 5.) Plaintiffs concede that Defendant Brantner was not charged with any crime following the incident, but argue that he should, nonetheless, be held civilly liable. (Id. at 6.) Plaintiffs also argue that the punitive damages claim as to Defendant Brantner should not be dismissed at this stage because they have alleged sufficient facts in the Complaint such that they should have the opportunity to conduct discovery on the issue. (Id. at 6-7.) The Court concludes that the Complaint fails to state a claim for negligence against Defendant Brantner, and will therefore not reach the issue of whether the punitive damages claim is proper with respect to this defendant. The Court's analysis as to Defendant Brantner's motion to dismiss closely tracks the analysis above for Defendant Brandt. As with Defendant Brandt, Plaintiffs have failed to allege that Defendant Brantner owed Plaintiffs any legally recognized duty. Plaintiffs failed to allege that Defendant Brantner was in a special relationship with either Defendant Plummer or with Mr. Andrews such that he had a duty to control Defendant Plummer's conduct. Moreover, the remaining allegations related to Defendant Brantner's individual conduct fail to establish that Defendant Brantner owed Plaintiffs a legal duty. There are no allegations to indicate that Defendant Brantner acted unreasonably or in any way that foreseeably elevated Mr. Andrews' risk of harm. See Miller, 912 F.Supp. at 167. Additionally, as with Defendant Brandt, there are no facts alleged, other than mere legal conclusions, that would support the reasonable inference that Defendant Brantner's conduct was the actual or proximate cause of Plaintiffs' harm. See McCullough, 2015 U.S. Dist. LEXIS 27683, at *7,2015 WL 1000223. Absent allegations that indicate that Defendant Brantner owed Plaintiffs a duty, or that Defendant Brantner caused Plaintiffs' injuries, there can be no cause of action for negligence against Defendant Brantner. *7 Plaintiffs' arguments in their brief in opposition to the instant motion are unavailing. There are no facts to support the imposition of alternative liability on the Defendants in this case. Indeed, Plaintiffs' own brief correctly articulates that this doctrine is reserved for cases in which there is “uncertainty” with regard to which of the defendants caused the plaintiff's injury. (See ECF No. 45 at 4.) Such “uncertainty” is not present here; the facts clearly allege that it was Defendant Plummer's conduct that caused Plaintiff's injury. The imposition of alternative liability is therefore both unnecessary and inappropriate in this case. See McNeil v. City of Easton, 694 F.Supp.2d 375, 400 (E.D. Pa. 2010). Plaintiffs have also failed to allege any facts in the Complaint to indicate that Defendant Brantner engaged in “disorderly conduct” or “inciting a riot,” as Plaintiffs suggest in their brief. The Court therefore finds that these arguments are not grounded in the Complaint, and are therefore without merit. (See ECF No. 45 at 5.) The Court's role at the motion to dismiss stage is to separate the legal conclusions asserted from the factual matters averred, and to determine whether the factual allegations are sufficient to demonstrate that the plaintiff has a “plausible claim for relief.” Fowler, 378 F.3d at 211. Here, while Plaintiffs have included words like “negligently” and “unreasonable” throughout the Complaint, when the Court separates those legal conclusions from the actual facts alleged, the Court concludes that the factual content in Plaintiffs' complaint simply does not allow the Court to reach any “reasonable inference” that Defendant Brantner is liable for negligence. See Sheridan, 609 F.3d at 262 n. 27. Rather, taking the facts in the light most favorable to Plaintiffs, the only reasonable inference from the facts alleged is that Mr. Andrews' injuries were caused by the intentional conduct of an individual with whom Defendant Brantner may have been associated. The facts therefore do not support a cause of action for negligence against Defendant Brantner, and it would be futile to permit Plaintiffs to amend the complaint with respect to the claims against Defendant Brantner. Therefore, the Court will dismiss the claims against Defendant Brantner with prejudice. See Reckner, 2011 WL 3810264, at *6 (dismissing negligence claim with prejudice, in part because the plaintiff failed to allege that the defendant owed to plaintiff a legal duty, and finding that amendment of the complaint would be futile). C. Defendant Plummer's Motion to Dismiss Defendant Plummer moves to dismiss the claims against him for failure to state a claim. (See ECF No. 37.) Defendant Plummer argues that no legal doctrine exists Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 7 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 to support a claim of negligence under the facts alleged. (ECF No. 38 at 4.) Specifically, Defendant Plummer argues that Plaintiffs have failed to allege that Defendant Plummer owed Plaintiffs a duty, that he breached a duty, or that Plaintiffs' injuries were caused by the purported breach. (Id.) Alternatively, Defendant Plummer argues that Plaintiffs' claim for punitive damages against him should be dismissed because the claim is unsupported by the factual allegations in the Complaint. (Id.) In opposition, Plaintiffs argue that the Complaint sufficiently states a claim against Defendant Plummer. (See ECF No. 46 at 3-5.) Specifically, Plaintiffs argue that “there is a duty to refrain from assault and battery,” and that “Defendant Plummer was negligent and breached this duty by, among other things, striking Thomas B. Andrews when physical force was neither required nor permitted.” (Id. at 4.) Plaintiffs also argue here, as they did in their brief in opposition to Defendant Brantner's motion to dismiss, that they should be permitted to allege alternative liability. (Id.) Lastly, Plaintiffs state that dismissal of their claim for punitive damages against Defendant Plummer would be premature at this stage, and that “there are sufficient facts in the Complaint to put the Defendant on notice of punitive damages and the Motion to Dismiss punitive damages should be deferred until Plaintiffs have had the opportunity to conduct discovery on the issue.” (Id. at 5.) *8 As outlined above, to state a claim for negligence under Pennsylvania law, the plaintiff must allege the following elements: (1) a legal duty; (2) a breach of that duty; (3) a causal relationship between the defendant's negligence and plaintiff's injuries; and (4) damages. City of Philadelphia, 277 F.3d at 422 n. 9 (3d Cir. 2002). Plaintiffs allege that Defendant Plummer “owed a duty to Plaintiffs” and that “in viciously attacking Thomas B. Andrews, [he] breached that duty by acting with excessive and unreasonable force, negligently and without due care.” (ECF No. 1 ¶ 45.) Specifically, Plaintiffs allege that Defendant Plummer “was unreasonable, negligent and breached his duty to exercise due care generally, and in the following respects: (a) Failing to remain on the bus; (b) Confronting Thomas B. Andrews; (c) Failing to attempt to retreat from the altercation; (d) Using excessive, disproportionate and unreasonable force; (e) Striking Thomas B. Andrews when physical force was neither required nor permitted; (f) Acting unreasonably throughout the altercation; and (g) Failing to exercise reasonable care.” (Id. ¶ 46.) While Plaintiffs couch their claims against Defendant Plummer in terms of negligence, and argue in their brief that he breached a “duty to refrain from assault and battery,” (ECF No. 46 at 4), the facts in the Complaint allege intentional physical conduct. Therefore, Plaintiffs' proper cause of action against Defendant Plummer is for an intentional tort, not for negligence. Although the Court is unaware of an authoritative case in which this precise issue has arisen, after a careful review of relevant case law arising in analogous contexts, the Court concludes that Pennsylvania law does not allow for recovery in negligence for what should be alleged as an intentional tort. See, e.g., Carbone v. City of New Castle, 2016 WL 406291, at *10-11 (W.D. Pa. Feb. 3, 2016) (dismissing the plaintiff's complaint in the context of lack of medical informed consent, and reasoning that because “Plaintiff's allegations sound in battery not negligence, Count VIII of the Amended Complaint must be ... dismissed”); Hall v. U.S., 2008 WL 919605, at *5 (M.D. Pa. April 2, 2008) (concluding, in the context of assessing whether a federal prisoner's claims could proceed under the Federal Tort Claims Act, that “[a]lthough the plaintiff use[d] the word ‘negligence,’ plaintiff's placement and confinement in the SHU was intentional,” and that the plaintiff therefore did “not state[ ] a negligence claim upon which relief [could] be granted”); Aetna Cas. And Sur. Co. v. Roe, 437 Pa. Super. 414, 427 (Pa. Super. 1994) (in the context of an insurer's duty to defend, noting that “after a thorough search of Pennsylvania case law, we conclude that no precedent exists for recovery in negligence for injuries suffered as a result of the commission by a tortfeasor of the intentional torts of assault and battery. To characterize [the conduct alleged] as negligence would be to create a legal oxymoron as an extension of tort law that we are not inclined to create”). The Court thus concludes that merely sprinkling the Complaint with the words like “unreasonable” and “negligently” does not suffice to transform alleged intentional conduct into negligent conduct. Therefore, Plaintiffs' claims against Defendant Plummer are dismissed, and Plaintiffs are granted leave to amend the Complaint in accordance with this Memorandum Opinion and Order. See Phillips, 515 F.3d at 236. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 8 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 *9 The negligence claim against Defendant Plummer at Count V of the Complaint serves as the basis for Plaintiffs' claim for punitive damages against Defendant Plummer in Count VIII of the Complaint. (See ECF No. 1 ¶¶ 44-47, 54-55). Therefore, because the Court has dismissed Plaintiffs' claim for negligence against Defendant Plummer, Plaintiffs' claim for punitive damages against Defendant Plummer is also dismissed. As noted above, Plaintiffs are granted leave to amend the Complaint with regard to their claims against Defendant Plummer to reflect the intentional nature of his alleged conduct. Accordingly, Court will also permit Plaintiffs to amend the claim for punitive damages against Defendant Plummer. D. Defendant Live Nation's Motion to Dismiss Punitive Damages Defendant Live Nation moves to dismiss Plaintiffs' claim against it for punitive damages. (See ECF No. 29.) Defendant Live Nation argues that Plaintiffs' allegations related to punitive damages are mere legal conclusions, and are unsupported by the requisite factual allegations. (ECF No. 30 at 4.) Defendant Live Nation asserts that these allegations fall far short of the pleading standard for punitive damages, which is well-established under Pennsylvania law. (Id. at 5-6.) In opposition to Defendant Live Nation's motion, Plaintiffs argue that the Complaint adequately states a claim against Defendant Live Nation which would allow Plaintiffs to recover punitive damages. (See ECF No. 42 at 4-6.) Under Pennsylvania law, “punitive damages may be awarded for conduct that is outrageous, because of the defendant's evil motive or his reckless indifference to the rights of others.” Maya v. Chertok, 2015 WL 5254377, at *3 (M.D. Pa. Sept. 9, 2015) (citing Feld v. Merriam, 506 Pa. 383, 485 A.2d 742, 746-47 (Pa. 1984)) (internal quotations omitted). Punitive damages are thus only proper “in cases where the defendant's actions are so outrageous as to demonstrate willful, wanton or reckless conduct.” Hutchinson ex rel. Hutchinson v. Luddy, 870 A.2d 766, 770 (Pa. 2005). To establish a claim for punitive damages, a plaintiff must demonstrate that “(1) a defendant had a subjective appreciation of the risk of harm to which plaintiff was exposed and that (2) he acted, or failed to act, as the case may be, in conscious disregard of that risk.” Id. at 772; see also Ditzler v. Wesolowski, No. 3:05-CV-325, 2007 U.S. Dist. LEXIS 56736, at *10, 2007 WL 2253596 (W.D. Pa. Aug. 3, 2007). Here, the Complaint falls far short of alleging sufficient facts to support a claim for punitive damages against Defendant Live Nation. Plaintiffs allege that Defendant Live Nation owns and operates First Niagara, and that the altercation took place at First Niagara. (See ECF No. 1 ¶¶ 17-19.) Plaintiffs allege that Defendant First Niagara failed to provide adequate security “to deter and or prevent” the altercation. (Id. ¶ 25.) In Count IV of the Complaint, Plaintiffs assert a claim of negligence against Defendant Live Nation, and state that the concert venue has a duty to establish protocol and policies to ensure the safety of its patrons. (Id. ¶ 41.) Plaintiffs allege that Defendant Live Nation breached this duty by failing to establish such rules or policies, failing to train its agents properly to adequately provide protection and security, and/or failing to follow established policies to ensure the Plaintiffs' safety. (Id. ¶ 42.) In Count VIII of the Complaint, Plaintiffs assert a claim for punitive damages against all Defendants “due to their respective conduct which was outrageous, grossly negligent, willful, wanton, reckless, and in utter disregard and/or with criminal indifference to civil obligations and for the safety of the public and patrons given the high degree of risk and peril caused by permitting the conditions which have been alleged.” (Id. ¶ 55.) *10 The Court has little difficulty concluding that the allegations in Count VIII of the Complaint constitute legal conclusions, and that these legal conclusions are not supported by the factual content related to Defendant Live Nation found elsewhere in the Complaint. Plaintiffs cite Martin v. Goodyear Tire and Rubber Co., 1999 WL 137938, at *1 (E.D. Pa. Feb. 8, 1999), for the assertion that a Complaint which alleges negligence, coupled with recitation of terms associated with punitive damages, such as “wanton, reckless, and outrageous,” is sufficient to state a claim for punitive damages. (ECF No. 42 at 6.) This case, however, is not persuasive for multiple reasons. First, and most importantly, it was decided well before the Supreme Court articulated the plausibility standard that now guides the Court's analysis on motions to dismiss. See Twombly, 550 U.S. 544 (2007); Iqbal, 556 U.S. 662 (2009). Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 9 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 Furthermore, even if the approach taken by the court in Martin had not been effectively overruled by two major Supreme Court cases, the court's analysis and reasoning in that case leaves it with little persuasive weight. Indeed, the Martin court acknowledged that, notwithstanding its holding, there were instances in which a claim for punitive damages should be “disallowed at the pleading state,” and cited several cases that had taken that approach, even before Twombly and Iqbal heightened the pleading standard to require factual plausibility. See Martin, 1999 WL 137938, at *1 (citing cases). The Court therefore concludes that the mere inclusion of words normally associated with the award of punitive damages, such as “outrageous,” “wanton,” and “reckless,” is insufficient to state a claim for such damages when the facts alleged make no mention of conduct that rises above ordinary negligence. Here, the Complaint alleges only that Defendant Live Nation failed in the way of establishing safety policies, training employees on such policies, and following such policies. The Complaint is completely devoid of any fact that would allow the Court reasonably to infer that Defendant Live Nation acted in a manner that could be classified as “outrageous” or with “reckless disregard” for the safety of its patrons. Plaintiffs have failed to state a plausible claim for punitive damages against Defendant Live Nation, and Defendant Live Nation's motion to dismiss Plaintiffs' punitive damages claim is therefore granted. See, e.g., Boring, 362 Fed. Appx. 273, 283 (3d Cir. 2010) (affirming the trial court's decision to grant the defendant's motion to dismiss the plaintiffs' claim for punitive damages, stating that the complaint “fails to allege conduct that is outrageous or malicious” and “there are no facts suggesting that [the defendant] acted maliciously or recklessly or that [the defendant] intentionally disregarded the [plaintiffs'] rights”); McCullough, 2015 U.S. Dist. LEXIS 27683, at *17,2015 WL 1000223 (granting motion to dismiss the plaintiff's claim for punitive damages because the allegations were “conclusory statements” that did not set forth a plausible claim for punitive damages where the plaintiff alleged that the defendant's actions “constituted outrageous conduct and demonstrated wanton and reckless indifference to the [plaintiff's] safety” and “evidenced conscious acts of an unreasonable character and demonstrated disregard of a risk”); Gregg v. Lonestar Transp., LLC, No. 3:14-CV-44, 2015 U.S. Dist. LEXIS 27680, at *10-11, 2015 WL 1003911 (W.D. Pa. Mar. 6, 2015) (granting motion to dismiss the plaintiff's claim for punitive damages because the plaintiff failed to allege sufficient supporting facts); Allegrino v. Conway E & S, Inc., No. 09-CV-1507, 2010 U.S. Dist. LEXIS 106734, at *38-39, 2010 WL 3943939 (W.D. Pa. Oct. 6, 2010) (dismissing the plaintiff's request for punitive damages because it was “pled in a conclusory fashion”). In light of legal principles favoring the opportunity to amend a deficiently pleaded complaint, the Court grants Plaintiffs leave to amend the Complaint to allege facts, if any, that would support a claim for punitive damages against Defendant Live Nation. See Phillips, 515 F.3d at 236. VI. Conclusion For the foregoing reasons, the Court grants the motions to dismiss filed by Defendants Brandt and Brantner with prejudice. The Court grants Defendant Plummer's motion to dismiss and Defendant Live Nation's motion to dismiss punitive damages with leave to file amended claims by way of an amended complaint. *11 An appropriate order follows. ORDER AND NOW, this 8th day of July, 2016, upon consideration of Defendant Brandt's Motion to Dismiss (ECF No. 22), Defendant Brantner's Motion to Dismiss (ECF No. 35), Defendant Plummer's Motion to Dismiss (ECF No. 37), Defendant Live Nation Worldwide Inc.'s Motion to Dismiss Punitive Damages (ECF No. 29), and Plaintiffs' Motions for Leave to Amend the Complaint (ECF Nos. 45, 46), IT IS HEREBY ORDERED AS FOLLOWS: • Defendant Brandt's Motion to Dismiss (ECF No. 22) is GRANTED. Plaintiffs' claims against Defendant Brandt are DISMISSED WITH PREJUDICE. • Defendant Brantner's Motion to Dismiss (ECF No. 35) is GRANTED. Plaintiffs' claims against Defendant Brantner are DISMISSED WITH PREJUDICE, and Plaintiffs' Motion for Leave to Amend the Complaint with respect to Defendant Brantner (ECF No. 45) is DENIED. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 10 of 192 Andrews v. Fullington Trail Ways, LLC, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 • Defendant Plummer's Motion to Dismiss (ECF No. 37) is GRANTED. Plaintiffs' Motion for Leave to Amend the Complaint with respect to the claims against Defendant Plummer (ECF No. 46) is GRANTED. • Defendant Live Nation's Motion to Dismiss Punitive Damages (ECF No. 29) is GRANTED. Plaintiffs are granted leave to amend the Complaint with respect to the punitive damages claim against Defendant Live Nation. • Plaintiffs shall file an Amended Complaint within twenty days of the date of this Order. All Citations Slip Copy, 2016 WL 3748579 Footnotes 1 The Complaint incorrectly refers to Defendant Tom Brandt as “Tom Brant.” (see ECF No. 1 ¶ 11.) The Court will use the proper spelling of Defendant Brandt's last name in this Memorandum Opinion and Order. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 11 of 192 EXHIBIT B Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 12 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Yellow Flag - Negative Treatment Distinguished by In re Carpenter, Bankr.W.D.Pa., May 7, 2013 362 Fed.Appx. 273 This case was not selected for publication in the Federal Reporter. Not for Publication in West's Federal Reporter. See Fed. Rule of Appellate Procedure 32.1 generally governing citation of judicial decisions issued on or after Jan. 1, 2007. See also Third Circuit LAR, App. I, IOP 5.7. (Find CTA3 App. I, IOP 5.7) United States Court of Appeals, Third Circuit. Aaron C. BORING; Christine Boring, husband and wife respectively, Appellants v. GOOGLE INC. No. 09-2350. | Submitted Under Third Circuit LAR 34.1(a) Jan. 25, 2010. | Filed: Jan. 28, 2010. Synopsis Background: Plaintiffs brought action in state court against Internet search engine, asserting claims for invasion of privacy, trespass, negligence, and unjust enrichment, and seeking temporary and permanent injunctive relief arising from presence of images of their residence as part of online map. Defendant moved to dismiss. The United States District Court for the Western District of Pennsylvania, Amy Reynolds Hay, United States Magistrate Judge, 598 F.Supp.2d 695,granted motion and, 2009 WL 931181, denied reconsideration. Plaintiffs appealed. Holdings: The Court of Appeals held that: [1] plaintiffs failed to state claim for intrusion upon seclusion; [2] plaintiffs failed to state claim for publicity given to private life; [3] plaintiffs stated claim for trespass; [4] plaintiffs failed to state claim for unjust enrichment; [5] plaintiffs had not alleged any claim warranting injunctive relief; and [6] plaintiffs failed to allege conduct that was outrageous or malicious and thus were not entitled to punitive damages. Affirmed in part and reversed in part. West Headnotes (17) [1] Federal Courts Pleading Court of Appeals conducts de novo review of dismissal of complaint for failure to state a claim. Fed.Rules Civ.Proc.Rule 12(b)(6), 28 U.S.C.A. Cases that cite this headnote [2] Federal Civil Procedure Construction of pleadings To avoid dismissal for failure to state a claim, complaint must set forth facts that raise plausible inference that defendant inflicted legally cognizable harm upon plaintiff. Fed.Rules Civ.Proc.Rule 12(b)(6), 28 U.S.C.A. Cases that cite this headnote [3] Federal Civil Procedure Construction of pleadings Federal Civil Procedure Matters deemed admitted; acceptance as true of allegations in complaint Court confronted with motion to dismiss for failure to state a claim must accept truth of all factual allegations in complaint and must draw all reasonable inferences in favor of nonmovant; legal conclusions receive no such deference, and court is not bound to accept as Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 13 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 true a legal conclusion couched as a factual allegation. Fed.Rules Civ.Proc.Rule 12(b)(6), 28 U.S.C.A. 2 Cases that cite this headnote [4] Torts Types of invasions or wrongs recognized Pennsylvania law recognizes four torts under umbrella of invasion of privacy: [1] unreasonable intrusion upon the seclusion of another, [2] appropriation of another's name or likeness, [3] unreasonable publicity given to another's private life, and [4] publicity that unreasonably places the other in a false light before the public. Cases that cite this headnote [5] Torts Intrusion Under Pennsylvania law, to state invasion of privacy claim for “intrusion upon seclusion,” plaintiffs must allege conduct demonstrating intentional intrusion upon seclusion of their private concerns which was substantial and highly offensive to a reasonable person, and aver sufficient facts to establish that information disclosed would have caused mental suffering, shame or humiliation to person of ordinary sensibilities; publication is not element of claim, and thus court must examine harm caused by intrusion itself. 9 Cases that cite this headnote [6] Torts Particular cases in general Under Pennsylvania law, plaintiffs did not suffer substantial and highly offensive intrusion upon seclusion arising from presence on Internet search engine of street level images of their residence, outbuildings, and swimming pool, taken from continuously filming digital panoramic camera mounted on vehicle in their driveway off private unpaved road, as required for liability to attach for tort of intrusion upon seclusion; existence of photographic image captured by camera's fleeting presence in their driveway did not in itself rise to level of intrusion that could reasonably be called highly offensive and, significantly, plaintiffs did not allege that they themselves were viewed inside their home. 9 Cases that cite this headnote [7] Torts Publications or Communications in General Under Pennsylvania law, to state invasion of privacy claim for “publicity given to private life,” plaintiff must allege that the matter publicized is (1) publicity, given to (2) private facts, (3) which would be highly offensive to a reasonable person, and (4) is not of legitimate concern to the public. 6 Cases that cite this headnote [8] Torts Miscellaneous particular cases Torts Pleading Plaintiffs failed to allege facts indicating that presence on Internet search engine of street level images of their residence, outbuildings, and swimming pool, taken from continuously filming digital panoramic camera mounted on vehicle in their driveway off private unpaved road, revealed private facts such that reasonable person would be highly offended, as required to state claim for publicity given to private life under Pennsylvania law; plaintiffs did not allege that their situation was unique or even unusual. 1 Cases that cite this headnote [9] Trespass Intent Trespass is strict liability tort, both exceptionally simple and exceptionally rigorous. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 14 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 2 Cases that cite this headnote [10] Trespass Trespass to Real Property Under Pennsylvania law, “trespass” is defined as an unprivileged, intentional intrusion upon land in possession of another. 10 Cases that cite this headnote [11] Trespass Entry Trespass Injury to property Plaintiffs stated trespass claim under Pennsylvania law by alleging that vehicle owned by Internet search engine entered upon their property without permission, albeit fleetingly, although they would bear burden of proving that the trespass was the legal cause, i.e., a substantial factor in bringing about actual harm or damage. Cases that cite this headnote [12] Implied and Constructive Contracts Unjust enrichment Under Pennsylvania law, to succeed on claim of unjust enrichment, plaintiff must allege facts sufficient to establish benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value. 4 Cases that cite this headnote [13] Implied and Constructive Contracts Unjust enrichment Facts alleged by plaintiffs, whose residence, outbuildings, and swimming pool were photographed from continuously filming digital panoramic camera mounted on vehicle in their driveway, provided no basis for unjust enrichment claim against Internet search engine under Pennsylvania law; complaint failed to allege void or unconsummated contract and additionally did not allege any benefit conferred upon search engine by plaintiffs. 1 Cases that cite this headnote [14] Injunction Grounds in general; multiple factors Pennsylvania law provides that in order to establish right to injunctive relief, plaintiff must establish that his right to relief is clear, that injunction is necessary to avoid injury that cannot be compensated by damages, and that greater injury will result from refusing rather than granting relief requested. 4 Cases that cite this headnote [15] Injunction Extraordinary or unusual nature of remedy Under Pennsylvania law, injunction is an extraordinary remedy. 2 Cases that cite this headnote [16] Injunction Threats, harassment, and rights of privacy Under Pennsylvania law, plaintiffs were not entitled to injunctive relief arising from presence of images of their residence as part of online map; complaint claimed nothing more than single, brief entry by Internet search engine onto plaintiffs' property and did not allege any facts to suggest injury resulting from search engine's retention of photographs at issue, which was unsurprising given that allegedly offending images had long since been removed from Internet. Cases that cite this headnote [17] Damages Grounds for Exemplary Damages Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 15 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 Under Pennsylvania law, to sustain claim for punitive damages, defendant must have engaged in outrageous or intentional reckless or malicious conduct. 20 Cases that cite this headnote *275 On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 08- cv-00694), *276 Magistrate Judge: Honorable Amy Reynolds Hay. Attorneys and Law Firms Dennis M. Moskal, Esq., Gregg R. Zegarelli, Esq., Tev Law Group, Pittsburgh, PA, for Appellants. Daralyn J. Durie, Esq., Durie Tangri, Elise M. Miller, Esq., Wilson, Sonsini, Goodrich & Rosati, San Francisco, CA, Brian P. Fagan, Esq., Keevican, Weiss, Bauerle & Hirsch, Pittsburgh, PA, Jason P. Gordon, Esq., Wilson, Sonsini, Goodrich & Rosati, Palo Alto, CA, Tonia O. Klausner, Esq., Joshua A. Plaut, Esq., Wilson, Sonsini, Goodrich & Rosati, New York, NY, for Appellee. Before: RENDELL and JORDAN, Circuit Judges, and PADOVA, * Senior District Judge. OPINION OF THE COURT JORDAN, Circuit Judge. **1 Aaron C. Boring and Christine Boring appeal from an order of the United States District Court for the Western District of Pennsylvania dismissing their complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons that follow, we affirm in part and reverse in part. I. Background On April 2, 2008, the Borings commenced an action in the Court of Common Pleas of Allegheny County, Pennsylvania against Google, Inc., asserting claims for invasion of privacy, trespass, injunctive relief, negligence, and conversion. The Borings sought compensatory, incidental, and consequential damages in excess of $25,000 for each claim, plus punitive damages and attorney's fees. The Borings' claims arise from Google's “Street View” program, a feature on Google Maps 1 that offers free access on the Internet to panoramic, navigable views of streets in and around major cities across the United States. To create the Street View program, representatives of Google attach panoramic digital cameras to passenger cars and drive around cities photographing the areas along the street. According to Google, “[t]he scope of Street View is public roads.” (Appellee's Ans. Br. at 10.) Google allows individuals to report and request the removal of inappropriate images that they find on Street View. The Borings, who live on a private road in Pittsburgh, discovered that Google had taken “colored imagery of their residence, including the swimming pool, from a vehicle in their residence driveway months earlier without obtaining any privacy waiver or authorization.” (App. at A31.) They allege that their road is clearly marked with a “Private Road, No Trespassing” sign (Appellants' Op. Br. at 11), and they contend that, in driving up their road to take photographs for Street View and in making those photographs available to the public, Google “disregarded [their] privacy interest.” (Id.) On May 21, 2008, Google invoked diversity jurisdiction, removed the action to the United States District Court for the Western District of Pennsylvania, and filed a motion to dismiss. The Borings then filed an amended complaint, substituting a claim for unjust enrichment for their earlier *277 conversion claim. 2 On August 14, 2008, Google again moved to dismiss the Borings' complaint for failure to state a claim. On February 17, 2009, the District Court granted Google's motion to dismiss as to all of the Borings' claims. The Court dismissed the invasion of privacy claim because the Borings were unable to show that Google's conduct was highly offensive to a person of ordinary sensibilities. Boring v. Google, Inc., 598 F.Supp.2d 695, 699-700 (W.D.Pa.2009). The Court dismissed the negligence claim because it found that Google did not owe a duty to the Borings. Id. at 701. In dismissing the trespass claim, the Court held that “the Borings have not alleged facts sufficient to establish that they suffered any damages caused by the alleged trespass.” Id. at 702. The Court found the unjust enrichment claim wanting because the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 16 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 parties had no relationship that could be construed as contractual and the Borings did not confer anything of value upon Google. Id. at 703. The Court also held that the Borings had failed to plead a plausible claim for injunctive relief under Pennsylvania's “demanding” standard for a mandatory injunction, and dismissed the punitive damages claim because the Borings failed to “allege facts sufficient to support the contention that Google engaged in outrageous conduct.” Id. at 701 n. 3, 704. In sum, the Court concluded that the Borings “failed to state a claim under any count” and that “any attempted amendment would be futile.” Id. at 698, 704 n. 8. **2 The Borings moved for reconsideration, asserting that it was error to dismiss their trespass and unjust enrichment claims, as well as their request for punitive damages. The District Court denied the motion. Boring v. Google, Civ. A. No. 08-694, 2009 WL 931181 (W.D.Pa. Apr. 6, 2009). The Court again said that the Borings had failed to allege conduct necessary to support a punitive damages award. 2009 WL 931181, at *2. It also declined to reconsider the dismissal of the unjust enrichment claim because the Borings did not point to any flaw in the Court's disposition of that claim. Id. Finally, the Court addressed the Borings' trespass claim only to “eliminate any possibility that the language in [its opinion] might be read to suggest that damages are part of a prima facie case for trespass.” Id., at *1. To clarify, the Court explained that it had dismissed the trespass claim because the Borings had “failed to allege facts sufficient to support a plausible claim that they suffered any damage as a result of the trespass” and because they failed to request nominal damages in their complaint. Id., at *1. The Borings filed a timely notice of appeal from both the District Court's order granting the motion to dismiss and the subsequent denial of their motion for reconsideration. II. Discussion 3 A. Standard of Review [1] [2] We conduct a de novo review of a Rule 12(b) (6) dismissal of a complaint. See Phillips v. County of Allegheny, 515 F.3d 224, 230 (3d Cir.2008). The Federal Rules of Civil Procedure require that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” FED.R.CIV.P. 8(a) (2). To avoid *278 dismissal, the complaint must set forth facts that raise a “plausible inference” that the defendant inflicted a legally cognizable harm upon the plaintiff. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1952, 173 L.Ed.2d 868 (2009); see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (explaining that a plaintiff must “identify[ ] facts that are suggestive enough to render [his claim] plausible”); Phillips, 515 F.3d at 234 (stating that “a plaintiff must ‘nudge [his or her] claims across the line from conceivable to plausible’ in order to survive a motion to dismiss”) (citations omitted). Conclusory allegations of liability do not suffice. See Iqbal, 129 S.Ct. at 1950 (opining that the federal pleading standard “marks a notable and generous departure from the hyper- technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions”). We must disregard “formulaic recitation of the elements of a cause of action....” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. [3] A court confronted with a Rule 12(b)(6) motion must accept the truth of all factual allegations in the complaint and must draw all reasonable inferences in favor of the non-movant. Gross v. German Found. Indus. Initiative, 549 F.3d 605, 610 (3d Cir.2008). Legal conclusions receive no such deference, and the court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) (cited with approval in Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citations omitted)). Although a plaintiff may use legal conclusions to provide the structure for the complaint, the pleading's factual content must independently “permit the court to infer more than the mere possibility of misconduct.” Iqbal, 129 S.Ct. at 1950. In short, when the well-pleaded complaint does not permit us “to infer more than the mere possibility of misconduct,” the pleader is not entitled to relief. Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir.2009) (quoting Iqbal, 129 S.Ct. at 1949). **3 On appeal, the Borings contend that the District Court erred in dismissing their invasion of privacy, trespass, unjust enrichment, and punitive damages claims, as well as their request for injunctive relief. We address each claim in turn. B. Invasion of Privacy [4] Pennsylvania law recognizes four torts under the umbrella of invasion of privacy: “[1] unreasonable intrusion upon the seclusion of another; [2] appropriation Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 17 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 of another's name or likeness; [3] unreasonable publicity given to another's private life; and [4] publicity that unreasonably places the other in a false light before the public.” See Burger v. Blair Med. Assocs., Inc., 600 Pa. 194, 964 A.2d 374, 376-77 (2009) (citing RESTATEMENT (SECOND) OF TORTSSSSSS §§ 652B-E (1977)). The District Court treated the Borings' complaint as asserting claims for both intrusion upon seclusion and publicity to private life, and it held that the complaint failed to state a claim for either, focusing on the lack of facts in the complaint to support a conclusion that the Street View images would be highly offensive to a reasonable person. The Borings contend that the District Court was wrong to decide, on a 12(b)(6) motion to dismiss, that “a reasonable person would not be highly offended” after having discovered, as the Borings did, that someone “entered onto secluded private property [and] took 360 [degree] pictures....” (Appellants' Op Br. at 19.) i. Intrusion upon Seclusion [5] To state a claim for intrusion upon seclusion, plaintiffs must allege conduct *279 demonstrating “an intentional intrusion upon the seclusion of their private concerns which was substantial and highly offensive to a reasonable person, and aver sufficient facts to establish that the information disclosed would have caused mental suffering, shame or humiliation to a person of ordinary sensibilities.” Pro Golf Mfg., Inc. v. Tribune Review Newspaper Co., 570 Pa. 242, 809 A.2d 243, 247 (2002) (citations omitted). Publication is not an element of the claim, and thus we must examine the harm caused by the intrusion itself. See Borse v. Piece Goods Shop, Inc., 963 F.2d 611, 621 (3d Cir.1992). [6] No person of ordinary sensibilities would be shamed, humiliated, or have suffered mentally as a result of a vehicle entering into his or her ungated driveway and photographing the view from there. The Restatement cites knocking on the door of a private residence as an example of conduct that would not be highly offensive to a person of ordinary sensibilities. See RESTATEMENT (SECOND) OF TORTS, § 652B cmt. d. The Borings' claim is pinned to an arguably less intrusive event than a door knock. Indeed, the privacy allegedly intruded upon was the external view of the Borings' house, garage, and pool-a view that would be seen by any person who entered onto their driveway, including a visitor or a delivery man. Thus, what really seems to be at the heart of the complaint is not Google's fleeting presence in the driveway, but the photographic image captured at that time. The existence of that image, though, does not in itself rise to the level of an intrusion that could reasonably be called highly offensive. 4 **4 Significantly, the Borings do not allege that they themselves were viewed inside their home, which is a relevant factor in analyzing intrusion upon seclusion claims. See, e.g., Pacitti v. Durr, Civ. A. No. 05-317, 2008 WL 793875, at *26 (W.D.Pa. Mar. 24, 2008) (holding that no reasonable person would find the fact that defendant entered into plaintiff's condominium to speak with a third party highly offensive because plaintiff was not in the condominium at the time), aff'd, 310 Fed.Appx. 526 (3d Cir.2009); GTE Mobilnet of S. Texas Ltd. P'ship v. Pascouet, 61 S.W.3d 599, 618 (Tex.App.2001) (finding that “the mere fact that maintenance workers ... look [ed] over into the adjoining yard is legally insufficient evidence of highly offensive conduct.”). The Borings suggest that the District Court erred in determining what would be highly offensive to a person of ordinary sensibilities at the pleading stage, but they do not cite to any authority for this proposition. Courts do in fact, decide the “highly offensive” issue as a matter of law at the pleading stage when appropriate. See, e.g., Diaz v. D.L. Recovery Corp., 486 F.Supp.2d 474, 475-480 (E.D.Pa.2007) (denying defendant's motion to dismiss as to plaintiff's invasion of privacy claim because allegations that debt collector called debtor at her home stating he would “repossess all of her household belongings and even her car” stated a claim for invasion of privacy). The Borings also suggest that the Court erred in expressing skepticism about whether the Borings were actually offended by Google's conduct in light of the Borings' public filing of the present lawsuit. However, the District Court's comments came after the Court had already concluded that Google's conduct would not be highly offensive to a person of ordinary sensibilities. Thus, the Court *280 properly applied an objective standard in deciding whether the conduct was highly offensive. 5 In sum, accepting the Borings' allegations as true, their claim for intrusion upon seclusion fails as a matter of law, because the alleged conduct would not be highly offensive to a person of ordinary sensibilities. ii. Publicity Given to Private Life Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 18 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 [7] [8] To state a claim for publicity given to private life, a plaintiff must allege that the matter publicized is “(1) publicity, given to (2) private facts, (3) which would be highly offensive to a reasonable person, and (4) is not of legitimate concern to the public.” Harris by Harris v. Easton Pub. Co., 335 Pa.Super. 141, 483 A.2d 1377, 1384 (1984) (citing RESTATEMENT (SECOND) OF TORTSS § 652D). For the reasons just described with respect to the intrusion upon seclusion claim, we agree with the District Court that the Borings have failed to allege facts sufficient to establish the third element of a publicity to private life claim, i.e., that the publicity would be highly offensive to a reasonable person. It is therefore unnecessary to address the other three prongs. 6 **5 In conclusion, accepting the Borings' allegations as true, their claim for publicity given to private life fails as a matter of law, because the alleged conduct would not be highly offensive to a person of ordinary sensibilities. C. Trespass The District Court dismissed the Borings' trespass claim, holding that trespass was not the proximate cause of any compensatory damages sought in the complaint and that, while nominal damages are generally available in a trespass claim, the Borings did not seek nominal damages in their complaint. While the District Court's evident skepticism about the claim may be understandable, its decision to dismiss it under Rule 12(b)(6) was erroneous. [9] [10] Trespass is a strict liability tort, “both exceptionally simple and exceptionally rigorous.” Prosser on Torts at 63 (West, 4th ed.1971). Under Pennsylvania law, it is defined as an “unprivileged, intentional intrusion upon land in possession of another.” Graham Oil Co. v. BP Oil Co., 885 F.Supp. 716, 725 (W.D.Pa.1994) (citing Kopka v. Bell Tel. Co., 371 Pa. 444, 91 A.2d 232, 235 (1952)). Though claiming not to have done so, it appears that the District Court effectively made damages an element of the claim, and that is problematic, since “[o]ne who intentionally enters land in the possession of another is subject to liability to the possessor for a trespass, although his presence on the land causes no harm to the land, its possessor, or to any thing or person in whose security the possessor has a legally protected interest.” *281 RESTATEMENT (SECOND) TORTS § 163; see also Corr. Med. Care, Inc. v. Gray, Civ. A. No. 07-2840, 2008 WL 248977, *11 (E.D.Pa. Jan. 30, 2008) (holding that a complaint alleging that defendants entered into plaintiffs' home on specified dates was “sufficient to survive a motion to dismiss under Pennsylvania trespass law.”). [11] Here, the Borings have alleged that Google entered upon their property without permission. If proven, that is a trespass, pure and simple. There is no requirement in Pennsylvania law that damages be pled, either nominal or consequential. 7 Cf. 1 STEIN ON PERSONAL INJURY DAMAGES § 1.3 (3d ed.2009) (“harm is not a prerequisite to a cause of action [for trespass,] and nominal damages can be awarded [even though] there has been and will be no substantial harm.”); 75 AM.JUR.2D Trespass § 112 (2009) (“[I]n the absence of proven or actual damages, plaintiffs are entitled to nominal damages in an action for trespass.” (citations omitted)). It was thus improper for the District Court to dismiss the trespass claim for failure to state a claim. Of course, it may well be that, when it comes to proving damages from the alleged trespass, the Borings are left to collect one dollar and whatever sense of vindication that may bring, but that is for another day. 8 For now, it is enough to note that they “bear the burden of proving that the trespass was the legal cause, i.e., a substantial factor in bringing about actual harm or damage” C & K Coal Co. v. United Mine Workers of Am., 537 F.Supp. 480, 511 (W.D.Pa.1982), rev'd in part on other grounds, 704 F.2d 690, 699 (3d Cir.1983), if they want more than a dollar. D. Unjust Enrichment **6 [12] To succeed on a claim of unjust enrichment, a plaintiff must allege facts sufficient to establish “benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.” Lackner v. Glosser, 892 A.2d 21, 34 (Pa.Super.Ct.2006) (quotation omitted). Typically, with an unjust enrichment claim, a “plaintiff seeks to recover from defendant for a benefit conferred under an unconsummated or void contact,” and the law then implies a quasi-contract which requires the defendant to compensate the plaintiff for the value of the benefit conferred. See Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 936 (3d Cir.1999) (citations omitted); Hershey Foods Corp. v. Ralph Chapek, Inc., 828 F.2d 989, 998-99 (3d Cir.1987). Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 19 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 The District Court dismissed the Borings' unjust enrichment claim after finding that they had not alleged any relationship *282 between themselves and Google that could be construed as contractual, and because “it cannot be fairly said that the Borings conferred anything of value upon Google.” (App. at A12-A13.) The Court further held that the unjust enrichment claim failed because the Borings had not adequately alleged any other tort, and Pennsylvania does not recognize unjust enrichment as a stand-alone tort. [13] We agree that the facts alleged by the Borings provide no basis for an unjust enrichment claim against Google. The complaint not only fails to allege a void or unconsummated contract, it does not allege any benefit conferred upon Google by the Borings, let alone a benefit for which the Borings could reasonably expect to be compensated. The complaint alleges that Google committed various torts when it took photographs of the Borings' property without their consent. The complaint does not allege, however, that the Borings gave or that Google took anything that would enrich Google at the Borings' expense. An unjust enrichment “claim makes sense in cases involving a contract or a quasi-contract, but not, as here, where plaintiffs are claiming damages for torts committed against them by [the] defendant[ ].” 9 Romy v. Burke, No. 1236, 2003 WL 21205975, at *5 (Pa. Com. Pl. Philadelphia May 2, 2003). E. Injunctive Relief [14] [15] Pennsylvania law provides that in order to establish the right to injunctive relief, a plaintiff must “establish that his right to relief is clear, that an injunction is necessary to avoid an injury that cannot be compensated by damages, and that greater injury will result from refusing rather than granting the relief requested.” Kuznik v. Westmoreland County Bd. of Comm'rs, 588 Pa. 95, 902 A.2d 476, 489 (2006) (citing Harding v. Stickman, 823 A.2d 1110, 1111 (Pa.Commw.Ct.2003)). An injunction is an extraordinary remedy. See Ambrogi v. Reber, 932 A.2d 969, 974 (Pa.Super.Ct.2007). **7 [16] The District Court held that the complaint failed to set out facts supporting a plausible claim of entitlement to injunctive relief. We agree that the Borings have not alleged any claim warranting injunctive relief. The complaint claims nothing more than a single, brief entry by Google onto the Borings' property. Importantly, the Borings do not allege any facts to suggest injury resulting from Google's retention of the photographs at issue, which is unsurprising since we are told that the allegedly offending images have long since been removed from the Street View program. F. Punitive Damages [17] Pennsylvania law provides that a defendant must have engaged in “outrageous” or “intentional, reckless or malicious” conduct to sustain a claim for punitive damages. Feld v. Merriam, 506 Pa. 383, 485 A.2d 742, 747- 48 (1984). Indeed, “punitive damages cannot be based upon ordinary negligence.” Hutchinson ex rel. Hutchinson v. Luddy, 946 A.2d 744, 747 (Pa.Super.Ct.2008). *283 The Borings' complaint fails to allege conduct that is outrageous or malicious. There is no allegation that Google intentionally sent its driver onto their property or that Google was even aware that its driver had entered onto the property. Moreover, there are no facts suggesting that Google acted maliciously or recklessly or that Google intentionally disregarded the Borings' rights. The Borings argue that a claim for punitive damages must always be determined by a jury, after discovery. But courts do indeed dismiss claims for punitive damages in advance of trial. See Phillips v. Cricket Lighters, 584 Pa. 179, 883 A.2d 439, 445, 447 (2005) (reversing a denial of summary judgment as to a punitive damages claim because “[a] showing of mere negligence, or even gross negligence, will not suffice to establish that punitive damages should be imposed”); Feld, 485 A.2d at 748 (holding that submission of punitive damages issue to jury was error). 10 And, under the pleading standards we are bound to apply, there is simply no foundation in the complaint for a demand for punitive damages. Cf. Iqbal, 129 S.Ct. at 1950 (explaining that while a plaintiff may use legal conclusions to provide the structure for the complaint, the pleading's factual content must independently “permit the court to infer more than the mere possibility of misconduct”); Twombly, 550 U.S. at 556, 127 S.Ct. 1955 (explaining that a plaintiff must “identify[ ] facts that are suggestive enough to render [his claim] plausible”). III. Conclusion For the foregoing reasons, we will affirm the District Court's grant of Google's motion to dismiss the Borings' Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 20 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 claims for invasion of privacy, unjust enrichment, injunctive relief, and punitive damages. We reverse, however, with respect to the trespass claim, and remand with instructions that the District Court permit that claim to go forward. All Citations 362 Fed.Appx. 273, 2010 WL 318281, 38 Media L. Rep. 1306 Footnotes * Honorable John R. Padova, United States District Court Senior Judge for the Eastern District of Pennsylvania, sitting by designation. 1 Google Maps is a service offered by Google that “gives users the ability to look up addresses, search for businesses, and get point-to-point driving directions-all plotted on interactive street maps....” (App. at A5.) 2 For ease of reference, the amended complaint is referred to herein simply as the “complaint.” 3 Google timely removed the action to the District Court pursuant to 29 U.S.C. §§ 1441 and 1446. The District Court exercised diversity jurisdiction under 28 U.S.C. § 1332. We have appellate jurisdiction over the final orders of the District Court under 28 U.S.C. § 1291. 4 Though not pertinent to our decision, we note Google's assertion, which is not seriously contested by the Borings, that the Street View photograph is similar to a view of the Borings' house that was once publicly available online through the County Assessor's website. 5 Google spends much time arguing that the Borings' driveway was not actually a private place sufficient to sustain an invasion of privacy claim. It notes that numerous courts have found no intrusion upon seclusion based upon a view that can be seen from the outside of the home, and points to the fact that images of the Borings' home were already available on the Internet. Because we conclude that the alleged conduct would not be highly offensive to a person of ordinary sensibilities, we need not decide whether the Borings' driveway was a “private place” for purposes of an invasion of privacy claim. 6 We note, however, that the facts revealed may not actually be “private facts,” as required by prong 2, because the Borings' property allegedly is or recently was available to public view by virtue of tax records and maps on other Internet sites. See Strickland v. Univ. of Scranton, 700 A.2d 979, 987 (Pa.Super.Ct.1997) (explaining that “a matter which was of public record [was] not a private fact”). 7 The District Court cited to a single case from 1899 to support its claim that plaintiffs in a trespass case are required to plead nominal damages. However, the case it cited was not a trespass case. See Morris & Essex Mut. Coal Co. v. Del., L. & W.R. Co., 190 Pa. 448, 42 A. 883, 884 (1899). In fact, that case is expressly inapplicable to this case. See id. (“The whole proceeding was to recover damages based, not upon a wrongful invasion of plaintiff's [property] rights, but upon an act of assembly which authorized the taking of the property.”). Similarly, none of the cases cited by Google in its brief are trespass cases. In fact, Google itself indicates the possibility that we may have to remand the case to proceed with a nominal damages trespass claim. While it may be true that for some claims, the failure to seek nominal damages waives a claim for nominal damages, that is not the case with trespass claims. 8 We imply nothing about whether the claim would survive summary judgment, either as to liability or damages, or about the limits on proof that may be appropriate. 9 Because we find that the Borings stated a claim for trespass (see supra, Section II.C.ii) and thus survived a 12(b)(6) motion to dismiss as to that claim, we need not address whether unjust enrichment is a stand-alone tort under Pennsylvania law. Instead, we hold that the Borings have failed to state a claim for unjust enrichment, regardless of whether it is a stand- alone tort, because they have failed to allege facts sufficient to establish a benefit conferred upon Google by the Borings. Thus, on remand, the Borings are not entitled to recover under their unjust enrichment claim. 10 Appellants rely on two cases to argue that punitive damages must always be determined by a jury after discovery: Kirkbride v. Lisbon Contractors, Inc., 521 Pa. 97, 555 A.2d 800 (1989), and Jacque v. Steenberg Homes, Inc., 209 Wis.2d 605, 563 N.W.2d 154 (1997). Kirkbride addressed whether a punitive damages award must bear a reasonable relationship to the compensatory award, rather than addressing what kind of conduct must be alleged in order to survive a 12(b)(6) motion to dismiss on a punitive damages claim. 555 A.2d at 801. The Jacque case, in addition to having no binding authority on our Court, addressed whether a punitive damages claim may be awarded in connection with a trespass claim, where nominal damages had been awarded and the trespass was committed “for an outrageous purpose Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 21 of 192 Boring v. Google Inc., 362 Fed.Appx. 273 (2010) 38 Media L. Rep. 1306 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 but no significant harm resulted.” 563 N.W.2d at 161. Thus, that court did not hold that the issue of punitive damages must always go to the jury. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 22 of 192 EXHIBIT C Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 23 of 192 Hardy v. Trustees of University of Pennsylvania, Not Reported in A.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2014 WL 10556361 Only the Westlaw citation is currently available. NON-PRECEDENTIAL DECISION- SEE SUPERIOR COURT I.O.P. 65.37 Superior Court of Pennsylvania. Leland HARDY and the Business Institute for Continuing Education in Professional Sports (B.I.C.E.P.S.), Appellants v. TRUSTEES OF the UNIVERSITY OF PENNSYLVANIA, Aresty Institute of Executive Education, Wharton School of University of PA and Kenneth L. Shropshire, Appellees. No. 381 EDA 2014. | Filed Dec. 26, 2014. Appeal from the Order Dated December 4, 2013, in the Court of Common Pleas of Philadelphia County, Civil Division at No.: April Term, 2007, No. 002178. BEFORE: GANTMAN, P.J., BENDER, P.J.E., and PLATT, J. * MEMORANDUM BY PLATT, J.: *1 Appellants, Leland Hardy and The Business Institute for Continuing Education in Professional Sports (B.I.C.E.P.S.), appeal from the trial court's final December 4, 2013 order and prior orders, which collectively dismissed their complaint for intentional interference with business relationships, misappropriation of trade secrets, breach of contract, and related claims with prejudice. We affirm. The trial court summarized the factual and procedural history of this case as follows: In 1998-1999, Hardy developed the B.I.C.E.P.S. Program (“Program”), an alleged novel and cutting edge concept to provide direct, customized business education for professional athletes in a business school setting. Hardy, an alumnus of the Wharton School, presented the Program to the Wharton School seeking aid in launching the program. Negotiations between [Appellants] and the Wharton School continued during the years 1999, 2000, and 2001. Hardy named the Program[,] “The Wharton Institute for Professional Athletes,” and developed a three-day course curriculum with the assistance of Kenneth Shropshire, the Academic Director of the Wharton Institute for Professional Athletes. Hardy provided the Wharton School with $55,000 to cover various costs to initiate the Program. On April 5, 2002, [Appellants] and the Wharton School reached agreements and the Program was presented at the Wharton School on July 17-19, 2002. Thereafter, Hardy initiated an aggressive promotional effort, which resulted in a content license and weblinking agreement with the Wharton School and a preliminary agreement with AIC Corporation to sponsor the [P]rogram's activities. In order to assist the sponsoring by the AIC Corporation, the Wharton School touted the success of the [P]rogram and the relationship between B.I.C.E.P.S. and the Wharton School. On April [15], 2003, [Appellants] entered into a second agreement[,] which provided that the Program would be offered, in the same form as previously, at the Wharton School on June 3-6[,] 2003. [Appellants] allege the Wharton School without any warning repudiated the April 15, 2003 agreement. In the meantime, [t]he Wharton School entered into an agreement with the National Football League and the National Football [League] Players Association to provide an education business program at the Wharton School to the league's athletes. The Wharton School's program took place on April 6-8, 2005 and was chaired by Shropshire. [Appellants] allege that the Wharton School [p]rogram contained a virtually identical curriculum as their [P]rogram. On April 18, 2007, [Appellants] commenced an action by writ of summons against the Trustees of the University of Pennsylvania, The Aresty Institute of Executive Education of [t]he Wharton School of the University of Pennsylvania, [t]he Wharton School of the University of Pennsylvania and Kenneth Shropshire (collectively referred to as [Appellees] ). On June 28, 2007, [Appellants] filed their complaint alleging claims for breach of contract, misrepresentation/ fraud, theft of ideas, conversion, unjust enrichment, misappropriation of trade secrets, unfair competition, intentional interference with prospective business Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 24 of 192 Hardy v. Trustees of University of Pennsylvania, Not Reported in A.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 relationships, punitive damages and violations of the Uniform Trade Secrets Act. *2 Appellees filed preliminary objections to the complaint for lack of personal jurisdiction and legal insufficiency. On February 21, 2008, after oral argument, the [trial] court sustained the preliminary objections as they pertained to the claims for misrepresentation/fraud, theft of ideas, conversion, misappropriation of trade secrets, punitive damages and violations of the Uniform Trade Secrets Act. The [trial] court granted [Appellants] leave to amend the claim for tortious interference with prospective contractual relations. An amended pleading was never filed. On February 28, 2008, [Appellees] filed a motion seeking clarification/reconsideration of the [trial] court[']s order dated February 21, 2008 regarding [Appellants'] claims for unjust enrichment and unfair competition. On March 3, 2008, the [trial] court denied [Appellees'] motion for clarification/reconsideration. On January 21, 2009, the [trial] court granted [Appellees] permission to file any and all motions that they deemed necessary and proper regarding the sufficiency of the allegations in [Appellants'] complaint that dealt with either [Appellants'] right to recover damages and or any limitations on [Appellants'] right to recover damages. In accordance with said order, [Appellees][,] on February 3, 2009, filed a motion to dismiss the claims for unjust enrichment and unfair competition. On July 16, 2009, the [trial] court granted the motion to dismiss as it pertained to the unfair competition claim only and denied the motion as it pertained to the unjust enrichment claim. On August 4, 2010, [Appellees] filed a renewed motion to dismiss the claim for unjust enrichment. On September 16, 2010, the [trial] court granted the motion and the claim for unjust enrichment was dismissed. On September 29, 2010, [Appellants] filed a motion for reconsideration of [the trial] court's order dated September 16, 2010. On October 7, 2010, the motion for reconsideration was denied. On January 13, 2011, [Appellees] filed a motion [for] summary judgment. On March 8, 2011, the motion for summary judgment was denied. On February 3, 2012, the parties filed a joint motion for extraordinary relief. On February 7, 2012, the [trial] court granted the motion for extraordinary relief and dismissed the remaining claim for breach of contract.... (Trial Court Opinion, 7/30/12, at 1-4). Appellants timely filed an appeal on March 6, 2012. On July 29, 2013, this Court quashed the appeal because the “count of intentional interference with prospective contractual relations ... [was] never specifically dismissed ... [or] disposed of, and [consequently] the February 6, 2012 order is not a final, appealable order.” (Hardy et al. v. Trs. of the Univ. of PA, et al., 1558 EDA 2012, unpublished memorandum at *3 (Pa.Super. filed July 29, 2013)). On November 27, 2013, the parties filed a joint motion for extraordinary relief. The trial court granted the motion and dismissed the remaining count of intentional interference with business relationships on December 4, 2013. Appellants timely appealed on December 20, 2013. 1 *3 Appellants raise the following issues for our review: 1. [Whether] [t]he [trial] [c]ourt erred as a matter of law in granting [Appellees'] [p]reliminary [o]bjections in finding that [Appellants'] claim for misrepresentation/ fraud was barred by the “gist of the action” doctrine[?] 2. [Whether] [t]he [trial] [c]ourt erred as a matter of law in granting [Appellees'] [p]reliminary [o]bjections as to [Appellants'] conversion claim in finding that [Appellees'] did not commit conversion because they had retained a property interest in the program in question[?] 3. [Whether] [t]he [trial] [c]ourt erred as a matter of law in granting [Appellees'] [p]reliminary [o]bjections as to [Appellants'] claim for misappropriation of trade secrets by finding that [Appellants'] had failed to establish that the program in question constituted a trade secret[?] 4. [Whether] [t]he [trial] [c]ourt erred as a matter of law in granting [Appellees'] [p]reliminary [o]bjections as to [Appellants'] claim for violation of the Uniform Trade Secrets Act by finding that the information [Appellants'] sought to protect did not meet the definition of trade secret[?] 5. [Whether] [t]he [trial] [c]ourt erred as a matter of law in granting [Appellees'] [m]otion to [d]ismiss, a motion Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 25 of 192 Hardy v. Trustees of University of Pennsylvania, Not Reported in A.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 not authorized under Pennsylvania law, and dismissing [Appellants'] count for unfair competition[?] 6. [Whether] [t]he [trial] [c]ourt erred as a matter of law in granting [Appellees'] [r]enewed [m]otion to [d]ismiss, a motion not authorized under Pennsylvania law, and dismissing [Appellants'] count for unjust enrichment[?] (Appellants' Brief, at 8) (footnote omitted). 2 It is well-settled that: In reviewing a trial court's grant of preliminary objections, the standard of review is de novo and the scope of review is plenary. The salient facts are derived solely from the complaint and pursuant to that standard of review, the court accepts all well-pleaded material facts in the complaint, and all inferences reasonably deduced therefrom must be accepted as true. Martin v. Rite Aid of PA, Inc., 80 A.3d 813, 814 (Pa.Super.2013) (citation omitted). Since the Rules of Civil Procedure do not recognize a[m]otion to [d]ismiss as a separate motion, we will characterize it as a motion for summary judgment. When reviewing a grant of a motion for summary judgment, our review is plenary. We will not disturb the trial court's order absent an error of law or abuse of discretion. Where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered. Lastly, we will view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Long v. Ostroff, 854 A.2d 524, 527-28 (Pa.Super.2004), appeal denied, 871 A.2d 192 (Pa.2005) (citations, brackets, and quotation marks omitted). *4 In their first issue, Appellants argue that the trial court erred in dismissing their claim for misrepresentation and fraud under the gist of the action doctrine where breach of contract is not the gist of the current action. (See Appellants' Brief, at 20-33). We disagree. The gist of the action doctrine forecloses tort claims (1) arising solely from the contractual relationship between the parties; (2) when the alleged duties breached were grounded in the contract itself; (3) where any liability stems from the contract; and (4) when the tort claim essentially duplicates the breach of contract claim. Indalex Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 83 A.3d 418, 425 (Pa.Super.2013), appeal denied, 99 A.3d 926 (Pa.2014) (citation and quotation marks omitted). Here, the record reflects that Appellants' contend that (1) Appellees misappropriated the concept embodied in the B.I.C.E.P.S. Program, disclosing it to the National Football League (NFL) and NFL Players Association (NFLPA), and marketing it as their own; (2) violated the confidentiality provision contained in the parties' April 2002 agreement; and (3) used the confidentiality agreement as a means to commit tortious acts against Appellants. (See Appellants' Brief, at 21, 24-26). All of these alleged acts of misrepresentation and fraud arose in the course of the parties' contractual relationship. Moreover, the parties' agreements created Appellees' duties regarding the B.I.C.E.P.S. Program. (See Agreement, 4/05/02; Agreement, 4/15/03). Based on the foregoing, we conclude that the trial court properly determined that the gist of Appellants' misrepresentation and fraud action sound in contract. (See Trial Court Opinion, 2/21/08, at 4-5); see also Indalex Inc., supra at 425. Accordingly, the trial court did not err as a matter of law and properly dismissed the misrepresentation and fraud claim under the gist of the action doctrine. See Indalex Inc., supra at 425; Martin, supra at 814. Appellants' first issue does not merit relief. In their second issue, Appellants argue that the trial court erred in dismissing their claim for conversion on the basis that under the contract, Appellees retained a property Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 26 of 192 Hardy v. Trustees of University of Pennsylvania, Not Reported in A.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 interest in the intellectual material. (See Appellants' Brief, at 33-39). We disagree. It is well-settled that: Conversion is defined as the deprivation of another's right of property in, or use or possession of, a chattel, or other interference therewith, without the owner's consent and without lawful justification. When such an act occurs, the plaintiff may bring suit if he had an immediate right to possession of the chattel at the time it was converted. Bank of Landisburg v. Burruss, 524 A.2d 896, 898 (Pa.Super.1987), appeal denied, 532 A.2d 436 (Pa.1987) (citations and quotation marks omitted). Here, Appellants contend that Appellees “interfered with their use and benefit of the ideas and concepts generated and owned by Leland Hardy, thereby depriving them of the ability to use those ideas and concepts for profit.” (Appellants' Brief, at 35 (record citations omitted)). *5 However, our independent review of the record reflects that the “curriculum for the three[-]day B.I.C.E.P.S. Program was developed by [Appellant], Leland Hardy, with the aid and assistance of [Appellee], Kenneth Shropshire[.]” (Complaint, 6/28/07, at 4 ¶ 9). Furthermore, “[n]egotiations and discussions continued [between the parties] with respect to the specific details of the B.I.C.E.P.S. Program at [Appellee,] Wharton, including ... curriculum[.]” (Id. at 5 ¶ 11). Moreover, the 2002 and 2003 agreements state that, “[Appellee,] Wharton retains all rights, title, and interest in and to all materials developed by Wharton.” (Agreement, 4/05/02, at unnumbered page 4; Agreement, 4/15/03, at unnumbered page 4). Additionally, Appellant, Leland Hardy, acknowledged that “Licensor [Appellee, Trustees of the University of Pennsylvania] owns all right, title and interest in the Licensor [c]ontent....” (Content License and Weblinking Agreement, 7/27/02, at 7 ¶ 9.1). Therefore, the trial court properly determined that Appellees retained a property interest in the intellectual material, which they had developed. (See Trial Ct. Op., 2/21/08, at 5-6); see also Bank of Landisburg, supra at 898. Accordingly, the trial court did not err as a matter of law and properly dismissed the conversion claim. See Martin, supra at 814; Bank of Landisburg, supra at 898. Appellants' second issue lacks merit. In their third and fourth issues, Appellants argue that the trial court erred in dismissing their claim for misappropriation of trade secrets by finding that the B.I.C.E.P.S. Program is not a trade secret. (See Appellants' Brief, at 40-47). We disagree. The determinative question in these claims is the interpretation of section 5302 of the Uniform Trade Secrets Act (UTSA). 12 Pa.C.S.A. §§ 5301-5308. “Questions of statutory construction are questions of law; therefore, our review is de novo.” Betts Ind., Inc. v. Heelan, 33 A.3d 1262, 1265 (Pa.Super.2011) (citation omitted). UTSA defines a trade secret as: Information, including a ... program ... that: (1) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use. (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 12 Pa.C.S.A. § 5302. It is well-settled that: ... Some factors which a court may consider in determining whether information qualifies as a trade secret include: (1) the extent to which the information is known outside the owner's business; (2) the extent to which it is known by employees and others involved in the owner's business; (3) the extent of measures taken by the owner to guard the secrecy of the information; (4) the value of the information to the owner and to his competitors; (5) the amount of effort or money expended by the owner in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 27 of 192 Hardy v. Trustees of University of Pennsylvania, Not Reported in A.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 *6 Iron Age Corp. v. Dvorak, 880 A.2d 657, 663 (Pa.Super.2005) (citation omitted). Here, the record reflects that Appellants promoted the B.I.C.E.P.S. Program to the NFLPA and specified that “The Wharton School has created a program ... [and] presents B.I.C.E.P.S.....” (Complaint, 6/28/07, Marketing Brochure, at Exhibit F) (emphases added). Moreover, the information was generally known and marketed to the public. Appellants presented and promoted the program and its materials to increase exposure to target markets. (See id. at 6-7 ¶¶ 14-17 (describing promotional efforts and efforts to obtain increased exposure); and Marketing Brochure, at Exhibit F). Furthermore, Appellants failed to show that they made reasonable efforts to maintain the B.I.C.E.P.S. Program's secrecy. (See Complaint, 6/28/07, at 6-7 ¶¶ 14-17). Therefore, the trial court properly determined that the B.I.C.E.P .S. Program is not a trade secret because: (a) the information was well within the public domain, (b) no measures were taken to ensure the secrecy of the information, and (c) the relative ease in which one could properly acquire and duplicate the information.... One would only have to enroll in the course in order to access all of the alleged “secret” information. (Trial Ct. Op., 2/21/08, at 6-7); see also 12 Pa.C.S.A. § 5302; Iron Age Corp., supra at 663. Accordingly, the trial court did not err as a matter of law and properly dismissed the misappropriation of trade secrets claims. See Betts Ind., Inc., supra at 1265; Martin, supra at 814. See also 12 Pa.C.S.A. § 5302; Iron Age Corp., supra at 663. Appellants' third and fourth issues lack merit. In their fifth issue, Appellants argue that the trial court erred in dismissing their claim for unfair competition where it found that Appellants “lacked the necessary ownership interest to allege a claim for unfair competition.” (Appellants' Brief, at 47; see id . at 50-52). Additionally, Appellants argue that Appellees “lacked any authority to file their motion [to dismiss]....” (Id. at 49). We disagree. 3 It is well-settled that “[a] claim of unfair competition encompasses trademark infringement, but also includes a broader range of unfair practices, which may generally be described as a misappropriation of the skill, expenditures and labor of another.” PA State Univ. v. Univ. Orthopedics, Ltd., 706 A.2d 863, 867 (Pa.Super.1998) (citation omitted). Additionally, “[t]he gist of the action lies in the deception practiced in ‘passing off’ the goods of one for that of another.” Id. at 870 (citation omitted). Here, because we have concluded that the trial court properly determined that Appellees retained a property interest in the intellectual material, the claim of unfair competition fails for Appellants' lack of the requisite ownership. (See Trial Ct. Op., 7/30/12, at 4); see also PA State Univ., supra at 867, 870. *7 Moreover, Appellants have failed to support their claim that Appellees have “passed off the program as their own creative design, thereby deceiving and confusing their consumers....” (Appellants' Brief, at 50). The record reflects that Appellees created the program. (See Complaint, 6/28/07, at 4-5 ¶¶ 9, 11; Marketing Brochure, at Exhibit F). They retained an intellectual property interest in the program. (See Agreement, 4/05/02, at unnumbered page 4; Content License and Weblinking Agreement, 7/27/02, at 7 ¶ 9.1; Agreement, 4/15/03, at unnumbered page 4). Appellees marketed their 2005 program as “business education ... to assist players in preparing for their post-playing career.... It focuses on personal investments as well as entrepreneurial opportunities for players transitioning from their football careers.” (Complaint, 6/28/07, News Release, at Exhibit O). Additionally, there is no non-compete clause in any of the parties' agreements, therefore, no unfair competition. (See Agreement, 4/05/02; Content License and Weblinking Agreement, 7/27/02; Agreement, 4/15/03). Accordingly, the trial court did not err as a matter of law and properly dismissed the unfair competition claim. See Long, supra at 527-28; PA State Univ., supra at 867. Appellants' fifth issue lacks merit. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 28 of 192 Hardy v. Trustees of University of Pennsylvania, Not Reported in A.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 In their final issue, Appellants argue that the trial court erred in dismissing their claim for unjust enrichment and refusing to find that “the conduct of the parties at issue goes well beyond the scope of their agreements.” (Appellants' Brief, at 53; see id. at 52-59). Additionally, Appellants argue that Appellees “lacked any authority to file their motion [to dismiss]....” (Id. at 54; see id. at 53-54). We disagree. 4 It is well-settled that “[a]n action based on unjust enrichment is an action which sounds in quasi-contract or contract implied in law. A quasi-contract imposes a duty, not as a result of any agreement ... but in spite of the absence of an agreement....” Discover Bank v. Stucka, 33 A.3d 82, 88 (Pa.Super.2011) (citations and quotation marks omitted). Additionally, “the doctrine of unjust enrichment is inapplicable when the relationship between parties is founded upon a written agreement or express contract, regardless of how harsh the provisions of such contracts may seem in the light of subsequent happenings.” Wilson Area Sch. Dist. v. Skepton, 895 A.2d 1250, 1254 (Pa.2006) (citations and quotation marks omitted). Here, the record reflects that three distinct contracts govern the parties' relationship. (See Complaint, 6/28/07, at 5-8 ¶¶ 13, 16, 19; Agreement, 4/05/02; Content License and Weblinking Agreement, 7/27/02; Agreement, 4/15/03). Therefore, the trial court properly determined that an express written contract existed between the parties. (See Trial Ct. Op ., 7/30/12, at 4-5); see also Discover Bank, supra at 88; Wilson Area Sch. Dist., supra at 1254. Accordingly, the trial court did not err as a matter of law and properly dismissed the unjust enrichment claim. See Long, supra at 527-28; Discover Bank, supra at 88; Wilson Area Sch. Dist., supra at 1254. Appellants' sixth issue lacks merit. *8 Order affirmed. All Citations Not Reported in A.3d, 2014 WL 10556361 Footnotes * Retired Senior Judge assigned to the Superior Court. 1 Pursuant to the court's March 8, 2012 order, Appellants timely filed a Rule 1925(b) statement on March 29, 2012. The court entered its Rule 1925(a) opinion on July 30, 2012. After Appellants timely appealed the December 4, 2013 order, the court did not order Appellants to file a Rule 1925(b) statement, but it entered its Rule 1925(a) opinion on January 2, 2014, in which it relied on its July 30, 2012 opinion. See Pa.R.A.P.1925. 2 Appellants note that, in effect, questions three and four raise identical issues, thus, “Appellants' will address these issues only once under question three.” (Appellants' Brief, at 8 n. 1). Accordingly, we also will review these claims as a single issue. 3 Appellees filed their motion to dismiss in accordance with the trial court's January 21, 2009 order, which specifically granted them permission to file “any and all motions ... regarding the sufficiency of allegations in [Appellants'] complaint that deal with either [Appellants'] right to recover damages and/or any limitations on [Appellants'] right to recover damages.” (Order, 1/21/09, at unnumbered pages 1-2). 4 See footnote 4, supra (quoting Order, 1/21/09, at unnumbered pages 1-2). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 29 of 192 EXHIBIT D Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 30 of 192 Ickes v. Flanagan, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2008 WL 859183 Only the Westlaw citation is currently available. United States District Court, W.D. Pennsylvania. Don R. ICKES, Plaintiff, v. Tim FLANAGAN, Roland Trombetto, Commonwealth of Pennsylvania, Defendants. Civil Action No. 3:2007-143. | March 31, 2008. Attorneys and Law Firms Don Ickes, Fishertown, PA, pro se. Tracey A. Wilson, Office of the Attorney General, Pittsburgh, PA, for Defendants. MEMORANDUM OPINION and ORDER OF COURT GIBSON, District Judge. *1 Presently before the Court is Defendants' Motion to Dismiss Plaintiff's complaint for failure to state a claim upon which relief could be granted pursuant to Federal Rule of Civil Procedure 12(b) (6) (Document No. 4) together with the briefs submitted by the parties in abetment and in opposition, respectively. Plaintiff's complaint, commenced in state court and removed to federal jurisdiction by Defendants on June 14, 2007, asserts six counts for relief predicated upon the actions of two state game officials in the spring of 1999. After removing the action, Defendants filed the instant motion and brief on July 19, 2007. On August 16, 2007, Plaintiff filed a response and brief (styled a memorandum of law). Scheduling and discovery conferences have been held and, the grant of Plaintiff's motion to amend notwithstanding, Defendants' Rule 12(b)(6) motion is now poised for disposition. From what the Court can decrypt from Plaintiff's complaint, it seems that Plaintiff was the target of a protean conspiracy perpetrated by, among others, the FAA, the Pennsylvania Game Commission, various Bedford County deer hunters and Plaintiff's officious neighbor, aimed at depriving Plaintiff of his Constitutionally protected civil rights. 1 To briefly summarize the facts giving rise to Plaintiff's complaint as well as the Court is able, on April 2, 1999, Plaintiff was approached by Defendants Timothy Flanagan (“Flanagan”) and Roland Trombetto (“Trombetto”) and asked to identify himself. Plaintiff refused to do so and directed the officers to convey all questions to his attorney. The officers again requested that Plaintiff identify himself, and Plaintiff again refused. On May 14, 1999, two citations were issued charging Plaintiff with violation of 34 Pa.C.S. § 904, “Resisting or interfering with an officer.” 2 On August 5, 1999, a district justice convicted Plaintiff on the first citation, fining him $800 plus costs, but dismissed the second citation as a continuation of the same offense. Plaintiff appealed the decision to the Pennsylvania Court of Common Pleas, where a judge upheld the conviction and sentence. On May 24, 2002, Plaintiff's conviction was reversed by the Commonwealth Court, holding the statute on which Plaintiff was convicted to be unconstitutional. The decision of the Commonwealth Court was unanimously affirmed by the Pennsylvania Supreme Court on May 4, 2005. The Supreme Court recently announced a new standard when ruling on a Rule 12(b)(6) motion in Bell Atlantic Corp. v. Twombly, --- U.S. ----, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). On February 5, 2008, the Third Circuit issued an opinion that contains an extended analysis of the standard promulgated in Twombly. See Phillips v. County of Allegheny, 515 F.3d 224 (3d Cir.2008). Accordingly, a discussion of the applicable standard when deciding a Rule 12(b)(6) motion as stated in those two cases is appropriate here. Certain aspects of the analysis remain intact. The court still must “accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non- moving party.” Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir.1989); D.P. Enters., Inc. v. Bucks County Cmty. Coll., 725 F.2d 943 (3d Cir.1984). The Court need not credit bald assertions or legal conclusions. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir.1997) (citation omitted). In addition to the allegations contained in the pleadings, the Court may Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 31 of 192 Ickes v. Flanagan, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 also review “matters of public record, orders, exhibits attached to the complaint and items appearing in the record of the case.” Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384-85 n. 2 (3d Cir.1994) (citation omitted). Furthermore, in deciding a rule 12(b) (6) motion, the Court may review “undisputably authentic document[s] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document.” Steinhardt Group v. Citicorp, 126 F.3d 144, 145 (3d Cir.1997). *2 In Twombly, supra, 1968-69, the distinction came when the Supreme Court criticized the oft-quoted “no set of facts” language from Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), that had served as the standard for dismissing a claim under Rule 12(b)(6) for fifty years. The crux of the censure of the Conley standard is that it is overly inclusive and unworkable. As the Third Circuit observed in Phillips v. County of Allegheny, 515 F.3d 224 (3d Cir.2008), “The Conley language was problematic because, for example, it could be viewed as requiring judges to speculate about undisclosed facts.” Id. at 232. The Supreme Court further stated, “On such a focused and literal reading of Conley's ‘no set of facts,’ a wholly conclusory statement of claim would survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some ‘set of [undisclosed] facts' to support recovery.” Twombly, supra, at 1968 (alteration in original). The Third Circuit also noted, parenthetically, that “literal compliance” with Conley “could consist simply of giving the names of the plaintiff and the defendant, and asking for judgment.” Phillips, supra, at 233, (citing Geoffrey C. Hazard, From Whom No Secrets Are Hid, 76 Tex. L.Rev. 1665, 1685 (1998) (cited for related proposition in Twombly, 127 S.Ct. at 1969)). This is not to say, as the Supreme Court was careful to point out, that there is now a heightened pleading standard or a probability requirement. Id., citing Twombly, 127 S.Ct. at 1964, 1965, 1973 n. 14, 1974. It remains an acceptable statement of the standard, for example, that courts ‘accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.’ “ Phillips, supra, at 233 (citations omitted). There is, however, another hurdle erected by Twombly that a party aspiring to defeat a Rule 12(b)(6) dismissal must overcome. Although the Court stresses that it is not adopting a heightened pleading standard, the Court does seem to introduce “plausibility” as an element to the standard for notice pleading. Twombly, 127 S.Ct. at 1974. “The Court explained that a plaintiff must ‘nudge [his or her] claims across the line from conceivable to plausible’ in order to survive a motion to dismiss.” Phillips, supra, at 234, quoting Twombly, 127 S.Ct. at 1974. Furthermore, the Third Circuit has held that Twombly is not to be read so narrowly as to limit its holding on plausibility to the antitrust context in which it arose. Phillips, supra. The “plausibility” requirement relates to the “showing” requirement of Rule 8, which requires notice of a claim and its grounds, as distinguished from “a pleader's ‘bare averment that he wants relief and is entitled to it.’ “ Id., (quoting Twombly, 127 S.Ct. at 1965 n. 3.) Even a well-pleaded complaint alleging facts the proof of which seem improbable can survive a Rule 12(b) (6) attack if the “[f]actual allegations [are] enough to raise a right to relief above the speculative level.” Phillips, supra, at 234 (quoting Twombly, 127 S.Ct. at 1965). The Supreme Court's Twombly formulation does not impose a probability requirement at the pleading stage, but it does insist that the pleader make some showing sufficient to justify moving the case beyond the pleadings to the next stage of litigation. Phillips, supra, at 234-35 (citing Twombly, 127 S.Ct. at 1965). *3 For purposes of clarity, the Court will group Plaintiff's claims into three groups and address them in the same sequence: 1) infliction of severe emotional distress, conspiracy and failure to train, supervise and discipline (Counts Four and Five, respectively), 2) Civil Rights violations (Count Three, alleging violations of the First, Fourth, Fifth, Sixth, Eighth, Ninth and Fourteenth Amendments, and Count Six) and 3) malicious prosecution and abuse of process (Counts One and Two, respectively). With respect to the first group, the Court finds that these claims are all time-barred by the applicable statutes of limitations. Each state law tort asserted by Plaintiff is subject to a two year statute of limitations. 42 Pa.C.S. § 5524. The instances giving rise to the claims happened in 1999, a full eight years before the commencement of Plaintiff's civil action. Plaintiff's only argument that the statute should not operate to dismiss his claims as time- Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 32 of 192 Ickes v. Flanagan, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 barred is that these claims were a continuing violation of rights that did not end until the final disposition of his case by the Pennsylvania Supreme Court in May 2005. That is simply an inaccurate statement. “The two-year period begins as soon as the injury is sustained.” Mest v. Cabot Corporation, 449 F.3d 502, 510 (3d Cir.2006) (citing Bohus v. Beloff, 950 F.2d 919, 924 (3d Cir.1991)). “[L]ack of knowledge, mistake or misunderstanding do not toll the running of the statute of limitations.” Id. (quoting Pocono Int'l Raceway, Inc. v. Pocono Produce, Inc., 503 Pa. 80, 468 A.2d 468, 471 (Pa.1983)). “For the statute of limitations to run, a plaintiff need not know the ‘exact nature’ of his injury, as long as it objectively appears that the plaintiff ‘is reasonably charged with the knowledge that he has an injury caused by another.’ “ Id. at 510-511 (citing Ackler v. Raymark Indus., Inc., 380 Pa.Super. 183, 551 A.2d 291, 293 (Pa.Super.1988)). For a claim to be actionable, a Plaintiff is required to exercise reasonable diligence in ascertaining the nature and cause of his injury. Reasonable diligence must be established by showing that Plaintiff “pursued the cause of his injury with those qualities of attention, knowledge, intelligence and judgment which society requires of its members for the protection of their own interests and the interests of others.” Cochran v. GAF Corp., 542 Pa. 210, 666 A.2d 245, 250 (Pa.1995) (internal quotation marks and citations omitted). Plaintiff's reliance on the continuing violation doctrine is misplaced. “A continuing violation is occasioned by continual unlawful acts, not continual ill effects from an original violation.” Cowell v. Palmer Twp., 263 F.3d 286, 293 (3d Cir.2001) (quoting Ocean Acres Ltd. v. Dare County Bd. of Health, 707 F.2d 103, 106 (4th Cir.1983)). The injuries upon which Plaintiff's claims of infliction of severe emotional distress, conspiracy and failure to train, supervise and discipline are based all occurred in 1999. For this reason the Court finds that those claims are time-barred by the applicable statutes of limitations. *4 As to the Civil Rights Claims, claims brought pursuant to 42 U.S.C. § 1983 are subject to state statutes of limitations governing personal injury actions. See Owens v. Okure, 488 U.S. 235, 249-50, 109 S.Ct. 573, 102 L.Ed.2d 594 (1989); Sameric Corp. of Del., Inc. v. City of Philadelphia, 142 F.3d 582, 599 (3d Cir.1998). As discussed above, the statute of limitations for personal injury actions in Pennsylvania is two years. 42 Pa.C.S. § 5524. All of Plaintiff's Civil Rights Claims are predicated on discrete acts, each of which occurred in 1999. As such, the analysis advanced above is equally germane to Plaintiff's § 1983 claims. “The limitations period for purposes of § 1983 claims begins to run ‘from the time when the plaintiff knows or has reason to know of the injury which is the basis of the § 1983 action.’ ” Fullman v. Pennsylvania Department of Corrections, 2008 WL 410116 at *1 (3d Cir. Feb.15, 2008) (quoting Genty v. Resolution Trust Corp., 937 F.2d 899, 919 (3d Cir.1991). Dismissal of a complaint for failure to state a claim on statute of limitations grounds is proper if the untimeliness of the complaint makes it facially invalid. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 n. 1 (3d Cir.1994). “As the Supreme Court has recognized, statutes of limitations are not ‘simply technicalities,’ but rather, ‘fundamental to a well-ordered judicial system.’ ” Lipschultz v. Logan Assistance Corporation, 50 Fed.Appx. 528, 529 (3d Cir.2002) (citing Board of Regents v. Tomanio, 446 U.S. 478, 487, 100 S.Ct. 1790, 64 L.Ed.2d 440 (1980)). Here, Plaintiff's claims for infliction of severe emotional distress, conspiracy and failure to train, supervise and discipline as well as Plaintiff's Civil Rights Claims arose in 1999, but Plaintiff's civil action was not filed until 2007, well beyond the two-year statute of limitations applicable to those claims. For this reason, those claims must be dismissed as time-barred. The third group of claims, malicious prosecution and abuse of process, must also be dismissed. As an initial matter, the Court must point out that a claim of malicious prosecution and a claim of abuse of process are not concomitantly cognizable for the same conduct; each being a distinct claim and the two being mutually exclusive. “A § 1983 claim for [ ] abuse of process lies where prosecution is initiated legitimately and thereafter is used for a purpose other than that intended by the law.” Williams v. Fedor, 69 F.Supp.2d 649, 673 (M.D.Pa.1999), aff'd mem., 211 F.3d 1263 (3d Cir.2000). “The gravamen of that tort is not the wrongfulness of the prosecution, but some extortionate perversion of lawfully initiated process to illegitimate ends.” Heck v. Humphrey, 512 U.S. 477, 486 n. 5, 114 S.Ct. 2364, 129 L.Ed.2d 383., 512 U.S. 477, 114 S.Ct. 2364, 129 L.Ed.2d 383 (1994). “If prosecution or process is initiated without probable cause and with a bad motive, malicious use of process lies. If prosecution is initiated legitimately and thereafter is used for a purpose other than that intended by the law, [ ] abuse of process lies.” Jennings v. Shuman, 567 F.2d 1213, 1217 (3d Cir.1977). “ ‘[T]here is no action for abuse of process Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 33 of 192 Ickes v. Flanagan, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant ....‘ ” Rosen v. Am. Bank of Rolla, 426 Pa.Super. 376, 627 A.2d 190, 192 (Pa.1993) (quoting Restatement (Second) of Torts § 682 cmt. b (1977)). *5 Petitioner inexorably asserts that the prosecution against him was initiated without probable cause. Indeed, even in his claim for abuse of process, Plaintiff asserts, “The criminal process was thus commenced and continued for the perverse purpose of furthering the illicit agenda of meddlesome neighbors.” Complaint, ¶ 31 (emphasis added). As stated above, to sustain a viable claim for abuse of process the prosecution must have been initiated legitimately. Plaintiff therefore nullifies his abuse of process claim in the very paragraphs meant to support it. Even if the Court were to ignore that inherent inconsistency, however, Plaintiff's abuse of process claim would still fail. Other than the bare assertion quoted above that the “perverse purpose” of the prosecution was for the benefit of Plaintiff's “meddlesome” neighbor, Plaintiff alleges no facts sufficient to justify allowing this claim to proceed to further stages of litigation. Moreover, it is the process that must be perverted to sustain the claim, not the purpose. See Gen. Refactories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 304 (3d Cir.2003); Rosen, 627 A.2d at 192. Furthermore, Plaintiff's allegation that the process was perverted for the benefit of his neighbor is insufficient to establish the claim for another reason. In order to establish a claim for abuse of process, a plaintiff must show evidence of an act or threat unauthorized by the process or aimed at an illegitimate objective. See McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1023 (Pa.1987). This Plaintiff has failed to do. Consequently, Plaintiff has failed to state a claim for abuse of process upon which relief can be granted, and that claim is therefore dismissed. 3 To show malicious prosecution, Plaintiff must show that the prosecution was initiated without probable cause and with a bad motive. Plaintiff contends “[t]he case against me was commenced without the charging officer having probable cause to reasonably believe that a cognizable crime had been committed by me on April 02, 1999.” Complaint, ¶ 24. 4 Plaintiff, however, fails to offer any facts to support this allegation beyond his bare assertions, other than the reversal of his conviction on appeal, the holding of which was based on the constitutionality of the statute and not on the presence or absence of probable cause. Moreover, termination of the proceedings in Plaintiff's favor does not conclusively establish the absence of probable cause. See Wainauskis v. Howard Johnson Co., 339 Pa.Super. 266, 488 A.2d 1117, 1122 (Pa.Super.1985). Probable cause existed at the time that Plaintiff's case was commenced, contrary to his argument, as the proceedings were premised on a Pennsylvania statute that was valid and enforceable as of the time the citations were issued and the process initiated. In exercising the duties attendant to their office, state actors can not reasonably be expected to predict changes in the law and conform their conduct accordingly. Plaintiff has likewise failed to make allegations sufficient to support a finding of malice or bad motive. See Hugee v. Pa. R.R. Co., 376 Pa. 286, 101 A.2d 740, 742 (Pa.1954). The Court therefore finds that Plaintiff's claim for malicious prosecution is untenable. *6 For all of the foregoing reasons, Defendant's motion is granted. An appropriate Order follows. AND NOW, this 31st day of March, 2008, in accordance with the foregoing Memorandum Opinion, IT IS HEREBY ORDERED THAT the Defendants' Motion to Dismiss (Document No. 4) is GRANTED WITH PREJUDICE as to all counts. IT IS FURTHER ORDERED THAT all current Defendants are dismissed as parties. IT IS FURTHER ORDERED THAT the Clerk of Court shall not close this case as the Plaintiff is still within his April 7, 2008 deadline for filing an amended Complaint to add another proposed defendant, Marcia Claar, only. All Citations Not Reported in F.Supp.2d, 2008 WL 859183 Footnotes Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 34 of 192 Ickes v. Flanagan, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 1 Plaintiff also seems to suggest that the Pennsylvania Attorney General's Office may be in on it, too. The Court notes, however, that only two Game Officers and the Commonwealth are named as defendants, with leave to amend granted to add Plaintiff's neighbor, Marcia Claar, as a defendant. 2 At the time the citations were issued, the text of 34 Pa.C.S. § 904 read: When an officer is in the performance of any duty required by this title, it is unlawful for any person to resist or interfere in any manner or to any degree or to refuse to produce identification upon request of the officer. A violation of this section is a summary offense of the first degree. 3 The Court further notes that Plaintiff's abuse of process claim may also be time-barred by the statute of limitations, as it is not required to sustain a claim for abuse of process that the proceedings be terminated in Plaintiff's favor, therefore making the claim actionable in 1999. See Rose v. Bartle, 871 F.2d 331, 350-52 (3d Cir.1989). 4 Plaintiff's complaint has two paragraphs numbered 24. The quoted passage is from the first paragraph 24. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 35 of 192 EXHIBIT E Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 36 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2013 WL 6388487 Only the Westlaw citation is currently available. United States District Court, M.D. Pennsylvania. Carl R. KAUFFMAN, III, Plaintiff v. Officer Daniel BARBAGELLO, et al., Defendants. No. 1:13-cv-00659. | Dec. 5, 2013. Attorneys and Law Firms Alina Dusharm, Stone Duncan & Linsenbach, PC, Dillsburg, PA, for Plaintiff. Christopher P. Gerber, Sheryl L. Brown, Siana, Bellwoar & McAndrew, LLP, Chester Springs, PA, for Defendant. MEMORANDUM YVETTE KANE, District Judge. *1 Presently pending before the Court is Defendants' motion to dismiss Plaintiff's complaint for failure to state a claim upon which relief can be granted. (Doc. No. 12.) The motion has been fully briefed and is ripe for disposition. For the reasons that follow, the Court will grant Defendants' motion in part and deny in part. I. BACKGROUND 1 On March 21, 2012, at approximately 10:00 p.m., Plaintiff Carl Kauffman was riding his motorcycle east on Route 30 after attending an evening class at the Franklin County Career and Technology Center. (Doc. No. 1 ¶¶ 11-12.) As the car traveling in front of him made a left turn, Plaintiff “casually passed on the right hand side.” (Id. ¶ 12.) Defendant Daniel Barbagello, a Patrolman First Class for the Cumberland Township Police Department, observed Plaintiff as he passed on the left side of the car and turned around to follow him. (Id. ¶ 13.) Defendant Barbagello signaled for Plaintiff to pull over, and Plaintiff pulled over in the parking lot at the top of a hill. (Id. ¶¶ 14- 15.) When Defendant Barbagello approached Plaintiff, he asked: “Were you trying to run from me?” (Id. ¶ 16.) Plaintiff replied in the negative and explained that he “was just looking for a safe place to pull over.” (Id. ¶ 17.) Over the next several minutes, Defendant Barbagello “interrogated Plaintiff about his drug and alcohol abuse, and seemingly tried to trick him into giving answers that would suggest his guilt.” (Id. ¶ 20.) Plaintiff complied with Defendant Barbagello's requests and explained that he neither used drugs nor was drunk. (Id. ¶ 21.) At some point, Defendant Barbagello called for back up, and Defendant John Doe I arrived at the scene shortly thereafter. (Id. ¶ 22.) Defendants Barbagello and John Doe I searched Plaintiff's pockets, but they found nothing incriminating. (Id. ¶¶ 23-24.) Defendants Barbagello and John Doe I then began asking Plaintiff to perform sobriety tests. (Id. ¶ 25.) Plaintiff attempted to comply with each request but “became nervous because of the way he was being treated.” (Id. ¶ 26.) First, Defendant Barbagello asked Plaintiff “to take ten steps heel to toe.” (Id . ¶ 27.) Plaintiff complied with this request “without any problems,” but Defendant Barbagello “accused Plaintiff of failing the test because he took ten steps instead of three steps, as he claims he directed him to take.” (Id. ¶ 28.) Plaintiff apologized for mishearing the instruction. (Id. ¶ 29.) During this time, Plaintiff “began to tear up from the stress of the long work day and frustration at not knowing what to do to prove his innocence.” (Id. ¶ 30.) Defendants Barbagello and John Doe I “began accusing and bullying Plaintiff, stating that because he was nervous and starting to cry, ‘there [was] something wrong with [him].’ ” (Id. ¶ 31.) Despite passing other sobriety tests, Defendants Barbagello and John Doe I administered a pen light test because Plaintiff appeared “teary-eyed and stressed.” (Id. ¶ 32.) They informed Plaintiff that he failed the test “because his eyes were red.” (Id. ¶ 33.) Defendants Barbagello and John Doe I then told Plaintiff that he had failed a sufficient number of tests to warrant his arrest and asked Plaintiff to take a Portable Breath Test, which Plaintiff passed. (Id. ¶¶ 35-36.) One defendant, who was not specifically identified in Plaintiff's complaint, then commented that Plaintiff “must be on drugs.” (Id. ¶ 37.) Defendants Barbagello and John Doe I then instructed Plaintiff to call someone to pick him up. (Id. ¶ 38.) Plaintiff explained that no one was available to pick him up because “[h]is wife and three children were already sleeping and he Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 37 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 could not wake up his wife to pack up all their children to come get him.” (Id. ¶ 39.) *2 Because Plaintiff had no one to call to pick him up, Plaintiff alleges that the officers handcuffed him and “pushed him into the back of the squad car.” (Id. ¶ 41.) Defendant Barbagello, however, informed Plaintiff that he was not under arrest. (Id. ¶ 42.) Plaintiff asked if he could leave, but Defendant Barbagello said, “No.” (Id. ¶ 43.) Defendants Barbagello and Doe I then drove Plaintiff to the nearest Pennsylvania State Police Barracks to conduct a drug recognition evaluation. (Id. ¶ 44.) After arriving at the barracks, one of the defendants read Plaintiff his Miranda rights, and Defendant John Doe II “subjected [him] to another hour's worth of testing, where he retook several of the same tests he had taken while pulled over ....” (Id. ¶ 45-46.) During this series of testing, the officers “again bullied and attempted to trick Plaintiff into failing the tests.” (Id. ¶ 47.) Plaintiff, in an attempt to ensure that he complied with the officers' instructions, “began repeating their commands.” (Id. ¶ 48.) This repetition angered Defendant Doe II. (Id. ¶¶ 49, 51.) “At this point, Plaintiff became scared because the Defendants were clearly angry at him and he was afraid he was going to fail the tests.” (Id. ¶ 52.) Plaintiff began to cry again. (Id. ¶ 53.) Defendant Doe II told Plaintiff that “[t]here was something wrong with [him] if [he was] scared.” (Id. ¶ 54.) None of the tests indicated that Plaintiff had drugs or alcohol in his system. (Id. ¶ 55.) Nevertheless, Plaintiff alleges that Defendants Barbagello, Doe I, and Doe II refused to allow him to leave the scene. (Id. ¶ 56.) Rather, they informed him that he could either go to jail or go to the hospital. (Id. ¶ 57.) Plaintiff chose to go to the hospital, where he waited approximately one hour before he was told to take a urine test, which came back negative for drug use. (Id. ¶¶ 58-60.) The officers then attempted to involuntarily commit Plaintiff under Section 302 of the Pennsylvania Mental Health Procedures Act. (Id . ¶ 61.) A doctor interviewed Plaintiff but refused to involuntarily commit him under Section 302. (Id. ¶ 62.) At this point, “Plaintiff had been held for about [five] hours,” and it was approximately 3:00 a.m. (Id. ¶ 63.) At some point, the officers left the scene and an unnamed defendant issued Plaintiff a citation for passing in a “No Passing Zone.” (Id. ¶ 77; Doc. No. 3.) The doctor informed Plaintiff that the officers had instructed him not to allow Plaintiff to ride his motorcycle. (Doc. No. ¶¶ 64.) Plaintiff then called the Pennsylvania State Police to obtain more information, and Defendant Barbagello returned his call. (Id. ¶¶ 65-66.) Defendant Barbagello “still seemed irritated and [was] unwilling to answer Plaintiff's questions.” (Id. ¶ 66.) Plaintiff asked him for the location of his keys and helmet, but Defendant Barbagello refused to answer this question, and instead told him, “I wouldn't ride for about a day.” (Id. ¶¶ 67-68.) Plaintiff then asked: “If I walk up and get my bike and ride it home, will you arrest me?” (Id. ¶ 69.) Defendant Barbagello told him he could not answer that question. (Id. ¶ 70.) After Plaintiff again asked for the location of his keys, Defendant Barbagello told him that he put them in his helmet. (Id. ¶ 71.) *3 Before leaving, Plaintiff again attempted to call the Pennsylvania State Police Barracks to inquire whether he could drive his motorcycle. (Id. ¶ 72.) The police, however, would not answer his question. (Id. ¶ 73.) Plaintiff then drove his motorcycle home. (Id. ¶ 74.) After spending most of his night held in police custody, Plaintiff was unable to go to work the next morning, and instead was forced to call off work. (Id. ¶ 75.) The next day, Plaintiff contacted Defendant Cumberland Township to speak to someone about his treatment and spoke with the on-duty supervisor. (Id. ¶ 78.) The supervisor informed Plaintiff that he would need to speak to Defendant Timothy Biggins, a Sergeant for the Township Police Department, who would be in the office on March 23, 2012. (Id. ¶ 79.) Plaintiff called back on March 23, 2012 but was unable to speak to Defendant Biggins. (Id. ¶ 80.) The next day, Plaintiff called and left another message for Defendant Biggins. (Id. ¶ 81.) After not hearing back, Plaintiff then contacted Defendant Don Boehs, the Chief of Police. (Id. ¶ 82.) Defendant Boehs did not answer the call or subsequently return Plaintiff's call. (Id. ¶ 83.) On April 2, 2012, Defendant Biggins called Plaintiff back and “became irritated and told Plaintiff that he already knew what happened from speaking to Defendant Barbagello.” (Id. ¶ 84.) Plaintiff attempted to file a complaint with the Police Department, but Defendant Biggins refused to accept any complaint. (Id. ¶ 85.) Defendant Biggins informed Plaintiff that Defendant Barbagello did nothing wrong and that he would have handled the situation the same way. (Id. ¶ 87.) Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 38 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 Approximately one year later, Plaintiff initiated this action by filing a civil rights complaint against Defendants Barbagello, Biggins, Boehs, Cumberland Township, John Doe I, and John Doe II. (Doc. No. 1.) In the complaint, Plaintiff alleges the following: (1) that Defendants Barbagello, Doe I, and Doe II violated his right to be free from unreasonable searches and seizures under the Fourth Amendment; (2) that all defendants violated his right to substantive due process under the Fifth and Fourteenth Amendments; (3) that Defendants Biggins, Doe I and Doe II failed to intervene when Defendant Barbagello violated his right to be free from excessive force; (4) that Defendants Biggins, Boehs, and Cumberland Township failed to train officers; (5) false arrest and false imprisonment against all individual defendants under Pennsylvania law; (6) abuse of process against all individual defendants under Pennsylvania law; and (7) intentional infliction of emotional distress against all individual defendants under Pennsylvania law. II. STANDARD OF REVIEW A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir.1993). In reviewing a motion to dismiss, a court may “consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim.” Lum v. Bank of Am., 361 F.3d 217, 221 n. 3 (3d Cir.2004). The motion will only be properly granted when, taking all factual allegations and inferences drawn therefrom as true, the moving party is entitled to judgment as a matter of law. Markowitz v. Ne. Land Co., 906 F.2d 100, 103 (3d Cir.1990). *4 The burden is on the moving party to show that no claim has been stated. Johnsrud v. Carter, 620 F.2d 29, 33 (3d Cir.1980). Thus, the moving party must show that Plaintiff has failed to “set forth sufficient information to outline the elements of his claim or to permit inferences to be drawn that those elements exist.” Kost, 1 F.3d at 183 (citations omitted). A court “need not credit a complaint's ‘bald assertions' or ‘legal conclusions' when deciding a motion to dismiss.” Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997). Although the 12(b)(6) standard does not require “detailed factual allegations,” there must be a “ ‘showing,’ rather than a blanket assertion of an entitlement to relief.... [F]actual allegations must be enough to raise a right to relief above the speculative level.” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231-32 (3d Cir.2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Put otherwise, a civil complaint must “set out ‘sufficient factual matter’ to show that the claim is facially plausible.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). III. DISCUSSION A. Count I: Fourth Amendment claims against Defendants Barbagello, Doe I, and Doe II In Count I, Plaintiff alleges that Defendants Barbagello, Doe I, and Doe II violated his right to be free from unreasonable searches and seizures, and subjected him to unlawful arrest and detention in violation of the Fourth Amendment to the United States Constitution. (Doc. No. 1 ¶¶ 91-100.) 2 Defendant Barbagello argues that the stop of Plaintiff was lawful, and therefore Plaintiff's claims that Defendants unlawfully seized, searched, arrested, and detained him in contravention of the Fourth Amendment must be dismissed as a matter of law. (Doc. No. 15 at 25- 26.) 1. Unlawful seizure A seizure under the Fourth Amendment occurs when, “taking into account all of the circumstances surrounding the encounter, the police conduct would ‘have communicated to a reasonable person that he was not at liberty to ignore the police presence and go about his business.’ ” Kaupp v. Texas, 538 U.S. 626, 629, 123 S.Ct. 1843, 155 L.Ed.2d 814 (2003) (citation omitted). The United States Supreme Court has established numerous context-based circumstances in which a “seizure” under the Fourth Amendment is effected, including “ ‘the threatening presence of several officers, the display of a weapon by an officer, some physical touching of the person of the citizen, or the use of language or tone of voice indicating that compliance with the officer's request might be compelled.’ ” Id. (citation omitted). Traffic stops constitute seizures for Fourth Amendment purposes. Whren v. United States, 517 U.S. 806, 809-10, 116 S.Ct. 1769, 135 L.Ed.2d 89 (1996). “[A] traffic stop will be deemed a reasonable ‘seizure’ when an objective review of the facts shows that an officer possessed specific, articulable facts that an individual was violating a traffic Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 39 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 law at the time of the stop.” United States v. Delfin-Colina, 464 F.3d 392, 398 (3d Cir.2006). *5 When an officer conducts a lawful stop of a motorist for an observed traffic infraction, the officer may question the motorist “on matters reasonably related in scope to the justification for the stop of the vehicle.” Padilla v. Miller, 143 F.Supp.2d 453, 467 (M.D.Pa.1999) (citing Berkemer v. McCarty, 468 U.S. 420, 439, 104 S.Ct. 3138, 82 L.Ed.2d 317 (1984)). A lawful traffic stop is analogous to a Terry stop, which allows an officer who “lack [s] probable cause to make an arrest but ha[s] a reasonable basis to suspect an individual ... [to] briefly detain that person in order to conduct an inquiry ‘reasonably related in scope to the justification for [the stop].’ ” Id. (quoting Terry v. Ohio, 392 U.S. 1, 29, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968)); Delfin-Colina, 464 F.3d at 397. An officer may conduct a pat-down search of the stopped motorist “where the officer is able to point to specific and articulable facts which, taken together with rational inferences from those facts, warrant that intrusion.” United States v. Moorefield, 111 F.3d 10, 13 (3d Cir.1997). However, “[a] seizure that is justified solely by the interest in issuing a warning ticket to the driver can become unlawful if it is prolonged beyond the time reasonably required to complete that mission.” Illinois v. Caballes, 543 U.S. 405, 407, 125 S.Ct. 834, 160 L.Ed.2d 842 (2005). The Court finds that Plaintiff's allegations that Defendants Barbagello and Doe I detained, handcuffed, and transported him to the Pennsylvania State Police Barracks after he passed the Portable Breath Test state a claim for unlawful seizure under the Fourth Amendment. See James v. City of Wilkes-Barre, 700 F.3d 675, 681- 82 (3d Cir.2012) (“[A] seizure results from ‘coercive pressure from state actors resulting in a significant, present disruption of the targeted person's freedom of movement ... [and] typically involves an almost complete restriction of movement ... (as when a police officer tells a suspect to get in the back of the squad car but declines to handcuff him).” Id. (citations omitted). Here, after Defendants Barbagello and Doe I finished conducting roadside sobriety tests which revealed that Plaintiff was not under the influence of alcohol, they nonetheless refused to allow Plaintiff to leave on his own. (Doc. No. 1 ¶¶ 35-40.) During the traffic stop, Defendants Barbagello and Doe I outnumbered Plaintiff, and he claims their behavior intimidated him such that he “began to tear up from the stress.” (Id. ¶ 30.) Although Defendants Barbagello and Doe I gave Plaintiff the option to have someone else come pick him up, their words and actions as set forth in Plaintiff's complaint make clear that Plaintiff was not free to leave on his own accord. (Id. ¶¶ 38-39). As alleged, Defendants Barbagello's and Doe I's conduct, even before they handcuffed Plaintiff, “present[ed] a disruption of [Plaintiff's] freedom of movement.” James, 700 F.3d at 681. Defendants went on to handcuff Plaintiff and place him in the back of a police cruiser. (Doc. No. 1 ¶ 41.) In this context, such conduct may convey to a reasonable person that he is not “free to decline the officers' requests” that he be taken to the Pennsylvania State Police Barracks. See United States v. Wilson, 413 F.3d 382, 386 (3d Cir.2005). By first refusing to allow Plaintiff to leave the site of the traffic stop on his own accord, and then placing him in the back of the police car in handcuffs for transport to the police barracks, Defendants effected a “complete restriction of [Plaintiff's] movement” amounting to a seizure. James, 700 F.3d at 681. *6 Defendant Barbagello argues that Plaintiff's Fourth Amendment claims fail as a matter of law under the doctrine of Heck v. Humphrey, which holds that “civil tort actions are not appropriate vehicles for challenging the validity of outstanding criminal judgments [and] applies to Section 1983 damages actions that necessarily require the plaintiff to prove the unlawfulness of his conviction.” 512 U.S. 477, 486, 114 S.Ct. 2364, 129 L.Ed.2d 383 (1994); (Doc. No. 15 at 25-26.) However, Heck is inapposite here, because Plaintiff does not challenge the citation he received for unlawful passing, but rather the prolonged stop, including being handcuffed, transported to the Pennsylvania State Police Barracks, and subjected to sobriety tests and an involuntary mental health evaluation. Plaintiff sets forth sufficient facts to support a claim that Defendant Barbagello unlawfully seized him in violation of the Fourth Amendment. The Court will therefore deny Defendant Barbagello's motion to dismiss Plaintiff's claim that Defendant Barbagello violated Plaintiff's Fourth Amendment right to be free from unlawful seizure. 2. Unlawful search Plaintiff also asserts that Defendants Barbagello, Doe I, and Doe II unlawfully searched him in violation of the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 40 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 Fourth Amendment. (Doc. No. 1 at 14.) Although police officers may conduct a “frisk” of a person when they have “specific and articulable facts which, taken together with rational inferences from those facts, reasonably warrant that intrusion,” officers may not perform a full search of a person without probable cause. Terry v. Ohio, 392 U.S. 1, 21, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). Plaintiff alleges that after Defendant Doe I arrived at the scene of the traffic stop, both he and Defendant Barbagello asked Plaintiff, “What is in your pockets? Let me check.” (Id. ¶ 23.) Defendants then checked Plaintiff's pockets but “found nothing incriminating,” which Plaintiff alleges violated his Fourth Amendment right to be free from unreasonable search. (Id. ¶ 14, 24.) The Court finds that Plaintiff's allegation that Defendants Barbagello and Doe I searched his pockets states a claim for unlawful search under the Fourth Amendment. Defendant Barbagello makes no specific arguments as to why his and Defendant Doe I's conduct in checking Plaintiff's pockets did not constitute a violation of Plaintiff's Fourth Amendment right to be free from an unlawful search. Instead, Defendant Barbagello appears to rely generally on the concept that Heck precludes Plaintiff from asserting any Fourth Amendment claims. (Doc. No. 15 at 17-18.) As discussed in Section III.A.1, Heck does not require Plaintiff's Fourth Amendment claims to be dismissed. Plaintiff asserts that Barbagello and Doe I performed a full search of his pockets without seeking his consent. (Doc. No. 1 ¶¶ 23-24.) Taking the facts as alleged in Plaintiff's complaint as true, Plaintiff has adequately stated facts to support a violation of the Fourth Amendment's protection again unreasonable searches. Defendant Barbagello's motion to dismiss Plaintiff's Fourth Amendment unlawful search claim is therefore denied. 3. Unlawful arrest *7 Plaintiff asserts a claim for unlawful arrest under the Fourth Amendment against Defendants Barbagello, Doe I, and Doe II. (Doc. No. 1 at 14.) “To state a claim for false arrest under the Fourth Amendment, a plaintiff must establish: (1) that there was an arrest; and (2) that the arrest was made without probable cause.” James v. City of Wilkes-Barre, 700 F.3d 675, 680 (3d Cir.2012) (citation omitted). Defendant Barbagello argues that Plaintiff was not arrested and relies on the holdings in Whitmill v. City of Philadelphia and Owens v. County of Delaware, which respectively held that placing a person in a police vehicle for transportation does not necessarily effect an arrest, and handcuffing a person does not necessarily effect an arrest. Whitmill v. City of Phila., 29 F.Supp.2d 241, (E.D.Pa.1998); Owens v. Cty. of Del., No. 95-4282, 1996 WL 476616, at *10 (E.D.Pa. Aug.15, 1996). (See also Doc. No. 23 at 3.) a. Whether Plaintiff was arrested In determining whether police formally arrested an individual, “the reasonableness of the intrusion is the touchstone, balancing the need of law enforcement officials against the burden on the affected citizens and considering the relation of the policeman's actions to his reason for stopping the suspect.” United States v. Edwards, 53 F.3d 616, 619 (3d Cir.1994). The Court uses a “totality of the circumstances” standard in measuring the reasonableness of police conduct against the intrusion on the person allegedly arrested. United States v. Sharpe, 470 U.S. 675, 685, 105 S.Ct. 1568, 84 L.Ed.2d 605 (1984). When a police officer's words and actions would convey to a reasonable person that he “was being ordered to restrict his movement,” the Court will find that the police made a “show of authority,” which may result in a seizure and formal arrest under the Fourth Amendment. California v. Hodari D., 499 U.S. 621, 628, 111 S.Ct. 1547, 113 L.Ed.2d 690 (1991). The Court finds that under the totality of the circumstances, Plaintiff's allegations fulfill the first prong of the unlawful arrest analysis. (See Doc. No. 1 ¶¶ 35-45.) Plaintiff alleges that he was not allowed to leave the scene of the traffic stop on his own accord. (Id. ¶ 43.) At no time was he considered a suspect in a violent crime, thus lessening the reasonableness of Defendants' decision to handcuff him for their own safety. See Whitmill, 29 F.Supp.2d 241, 242 (E.D.Pa.1998); (Doc. No. 1 ¶ 42.) Further, Defendants Barbagello and Doe I had already searched Plaintiff's pockets and had not found any weapons or other instrumentalities that could cause harm. (Id. ¶ 24.) Although any one of the steps Defendants Barbagello and Doe I took to detain Plaintiff and restrain his movement might not rise to the level of formal arrest alone, under the totality of the circumstances, Plaintiff alleges facts adequate to establish that Defendants Barbagello and Doe I arrested him. The Court will thus proceed to the second prong of the false arrest analysis. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 41 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 b. Whether Plaintiff's arrest was without probable cause *8 In order for Defendants Barbagello's and Doe I's warrantless arrest of Plaintiff to be lawful, it must be based on probable cause. Wright v. City of Phila., 409 F.3d 595, 601 (3d Cir.2005). Officers have probable cause for an arrest if “at the moment the arrest was made ... the facts and circumstances within [the officers'] knowledge and of which they had reasonably trustworthy information were sufficient to warrant a prudent man in believing that [the suspect] had committed or was committing an offense.” Beck v. Ohio, 379 U.S. 89, 91, 85 S.Ct. 223, 13 L.Ed.2d 142 (1964). The Court must determine whether “the objective facts available to the officers at the time of arrest were sufficient to justify a reasonable belief that an offense was being committed.” United States v. Glasser, 750 F.2d 1197, 1205 (3d Cir.1984). The Court finds that Plaintiff's allegations indicate Defendants Barbagello and Doe I did not have probable cause to arrest him, and thereby satisfy the second prong of the unlawful arrest analysis. As Plaintiff argues, the fact that Defendants Barbagello and Doe I were willing to release Plaintiff if someone was available to pick him up by the side of the road indicates that Defendants did not have information giving them a “fair probability” that Plaintiff committed or was committing a crime. (Doc. No. 1 ¶ 38.) Further, Plaintiff had already passed a Portable Breath Test, which showed that he was not under the influence of alcohol. (Id. ¶ 36.) When directly asked about drug and alcohol use, Plaintiff told Defendant Barbagello that he did not use drugs and was not drunk. (Id. ¶ 21.) From the facts as pled, Defendants Barbagello and Doe I appear to have based their assumption that Plaintiff was under the influence of drugs or alcohol on Plaintiff's becoming upset, crying, and developing red eyes during the traffic stop. (Id. ¶¶ 31-33.) However, the fact that Plaintiff became upset during a traffic stop is insufficient “to warrant a prudent man in believing that [Plaintiff] had committed or was committing [the] offense” of driving under the influence. Beck, 379 U.S. at 91. Accordingly, Plaintiff's allegations satisfy both prongs of the unlawful arrest analysis, and Defendant Barbagello's motion to dismiss Plaintiff's unlawful arrest claim is denied. 4. Unlawful detention Plaintiff asserts that the prolonged stop to which he was subjected, including his transport to the Pennsylvania State Police Barracks and later, to the hospital, constitute unlawful detention in violation of the Fourth Amendment. (Doc. No. 1 at 14.) To assert unlawful detention under the Fourth Amendment, Plaintiff must allege that he was seized within the meaning of the Fourth Amendment, and that police officers did not have probable cause to seize him. See James v. City of Wilkes- Barre, 700 F.3d 675, 682 (3d Cir.2012). As discussed in Section III.A.1 and III.A.3.b above, Plaintiff alleges facts adequate to support his claims that he was unlawfully seized within the meaning of the Fourth Amendment, and that Defendants did not have probable cause to arrest him. Plaintiff has therefore alleged facts adequate to state a claim for unlawful detention under the Fourth Amendment, and consequently Defendant Barbagello's motion to dismiss Plaintiff's unlawful detention claim will be denied. B. Count II: Fifth and Fourteenth Amendment substantive due process claims against all defendants *9 Plaintiff claims that all Defendants violated his Fifth and Fourteenth Amendment rights to substantive due process when they engaged in “egregious conscious shocking mistreatment” under color of state law. (Doc. No. 1 ¶ 102.) “In a due process challenge to executive action, the threshold question is whether the behavior of the governmental officer is so egregious, so outrageous, that it may fairly be said to shock the contemporary conscience.” Benn v. Universal Health Sys., Inc., 371 F.3d 165, 174 (3d Cir.2004.) Whether conduct “shocks the conscience' is a matter of law for the courts to decide.” Id. (citing Rochin v. California, 342 U.S. 165, 172, 72 S.Ct. 205, 96 L.Ed. 183 (1952)). “Involuntary commitment under the [Pennsylvania Mental Health Procedures Act] does not in itself violate substantive due process.” Benn, 371 F.3d at 174. Plaintiff alleges that all defendants forced him to undergo a mental health evaluation pursuant to Section 302 of the Pennsylvania Mental Health Procedures Act (MHPA) in violation of his constitutional right to substantive due process. (Doc. No. 1 ¶¶ 57-62.) Plaintiff brings his claim against all defendants, but from the facts as pled, only Defendants Barbagello, Doe I, and Doe II were involved in transporting Plaintiff to the hospital and submitting him to a mental health evaluation. (See id. ¶¶ 44, 55-56 (placing Barbagello, Doe I, and Doe II as the only defendants at the police barracks when “Defendants” told Plaintiff, “you can go to jail or you can go to the hospital.”)) (Id. ¶ 57.) Because Plaintiff's Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 42 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 substantive due process claim is based on his being subjected to a mental health evaluation for involuntary commitment, Plaintiff cannot adequately state a claim for violation of his substantive due process rights against any defendants who were not involved in his involuntary mental health evaluation. The Court therefore finds that Plaintiff's substantive due process claims in Count II against Defendants Sergeant Biggins, Chief Don Boehs, and Cumberland Township should be dismissed as a matter of law. Further, although Plaintiff captions Count II as “Violation of Fifth and Fourteenth Amendment Right to Substantive Due Process,” he limits his arguments to Fourteenth Amendment jurisprudence. (Doc. No. 1 ¶¶ 102-109; Doc. No. 22 at 10-12.) Because Plaintiff advances no specific arguments regarding his claim that his Fifth Amendment right to substantive due process was violated, he has not sufficiently stated a claim under the Fifth Amendment, and the Court finds that Plaintiff's Fifth Amendment claim should be dismissed as to all defendants. 1. Plaintiff's Fourteenth Amendment substantive due process claims against Defendants Barbagello, Doe I, and Doe II Plaintiff alleges that Defendants Barbagello, Doe I, and Doe II's conduct in forcing him to choose between jail or the hospital, and subsequently submitting him for an involuntary mental health evaluation, was “conscience shocking” because he had not exhibited behavior indicating mental instability. (Doc. No. 1 ¶ 107.) The MHPA allows peace officers who observe an individual behaving in such a way that gives an officer “reasonable grounds to believe that [the individual] is severely mentally disabled and in need of immediate treatment,” to submit that individual to a mental health evaluation by medical personnel who are to determine whether that individual should be involuntarily committed. 50 Pa. Stat. Ann. tit. 50 § 7302(a)(2). The MHPA further provides civil and criminal immunity for peace officers participating in an involuntary commitment process, so long as their conduct is without “willful misconduct or gross negligence.” 50 Pa. Stat. Ann. § 7114(a). Thus, the MHPA shields the conduct of Defendants Barbagello, Doe I, and Doe II in submitting Plaintiff for a mental health evaluation unless Plaintiff establishes that Defendants engaged in “willful misconduct or gross negligence.” Id. *10 The Third Circuit looks to Pennsylvania law to determine what constitutes “willful misconduct” and “gross negligence” under the MHPA. See, e.g., Doby v. DeCrescenzo, 171 F.3d 858, 875 (3d Cir.1999). “Willful misconduct” occurs “when the danger to the plaintiff, though realized, is so recklessly disregarded that, even though there be no actual intent, there is at least a willingness to inflict injury, a conscious indifference to the perpetration of the wrong.” Id. (citations omitted). Gross negligence is characterized by “facts indicating more egregiously deviant conduct than ordinary carelessness, inadvertence, laxity, or indifference.... The behavior of the defendant must be flagrant, grossly deviating from the ordinary standard of care.” Id. (citations omitted). Plaintiff has not met the pleading standard for willful misconduct or gross negligence here. Plaintiff conclusorily pleads that Defendants were “without evidence of an intent or threat [by Plaintiff] to harm himself or others,” and that “Defendants forced Plaintiff to submit to mental evaluation without any evidence of a clear and present danger, and with no threats made by Plaintiff to himself or others.” (Doc. No. 1 ¶¶ 105, 107.) Plaintiff has not specifically pled that Defendants engaged in willful misconduct or gross negligence in subjecting him to a mental health evaluation, such that their conduct would not be shielded by the qualified immunity protection of the MH PA. Accordingly, the Court finds that Plaintiff's substantive due process claims should be dismissed without prejudice. Plaintiff may file an amended complaint with the proper pleading for a substantive due process claim under the MHPA. C. Count III: Excessive Force-Failure to Intervene claims against Defendants Doe I, Doe II, and Biggins Plaintiff asserts a “failure to intervene” claim against Defendants Doe I, Doe II, and Biggins for their alleged failure to intervene to prevent Defendant Barbagello's alleged use of excess force. (Doc. No. 1 ¶¶ 111-114.) The Fourth Amendment prohibits police officers from using excess force when making an arrest. Abraham v. Raso, 183 F.3d 279, 288 (3d Cir.1999). Further, officers have “a duty to take reasonable steps to protect a victim from another officer's use of excessive force ... if there is a realistic and reasonable opportunity to intervene.” Smith v. Mensinger, 293 F.3d 641, 650-51 (3d Cir.2002). Plaintiff has not alleged any facts to support a claim that Defendant Barbagello used excessive force, nor has he Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 43 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 specifically brought a claim against Defendant Barbagello for excessive force. (See Doc. No. 1 ¶¶ 111-116.) Because Plaintiff has not pled facts to support a claim of excessive force against Defendant Barbagello, he cannot support claims against Defendants Doe I, Doe II, and Biggins for failure to intervene and protect him from excessive force. Accordingly, the Court finds that Defendants' motion to dismiss Plaintiff's “excessive force-failure to intervene” claim will be granted as to Defendants Biggins, Doe I, and Doe II. D. Count IV: Monell liability against Defendants Biggins, Boehs, and Cumberland Township *11 In Count IV, Plaintiff brings a Monell claim pursuant to Section 1983 against Defendants Biggins, Boehs, and Cumberland Township for failure to train and supervise Defendants Barbagello and Doe I, whom Plaintiff alleges violated his Fourth, Fifth, and Fourteenth Amendment rights. 3 (Doc. No. 1 at 19.) Under the Monell doctrine, “[l]ocal governing bodies ... can be sued directly under § 1983 for monetary, declaratory, or injunctive relief where ... the action that is alleged to be unconstitutional implements or executes a policy statement, ordinance, regulation, or decision officially adopted and promulgated by that body's officers.” 436 U.S. 658, 690, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). A municipality cannot be liable solely on the basis of respondeat superior, but will be liable if Plaintiff shows “that the municipality itself supported the violation of rights alleged.” Andrews v. City of Phila., 895 F.2d 1469, 1480 (3d Cir.1990) (citing Monell, 436 U.S. at 692-95)). To establish that a municipality supported the violation of rights alleged, Plaintiff must show the “execution of a government's policy or custom, whether made by its lawmakers or by those whose edicts or acts may fairly be said to represent official policy, inflicts the injury.” Monell, 436 U.S. at 694. To establish public policy or custom, Plaintiff must show that a “a policymaker is responsible either for the policy or, through acquiescence, for the custom” or that “authorized policymakers approved a subordinate's decision and the basis for it ....” Id. at 1480-81 (citations omitted). If the policy or custom “does not facially violate federal law,” then mere negligence will not suffice to establish causation, and Plaintiff must “demonstrat[e] that the municipal action was taken with deliberate indifference as to known or obvious consequences.” Kelly v. Borough of Carlisle, 622 F.3d 248, 263 (3d Cir.2010) (citations omitted). Determining who is a “policymaker” for Monell purposes is a matter of state law, and in Pennsylvania, a policymaker is an official with “final and unreviewable” policymaking authority “in the particular area of municipal business in question.” Hill v. Borough of Kurtztown, 455 F.3d 255, 245 (3d Cir.2006). However, “[a]n employee who lacks policymaking authority can still bind the municipality if a municipal policymaker delegated power to the employee or ratified his decision.” Kelly, 622 F.3d 248, 264 (citations omitted). But, “[s]imply going along with discretionary decisions made by one's subordinates ... is not a delegation to them of the authority to make policy.” Id. 1. Plaintiff's Monell claims against Defendant Sergeant Biggins Plaintiff alleges that under Monell, Defendant Biggins is liable for violations of Plaintiff's Fourth, Fifth, and Fourteenth Amendment rights. (Doc. No. 1 at 19.) Plaintiff asserts that a supervisor at the Cumberland Township Police Department told him that Defendant Biggins supervised Defendant Barbagello, that Plaintiff attempted to contact Defendant Biggins by phone for several days without success, and that when he finally spoke to him, Defendant Biggins “became irritated and told Plaintiff that he already knew what happened from speaking to Defendant Barbagello.” (Id. ¶¶ 79-81, 84.) Further, Plaintiff asserts that he tried to file a complaint with Defendant Biggins which he refused to accept, and that Biggins told Plaintiff that he would have handled the traffic stop precisely as Defendant Barbagello did. (Id. ¶¶ 85-87.) *12 The Court finds that Plaintiff has not alleged facts to support a Monell claim against Defendant Biggins. He has not pled facts to establish that Defendant Biggins is a “policymaker” for Monell purposes, or that Defendant Biggins delegated policymaking authority to Barbagello. Instead, he pleads that Defendant Biggins's conduct establishes Monell liability because “Defendants have not provided proper training and/or supervision of their officers so that they are fully equipped to react properly in the field while protecting the rights and liberties of United States Citizens.” (Id. ¶ 120.) This statement is merely a legal conclusion. Merely pleading that a named Defendant approved of a subordinate officer's actions without asserting facts to establish that Defendant exercised policymaking authority or delegated Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 44 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 that authority to the subordinate cannot establish a claim under Monell. Kelly, 622 F.3d at 264. Therefore, because Plaintiff's Monell claim against Defendant Biggins does not assert that he is a policymaker for a public entity or that he either delegated policymaking authority to Defendant Barbagello or ratified his conduct, the Court will grant Defendant Biggins's motion to dismiss Plaintiff's Monell claim. 2. Plaintiff's Monell claim against Defendant Chief Don Boehs Plaintiff asserts that Defendant Don Boehs, Chief of the Cumberland Township Police Department, is liable under Monell for failing to train and supervise Defendants Barbagello and Doe I. (Doc. No. 1 at 19.) Plaintiff alleges that he contacted Defendant Boehs, but Boehs did not answer and did not return his voicemail. (Id. ¶¶ 82-83.) The Court's analysis of Plaintiff's Monell claim against Defendant Boehs is identical to that brought against Defendant Biggins. Plaintiff has not set forth any facts to establish that Defendant Boehs acted as a policymaker for Cumberland Township, as required to establish Monell liability. Further, Plaintiff does not assert any facts that would establish Defendant Boehs delegated power to a subordinate or ratified a subordinate's actions. Accordingly, the Court will dismiss Plaintiff's Monell claim against Defendant Boehs. 3. Plaintiff's Monell claim against Cumberland Township Plaintiff alleges that Defendant Cumberland Township failed to train and supervise Defendants Barbagello and Doe I. (Doc. No. 1 at 19.) To establish Monell liability for a municipality such as Cumberland Township, Plaintiff must show that the municipality set forth a policy or custom that facially violated constitutional or other federal law, or that “municipal action was taken with deliberate indifference as to known or obvious consequences.” Kelly, 622 F.3d at 263 (3d Cir.2010) (citations omitted). Plaintiff must identify a Cumberland Township policy or custom amounting “to deliberate indifference to the rights of people with whom the police come in contact,” which generally “requires proof of a pattern of underlying constitutional violations.” Carswell v. Borough of Homstead, 381 F.3d 235, 244 (3d Cir.2004) (citations omitted). It is possible, but difficult, to prove deliberate indifference without establishing a pattern of underlying constitutional violations. Id. In addition to establishing “deliberate indifference,” Plaintiff must show “that the [alleged] inadequate training caused the constitutional violation,” as well as “a direct causal link between a municipal policy or custom and the alleged constitutional violation.” Id. at 244-45 (citations omitted). *13 The Court finds that Plaintiff's allegations do not establish “deliberate indifference” on behalf of Cumberland Township, or “a direct causal link between a municipal policy or custom and the alleged constitutional violation.” Id. Plaintiff asserts that “Defendant Cumberland Township has a policy, practice, and/or custom of unlawful violations of a citizens' [sic] civil rights” based on the conduct of Defendants Barbagello and Doe I during the traffic stop, Defendant Biggins's behavior when Plaintiff spoke to him about the incident (including Biggins's statement that he agreed with Barbagello's conduct), his refusal to accept Plaintiff's citizen's complaint, and his condonation of “the actions of Defendants through policies and practices, verbal encouragement, and/or lack of acknowledgment of the incident.” (Doc. No. 1 ¶ 119.) First, Defendant Biggins's statement to Plaintiff that he agreed with Defendant Barbagello's conduct is inadequate to establish municipal liability under Monell. See Kelly, 622 F.3d at 264. Second, although Plaintiff's complaint points to specific incidents which he believes stemmed from Cumberland Township's policy or custom, he does not identify other instances of detention, drug and alcohol testing, or involuntary mental health evaluation that show an underlying pattern of constitutional violations by the police department. He also has not pled facts that would establish a direct, causal connection between a Cumberland Township policy or custom and alleged constitutional violations. Plaintiff's assertion that “Defendant Cumberland Township has a policy, practice, and/or custom of unlawful violations of a citizens' civil rights” is merely a legal conclusion, which the Court need not credit. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997). Accordingly, the Court finds that Defendant Cumberland Township's motion to dismiss Plaintiff's Monell claim will be granted. E. Count V: State law claims for false arrest and imprisonment against all individual defendants Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 45 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 In Count V, Plaintiff brings pendent state law claims against all individual defendants for false arrest and imprisonment. 4 (Doc. No. 1 at 21.) Under Pennsylvania law, “false arrest” and “false imprisonment” share a common definition in certain contexts. See Gagliardi v. Lynn, 446 Pa. 144, 285 A.2d 109, 110 (Pa.1971) (“Detainment and confinement constitute the gravamen of the civil wrong committed by an individual who illegally asserts or employs authority over another while purportedly enforcing the law. This civil wrong can be denominated as either false arrest or false imprisonment.”) Id. When a defendant allegedly acts “for the purpose of securing the administration of the law without actual legal justification, ‘false arrest’ is synonymous with false imprisonment.” Id. at 111. False arrest/imprisonment requires “(1) the detention of another person, and (2) the unlawfulness of such detention.” Renk v. City of Pittsburgh, 537 Pa. 68, 641 A.2d 289, 293 (Pa.1994). “A police officer may be held liable ... for false imprisonment when a jury concludes that he did not have probable cause to make an arrest.” Id. 1. False arrest and imprisonment claims against Defendants Boehs and Biggins *14 Plaintiff pleads that only Defendants Barbagello, Doe I, and Doe II were involved directly in his physical detention. (See Doc. No. 1 ¶¶ 14, 22, 46) (pleading that Defendants Barbagello, Doe I, and Doe II physically detained Plaintiff.) (See also id. ¶¶ 82-87) (pleading Defendants Boehs's and Biggins's involvement was limited to telephone calls after the detention concluded.) Because Plaintiff has not pled any facts to establish that Defendants Boehs and Biggins participated in his alleged unlawful detention, he has failed to state a state law claim for false arrest against them. Accordingly, the Court will dismiss Plaintiff's state law claims for false arrest and imprisonment against Defendants Boehs and Biggins. 2. False arrest and imprisonment claims against Defendants Barbagello, Doe I, and Doe II Plaintiff also alleges that Defendants Barbagello, Doe I, and Doe II are liable in their individual capacities for false arrest and imprisonment. (Doc. No. 1 at 21.) Plaintiff avers that the following occurred: Defendant Barbagello pulled him over in a traffic stop, questioned him about drug and alcohol use, and called for Defendant Doe I as back up. (Id. ¶¶ 14, 20, 22.) Defendant Doe I then assisted Defendant Barbagello in searching Plaintiff's pockets, handcuffing him, transporting him from the traffic stop to the nearest police barracks in a police car, reading him his Miranda rights, subjecting him to further sobriety testing, and finally submitting him for an involuntary mental health evaluation. (Id. ¶¶ 14, 20, 23-25, 40-45, 56-61.) Plaintiff alleges that Defendant Doe II performed sobriety tests on him at the police barracks and, along with Defendants Barbagello and Doe I, told Plaintiff that he could not leave the barracks after the tests concluded, and that he must choose between spending the night in jail or in the hospital. (Id. ¶¶ 46, 56-57.) As discussed in Section A.1.3, Plaintiff adequately stated a claim under the Fourth Amendment to the United States Constitution for unlawful arrest against Defendants Barbagello, Doe I, and Doe II. Because “Pennsylvania state law false arrest claims and federal constitutional false arrest claims are co-extensive both as to elements of proof and elements of damages,” the Court finds that Plaintiff adequately asserts state law claims for false arrest and imprisonment against Defendants Barbagello, Doe I, and Doe II. Maiale v. Youse, No. 03-5450, 2004 WL 1925004, at *12 (E.D.Pa. Aug.27, 2004). Accordingly, the Court will not dismiss Plaintiff's claims of false arrest and imprisonment against Defendants Barbagello, Doe I, and Doe II. F. Count VI: State law claims for abuse of process against all individual defendants Plaintiff alleges that all individual defendants are liable for abuse of process under Pennsylvania state law. (Doc. No. 1 at 22.) Abuse of process is “the use of legal process against another ‘primarily to accomplish a purpose for which it is not designed.’ ” Rosen v. Am. Bank of Rolla, 426 Pa.Super. 376, 627 A.2d 190, 192 (Pa.Super.Ct.1993) (citations omitted). The crux of an abuse of process claim is the “improper use of process after it has been issued, that is, a perversion of it.” McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1023 (Pa.1987) (citations omitted). Under Pennsylvania law, “abuse of process” and “malicious use of process” are similar to, but ultimately distinct from one another. See, e.g., id. The critical difference between the two claims is that “[m]alicious use of civil process has to do with the wrongful initiation of such process, while abuse of civil process is concerned with a perversion of a process after it is issued.” Id. (citations omitted). *15 Here, Plaintiff pleads that the individual defendants abused legal process by, “unlawfully, willfully and Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 46 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 intentionally abus[ing] the procedure of drug and alcohol testing, mental evaluation, and involuntary [evaluation under MHPA Section] 302 without probable cause and despite recurring indications the Plaintiff had done nothing wrong.” (Doc. No. 1 ¶ 132; Doc. No. 22 at 18.) He further alleges that “[t]hough there was no probable cause to detain [him],” Defendants used every possible avenue to hold Plaintiff.” (Doc. No. 22 at 18.) Although it is not stated directly, Plaintiff's claim appears to allege that Defendants Barbagello, Doe I, Doe II, Biggins, and Boehs all initiated drug, alcohol, and mental health evaluations while knowing there was no basis for these tests, and with the specific purpose of causing him harm. (See Doc. No. 22 at 18.) Because Plaintiff's claim is based on the alleged wrongful initiation of actions related to his arrest rather than on the perversion of legal process already underway, it appears it would have been properly raised as a malicious use of process rather than abuse of process claim. As pled, Plaintiff's complaint does not state a claim for abuse of process under Pennsylvania law. At no point does Plaintiff precisely allege what process individual Defendants perverted when they conducted drug and alcohol testing on him and submitted him to an involuntary mental health evaluation, as is required to establish a prima facie case for abuse of process. See McGee, 535 A.2d at 1023. Accordingly, Plaintiff fails to state a claim for state law abuse of process, and the Court finds that Plaintiff's abuse of process claims should be dismissed. G. Count VII: State law claim for intentional infliction of emotional distress against all individual defendants Plaintiff brings state law claims of intentional infliction of emotional distress (“IIED”) against all individual defendants for their conduct relating to Plaintiff's detention on March 21-22, 2012. (Doc. No. 1 at 23.) To establish an IIED claim, Plaintiff must show: (1) extreme and outrageous conduct; (2) done intentionally or recklessly; (3) that causes emotional distress; and (4) the distress is severe. Chuy v. Phila. Eagles Football Club, 595 F.2d 1265, 1273 (3d Cir.1979). The conduct must “go beyond all possible bounds of decency, and ... [be] regarded as atrocious, and utterly intolerable in a civilized society.” Dull v. W. Manchester Twp. Police Dep't., 604 F.Supp.2d 739, 756 (M.D.Pa.2009) (citations omitted). Further, to succeed on an IIED claim, Plaintiff must show “some type of resulting physical harm due to the defendant's outrageous conduct.” Reedy v. Evanson, 615 F.3d 197, 231 (3d Cir.2010). Plaintiff has not alleged any facts to show that individual defendants' conduct extended “beyond all possible bounds of decency,” or that he experienced “physical harm due to the defendant[s'] outrageous conduct.” Id.; Dull, 604 F.Supp.2d at 755. Instead, he advances several conclusory statements, such as “Defendants conduct was extreme and outrageous, beyond all possible bounds of decency and utterly intolerable in a civilized society,” and “[t]he actions of the Defendants were the cause of Plaintiff's distress.” (Doc. No. 1 ¶¶ 137-38.) Because Plaintiff has not pled facts showing that he experienced physical harm from Defendants' allegedly outrageous conduct, he has not properly stated a claim for IIED. 5 See Reedy, 615 F.3d at 231. Accordingly, the Court finds that Plaintiff's state law claims for intentional infliction of emotional distress should be dismissed as to all individual defendants. H. Qualified immunity *16 Defendants Biggins, Boehs, and Barbagello assert that they are entitled to qualified immunity for all claims brought against them in their official capacities. (Doc. No. 15 at 31.) Qualified immunity protects “government officials performing discretionary functions” by “shield[ing them] from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.” Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). Qualified immunity shields the government officials from facing lawsuits. Saucier v. Katz, 533 U.S. 194, 200, 121 S.Ct. 2151, 150 L.Ed.2d 272 (2001). To determine whether an official is entitled to qualified immunity, the Court must decide, in either order, whether, “taken in the light most favorable to the party asserting the injury ... the facts alleged show the officer's conduct violated a constitutional right,” and “whether the right was clearly established” at the time of the official's conduct, in that a reasonable officer would have known his conduct was unlawful. Id. at 201; Egolf v. Witmer, 526 F.3d 104, 110 (3d Cir.2008) (citations omitted). Plaintiff alleges that Defendant Barbagello violated his Fourth Amendment rights against unlawful seizure, search, detention, and arrest, and that Defendants Barbagello, Boehs, and Biggins violated his Fifth and Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 47 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 12 Fourteenth Amendment substantive due process rights. (Doc. No. 1 at 14, 16.) Because the Court finds that Plaintiff's Fourteenth Amendment claims against Defendants Boehs and Biggins should be dismissed, as should Plaintiff's Fifth Amendment substantive due process claims against all Defendants, Plaintiff has no remaining constitutional claims against Defendants Boehs and Biggins, and thus there is no need for a qualified immunity discussion with respect to these Defendants. However, Plaintiff adequately states claims for unlawful seizure, search, arrest, and detention against Defendant Barbagello under the Fourth Amendment. See Section III.A. Therefore, the Court must determine whether Defendant Barbagello can assert qualified immunity in response to Plaintiff's Fourth Amendment claims. 1. Whether officers violated a constitutional right Taking the facts as alleged by Plaintiff as true, the Court has determined that Plaintiff has adequately stated claims for unlawful seizure, search, arrest, and detention under the Fourth Amendment against Defendant Barbagello. See Section III.A.1-4. The Court will therefore assess whether Defendant Barbagello's conduct violated clearly established law such that every “reasonable official would have understood that what he is doing violates that right.” Anderson v. Creighton, 483 U.S. 635, 107 S.Ct. 3034, 97 L.Ed.2d 523 (1987). The Court need not rely on a precedential case that is factually identical, but “existing precedent must have placed the statutory or constitutional question beyond debate.” Ashcroft v. al-Kidd, ---U.S. ----, ----, 131 S.Ct. 2074, 2083, 179 L.Ed.2d 1149 (2011) (citations omitted). *17 Considering the facts in the light most favorable to Plaintiff, Defendant Barbagello has not established that his conduct did not violate any clearly established right. Defendant Barbagello merely states that “no right was violated” by his conduct, and that his stop of Plaintiff was lawful. (Doc. No. 15 at 33.) Such conclusory statements are insufficient to meet the pleading burden for qualified immunity. See Thomas v. Independence Twp., 463 F.3d 285, 293-94 (3d Cir.2006) (“[T]he burden of pleading qualified immunity rests with the defendant, not the plaintiff.... [P]laintiff has no obligation to plead a violation of clearly established law in order to avoid dismissal on qualified immunity grounds.”). Id. at 293. a. Unlawful seizure and qualified immunity Plaintiff has stated a claim for unlawful seizure against Defendant Barbagello based on Defendant Barbagello's conduct after Plaintiff passed the Portable Breath Test, which indicated that he was not under the influence of alcohol. (Doc. No. 1 ¶ 36.) As discussed in Section III.A.1, the Supreme Court and the Third Circuit have long established the lawful bounds of a traffic stop, and delineated the standard for when a stop becomes an unlawful detention or seizure. See, e.g., Illinois v. Caballes, 543 U.S. 405, 407, 125 S.Ct. 834, 160 L.Ed.2d 842 (2005). The Court thus finds that a reasonable police officer should have known that by disrupting Plaintiff's freedom of movement by refusing to allow him to leave the scene of the traffic stop, handcuffing him, transporting him to police barracks, and submitting him to further sobriety tests and a mental health evaluation, Defendant Barbagello effected a seizure of Plaintiff. See James v. City of Wilkes-Barre, 700 F.3d 675, 681 (3d Cir.2012). The Court will deny Defendant Barbagello's motion to dismiss on the basis of qualified immunity as to Plaintiff's Fourth Amendment unlawful seizure claim. b. Unlawful search and qualified immunity Plaintiff alleges that Defendant Barbagello, along with Defendant Doe I, performed a full search of Plaintiff's pockets in violation of his Fourth Amendment right to be free from unlawful searches. (Doc. No 1 ¶ 24; Doc. No. 22 at 13.) As discussed in Section III.A.2, the Supreme Court has clear, long-established precedent establishing warrantless searches as per se unreasonable. See Terry v. Ohio, 392 U.S. 1, 30, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968) (delineating the bounds between a “stop and frisk” requiring only reasonable, articulable suspicion, and a warrantlesss search, requiring probable cause). There is no question that a reasonable officer would know that he cannot perform a full search of an individual's person without a warrant or probable cause. Berkemer v. McCarty, 468 U.S. 420, 439, 104 S.Ct. 3138, 82 L.Ed.2d 317 (1984). Thus, Defendant Barbagello is not entitled to qualified immunity with regard to Plaintiff's unlawful search claim. Accordingly, the Court will deny Defendant Barbagello's motion to dismiss Plaintiff's unlawful search claim on the basis of qualified immunity. c. Unlawful arrest and qualified immunity *18 As discussed in Section III.A.3, under the facts as pled, Defendant Barbagello's refusal to allow Plaintiff to leave on his own accord after he passed the Portable Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 48 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 13 Breath Test constituted an unlawful restraint of Plaintiff's freedom of movement rising to the level of an arrest without probable cause. Courts use a totality of the circumstances test and a reasonableness standard to determine whether a police officer's conduct in restricting the movement of an individual constitutes an arrest. United States v. Edwards, 53 F.3d 616, 619 (3d Cir.1994). A reasonable officer would know that in refusing to allow Plaintiff to leave on his own, handcuffing him, transporting him to the Pennsylvania State Police Barracks, and reading him his Miranda rights, he exerted control and will over Plaintiff rising to the level of arrest. See id. Warrantless arrests are unlawful if the arresting officer lacks probable cause. Carroll v. United States, 267 U.S. 132, 156, 45 S.Ct. 280, 69 L.Ed. 543 (1925). At this time, Defendant Barbagello has not established that he had probable cause to arrest Plaintiff. Defendant Barbagello merely asserts that his actions “were reasonable under the circumstances and there is no clearly established right to indicate otherwise,” which does not meet the pleading requirement for a motion to dismiss based on qualified immunity. Accordingly, at this time the Court cannot conclude that Defendant Barbagello is entitled to qualified immunity on Plaintiff's claim of unlawful arrest under the Fourth Amendment. The Court therefore will deny Defendant Barbagello's motion to dismiss Plaintiff's unlawful arrest claim against him on the basis of qualified immunity. d. Unlawful detention and qualified immunity Defendant Barbagello also asserts that he is entitled to qualified immunity on Plaintiff's Fourth Amendment unlawful detention claim. (Doc. No. 15 at 25-26.) As discussed in Section III.A, a claim for unlawful detention under the Fourth Amendment requires Plaintiff to establish that he was subjected to a Fourth Amendment seizure without probable cause. See James v. City of Wilkes-Barre, 700 F.3d 675, 682 (3d Cir.2012). Plaintiff has alleged facts sufficient to support his claim for unlawful seizure under the Fourth Amendment. See Sections III.A.1; III.A.3.b. The Court has also found that as the moving party, Defendant Barbagello failed to establish that he had probable cause to arrest Plaintiff. See Section III.H.1.c. Thus, the Court's analysis of Defendant Barbagello's motion to dismiss Plaintiff's Fourth Amendment claim for unlawful detention on the basis of qualified immunity is identical to that for Defendant Barbagello's motion to dismiss Plaintiff's Fourth Amendment claims for unlawful seizure and, to the extent it relates to probable cause, that for unlawful arrest. Accordingly, for the same reasons outlined above in the Court's qualified immunity discussion pertaining to unlawful seizure and probable cause for arrest, the Court will deny Defendant Barbagello's motion to dismiss Plaintiff's Fourth Amendment claim for unlawful detention. I. Defendants' motion to dismiss Plaintiff's punitive damages claim *19 Plaintiff prays for punitive damages against all individual Defendants. (Doc. No. 1 at 25.) However, all federal constitutional claims against Defendants Boehs and Biggins have been dismissed, leaving Plaintiff's Fourth Amendment claims against Defendants Barbagello, Doe I, and Doe II as the only remaining federal constitutional claims at this stage. Accordingly, punitive damages pursuant to Section 1983 would only be available to Plaintiff as to Defendants Barbagello, Doe I, and Doe II in their individual capacities. For federal civil rights complaints brought under Section 1983, punitive damages are available “when the defendant's conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others.” Smith v. Wade, 461 U.S. 30, 45, 103 S.Ct. 1625, 75 L.Ed.2d 632 (1983). Considering the facts in the light most favorable to Plaintiff, a jury could find that Defendants Barbagello, Doe I, and Doe II acted with reckless indifference as to Plaintiff's Fourth Amendment rights, because as police officers, they should have known that their conduct in detaining, handcuffing, and transporting Plaintiff to police barracks, as well as subjecting him to drug testing and an involuntary mental evaluation, violated Plaintiff's Fourth Amendment rights to be free from unlawful seizure, search, arrest, and detention. See, e.g., Brewer v. Hayman, No. 06- 6294, 2009 WL 2139429, at *8 (D.N.J. July 10, 2009) (denying Defendants' motion for summary judgment on punitive damages claim stemming from alleged Fourth Amendment violations by police officers). Id. Because it is possible for a jury to find that Defendants Barbagello, Doe I, and Doe II were recklessly indifferent to Plaintiff's Fourth Amendment rights, the Court will not dismiss Plaintiff's claim for punitive damages against Defendants Barbagello, Doe I, and Doe II at this stage. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 49 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 14 Plaintiff has also stated state law claims against Defendants Barbagello, Doe I, and Doe II for false arrest and imprisonment. (Doc. No. 1 at 21.) Under Pennsylvania law, “the assessment of punitive damages is proper whenever a party's actions are of such an outrageous nature as to demonstrate intentional, willful, wanton or reckless conduct resulting from either an evil motive or because of a reckless indifference to the rights of others.” Angelopoulos v. Lazarus PA Inc., 884 A.2d 255, 262 (Pa.Super.Ct.2005) (citation omitted). In this instance, it is possible for a jury to find that Defendants Barbagello, Doe I, and Doe II acted with reckless indifference to Plaintiff's right to be free from false arrest and imprisonment. See id. Thus, the Court will deny Defendants Barbagello, Doe I, and Doe II's motion to dismiss Plaintiff's claim for punitive damages for his state law claim of false arrest and imprisonment. IV. CONCLUSION Upon review of Plaintiff's complaint, the exhibits attached thereto, and the parties' briefs relating to Defendants' motion to dismiss, the Court will grant Defendants' motion in part, and deny in part. A. Surviving claims *20 The Court finds that in Count I, Plaintiff sufficiently alleges facts to state claims for violations of the Fourth Amendment against Defendants Barbagello, Doe I, and Doe II. Further, the Court finds that Defendant Barbagello is not at this time entitled to qualified immunity with regard to Plaintiff's Fourth Amendment claims. Additionally, the Court finds that Plaintiff sufficiently alleges facts in Count V to state a claim for state law false arrest and imprisonment against Defendants Barbagello, Doe I, and Doe II. Finally, the Court will not dismiss Plaintiff's claims for punitive damages against Defendants Barbagello, Doe I, and Doe II at this time. B. Claims that will be dismissed The Court finds that Plaintiff fails to allege sufficient facts in Count V to plead state law false arrest and imprisonment claims against Defendants Boehs and Biggins. Accordingly, Plaintiff's Count V claims for false arrest and imprisonment against Defendants Boehs and Biggins will be dismissed. Plaintiff also fails to allege facts sufficient to support the following: Fifth and Fourteenth Amendment substantive due process claims in Count II; excessive force-failure to intervene pursuant to 42 U.S.C. § 1983 in Count III; Monell liability claims in Count IV; and state law abuse of process and intentional infliction of emotional distress claims in Counts VI and VII. Accordingly, Plaintiff's claims in Counts II, IV, VI, and VII will be dismissed as to all defendants. Plaintiff's Count II Fourteenth Amendment substantive due process claims against Defendants Barbagello, Doe I, and Doe II will be dismissed without prejudice, and Plaintiff will have the opportunity to file an amended complaint with respect to these claims. An order consistent with this memorandum follows. ORDER AND NOW, on this 5th day of December 2013, IT IS HEREBY ORDERED THAT Defendants' motion to dismiss (Doc No. 12) is GRANTED IN PART and DENIED IN PART as follows: 1. The motion is GRANTED to the extent it seeks to dismiss Counts III, IV, VI, and VII against all Defendants; 2. The motion is GRANTED to the extent it seeks to dismiss the allegations raised against Defendants Boehs and Biggins in Count V, and DENIED to the extent that it seeks to dismiss the allegations raised against Defendants Barbagello, Doe I, and Doe II in Count V; 3. The motion is GRANTED with respect to the Fourteenth Amendment due process allegations in Count II against Defendants Barbagello, Doe I, and Doe II without prejudice to Plaintiff's ability to amend; 4. The motion is GRANTED to the extent it seeks to dismiss the Fourteenth Amendment due process allegations in Count II against Defendants Boehs, Biggins, and Cumberland Township; 5. The motion is GRANTED to the extent it seeks to dismiss the Fifth Amendment due process allegations in Count II against all Defendants; Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 50 of 192 Kauffman v. Barbagello, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 15 6. The motion is DENIED to the extent it seeks to dismiss Count I against Defendants Barbagello, Doe I, and Doe II; *21 7. The motion is DENIED to the extent it seeks to dismiss the claims against Defendant Barbagello on the basis of qualified immunity, and is DENIED AS MOOT to the extent it seeks to dismiss the claims against Defendants Boehs and Biggins on the basis of qualified immunity; 8. The motion is DENIED to the extent that it seeks to dismiss Plaintiff's prayer for punitive damages against Defendants Barbagello, Doe I, and Doe II, and is DENIED AS MOOT to the extent it seeks to dismiss Plaintiff's prayer for punitive damages against Defendants Boehs and Biggins; and 9. The Clerk of Court is directed to TERMINATE Defendants Biggins, Boehs, and Cumberland Township from this action. All Citations Not Reported in F.Supp.2d, 2013 WL 6388487 Footnotes 1 In stating the relevant facts, the Court must accept Plaintiff's factual allegations as true and “consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim.” Lum v. Bank of Am., 361 F.3d 217, 221 n. 3 (3d Cir.2004). 2 Defendants Doe I and II have not offered a response to Plaintiff's complaint. 3 Per the caption on Plaintiff's complaint, he brings suit against all Defendants in their individual and official capacities. (Doc. No. 1.) However, a claim based on Monell asserts municipal, rather than individual liability. 436 U.S. 658, 690, 98 S.Ct. 2018, 56 L.Ed.2d 611. Thus, the Court will construe Plaintiff's Count IV claim as brought against Defendants Biggins and Boehs in their official rather than individual capacities. 4 Federal courts have jurisdictional power to hear state law claims when a Plaintiff asserts “a claim ‘arising under [the] Constitution, the Laws of the United States, and Treaties made ...’ and the relationship between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional case.” United Mine Workers of America v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) (quoting U.S. Const. Art. III, Section 2). “The state and federal claims must derive from a common nucleus of operative fact.” Id. 5 Plaintiff cites Toney v. Chester County Hospital for the proposition that “no physical impact” is required to state a claim for intentional infliction of emotional distress. 36 A.3d 83, 100 (Pa.2011). (Doc. No. 22 at 23.) However, Toney involved a claim for negligent infliction of emotional distress, which requires a plaintiff to meet a different standard than that of intentional infliction of emotional distress. Id. Therefore, Toney is irrelevant to Plaintiff's claim. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 51 of 192 EXHIBIT F Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 52 of 192 Latuska v. Sethuraman, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2016 WL 4082738 Only the Westlaw citation is currently available. United States District Court, W.D. Pennsylvania. Richard F. Latuska and Annette E. Latuska, Plaintiffs, v. Venkat Sethuraman, Naheed Shahdid, Defendants and Third-Party Plaintiffs, Bureau Veritas North America, Inc. Defendant and Third-Party Plaintiff, v. Mike Hoffer and Heritage Homes, LLC, Lezzer Truss Systems, Inc. and MiTek USA, Inc. f/k/a MiTek Industries, Inc., Third-Party Defendants. CIVIL ACTION NO. 3:15-208 | Signed 07/29/2016 Attorneys and Law Firms Matthew B. Taladay, Hanak, Guido and Taladay, Dubois, PA, James A. McGovern, Marshall, Dennehey, Warner, Coleman & Goggin, Kurt F. Fernsler, Robert M. Palumbi, Babst, Calland, Clements & Zomnir, P.C., Pittsburgh, PA, Jay L. Edelstein, Kelly L. Czajka, Edelstein Law, LLP, Philadelphia, PA, for Plaintiff/ Third-Party Defendants. Ronald J. Chleboski, Matthew J. Lautman, Houston Harbaugh, Samantha L. Brutout, Dingess Foster Luciana Davidson & Chleboski LLP, Pittsburgh, PA, for Defendants and Third-Party Plaintiffs. MEMORANDUM OPINION KIM R. GIBSON, UNITED STATES DISTRICT JUDGE I. Introduction *1 This action comes before the Court upon motions to dismiss filed by Bureau Veritas North America, Inc. and Mike Hoffer. (ECF Nos. 9, 20.) For the reasons that follow, Mr. Hoffer's motion to dismiss will be denied, without prejudice, as moot. Bureau Veritas North America, Inc.'s motion to dismiss will be GRANTED. However, Plaintiffs, Richard E. Latuska and Annette E. Latuska, will be granted leave to file an amended complaint as set forth in the Order. II. Jurisdiction The Court has diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(1), as there is complete diversity of citizenship between the parties, and the amount in controversy in the state proceeding exceeds $75,000, exclusive of interest and costs. Venue is proper under 28 U.S.C. § 1391(b)(2) because a substantial portion of the events giving rise to the claims occurred in the Western District of Pennsylvania. III. Background This case arises from the construction of a new home. The following facts are alleged in the complaint, which the Court will accept as true for the sole purpose of deciding the pending motion. In early 2009, Venkat Sethuraman and Naheed Shahid engaged Heritage Homes, LLC to construct a new residence. (ECF No. 1-2 ¶ 10.) A zoning permit was issued by Sandy Township to Mr. Sethuraman on April 22, 2009, for the construction of the new home. (Id. ¶ 11.) Guardian Inspection Services, Inc., which operates with Bureau Veritas North America, Inc., approved the building plans and issued a construction permit on April 27, 2009. (Id. ¶¶ 7, 12.) Heritage Homes, LLC commenced construction of the home in July 2009. (Id. ¶ 13.) At all times during the construction process, Bureau Veritas North America, Inc., as a service agency for Sandy Township, was charged with the duty of conducting all required inspections. (Id. ¶ 14.) Bureau Veritas North America, Inc. issued a final certificate of occupancy, dated August 2, 2010, to Mr. Sethuraman and Ms. Shahid. (Id. ¶ 15.) Mr. Sethuraman and Ms. Shahid, who occupied the home for approximately six months, moved out in February 2011 and listed the property for sale. (Id. ¶ 16.) On or about October 12, 2011, Richard F. Latuska and Annette E. Latuska entered into a written agreement to purchase Mr. Sethuraman and Ms. Shahid's property for $950,000.00. (Id. ¶¶ 17-18.) Prior to the sale, Mr. Sethuraman and Ms. Shahid provided a disclosure statement to Mr. and Ms. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 53 of 192 Latuska v. Sethuraman, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 Latuska. (Id. ¶¶ 19-20.) In the disclosure statement, Mr. Sethuraman and Ms. Shahid denied the following: (1) any problems with the home, including structural items or any other component problems; (2) any water damage, leakage or other problems with water, such as the roof, ice, downspouts, or gutters; and (3) any material defects to the property, dwelling, or fixtures. (Id. ¶ 21.) Mr. and Ms. Latuska engaged the services of Minich Home Inspections to complete a residential home inspection, which was limited to a visual inspection. (Id. ¶¶ 23-24.) The inspection report, dated October 22, 2011, did not identify any latent or obvious structural defects or deficiencies within the home. (Id.) Small moisture stains were discovered around the master bath shower. (Id. ¶ 24.) Mr. Sethuraman and Ms. Shahid's real estate agent advised Mr. and Ms. Latuska that the moisture problems arose because Mr. Sethuraman and Ms. Shahid used the bathroom as a steam room. (Id. ¶ 26.) The real estate agent assured Mr. and Ms. Latuska that Mr. Sethuraman and Ms. Shahid had denied experiencing leakage or other water issues. (Id.) Based upon the inspector's recommendation, the shower door was caulked before Mr. and Ms. Latuska signed the agreement of sale. (Id. ¶¶ 25, 27.) *2 After Mr. and Ms. Latuska settled with Mr. Sethuraman and Ms. Shahid on December 19, 2011, they moved into the home on January 13, 2012. (Id. ¶¶ 29-30.) A few months later, Mr. and Ms. Latuska began to have problems with water marks in the master bathroom. (Id. ¶ 31.) Mr. and Ms. Latuska attempted to remedy the problem by not leaving the shower door open while turning on the shower, re-caulking the door, and minimizing their use of the shower. (Id.) When the ceramic tile in the master bathroom began to crack at the grout lines, Mr. and Ms. Latuska ceased using the shower. (Id. ¶ 32.) In July 2014, Mr. and Ms. Latuska hired William Morelock of Morelock Construction to repair the ongoing water problems in the master bathroom. (Id. ¶ 33.) After removing tiles, the dry wall, and the shower floor, Mr. Morelock discovered serious and extensive structural deficiencies, which continue to date. (Id. ¶¶ 33-34.) Specifically, the home has severe, consistent, and building- wide defects and building code violations that impact its structural viability and safety. (Id. ¶ 35.) After the home was deemed uninhabitable, Mr. and Ms. Latuska were forced to live in a renal home from March 2015 until July 2015. (Id. ¶¶ 36-37.) In July 2015, Mr. and Ms. Latuska were required to find a new rental home, where they expected to remain while structural repairs were completed. (Id. ¶¶ 37-38.) Mr. and Ms. Latuska filed a seven-count complaint in the Court of Common Pleas of Clearfield County on July 13, 2015, and Mr. Sethuraman and Ms. Shahid removed the action to this Court on August 13, 2015. (See ECF Nos. 1, 1-2 at 4.) Mr. and Ms. Latuska assert four claims against Mr. Sethuraman and Ms. Shahid: (1) violation of the real estate seller disclosure law, (ECF No. 1-2 ¶¶ 43-57); (2) fraudulent misrepresentation, (id. ¶¶ 58-64); (3) violation of the Unfair Trade Practices and Consumer Protection Law (“the UTPCPL”), (id. ¶¶ 65-70); and (4) breach of contract, (id. ¶¶ 71-80). Mr. and Ms. Latuska assert three claims against Bureau Veritas North America, Inc.: (1) intentional misrepresentation, (id. ¶¶ 81-97); (2) negligence, (id. ¶¶ 98-117); and (3) violation of the UTPCPL, (id. ¶¶ 118-126). In their answer, filed on August 31, 2015, Mr. Sethuraman and Ms. Shahid asserted cross-claims against Bureau Veritas North America, Inc. for negligence, intentional misrepresentation, violation of the UTPCPL, and contribution. (ECF No. 7 ¶¶ 20-38.) On September 1, 2015, Bureau Veritas North America, Inc. filed an answer and included cross-claims against Mr. Sethuraman and Ms. Shahid for contribution and indemnification. (ECF No. 8 ¶¶ 1-5.) On September 14, 2015, Mr. Sethuraman and Ms. Shahid filed a third-party complaint against Heritage Homes, LLC and Mike Hoffer. (ECF No. 11.) Mr. Sethuraman and Ms. Shahid asserted a claim against Heritage Homes, LLC for breach of contract and included claims against Mr. Hoffer for third-party beneficiary/ breach of contract and negligence. (Id. ¶¶ 27-47.) On April 7, 2016, Bureau Veritas North America, Inc. filed a third-party complaint against Heritage Homes, LLC, Lezzer Truss Systems, Inc., and MiTek USA, Inc. f/k/a MiTek Industries, Inc. (“MiTek”). (ECF No. 35.) Bureau Veritas North America, Inc. asserted claims against each additional defendant for negligence and contribution. (Id. ¶¶ 23-54.) MiTek filed an answer on June 8, 2016, and included cross-claims against Mr. Sethuraman and Ms. Shahid, Bureau Veritas North America, Inc., Mr. Hoffer, Heritage Homes, LLC, and Lezzer Truss Systems, Inc. for contribution and indemnification. (ECF No. 50 at 8.) On June 23, 2016, Lezzer Truss Systems, Inc. filed an answer and asserted cross-claims against MiTek, Mr. Sethuraman Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 54 of 192 Latuska v. Sethuraman, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 and Ms. Shahid, Heritage Homes, LLC, Mr. Hoffer, and Bureau Veritas North America, Inc. for contribution and indemnification. (ECF No. 55 ¶¶ 19-22.) *3 There are three motions to dismiss pending in this matter. First, Bureau Veritas North America, Inc. has filed a motion to dismiss Mr. and Ms. Latuska's UTPCPL claim and their requests for attorneys' fees and punitive damages. (ECF No. 9.) Bureau Veritas North America, Inc.'s motion has been fully briefed and is ripe for disposition. (See ECF Nos. 9, 10, 12, 13.) Second, Mr. Hoffer filed a motion to dismiss Mr. Sethuraman and Ms. Shahid's third-party complaint against him. (ECF No. 20.) After Mr. Hoffer's motion was fully briefed (see ECF Nos. 20, 21, 28), an early neutral evaluation session was held, at which time Mr. and Ms. Latuska's claims against Mr. Sethuraman and Ms. Shahid were resolved, and Mr. Sethuraman and Ms. Shahid's claims against Mr. Hoffer were resolved (see ECF No. 32). In a joint motion to amend the scheduling order, the parties confirmed the settlement. (See ECF No. 48 ¶ 5.) In light of the settlement between Mr. Sethuraman and Ms. Shahid and Mr. Hoffer, the Court will dismiss, without prejudice, Mr. Hoffer's motion to dismiss Mr. Sethuraman and Ms. Shahid's third-party complaint against him. (ECF No. 20.) Third, MiTek filed a motion to dismiss Bureau Veritas North America, Inc.'s third-party complaint against it. MiTek's motion has not been fully briefed and is not yet ripe for disposition. (ECF No. 60.) Accordingly, the Court will address only Bureau Veritas North America, Inc.'s motion to dismiss at this time. IV. Standard of Review Bureau Veritas North America, Inc. moves to dismiss Mr. and Ms. Latuska's UTPCPL claim and their requests for attorneys' fees and punitive damages pursuant to Rule 12(b)(6). The Federal Rules of Civil Procedure require that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(2). Rule 12(b)(6) allows a party to seek dismissal of a complaint or any portion of a complaint for failure to state a claim upon which relief can be granted. Although the federal pleading standard has been “in the forefront of jurisprudence in recent years,” the standard of review for a Rule 12(b)(6) challenge is now well established. Fowler v. UPMC Shadyside, 578 F. 3d 203, 209 (3d Cir. 2009). In determining the sufficiency of a complaint, a district court must conduct a two-part analysis. First, the court must separate the factual matters averred from the legal conclusions asserted. See id. at 210. Second, the court must determine whether the factual matters averred are sufficient to show that plaintiff has a “ ‘plausible claim for relief.’ ” Id. at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). The complaint need not include “ ‘detailed factual allegations. ’ ” Phillips v. County of Allegheny, 515 F. 3d 224, 231 (3d Cir. 2008) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Moreover, the court must construe the alleged facts, and draw all inferences gleaned therefrom, in the light most favorable to the non-moving party. See id. at 228 (citing Worldcom, Inc. v. Graphnet, Inc., 343 F. 3d 651, 653 (3d Cir. 2003)). However, “legal conclusions” and “[t]hreadbare recitals of the elements of a cause of action ... do not suffice.” Iqbal, 556 U.S. at 678. Rather, the complaint must present sufficient “ ‘factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ ” Sheridan v. NGK Metals Corp., 609 F. 3d 239, 262 n.27 (3d Cir. 2010) (quoting Iqbal, 556 U.S. at 678). Ultimately, whether a plaintiff has shown a “plausible claim for relief” is a “context-specific” inquiry that requires the district court to “draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. The relevant record under consideration includes the complaint and any “document integral to or explicitly relied upon in the complaint.” U.S. Express Lines, Ltd. v. Higgins, 281 F. 3d 383, 388 (3d Cir. 2002) (citing In re Burlington Coat Factory Sec. Litig., 114 F. 3d 1410, 1426 (3d Cir. 1997)). If a complaint is vulnerable to dismissal pursuant to Rule 12(b)(6), the district court must permit a curative amendment, irrespective of whether a plaintiff seeks leave to amend, unless such amendment would be inequitable or futile. Phillips, 515 F. 3d at 236; see also Shane v. Fauver, 213 F. 3d 113, 115 (3d Cir. 2000). V. Discussion Bureau Veritas North America, Inc. has filed a motion to dismiss Mr. and Ms. Latuska's UTPCPL claim in Count VII of their complaint and their requests for attorneys' fees and punitive damages in Counts V and VI of their complaint. The Court will separately address Bureau Veritas North America, Inc.'s arguments. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 55 of 192 Latuska v. Sethuraman, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 A. Mr. and Ms. Latuska's UTPCPL Claim *4 Bureau Veritas North America, Inc. argues that Count VII of Mr. and Ms. Latuska's complaint must be dismissed because they lack standing to sue under the UTPCPL. (ECF No. 10 at 3-5.) Specifically, Bureau Veritas North America, Inc. contends that the UTPCPL applies only to protect those parties who leased or purchased goods and services from the defendant in question. (Id. at 3-4.) Asserting that Mr. and Ms. Latuska failed to allege that it entered into a consumer transaction with it, Bureau Veritas North America, Inc. requests that Count VII be dismissed. (Id. at 4-5.) In response, Mr. and Ms. Latuska argue that a plaintiff need not be in direct privity with a defendant to file a UTPCPL claim because the statute extends to third parties who are intended purchasers or reasonably foreseeable consumers. (ECF No. 13 at 7-8.) Mr. and Ms. Latuska claim that Bureau Veritas North America, Inc. made representations in the inspection reports and certificate of occupancy as to the quality and safety of the home. (Id. at 12.) Contending that their complaint contains sufficient facts to support a finding that Bureau Veritas North America, Inc. made false and misleading representations, Mr. and Ms. Latuska maintain that they have standing to file a UTPCPL claim. (Id.) The UTPCPL is Pennsylvania's consumer protection law. Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145, 151 (Pa. Super. Ct. 2012). Its purpose is to prevent “ ‘[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce,’ ” as defined by the statute. Id. (quoting 73 Pa. Stat. Ann. § 201-3). The Pennsylvania Supreme Court has stated that the UTPCPL should be liberally construed to give effect to its legislative goal of consumer protection. Id. (citing Pennsylvania ex rel. Creamer v. Monumental Props., Inc., 329 A.2d 812 (Pa. 1974)). The UTPCPL provides a private right of action as follows: Any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act or practice declared by section 3 of this act, may bring a private right of action to recover actual damages or one hundred dollars ($100), whichever is greater. 73 Pa. Stat. Ann. § 201-9.2(a). This language establishes that the private right of action under the UTPCPL is limited to anyone who purchases or leases goods or services for primarily personal, family, or household purposes. The question here is whether Mr. and Ms. Latuska “purchase[d] ... goods or services” within the meaning of the statute. Based upon relevant case law interpreting this statute, the Court concludes that they did not. The UTPCPL's “reach is expansive.” Trunzo v. Citi Mortg., 876 F. Supp. 2d 521, 543 (W.D. Pa. 2012). Its private right of action has been construed to apply not only to those circumstances where the unfair or deceptive conduct induced the consumer to make the initial purchase, but also to unfair or deceptive practices which occur after entering an agreement and which were not a basis for the original agreement. Id. (holding that liability can be imposed upon a mortgage assignee under the UTPCPL provided that the plaintiff advances specific allegations of wrongdoing against the assignee, not simply against the original lender) (citing In re Smith, 866 F.2d 576 (3d Cir. 1989) (noting that a more limited reading “would insulate all kinds of practices from the [UTPCPL]”)). See also Behr v. Fed. Home Loan Mortg., No. 1:14-CV-291, 2015 U.S. Dist. LEXIS 116919, at *16-17, 2015 WL 5123656 (W.D. Pa. July 29, 2015) (holding that liability could be imposed against a lender based upon an underlying mortgage and related mortgage financing services). *5 In applying a liberal construction of the UTPCPL, the United States Court of Appeals for the Third Circuit has held that a plaintiff need not be in direct privity with a defendant to bring a claim for damages under the statute. Katz v. Aetna Casualty & Surety Co., 972 F.2d 53, 56 (3d Cir. 1992) (citing Valley Forge Towers S. Condominium v. Ron-Ike Insulators, Inc., 574 A.2d 641, 645 (Pa. Super. Ct. 1990) (stating that there was no “express requirement that there be strict technical privity between the party suing and the party sued”)). Rather, standing also extends to “those specifically intended to rely upon the fraudulent conduct, and those whose reasonable reliance was specially foreseeable.” Valley Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 56 of 192 Latuska v. Sethuraman, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 Forge Towers S. Condominium, 574 A.2d at 647. Standing does not, however, extend to “a plaintiff lacking any commercial dealings with the defendant.” Katz, 972 F.2d at 56. Similarly, standing does not extend to an assignee of a purchaser. Gemini Physical Therapy & Rehab. v. State Farm Mut. Auto. Ins. Co., 40 F.3d 63, 65 (3d Cir. 1994). In their complaint, Mr. and Ms. Latuska allege that Guardian Inspection Services, Inc., which operates with Bureau Veritas North America, Inc., approved the building plans and issued a construction permit on April 27, 2009. (ECF No. 1-2 ¶¶ 7, 12.) Mr. and Ms. Latuska aver that Bureau Veritas North America, Inc. was charged with the duty of conducting all required inspections. (Id. ¶ 14.) Mr. and Ms. Latuska further allege that Bureau Veritas North America, Inc. issued a final certificate of occupancy, dated August 2, 2010, to Mr. Sethuraman and Ms. Shahid. (Id. ¶ 15.) In asserting their claims against Bureau Veritas North America, Inc., Mr. and Ms. Latuska maintain that Bureau Veritas North America, Inc. failed to inspect, ignored, or failed to report the home's code violations and material defects. (Id. ¶¶ 88, 90.) Mr. and Ms. Latuska further aver that Bureau Veritas North America, Inc. engaged in willful misconduct because it intentionally overlooked or ignored serious structural defects and deliberately concealed known facts or failed to make any reasonable investigation to determine the condition of home. (Id. ¶¶ 91-92, 121.) Mr. and Ms. Latuska have failed to allege that they purchased any goods or services from Bureau Veritas North America, Inc. The Court recognizes that Mr. and Ms. Latuska need not be in direct privity with Bureau Veritas North America, Inc. because, as subsequent purchasers of the home, their reasonable reliance upon Bureau Veritas North America, Inc.'s inspection and certificate of occupancy was “specially foreseeable.” Valley Forge Towers S. Condominium, 574 A.2d at 647. However, Mr. and Ms. Latuska have failed to allege that they had “any commercial dealings with the defendant.” Katz, 972 F.2d at 56. Specifically, Mr. and Ms. Latuska have not alleged that they had to “give up something of significant value in order to consummate the transaction.” Johnson v. Metlife Bank, N.A., No. 11-CV-800, 2011 U.S. Dist. LEXIS 107460, at *13, 2011 WL 4389152 (E.D. Pa. Sept. 21, 2011). Thus, in accordance with well-settled law, standing does not extend to Mr. and Ms. Latuska. The Court finds that Mr. and Ms. Latuska's reliance upon Barker v. Hostetter, No. 13-CV-5081, 2014 U.S. Dist. LEXIS 51688, 2014 WL 1464319 (E.D. Pa. Apr. 15, 2014), is unpersuasive. The plaintiffs in Barker were “prospective purchasers,” not subsequent purchasers, of lots that the defendants were developing for residential use. 2014 U.S. Dist. LEXIS 51688, at *91, 2014 WL 1464319 (emphasis added). Because the plaintiffs alleged that the defendants withheld material information from them and misrepresented facts about the sewage system and water supply on the lots, the court concluded that although the plaintiffs did not purchase lots directly from the defendants, “[a]s prospective purchasers, [they] were specifically intended to rely upon the representations in the [public offering statement].” Id. at *91. Not only is Barker factually distinguishable because Mr. and Ms. Latuska were subsequent purchasers of the home, but the court in Barker also did not address the Third Circuit's holding in Katz that standing under the UTPCPL does not extend to plaintiffs lacking commercial dealings with the defendant. Similarly, Mr. and Ms. Latuska's reliance upon In re Smith, 866 F.2d 576 (3d Cir. Pa. 1989), and Behr, No. 1:14-CV-291, 2015 U.S. Dist. LEXIS 116919, is unconvincing because both decisions involved the imposition of liability against a lender based upon an underlying mortgage and related mortgage financing services. *6 Because Mr. and Ms. Latuska have failed to allege that they purchased goods or services from, or had any commercial dealings with, Bureau Veritas North America, Inc., the Court will grant Bureau Veritas North America, Inc.'s motion to dismiss Count VII of Mr. and Ms. Latuska's complaint. See, e.g., Katz, 972 F.2d at 57 (explaining that “[a]lthough Valley Forge Towers held that strict privity is not always an element of the private cause of action, there is no indication that the court would have extended the private cause of action to a plaintiff lacking any commercial dealings with the defendant” and concluding that the plaintiffs had “conducted no business whatsoever” with the defendants); Gemini Physical Therapy & Rehab., 40 F.3d at 65 (concluding that the plaintiff lacked standing because “its complaint does not allege that it is a purchaser or consumer of goods or services from [the defendant]”); Country Classics at Morgan Hill Homeowners' Ass'n v. Country Classics at Morgan Hill, LLC, 780 F. Supp. 2d 367, 376 (E.D. Pa. 2011) (granting motion to dismiss because the plaintiff did not allege that it contracted Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 57 of 192 Latuska v. Sethuraman, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 with any party to provide goods or services for the unit owners' benefits or that it was a third-party beneficiary of any contract entered into by the defendant); Bracciale v. Nationwide Mut. Fire Ins. Co., No. 92-CV-7190, 1994 U.S. Dist. LEXIS 198, at *9, 1994 WL 7707 (E.D. Pa. Jan. 12, 1994) (granting motion to dismiss because the plaintiff, who “conducted no business with [the defendant],” was not a purchaser under the UTPCPL); Schwarzwaelder v. Fox, 895 A.2d 614, 620 (Pa. Super. Ct. 2006) (holding that “[the plaintiffs] purchased nothing from [the defendant] and cannot claim an attendant cause of action under the UTPCPL”). Cf. Johnson v. MetLife Bank, N.A., 883 F. Supp. 2d 542, 548 (E.D. Pa. 2012) (finding that the plaintiff had standing based upon evidence “that he had commercial dealings with [the defendant], that [the defendant] misled him during those commercial dealings knowing that he might rely on the misrepresentations, and that he ultimately made a purchase as a result of the misrepresentations”). B. Mr. and Ms. Latuska's Requests for Attorneys' Fees and Punitive Damages Bureau Veritas North America, Inc. argues that Mr. and Ms. Latuska's requests for attorneys' fees and punitive damages in Counts V and VI of their complaint must be dismissed. (ECF No. 10 at 5-6.) Bureau Veritas North America, Inc. contends that Mr. and Ms. Latuska are not entitled to punitive damages because they failed to allege that it engaged in outrageous behavior. (Id. at 6.) Bureau Veritas North America, Inc. also asserts that Mr. and Ms. Latuska failed to cite to any contract, statute, or legal principle that would require it to pay the attorneys' fees requested in Counts V and VI. (Id. at 5.) In response, Mr. and Ms. Latuska contend that Bureau Veritas North America, Inc. engaged in outrageous behavior by failing to inspect the home or report the building code violations and acted with reckless indifference by issuing the occupancy certificate. (ECF No. 13 at 15.) Mr. and Ms. Latuska further argue that the building-wide defects and code violations were so severe and numerous that they would have been open and obvious to Bureau Veritas North America, Inc. (Id. at 16.) Regarding attorneys' fees and costs, Mr. and Ms. Latuska first note that Section 908(2) of the Restatement (Second) of Torts provides that the nature and extent of the harm must be considered in awarding punitive damages. (Id. at 18.) Asserting that they are entitled to punitive damages, Mr. and Ms. Latuska claim that their attorneys' fees and costs “are relevant to the nature and extent of the harm [they] suffered.” (Id. at 19 (emphasis omitted).) Punitive damages are an “extreme remedy” available only in the most exceptional matters. Phillips v. Cricket Lighters, 883 A.2d 439, 445 (Pa. 2005). Under Pennsylvania law, “[p]unitive damages may be awarded for conduct that is outrageous, because of the defendant's evil motive or his reckless indifference to the rights of others.” Feld v. Merriam, 485 A.2d 742, 747 (Pa. 1984). Punitive damages “are proper only in cases where the defendant's actions are so outrageous as to demonstrate willful, wanton or reckless conduct.” Hutchison ex rel. Hutchison v. Luddy, 870 A.2d 766, 770 (Pa. 2005). To establish a claim for punitive damages, a plaintiff must demonstrate that “(1) a defendant had a subjective appreciation of the risk of harm to which plaintiff was exposed and that (2) he acted, or failed to act, as the case may be, in conscious disregard of that risk.” Id. at 772; see also Ditzler v. Wesolowski, No. 3:05-CV-325, 2007 U.S. Dist. LEXIS 56736, at *10, 2007 WL 2253596 (W.D. Pa. Aug. 3, 2007). *7 In Counts V and VI of their complaint, Mr. and Ms. Latuska assert claims against Bureau Veritas North America, Inc. for intentional misrepresentation and negligence. (ECF No. 1-2 ¶¶ 81-117.) In support of their claims, Mr. and Ms. Latuska state that Bureau Veritas North America, Inc. had a duty to review the building plans and specifications for compliance with the construction code and all other pertinent regulations, to perform ongoing construction inspections, to report to the owner to assure compliance with the construction code and all pertinent building standards, and to issue written stop orders when a code violation was detected. (Id. ¶¶ 83, 85, 89, 101-103, 105.) Mr. and Ms. Latuska allege that Bureau Veritas North America, Inc. issued a certificate of occupancy despite “blatant and obvious” code violations. (Id. ¶ 108.) Mr. and Ms. Latuska also aver that Bureau Veritas North America, Inc. “knew or should have known of the defects,” (id. ¶ 109), that would have been “glaring, open[,] and obvious to an inspector,” (id. ¶¶ 88, 109). In their claim for intentional misrepresentation, Mr. and Ms. Latuska state that Bureau Veritas North America, Inc. intentionally overlooked or ignored the home's structural defects and that its lack of inspections and/or failure to report known construction defects constitutes willful misconduct. (Id. ¶¶ 91-92, 96.) Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 58 of 192 Latuska v. Sethuraman, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 Accepting the allegations of Mr. and Ms. Latuska's complaint as true, this Court finds that Mr. and Ms. Latuska have not alleged sufficient facts to establish a plausible claim for punitive damages against Bureau Veritas North America, Inc. While the facts alleged support Mr. and Ms. Latuska's claims for intentional misrepresentation and negligence, they do not rise to the level of outrageous conduct required under Pennsylvania law to warrant punitive damages. Rather, Mr. and Ms. Latuska's allegations regarding their request for punitive damages are conclusory statements and not factual averments sufficient to state a plausible claim for relief. Based upon the allegations in the complaint, Mr. and Ms. Latuska have failed to satisfy the pleading requirements of the rules of procedure to set forth a plausible claim for relief for punitive damages in Counts V and VI against Bureau Veritas North America, Inc. The Court will therefore grant Defendants' motion to dismiss the punitive damages claim in Counts V and VI of the complaint. See, e.g., Boring v. Google Inc., 362 Fed. Appx. 273, 283 (3d Cir. Pa. 2010) (affirming the trial court's decision to grant the defendant's motion to dismiss the plaintiffs' claim for punitive damages because the complaint “fails to allege conduct that is outrageous or malicious” and “there are no facts suggesting that [the defendant] acted maliciously or recklessly or that [the defendant] intentionally disregarded the [plaintiffs'] rights”); McCullough v. Peeples, No. 3:14-CV-123, 2015 U.S. Dist. LEXIS 27683, at *17, 2015 WL 1000223 (W.D. Pa. Mar. 5, 2015) (granting motion to dismiss the plaintiff's claim for punitive damages where the plaintiff alleged that the defendant's actions “constituted outrageous conduct and demonstrated wanton and reckless indifference to the [plaintiff's] safety” and “evidenced conscious acts of an unreasonable character and demonstrated disregard of a risk”); Gregg v. Lonestar Transp., LLC, No. 3:14-CV-44, 2015 U.S. Dist. LEXIS 27680, at *10-11, 2015 WL 1003911 (W.D. Pa. Mar. 6, 2015) (granting motion to dismiss the plaintiff's claim for punitive damages because the plaintiff failed to allege sufficient supporting facts); Allegrino v. Conway E & S, Inc., No. 09-CV-1507, 2010 U.S. Dist. LEXIS 106734, at *38-39, 2010 WL 6634484 (W.D. Pa. Oct. 6, 2010) (dismissing the plaintiff's request for punitive damages because it was “pled in a conclusory fashion”). As discussed above, Mr. and Ms. Latuska have argued that they are entitled to attorneys' fees and costs because Section 908(2) of the Restatement (Second) of Torts provides that the nature and extent of the harm must be considered in awarding punitive damages. (ECF No. 13 at 18-19.) In support of their argument, Mr. and Ms. Latuska state that “while not statutorily authorized as independent taxable costs in the Courts for intentional misrepresentation and negligence, it is appropriate to consider attorney[s'] fees expended ... as an element of the compensatory losses and punitive damages award.” (Id. at 19.) Accordingly, because Mr. and Ms. Latuska have conceded that attorneys' fees and costs are recoverable only as an element of an award for punitive damages, and because the Court will dismiss Mr. and Ms. Latuska's claims for punitive damages in Counts V and VI, the Court will also dismiss their claims for attorneys' fees and costs in Counts V and VI. See, e.g., Sloan & Co. v. Liberty Mut. Ins. Co., 653 F.3d 175, 186 (3d Cir. 2011) (“[T]he ‘settled’ law of Pennsylvania is that ‘attorneys[’] fees are recoverable from an adverse party to a cause only when provided for by statute, or when clearly agreed to by the parties.' ”) (quoting Fidelity-Phila. Trust Co. v. Phila. Transp. Co., 173 A.2d 109, 113 (Pa. 1961)). C. Leave to Amend *8 The law is well settled that, “if a complaint is subject to a Rule 12(b)(6) dismissal, a district court must permit a curative amendment unless such an amendment would be inequitable or futile.” Phillips, 515 F. 3d at 245. Likewise, Federal Rule of Civil Procedure 15 embodies a liberal approach to amendment and directs that “leave shall be freely given when justice so requires” unless other factors weigh against such relief. Dole v. Arco Chem. Co., 921 F. 2d 484, 486-87 (3d Cir. 1990). Factors that weigh against amendment include “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962). Amendment is futile “if the amended complaint would not survive a motion to dismiss for failure to state a claim upon which relief could be granted.” Alvin v. Suzuki, 227 F. 3d 107, 121 (3d Cir. 2000). A district court may therefore “properly deny leave to amend where the amendment would not withstand a motion to dismiss.” Centifanti v. Nix, 865 F. 2d 1422, 1431 (3d Cir. 1989); Davis v. Holder, 994 F. Supp. 2d 719, 727 (W.D. Pa. 2014). In light of these legal principles favoring the opportunity to amend a deficiently pleaded complaint, Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 59 of 192 Latuska v. Sethuraman, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 the Court will grant Mr. and Ms. Latuska leave to amend their complaint. VI. Conclusion For the reasons stated above, the Court will deny, without prejudice, Hoffer's motion to dismiss as moot. The Court will grant Bureau Veritas North America, Inc.'s motion to dismiss. However, Plaintiffs, Richard E. Latuska and Annette E. Latuska, will be granted leave to file an amended complaint as set forth in the Order. An appropriate order follows. ORDER AND NOW, this 29th day of July, 2016, upon consideration of Bureau Veritas North America, Inc.'s motion to dismiss (ECF No. 9) and Mike Hoffer's motion to dismiss (ECF No. 20), IT IS HEREBY ORDERED as follows: 1. Bureau Veritas North America, Inc.'s motion to dismiss (ECF No. 9) is GRANTED. Plaintiffs' requests for punitive damages and for attorneys' fees and costs in Counts V and VI of their complaint are dismissed. Plaintiffs' Unfair Trade Practices and Consumer Protection Law claim in Count VII of their complaint is also dismissed. 2. Mike Hoffer's motion to dismiss (ECF No. 20) is DENIED, without prejudice, as moot. IT IS FURTHER ORDERED that Plaintiffs, Richard F. Latuska and Annette F. Latuska, are granted 21 days from July 29, 2016, to file an amended complaint. All Citations Slip Copy, 2016 WL 4082738 End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 60 of 192 EXHIBIT G Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 61 of 192 Lease v. Fishel, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2009 WL 922486 Only the Westlaw citation is currently available. United States District Court, M.D. Pennsylvania. David R. LEASE, Plaintiff v. Douglas FISHEL et al., Defendants. Civil Action No. 1:07-CV-0003. | April 3, 2009. Attorneys and Law Firms Don A Bailey, Harrisburg, PA, Sheri D. Coover, Law Office of Sheri D. Coover, Carlisle, PA, for Plaintiff. Devon M. Jacob, Frank J. Lavery, Jr., Lavery, Faherty, Young & Patterson, P.C., David L. Schwalm, Thomas, Thomas & Hafer, LLP, Harrisburg, PA, James E. Chiaruttini, Stock and Leader, Sean E. Summers, Barley Snyder Senft & Cohen, LLC, York, PA, Ronald H. Pollock, Jr., Lancaster, PA, Christopher P. Gerber, Siana, Bellwoar & McAndrew, LLP, Exton, PA, Eric M. Brown, Siana, Bellwoar & Mc Andrew LLP, Chester Springs, PA, for Defendants. MEMORANDUM YVETTE KANE, Chief Judge. *1 Before the Court are Rule 12(b)(6) Motions to Dismiss filed by Defendants Brian Coffey (“Coffey”) (Doc. No. 23); George A. Taughinbaugh (“Taughinbaugh”) and Ron Plank (“Plank”) (Doc. No. 25); Ronald Balutis (“Balutis”), Timothy Beard (“Beard”), and Hamilton Township (Doc. No. 28); and David Ogle (“Ogle”) and Douglas Fishel (“Fishel”) (Doc. No. 40). Additionally, Defendants Plank and Taughinbaugh have filed a motion for sanctions against Plaintiff's counsel pursuant to Rule 11 of the Federal Rules of Civil Procedure. (Doc. No. 27.) Finally, Plaintiff's counsel, Don Bailey, has moved to withdraw from the case due to irreconcilable differences that have developed with the Plaintiff. (Doc. No. 56.) These motions are ripe for disposition, and the Court will consider them together in this Memorandum. For the following reasons, Plank and Taughinbaugh's motion to dismiss and motion for sanctions will be granted, Lease will be required to file an amended complaint with the Court, the remaining motions to dismiss will be denied as moot, and Mr. Bailey will be allowed to withdraw as counsel for the Plaintiff. I. BACKGROUND A. Factual Background The allegations in this complaint arise out of a land development dispute between Defendant Hamilton Township and the Plaintiff David R. Lease (“Lease”). (Doc. No. 1 ¶ 8.) Lease alleges that the Defendants have acted unlawfully together to intimidate and retaliate against him because he “vigorously and successfully defended his rights ....” in resolving the dispute with Hamilton Township in state court. (Id. ¶ 19.) Many of the Defendants have no apparent connection to each other, but Lease alleges that their retaliatory conspiracy “to harm or otherwise injure the plaintiff” in furtherance of the interests of Hamilton Township is “evidenced by all of the defendants' individual unlawful actions.” (Id.) B. Procedural Background This case comes before the Court in an unusual procedural posture, in that the alleged retaliation and conspiracy has already been the subject of one action before this Court (involving some of the same parties and events that underlie the present complaint), captioned as Lease v. Tyler, at docket number 1:05-CV-00618 (“Lease I”). Before commencing the present action, Lease sought leave to file a second amended complaint in Lease I to include the claims presented in the instant action. (Lease I, Doc. No. 44.) The Court denied this request as untimely (Lease I, Doc. No. 54), and Lease commenced the present case on January 2, 2007. (Doc. No. 1.) The Court ultimately granted summary judgment for the Defendants in Lease I on June 30, 2008, (Lease I, Doc. No. 82), after the present motions to dismiss were already ripe. C. Standard of Review The Supreme Court's recent opinion in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), has altered the standard of review for a motion to dismiss pursuant to Rule 12(b)(6). Phillips v. County of Allegheny, 515 F.3d 224, 230 (3d Cir.2008). In construing the Rule 12(b)(6) standard generally, the Court Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 62 of 192 Lease v. Fishel, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 required the plaintiff to provide more than a formulaic recitation of a claim's elements that amounted to mere labels and conclusions. Twombly, 127 S.Ct. at 1964-65. Additionally, the Court held that the complaint's “factual allegations must be enough to raise a right to relief above the speculative level.” Id. The Third Circuit has held that this language in Twombly applies generally to all motions brought under Rule 12(b)(6) and summed up the Twombly standard as follows: “stating ... a claim requires a complaint with enough factual matter (taken as true) to suggest the required element. This does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element.” Phillips, 515, F.3d at 234 (internal quotations and citations omitted). After Twombly, it is still true that “courts accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Id. at 232 (quoting Pinker v. Roche Holdings Ltd. ., 292 F.3d 361, 374 n. 7 (3d Cir.2002)). III. COMPLAINT DEFICIENCIES *2 All of the Defendants have moved to reform or strike the complaint in this case, either to remove allegations that do not comply with Rules 8 and 10 of the Federal Rules of Civil Procedure or requesting a more definite statement. (See Doc. No. 23 ¶ 13; Doc. No. 26 at 13; Doc. No. 29 at 15; Doc. No. 40 ¶ 15.) The Court agrees that the complaint must be amended. Rule 8 requires that pleadings contain “a short and plain statement of the claim showing that the pleader is entitled to relief, Fed.R.Civ.P. 8(a)(2), and further requires that each allegation must be “simple, concise, and direct,” Fed.R.Civ.P. 8(d)(1). Rule 10 additionally prescribes that “[a] party must state its claims or defenses in numbered paragraphs, each limited as far as practicable to a single set of circumstances,” and that “if doing so would promote clarity, each claim founded on a separate transaction or occurrence ... must be stated in a separate count or defense.” Fed. R Civ. P. 10(b). The present complaint does not satisfy Rules 8 and 10. Most glaringly, Paragraph 1, included under the title “Introductory Statement,” effectively takes up 8 of the complaint's 18 pages. (Doc. No. 1 ¶ 1 at 1-8.) The mash of allegations in this introductory statement read more like a novel than a legal pleading and frequently digress into improper argumentative detail. See Burks v. City of Philadelphia, 904 F.Supp. 421, 424 (E.D.Pa.1995). This single numbered paragraph also includes many of the most pertinent allegations against each Defendant, which is clear from Lease's own briefs citing it repeatedly to set out the procedural and factual history of the case. (See Doc. No. 33 at 2; Doc. No. 42 at 2-3.) The use of this meandering “Introductory Statement” violates Rules 8 and 10 and does not comport with Plaintiffs' obligations, especially given the multiple defendants and separate transactions that Lease is trying to articulate as the bases for his relief; the result is a confusing mess that reduces efficiency and will complicate issues as the case goes forward. Further, because it seems that several critical allegations are made in the introductory statement that are not made elsewhere in the complaint, it is not even possible to simply strike paragraph 1 and rely on other sections of the complaint. Even if the Court were to rely on the remainder of the complaint, other portions of the complaint suffer from the same deficiencies. (See Doc. No. 1 ¶ 23.) Additionally, since the complaint was filed, the Court has issued a memorandum and order granting summary judgment to the defendants in Lease I. (Lease I, Doc. No. 82.) Some of the allegations and issues in the present case overlap with Lease I, especially with respect to Defendant Coffey-sued specifically for his role with Kevin Tyler and Douglas Fishel in the same events taking place on March 17, 2004 that the Court determined did not violate Lease's constitutional rights-and the plaintiff may be precluded from litigating them again. Because the Court's summary judgment order in Lease I was not available when the present complaint was filed, the Plaintiff should re-assess the viability of the claims and allegations made in this action to ensure the Court has not already preclusively determined these issues. *3 As the Court will require Lease to submit an amended complaint, the pending motions to dismiss will be denied as moot. The Court will review the claims made against Plank and Taughinbaugh, see Burks, 904 F.Supp. at 424, however, because they are the subject of a Rule 11 motion for sanctions that must be addressed before proceeding with the litigation to guide counsel in their future filings in this matter. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 63 of 192 Lease v. Fishel, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 IV. PLANK AND TAUGHINBAUGH: MOTION TO DISMISS Though the complaint itself frequently fails to distinguish between Defendants, there does not appear to be any dispute that the claims against Defendants Plank and Taughinbaugh in the instant action solely arise from an inspection of Lease's property conducted during discovery in Lease I. (See Doc. No. 26 at 2; Doc. No. 33 at 2.) Lease alleges that this was an “unlawful search ... under the guise of discovery (in [Lease I] ). This search was conducted by the defendants Taughinbaugh and Plank asserting a right to do so pursuant to this court's authority in the pending case .... There was virtually no probable cause, or factual basis for this search either.” (Doc. No. 1 ¶ 1 at 3.) Suspecting that Plank and Taughinbaugh had iniquitous motives during the inspection, Lease's counsel queried them about their purpose for the inspection. (Id. at 6.) In response, “[b]oth Mr. Plank ... and Mr. Taughinbaugh, ... literally blurted out ... that the so- called ‘view’ was about showing that Lease was “stealing electricity from his tenants.” (Id.) Lease contends that this inspection was a fishing expedition “irrelevant to the pending federal action,” and that it was undertaken in cooperation with Hamilton Township “to retaliate against him for litigating against Hamilton Township and ... for filing [Lease I] ....” (Id.) Based on these allegations, Lease asserts claims against Plank and Taughinbaugh for violations of his First and Fourth Amendment rights under 42 U.S.C. § 1983, conspiracy to deprive him of his rights, and abuse of legal process “as a matter of federal and state law.” (Id. at 18.) It seems Lease also believes that this conduct amounts to defamation, but admits the statute of limitations on those claims has expired. (Id. at 17.) The Defendants argue that these claims are frivolous and were advanced in violation of Rule 11 of the Federal Rules of Civil Procedure. (Doc. No. 27.) The Court will evaluate each claim in turn. A. 42 U.S.C. § 1983 1. State Action To make out a prima facie case under § 1983, the plaintiff must demonstrate that a person acting under color of law deprived him of a federal right; the statute itself is not a source of substantive rights. Marran v. Marran, 376 F.3d 143, 155 (3d Cir.2004) (citing Berg v. County of Allegheny, 219 F.3d 261, 268 (3d Cir.2000)). Initially, there is no indication in the complaint that Defendants were acting under color of state law. 1 The Court agrees with Plank and Taughinbaugh that neither litigation between private parties nor conducting discovery pursuant to the rules of civil procedure amounts to action under color of law. (See Doc. No. 26 at 12-13.) Lease seems to concede this point in his brief, arguing instead that the § 1983 claim is appropriate because Plank and Taughinbaugh were acting in a conspiracy with public officials. (Doc. No. 33 at 7.) *4 A private party can still be liable under § 1983 if he or she willfully participates in a joint conspiracy with state officials to deprive a person of a constitutional right. Abbott v. Latshaw, 164 F.3d 141, 147-48 (3d Cir.1998) (citing Dennis v. Sparks, 449 U.S. 24, 27-28, 101 S.Ct. 183, 66 L.Ed.2d 185 (1980)). Despite this, mere conclusory allegations of concerted action in the complaint are insufficient to plead the requisite conspiracy. See id. at 148 (citing Fries v. Helsper, 146 F.3d 452, 458 (7th Cir.1998) (“[M]ere allegations of joint action or a conspiracy do not demonstrate that the defendants acted under color of state law and are not sufficient to survive a motion to dismiss.... Nothing in the complaint demonstrates the existence of any joint action, concerted effort, or even a general understanding between Judge Kinney and the defendants.”) Lease contends that “[t]he complaint has sufficiently pled that Plank and Taughinbaugh were working in concert with their attorneys and also with township officials to deny the Plaintiff his constitutional rights.” (Doc. No. 33 at 8.) The Court disagrees. There is no question that the complaint is peppered with bald allegations of conspiracy. For instance, Lease alleges that “the defendants cooperated in efforts to retaliate against him for litigating against Hamilton Township,” and “the defendants unlawfully cooperated together ... to further the unlawful retaliatory interests of Hamilton Township which was to harm or otherwise injure the plaintiff ....” (Doc. No. 1 ¶¶ 1, 19.) These allegations are conclusory and insufficient to show conspiracy or survive the motion to dismiss. Lease further contends “[t]his retaliatory behavior is evidenced by all of the defendants' individual unlawful actions.” (Id. ¶ 19.) The only alleged unlawful action undertaken by Plank and Taughinbaugh is their conduct during the Rule 34 inspection in Lease I, and, even taken as true, the allegations describing that conduct do not show any conspiracy undertaken Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 64 of 192 Lease v. Fishel, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 with Hamilton Township or the other Defendants. Like in Fries, nothing in the complaint can be construed to support a general understanding between Hamilton Township and Plank and Taughinbaugh. As such, any claims against Plank and Taughinbaugh for conspiracy to violate Lease's rights pursuant to § 1983 are dismissed. 2. Plank and Taughinbaugh's Inspection Even assuming arguendo that Plank and Taughinbaugh could be considered state actors, it is troubling that Lease has asserted claims for constitutional violation at all solely from the inspection of his building pursuant to Rule 34 of the Federal Rules of Civil Procedure, which provides in pertinent part: A party may serve on any other party a request within the scope of Rule 26(b) ...; to permit entry onto designated land or other property possessed or controlled by the responding party, so that the requesting party may inspect, measure, survey, photograph, test, or sample the property or any designated object or operation on it. *5 Fed.R.Civ.P. 34(a)(2). Rule 26(b) provides a broad scope for discovery requests: “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense .... Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Fed.R.Civ.P. 26(b). Here, there is no question that Lease had commenced an action against Plank, which entitled Plank to inspect Lease's property in accordance with the rules of discovery. It is clear that Lease consented to the Rule 34 inspection, allowed him onto his property, and was accompanied by his counsel during the inspection. (See Doc. No. 1 ¶ 1.) Though Lease refers to him only as a “co-conspirator,” Taughinbaugh himself appears to have only been along on the inspection as a non-testifying expert witness to assist Plank. (Doc. No. 26 at 2.) Most problematic of all, Lease, though accompanied by counsel who had become “suspicious of the [inspection] of [Plank and Taughinbaugh] as they went beyond the activities of the underlying issues [in Lease I],” (Doc. No. 33 at 2), never stopped the inspection or sought the Court's intervention, available under Rule 37, to limit any improper discovery. Despite all of this, Lease argues that the inspection violated his First and Fourth Amendment rights. a. Fourth Amendment The Fourth Amendment protects against unreasonable searches or seizures. See, e.g., United States v. Sharpe, 470 U.S. 675, 683, 105 S.Ct. 1568, 84 L.Ed.2d 605 (1985). Lease cites to no authority that suggests an overbroad discovery inspection conducted pursuant to the Rules of Civil Procedure can constitute a violation of the Fourth Amendment. (See Doc. No. 33 at 5.) It is clear, even taking the allegations as true, that the Fourth Amendment is not implicated in this case and Plaintiff provides no authority from which the Court might find otherwise. See United States v. Int'l Bus. Mach. Corp., 83 F.R.D. 97, 101-102 (D.C.N.Y.1979) (“When a subpoena duces tecum in a civil case is challenged, it would appear the protection sought resides in the Federal Rules of Civil Procedure, not the fourth amendment.... It strains common sense and constitutional analysis to conclude that the fourth amendment was meant to protect against unreasonable discovery demands made by a private litigant in the course of civil litigation” (emphasis added).) Further, were it implicated, the inspection in question was conducted pursuant to the rules of civil procedure, which also provide limitations on the scope and character of civil discovery. These safeguards help ensure that civil discovery does not run afoul of the Fourth Amendment and provide litigants with tools to protect themselves from overbroad requests. Rule 34, for instance, only provided Plank with the right to “request ... to permit entry,” and also provided Lease with the ability to object to such a request. Fed.R.Civ.P. 34. Accordingly, this inspection was reasonable, especially in light of the fact that Lease and his counsel neither opposed any part of the inspection as it occurred nor sought a protective order from this Court. The allegation that Plank and Taughinbaugh “literally blurted out with responses that the so-called ‘view’ was about showing that Lease was ‘stealing electricity from his tenants” does not alter this determination or give Lease license to ignore the recognized discovery safeguards in favor of pursuing new § 1983 claims. b. First Amendment *6 Lease claims Plank and Taughinbaugh violated his First Amendment rights by retaliating against him for petitioning the government, both in litigating against Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 65 of 192 Lease v. Fishel, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 Hamilton Township to get approval for his subdivision plan and also for pursuing his claims in Lease I. (Doc. No. 1 ¶ 1 at 7.) “In order to plead a retaliation claim under the First Amendment, a plaintiff must allege: (1) constitutionally protected conduct, (2) retaliatory action sufficient to deter a person of ordinary firmness from exercising his constitutional rights, and (3) a causal link between the constitutionally protected conduct and the retaliatory action.” Thomas v. Independence Tp., 463 F.3d 285, 296 (3d Cir.2006). The key inquiry in whether a cognizable First Amendment claim has been stated is whether the alleged retaliatory conduct was sufficient to deter a person of ordinary firmness from exercising his First Amendment rights. Id. This claim would have the Court assume that an uncontested discovery inspection conducted by a defendant-to defend himself against, inter alia, an extant First Amendment retaliation claim-can be a viable ground to bring a separate First Amendment retaliation claim and also constitutes sufficient retaliatory action to deter a person from exercising his constitutional rights. Plank and Taughinbaugh argue that “certainly, the law does not support such an absurd result.” (Doc. No. 26 at 9.) The Court agrees. Further, the factual allegations in the complaint do not raise a right to relief above a speculative level on this claim against Plank and Taughinbaugh. Beyond bald, generalized assertions, the only pertinent allegations concerning the required elements of a First Amendment retaliation claim for Plank and Taughinbaugh involve the discovery inspection and the alleged comment that Lease was stealing electricity. The Court finds that these allegations are not sufficient to raise a reasonable expectation that discovery will reveal evidence of the required elements of First Amendment retaliation as set out above. B. Abuse of Process Lease alleges that “the defendants Plank and Taughinbaugh have violated plaintiff's rights under Pennsylvania law i.e. [sic] they have abused legal process both as a matter of federal and state law ....” (Doc. No. 1 at 18.) In the only other mention of “abuse of process” in the complaint, Lease seems to suggest that there has been an abuse of process because the statute of limitations had run on any potential defamation claim: “Plank and Taughinbaugh have not only defamed the plaintiff, but are further abusing legal process and violating his rights in this regard, both as a matter of federal law and as a matter of state law, the statute of limitations on defamation and false light representation having expired.” (Doc. No. 1 ¶ 38.) Plank and Taughinbaugh did not initiate any legal proceeding against Lease, so this claim must be brought under the Pennsylvania common law tort for abuse of process. See McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1023 (Pa.1987) ( “malicious use of civil process has to do with the wrongful initiation of such process, while abuse of civil process is concerned with ... process after it is issued.”) The abuse of process tort has been described as “the improper use of process after it has been issued, that is, a perversion of it.” General Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 304 (3d Cir.2003) (quoting McGee, 535 A.2d at 1023). The word “process” is defined broadly enough to include, inter alia, discovery proceedings. Rosen v. American Bank of Rolla, 426 Pa.Super. 376, 627 A.2d 190, 192 (Pa.Super.Ct.1993). To establish abuse of process, the plaintiff must show that “the defendant (1) used a legal process against the plaintiff, (2) primarily to accomplish a purpose for which the process was not designed; and (3) harm has been caused to the plaintiff.” Lerner v. Lerner, 954 A.2d 1229, 1237 (Pa.Super.Ct.2008) (quoting Shiner v. Moriarty, 706 A.2d 1228, 1236 (Pa.Super.Ct.1998)). There is no action for abuse of process when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant. Rosen, 627 A.2d at 192; see also Shiner, 706 A.2d at 1236 (“[T]here is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions.”) Finally, while parties who employ legal process primarily intending to burden or cause litigation expense to their adversaries can be liable under this standard, such behavior must “become so lacking in justification as to lose its legitimate function as a reasonably justifiable litigation procedure.” General Refractories, 337 F.3d at 302. The court should ask whether a legal process has been used “as a tactical weapon to coerce a desired result that is not the legitimate object of the process.” Id. at 305. *7 Based on the alleged conduct discussed above, the Court finds that the factual allegations in the complaint do not raise a right to relief on this claim above the speculative level. The discovery request was seemingly legitimate in itself, as Lease and his counsel consented and never sought a protective order from the Court. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 66 of 192 Lease v. Fishel, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 The allegations are also insufficient to show that the primary purpose of the discovery inspection was to accomplish a goal for which the discovery process was not designed. Though Lease alleges that his electricity use was not material in Lease I (Doc. No. 1 ¶ 32), the entire dispute arose over damaged electric meters on Lease's property (See Lease I, Doc. No. 6 ¶ 14), and it is far from clear that a Rule 34 inspection to evaluate such matters would have been outside the scope of Rule 26. There are also no other allegations concerning the Defendants that show abusive conduct during the Lease I litigation that would help raise a reasonable expectation that discovery would reveal evidence of this necessary element. In General Refractories, for instance, there were allegations that the defendants “intentionally withheld critical documents, ignored court orders, permitted false testimony at depositions and misrepresented facts to opposing counsel and the court.” General Refractories, 337 F.3d at 301; see also In re Finney, 184 Fed. Appx. 285, 289-290 (3d Cir.2006). As discussed above, the allegations in the present complaint fall far short of such conduct, and at most show a violation of civil discovery rules. See Flores v. Emerich & Fike, 416 F.Supp.2d. 885, 907 (E.D.Cal.2006) (“[A civil discovery violation,] on its own, does not constitute an abuse of process. Moreover, there were adequate remedies to enforce the discovery rules in the prior case. It is impermissible to sue for prior violations of discovery rules in a subsequent lawsuit.”). The claim will be dismissed. V. PLANK AND TAUGHINBAUGH: MOTION FOR SANCTIONS A. Rule 11 Along with their motion to dismiss, Plank and Taughinbaugh seek sanctions against Lease and his counsel, Don Bailey, for filing the complaint in this action. (Doc. No. 27.) Plank and Taughinbaugh argue that Mr. Bailey has violated Rule 11(b)(2) in that the relief sought in the complaint is not warranted by existing law or the non-frivolous argument for the extension, modification or reversal of existing law. (Id. ¶ 7.) Rule 11 provides in pertinent part: (b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper -whether by signing, filing, submitting or later advocating it-an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1) It is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; *8 (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; (3) the factual contentions have evidentiary support, or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and (4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information. Fed.R.Civ.P. 11(b). It is clear that the central purpose of Rule 11 is to deter baseless filings, streamline litigation, and curb abuses of the judicial system. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393-394, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). As the rule sets out, the standard for testing an attorney's conduct is that of what was reasonable under the circumstances, which is defined as an “objective knowledge or belief at the time of the filing that the claim was well-grounded in law and fact.” See Ford Motor Co. v. Summit Motor Products, Inc. 930 F.2d 277, 289 (3d Cir.1991). “To comply with this standard, counsel must conduct a reasonable investigation of the facts and a normally competent level of legal research to support the presentation.” Simmerman v. Corino, 27 F.3d 58, 62 (3d Cir.1994) (quoting Pensiero v. Lingle, 847 F.2d 90, 96 (3d Cir.1994)). When assessing an attorney's compliance, the court should consider: “(1) the amount of time available to the signer for conducting relevant factual and legal investigation; (2) the necessity for reliance on a client for underlying factual information; (3) whether the case was referred to the signer by another member of the bar; and (4) the plausibility of the legal position advanced.” Pensiero, 847 F.2d at 95. Bad faith is not required before imposition of sanctions, Martin v. Brown, 63 F.3d 1252, 1264 (3d Cir.1995), and “the Rule does not recognize a ‘pure heart and empty head’ defense.” See In re Cendant Corp. Derivative Action Litigation, 96 F.Supp.2d. 403 at 405 (citing Gaiardo v. Ethyl Corp., 835 F.2d 479, 482 (3d Cir.1987)). Rule 11 is intended only Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 67 of 192 Lease v. Fishel, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 for exceptional circumstances, however, and should not be imposed merely because the party failed to prevail on an argument or motion. Teamsters Local Union No. 430 v. Cement Exp. Inc., 841 F.2d 66, 70 (3d Cir.1988); Gaiardo, 835 F.2d at 483. It is not intended to chill an attorney's enthusiasm or creativity in pursuing factual or legal theories and the district court should avoid using hindsight to test counsel's conduct at the time the pleading was submitted. See Gaiardo, 835 F.2d at 484. The ultimate Rule 11 inquiry is thus “whether at the time he filed the complaint, counsel ... could reasonably have argued in support of his legal theory.” Pensiero, 847 F.2d at 96 (citing Teamsters Local Union, 841 F.2d at 70). *9 To the extent Plank and Taughinbaugh argue that sanctions should be imposed because Mr. Bailey filed this separate action against them in contravention of the Court's order in Lease I, (See Doc. No. 31 at 8), that argument must be rejected. Mr. Bailey's attempt to amend his complaint in Lease I was rejected by this Court, but on grounds of untimeliness and unfair prejudice to Defendants in that action; the Court did not address the issue of whether the amendments were futile. (See Lease I, Doc. No. 54 at 3.) Additionally, as discussed above, the Court's ultimate disposition of Lease I was not available to Mr. Bailey when he originally filed the present action or when he submitted briefs in opposition to the pending motions to dismiss. As partially set out above, there are serious issues with this pleading, however, as it pertains to Plank and Taughinbaugh. 2 Mr. Bailey has brought claims which arise solely out of a discovery inspection that took place in August 2005. The Court notes that Mr. Bailey has largely articulated the correct elements and standard for the claims he has brought in his opposition to the motion to dismiss and motion for sanctions. (See Doc. Nos. 33. 42.) But, Mr. Bailey pursues frivolous arguments in applying these standards to a civil discovery inspection by Plank and Taughinbaugh. For instance, Mr. Bailey neither explains why the Fourth Amendment should apply in the context of civil discovery between private parties nor attempts to justify how its violation could justify a separate cause of action. In fact, he does not even bother to cite a single case in support of such a claim (nor has the Court's own research located any). Instead, Mr. Bailey relies on unsupported, questionable arguments, claiming that the search was only conducted “under the guise of discovery” and that Plank and Taughinbaugh “had no basis in fact for this filing [sic] expedition beyond an unlawful desire to injure Lease and prevent this litigation from succeeding.” (Doc. No. 33 at 2.) The Court is unaware that a defendant could unlawfully desire that litigation brought against him not succeed, though Mr. Bailey makes this argument at various points. He even involves opposing counsel, arguing that Plank and Taughinbaugh “violated his First Amendment rights to petition the government. They did this through their lawyers as participates [sic] in the litigation.” (Doc. No. 33 at 2.) Of course, the Court does not suggest that civil discovery is never used for improper purposes. Mr. Bailey has never contested, however, that Lease consented to the Rule 34 inspection, allowed Plank and Taughinbaugh onto the property, and was even accompanied by Mr. Bailey during the inspection. (See Doc. No. 1 at 6.) Further, it is clear from the complaint and record that even though Mr. Bailey claims to have “become suspicious” as the inspection took place, he neither took action to stop the inspection at the time nor properly notified the Court about any perceived discovery abuses. Under these circumstances the Court must assume the inspection complied with the rules, because Mr. Bailey never even attempted to utilize the Rule 37 method prescribed by the rules to protect litigants from overbroad discovery requests. From the record of Lease I, it appears the issue was only first raised in the aforementioned motion to amend almost a year after the offending inspection had taken place. (See Lease I, Doc. No. 44.) Mr. Bailey's decision to bring completely separate claims against Plank and Taughinbaugh for this dispute-properly resolved by the mechanisms provided for in the discovery rules-is an abuse of the judicial system and is not warranted by existing law. *10 The Court finds that Mr. Bailey has advanced these claims against Plank and Taughinbaugh without a reasonable inquiry under the circumstances. The claims are not warranted by existing law or by nonfrivolous argument for extending, modifying, or creating new law. As such, Mr. Bailey has violated Rule 11(b). 3 B. Appropriate Sanctions If Rule 11(b) has been violated, the Court has discretion to tailor a sanction to the particular facts of the case. Cendant Corp., 96 F.Supp.2d. at 407-08. The Court Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 68 of 192 Lease v. Fishel, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 may impose appropriate sanctions “on any attorney, law firm, or party that violated the rule or is responsible for the violation.” Fed.R.Civ.P. 11(c)(1). The court can impose monetary sanctions such as attorney fees or penalties, or non-monetary sanctions, which can include: oral or written reprimands, publication of the sanctioning opinion, referral of the matter to the state bar for disciplinary proceedings, an order barring an attorney from appearing for a period of time, compulsory legal education, or dismissal of baseless claims. Doering v. Union County Board of Chosen Freeholders, 857 F.2d 191, 194 (3d Cir.1988) (citing Gaiardo, 835 F.2d at 482)); see also Langer v. Monarch Life Ins. Co., 966 F.2d 786, 810 (3d Cir.1992). But, an appropriate sanction must be limited to the least severe sanction that suffices to deter repetition of the conduct or comparable conduct by others similarly situated. Fed.R.Civ.P. 11(c)(4); Langer, 966 F.2d at 810. In assessing the appropriateness of monetary sanctions as opposed to non-monetary sanctions, courts have considered: “(1) the willfulness of counsel's conduct; (2) whether the conduct was part of a pattern; (3) whether counsel engaged in past similar conduct; (4) whether the conduct was intended to injure; (5) what effect the conduct had on the time or expense of litigation; and (6) the type of sanction sufficient to deter a repetition of such conduct.” Cendant Corp., 96 F.Supp.2d. at 407- 08 (citing Shepherdson v. Nigro, 179 F.R.D. 150, 153 (E.D.Pa.1998)). Plank and Taughinbaugh request that the Court order Mr. Bailey to pay the costs to defend this action, including reasonable attorney fees. Plank and Taughinbaugh argue with some force that Mr. Bailey brought these claims against them in bad faith to harass and injure them. (See Doc. No. 31 at 9.) Indeed, arguing in support of amending his Lease I complaint with these new claims, Mr. Bailey spent nearly six pages (over half of his brief) detailing his frustrations with the defendants' discovery objections (See Lease I, Doc. No. 45 4-10.) Despite this, the Court cannot conclude that bringing these separate claims was a willful violation of Rule 11 or necessarily done with intent to injure. One troubling consideration is the many times that Mr. Bailey has already been sanctioned for similar conduct in this and other courts. See, e.g ., Conklin v. Warrington Township, No. 05-CV-1707, 2006 WL 2246415 (M.D.Pa.2006); Beam v. Bauer, 383 F.3d 106 (3d Cir.2004); Beam v. Downey, 151 Fed. Appx. 142 (3d Cir.2005). Failing to utilize the proper discovery procedures to resolve this dispute has also taken a lot of additional time and effort, both for Plank and Taughinbaugh and the Court. Finally, the Court must note the character of the litigation (from Lease I until now), which seems from the filings to have devolved into fractiousness between counsel, particularly Mr. Bailey and counsel representing Plank and Taughinbaugh. See Langer, 966 F.2d at 811-12. *11 Considering the above, the Court finds that reasonable attorney fees and costs are the least severe sanctions that suffice to deter repetition of this conduct. Counsel for Plank and Taughinbaugh are directed to submit a detailed fee petition with affidavits outlining background, hourly billing rates, and the time spent in defending the instant complaint and litigating the motion for sanctions so that the Court can calculate the “lodestar” figure. See Doering, 857 F.2d at 195. VI. CONCLUSION For the foregoing reasons, Plank and Taughinbaugh's motion to dismiss and motion for sanctions will be granted. The Court will require Plaintiff Lease to amend his complaint to resolve violations of Rule 8 and 10 of the Federal Rules of Civil Procedure, and the remaining motions to dismiss will be denied as moot. An order consistent with this memorandum will follow. ORDER AND NOW, this 3rd day of April 2009, upon consideration of the Defendants' motions to dismiss (Doc. Nos.23, 25, 28, 40), Defendant Ron Plank and George A. Taughinbaugh's motion for sanctions (Doc. No. 27), and Don Bailey's motion to withdraw (Doc. No. 56), and for the reasons set forth in this Court's Memorandum Opinion filed herewith, IT IS HEREBY ORDERED THAT: 1. Defendant Plank and Taughinbaugh's motion to dismiss (Doc. No. 25) and motion for sanctions (Doc. No. 27) are GRANTED. 2. Don Bailey's motion to withdraw as counsel for the Plaintiff (Doc. No. 56) is GRANTED. 3. Counsel for Defendants Plank and Taughinbaugh shall submit affidavits setting forth each attorney's educational background, work experience, specializations and their Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 69 of 192 Lease v. Fishel, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 current hourly billing rate. These attorneys shall also submit an exhibit detailing the hours expended and work performed in defending the instant complaint and litigating the motion for sanctions. This documentation shall be submitted within twenty (20) days from the date of this order. 4. Plaintiff is permitted to file objections to the hourly rate and hours expended by the Defendants. These objections shall be filed within fifteen (15) days of the filing of Plank and Taughinbaugh's affidavits and exhibits. These objections may be filed by Don Bailey or through substitute counsel now that Mr. Bailey has been granted leave to withdraw as Plaintiff's counsel. 5. Taking into account the Court's disposition of the prior related lawsuit in this matter and the deficiencies with the present complaint identified in the Court's Memorandum Opinion, Plaintiff shall submit an amended complaint that complies with Rules 8 and 10 of the Federal Rules of Civil Procedure within twenty (20) days from the date of this order. 6. The Defendants' remaining motions to dismiss (Doc. Nos.23, 28, 40) are DENIED AS MOOT. All Citations Not Reported in F.Supp.2d, 2009 WL 922486 Footnotes 1 Indeed, in Lease I, the Court determined that Plank was not a state actor when granting summary judgment in his favor. (See Lease I, Doc. No. 82 at 18.) 2 Nothing in this discussion should be construed as a determination on the pending claims against the other Defendants in this litigation. 3 Plank and Taughinbaugh also seek sanctions against Plaintiff Lease himself. (Doc. No. 31 at 10.) Because the Rule 11 violation in this case is primarily based on meritless legal claims and contentions, the Court finds that sanctioning Lease himself is not warranted under the circumstances. Further, Plank and Taughinbaugh seek monetary sanctions, which cannot be awarded against a represented party for violating Rule 11(b)(2). Fed.R.Civ.P. 11(c)(5)(A). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 70 of 192 EXHIBIT H Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 71 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Yellow Flag - Negative Treatment Distinguished by Roberts Technology Group, Inc. v. Curwood, Inc., E.D.Pa., September 23, 2015 2008 WL 423446 Only the Westlaw citation is currently available. United States District Court, E.D. Pennsylvania. ORTHOVITA, INC., Plaintiff v. Erik M. ERBE, Defendant. Civil Action No. 07-2395. | Feb. 14, 2008. Attorneys and Law Firms Amanda M. Kessel, David J. Wolfsohn, Woodcock Washburn, LLP, Edward S. Mazurek, Michael J. Ossip, Sarah Elise Pontoski, Morgan Lewis & Bockius LLP, Philadelphia, PA, for Plaintiff. Michael O'Hayer, West Chester, PA, for Defendant. MEMORANDUM AND ORDER GENE E.K. PRATTER, District Judge. *1 Employee loyalty and post-employment competition against the former employer spawn many disputes. This is one of them. Orthovita, Inc., a company in the medical technology field, asserted thirteen claims 1 against its former Chief Science Officer, Dr. Erik M. Erbe. As described in greater detail in this Memorandum, Orthovita believes Dr. Erbe's disloyal conduct while in the company's employ was so extensive as to justify a host of claims, subjecting him to both money damages and equitable remedies. Dr. Erbe has moved to dismiss all the claims against him except the claims for breach of contract and for violation of the Computer Fraud and Abuse Act. Dr. Erbe argues that (1) the gist of the action doctrine requires dismissal of Counts II-V, IX, X, XII and XIII; (2) Counts II, III, IV and V are not viable and lack necessary supporting factual allegations; (3) Counts VI and VII (trademark infringement) must fail because Dr. Erbe has not used Orthovita's CORTOSS product name in marketing products or in any manner that could confuse potential investors or buyers; (4) Count VIII (promissory estoppel) must be dismissed because neither party disputes the existence of a valid employment contract; and (5) Count X (breach of fiduciary duty) must be dismissed because Pennsylvania law does not impose such a duty on corporate officers or employees. For the reasons set forth below, Dr. Erbe's Motion to Dismiss is granted as to Counts V (unfair competition) and X (breach of fiduciary duty), but denied in all other respects. I. LEGAL STANDARD To decide a Rule 12(b)(6) motion, the Court may look only to the facts alleged in the complaint and its attachments. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1251, 1261 (3d Cir.1994). The Court must accept as true all well-pleaded allegations in the complaint and view them in the light most favorable to the plaintiff. Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939, 944 (3d Cir.1985). A Rule 12(b)(6) motion will be granted only if it is certain that no relief could be granted under any set of facts that could be proved by the plaintiff. Ransom v. Marrazzo, 848 F.2d 398, 401 (3d Cir.1988). II. FACTUAL BACKGROUND A. Orthovita and Its Products Orthovita, a Pennsylvania corporation, develops, manufactures and markets high-tech, synthetic-based biomaterial products for use in spinal surgery. Orthovita has five key commercial product groups: VITOSS Bone Graft Substitute, VITAGEL Surgical Hemostat, CORTOSS Bone Augmentation Material, ALIQUOT Delivery System, and IMBIBE Needles, Syringes and Disposable Delivery Systems. All of its products are regulated by the U.S. Food and Drug Administration (“FDA”). CORTOSS, the product at the center of this litigation, is a glass ceramic polymeric composite engineered specifically to mimic the characteristics of human bone. According to Orthovita, CORTOSS may be used in surgical procedures to aid in the repair of bones, including the spine. Orthovita's CORTOSS trademark received federal Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 72 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 protection on November 5, 2002 in connection with bioactive bone augmentation material. B. Dr. Erbe's Employment with Orthovita *2 Orthovita hired Dr. Erik Erbe as Director, Technical Operations on May 22, 1995. In October of 1996, Orthovita promoted him to the position of Vice President, Research and Development. Orthovita again promoted Dr. Erbe on May 1, 2002, when he became Chief Science Officer overseeing research and development for all Orthovita products, preparing patent applications, and testifying as an expert witness regarding Orthovita products. Orthovita asserts that in this role, Dr. Erbe had access to the company's research and development plans, testing procedures, and patent prosecution strategies. On April 23, 2003, Dr. Erbe entered into an employment agreement with Orthovita. See, Amended Compl., Ex. A. The agreement required Dr. Erbe to maintain the confidentiality of the company's business. It included provisions related to confidential information, intellectual property, and non-competition. In addition, the agreement required that Dr. Erbe provide Orthovita with all new ideas he had for undeveloped intellectual property. C. Behavior Prior to Dr. Erbe's Termination 2 On the weekend of April 29, 2007, Dr. Erbe called an “urgent” meeting with Charanpreet Bagga, Dr. Joshua D. Auerbach, and Dr. Philip Maurer 3 to discuss his plans for a company called Augmented Spinal Technologies (“AST”). According to Orthovita, Dr. Erbe planned to incorporate AST and use the new company to develop and/or market a bioactive bone augmentation material similar to CORTOSS in competition with Orthovita. During the meeting, Dr. Erbe showed a PowerPoint presentation that Orthovita asserts was largely copied from its corporate materials. Dr. Erbe presented a detailed plan for developing AST's business, including information about the products it will develop and market. The presentation materials used the word “CORTOSS” in relation to Dr. Erbe's description of plans regarding the development and marketing of bioactive bone augmentation material. The PowerPoint also contained images found in Orthovita's Technical Information Package about CORTOSS. Dr. Erbe then traveled to Berlin, Germany to attend a meeting, ostensibly on behalf of Orthovita. While in Germany, on May 3, 2007, Dr. Erbe met with Bess Weatherman, a director of Kyphon, Inc., a direct competitor of Orthovita. Prior to the meeting, Dr. Erbe told Ms. Weatherman that he wanted to discuss “confidential information” with her. Amended Compl. ¶ 71. During the meeting, Dr. Erbe showed Ms. Weatherman the same PowerPoint presentation. On the same trip, Dr. Erbe also met with Dr. Rudolph Bertagnoli, an orthopedic spine surgeon who serves as a consultant to Orthovita. Dr. Erbe again showed the AST PowerPoint presentation. Following his trip to Berlin, Dr. Erbe did not report to work on May 7-9 or May 11, 2007, although he went to work for a brief period on May 10. Orthovita avers that instead of working Dr. Erbe met with various potential investors and medical advisors to present the AST PowerPoint. Potential investors included Sean Carney of Warburg Pincus LLP, Richard Emmitt of The Vertical Group, and Susan Locktov and Mary Bowman, formerly of Bowman & Associates. Orthovita asserts that during meetings with these individuals, Dr. Erbe revealed Orthovita's confidential information and trade secrets with respect to CORTOSS. *3 On May 8, 2007, accordingly to Orthovita, Dr. Erbe again spoke with Dr. Auerbach. He sought information from Dr. Auerbach regarding the time line to secure intellectual property before proceeding with an anatomy study. On May 14, 2007, Dr. Erbe attended a meeting regarding Orthovita's future goals. Management analyzed and discussed CORTOSS's intellectual property, future development of CORTOSS, and steps for the development of Orthovita's intellectual property portfolio. Orthovita asserts that Dr. Erbe did not affirmatively contribute to the meeting. Following this planning meeting, Dr. Erbe indicated that he was unhappy about issues concerning royalty payments he claimed he was due and that he anticipated that the company's Board of Directors would terminate his employment at its next meeting. D. Dr. Erbe's Computer Use Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 73 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 Orthovita asserts that unbeknownst to the company at this time, Dr. Erbe engaged in a deliberate campaign of deleting from the Orthovita computer system files used in the normal course of the company's business. Further, Orthovita alleges that between November 2006 and May 2007, Dr. Erbe inserted 13 flash drives into his company laptop computer to copy Orthovita files. By using flash drives, after his termination Dr. Erbe was able to retain on his home computer Orthovita's proprietary formula for CORTOSS, 4 development plans and strategies, and Orthovita's operating procedures relating to the development, testing and manufacture of products. While he was still a company officer, from March through May 2007, Dr. Erbe allegedly tried to hide his copying of files by deleting more than 5,500 files from his company laptop. In addition, some of the flash drives Dr. Erbe inserted into his computer were U3 Cruzer Micro USB flash drives. These drives use U3 technology, which is able to run software on computers so that once a file has been downloaded or deleted, no trace evidence/artifacts of the downloaded or deleted file will remain on the computer hard drive. After his termination, according to Orthovita, Dr. Erbe allegedly delayed returning his laptop to Orthovita. E. Dr. Erbe's Termination On May 16, 2007, Orthovita informed Dr. Erbe that his employment was terminated without cause pursuant to Section 5.4(a) of his employment agreement. See, Amended Compl., Ex. A. Because the agreement required 30 days notice prior to termination, Orthovita set the effective date for his termination as June 15, 2007. Dr. Erbe continued to receive his full pay and benefits through that date. The Amended Complaint alleges that Dr. Erbe's termination was the result of his failure to report for work May 7-9 and 11, 2007 and his lack of insight or contributions at the May 14, 2007 management meeting. Amended Compl. ¶ 51. See also, id. ¶¶ 45-53. Orthovita avers that this behavior demonstrated Dr. Erbe's alleged lack of loyalty to the company and his inappropriate preoccupation with royalty payment issues. *4 On June 15, 2007, after learning the extent of Dr. Erbe's behavior prior to his termination (i.e. the multiple meetings with competitors and potential AST investors), Orthovita sent Dr. Erbe another notice of termination informing him of his termination for cause, effective immediately. III. DISCUSSION A. Pennsylvania's Gist of the Action Doctrine Dr. Erbe asserts that Pennsylvania's gist of the action doctrine supports dismissal of Counts II-V, IX, X, XII and XIII. He maintains that each of these counts presents a state tort claim for conduct which, if proven, would violate specific provisions of the employment agreement. Therefore, according to Dr. Erbe, his alleged conduct justifies the breach of contract claim in Count I, but renders the other specific counts redundant of the basic contract claim. See, Brief in Support of Def.'s Motion to Dismiss (“Motion”) at 6. Under the gist of the action doctrine, a plaintiff is barred from recasting a breach of contract claim as a tort claim. eToll, Inc. v. Elias/Savion Adver., Inc., 811 A.2d 10, 14 (Pa.Super.Ct.2002). The gist of the action doctrine bars tort claims: (1) arising solely from a contract between the parties; (2) where the duties allegedly breached were created and grounded in the contract itself; (3) where the liability stems from a contract; or (4) where the tort claim essentially duplicates a breach of contract claim or the success of which is wholly dependent on the terms of a contract. Id. at 19 (internal citations omitted). “When a plaintiff alleges that the defendant committed a tort in the course of carrying out a contractual agreement, Pennsylvania courts examine the claim and determine whether the ‘gist’ or gravamen of it sounds in contract or tort; a tort claim is maintainable only if the contract is ‘collateral’ to conduct that is primarily tortuous.” Caudill Seed & Warehouse Co., Inc. v. Prophet 21, Inc., 123 F.Supp.2d 826, 833 (E.D.Pa.2000) (quoting Sunquest Info. Sys., Inc. v. Dean Witter Reynolds, Inc., 40 F.Supp.2d 644, Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 74 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 651 (W.D.Pa.1999)). “[I]f the claim essentially alleges a breach of duties that flow from an agreement between the parties, the claim is contractual in nature, whereas if the duties allegedly breached were of a type imposed on members of society as a matter of social policy, the claim is essentially tort-based.” Id. (cited with approval by Wilmington Fin., Inc. v. Am. One Fin., Inc., 2007 U.S. Dist. LEXIS 55738, at *6 (E.D.Pa. July 31, 2007)). Notwithstanding the efficacy of the doctrine, a court should be slow to dismiss claims under the gist of the action doctrine. Federal civil procedure allows parties to plead multiple claims as alternative theories of liability. See, e.g., Berger & Montague v. Scott & Scott, 153 F.Supp.2d 750, 754 (E.D.Pa.2001) (rejecting a challenge under the gist of the action doctrine and allowing a plaintiff to pursue claims for both breach of contract and conversion). In fact, F.R.C.P. 8(e)(2) expressly states: *5 A party may set forth two or more statements of a claim or defense alternatively or hypothetically, either in one count or defense or in separate counts or defenses. When two or more statement are made in the alternative and one of them if made independently would be sufficient, the pleading is not made insufficient by the insufficiency of one or more of the alternative statements. A party may also state as many separate claims or defenses as the party has regardless of consistency and whether based on legal, equitable, or maritime grounds. Fed.R.Civ.P. 8(e)(2). “This permissive pleading rule has been applied to cases involving both contract claims and other claims related [to] the same facts.” Interwave Technology Inc. v. Rockwell Automation, Inc., 2005 U.S. Dist. LEXIS 37980, at *37 (E.D.Pa. December 30, 2005). Dr. Erbe's invocation of the gist of the action doctrine requires that the Court consider the theories underlying Orthovita's various claims. i. Counts II, III, IV and V-Misappropriation, Inevitable Disclosure, and Unfair Competition Dr. Erbe asserts that Counts II, III, IV and V of the Amended Complaint (common law misappropriation, statutory misappropriation, inevitable disclosure and unfair competition 5 ) are all subsumed by the parties' contractual undertaking. Dr. Erbe specifically points to paragraph 2.0 of his employment agreement, concerning “confidential information,” to support this argument. See, Amended Compl., Ex. A. Dr. Erbe notes that the contract requires him to “maintain the secrecy of Orthovita's confidential and trade secret information for a period of three years after his termination from employment.” Motion at 8. Thus, he argues that Counts II, III, IV and V all are merely variations of the contract claim that he violated paragraph 2.0 of the employment agreement. a. Common Law and Statutory Misappropriation (Counts II and III) Although Dr. Erbe argues that his duty to refrain from misappropriating trade secrets arises only through his employment contract, “Pennsylvania law ... imposes a common law duty on an employee not to use or disclose trade secrets obtained in the course of a confidential employment relationship.” Freedom Med.. Inc. v. Gillespie, 2007 U.S. Dist. LEXIS 63720, at *65 (E.D.Pa.2007). Pennsylvania law also imposes such a duty by statute, 12 Pa.C.S.A. § 5302. The Amended Complaint asserts that Dr. Erbe had “intimate” knowledge of Orthovita's inner workings and confidential strategies. See, e.g., Amended Compl. ¶ 33. At this juncture in the litigation, it is too soon to know whether the common law or statutory prohibition against misappropriation will address a broader scope of Orthovita secrets or greater duties than the contract obligation. Accordingly, when viewed in the light most favorable to Orthovita, the pleadings allege that Dr. Erbe had a confidential relationship with his former employer which, depending on the facts developed during the course of litigation, could “give rise to independent duties to refrain from disclosing or misappropriating trade secrets.” Freedom Med., 2007 U.S. Dist. LEXIS 63720, at *66 (allowing a claim for misappropriation to move forward following a challenge under the gist of the action doctrine). Therefore, the Court will not apply the gist of the action doctrine to dismiss these Counts at this time. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 75 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 b. Inevitable Disclosure (Count IV) *6 Orthovita asserts that Dr. Erbe had access to company trade secrets as a direct result of his employment. Accordingly, the company argues that it would be impossible for Dr. Erbe to work for AST or any other biomaterials company either as a direct employee or as a consultant without drawing directly from and using his knowledge of Orthovita's confidential information and trade secrets. Hence, the claim is that he will inevitably disclose Orthovita's confidential information. Dr. Erbe asserts that his employment contract's confidentiality requirements fully protect Orthovita from any potential disclosure of the company's confidential information and trade secrets. Accordingly, Dr. Erbe seeks dismissal of Orthovita's inevitable disclosure claim under the gist of the action doctrine. The Pennsylvania Supreme Court in Air Prods. & Chems., Inc. v. Johnson, 296 Pa.Super. 405, 442 A.2d 1114, 1119-20 (Pa. Super Ct.1982), recognized that the inevitable disclosure doctrine provides for an equitable remedy and does not emanate from a tort. This equitable remedy applies when there is no restrictive covenant in place to protect a former employer's trade secrets. Id. Orthovita asserts that certain of its trade secrets are not protected by the employment contract, so the company is entitled, under Air Products & Chemicals, to invoke the inevitable disclosure doctrine to protect those trade secrets and to prevent Dr. Erbe from working or consulting with certain entities. Indeed, Orthovita points to Dr. Erbe's Motion to support its argument that it may not be fully protected by the employment agreement. In his Motion, Dr. Erbe indicates that he will contest the scope of the employment agreement. Compare, Motion at 13, n. 5 with Amended Compl. ¶¶ 22, 43. The possible reach of the agreement's purported restrictive covenant could well be one of the points of contention Dr. Erbe may raise. In addition, it is conceivable that the alleged inevitable disclosure relates to information or circumstances not covered by the employment agreement. Thus, this claim cannot be dismissed on the basis of the gist of the action doctrine at this time. ii. Count IX-Conversion Dr. Erbe argues that the conversion claim in Count IX must be dismissed under the gist of the action doctrine because the employment agreement subsumes it as well. Orthovita alleged in Count IX that Dr. Erbe “unlawfully and willfully converted for his own use Orthovita's confidential information, propriety information and trade secrets,” and that, as a result, he has realized or will realize profits from the conversion. Amended Compl. ¶¶ 191-92. Dr. Erbe asserts that “the duty to maintain confidentiality, and to refrain from disclosure of sensitive information, is imposed by the parties' contract ... preventing Plaintiff's attempt to recast the claim as one sounding in tort.” Motion at 8. When a plaintiff has a property interest in the thing that is the subject of a conversation claim, the gist of the action doctrine does not bar recovery under a conversion theory even though the property may also be the subject of a contract. See, Berger, 153 F.Supp.2d at 753-54 (holding that conversion claim was not barred when plaintiff had property interest in proceeds that were both the subject of the breach of contract and conversion claims). Orthovita has alleged that it has a property interest in its trade secrets, confidential information and computer files. That property properly can be the subject of both a breach of contract claim and a conversion claim. *7 Of course, even if the gist of the action doctrine could be used here, ultimately, the broad federal pleading possibilities allow the company to plead both causes of action as alternative theories of liability. See, Berger, 153 F.Supp.2d at 754 (“[As Rule 8(e)(2) ] allows [a plaintiff] to plead two or more alternative claims against [a defendant] for either breach of contract or conversion, regardless of their consistency, and whether based on legal, equitable or other grounds, Defendant's motion to dismiss the claim for conversion must, at this juncture, be denied.”). Accordingly, at this stage in the litigation, Orthovita may pursue the alternative claims for breach of contract and conversion. iii. Counts X and XII-Breach of Fiduciary Duty and Breach of Duty of Loyalty Dr. Erbe argues that the claims for breach of fiduciary duty (Count X) and breach of duty of loyalty (Count XII) also must be dismissed under the gist of the action doctrine. He acknowledges that “superficially, these claims rest upon alleged duties imposed by law as a matter of social policy,” but as framed in this case, Dr. Erbe emphasizes that “the breaches alleged ... are all breaches for specific duties contained in the contract.” Motion at 9. Paragraph 2.0 of the employment contract restricts the use of confidential Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 76 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 information while paragraph 3.0 addresses Dr. Erbe's duty to refrain from competing with the company. See, Amended Compl., Ex. A. Thus, according to Dr. Erbe, breaches of the fiduciary duty and of the duty of loyalty are properly considered breaches of the employment contract. Assuming that as an officer of the company Dr. Erbe owed a fiduciary duty to his employer, 6 Orthovita asserts that the duty extends well beyond the limited obligations of the employment contract. The Third Circuit Court of Appeals held in Bohler-Uddeholm Am., Inc. v. Ellwood Group Inc., 247 F.3d 79 (3d Cir.2001), that obligations arising under a fiduciary duty are imposed “as a matter of social policy, rather than by mutual consensus.” Id. at 105. Such “larger social policies [are] embodied in the law of torts rather than the terms of the contract.” Id. Although Dr. Erbe asserts that Orthovita is seeking redress for his alleged misuse of confidential information and his supposed breach of his duty not to compete with his former employer, the Amended Complaint asserts a broader cause of action under the breach of fiduciary duty claim, including generalized harm from “acts and omissions.” Amended Compl. ¶ 201. Because the Court must view all well-pleaded allegations in the Amended Complaint in the light most favorable to Orthovita at this time, the Court finds that the gist of the breach of fiduciary duty claim is the tort ascribed to Dr. Erbe's failure to abide by the social policy embracing an employee's fiduciary duty, not the collateral (in this specific aspect of the dispute) employment contract. 7 *8 Similarly, a claim for breach of the duty of loyalty is defined by “larger social policies embodied in the law of torts.” So long as such fiduciary duties extend beyond the limits of an employment contract due to the parties' relative positions, the gist of the action doctrine will not bar a claim for breach of loyalty. See e,., Murphy v. Mid East Oil Co., 2007 WL 527715, at *6-7 (W.D.Pa. Feb.14, 2007). As an officer and agent of the company, any duty of loyalty owed by Dr. Erbe to Orthovita would flow from the parties' positions, not merely the terms of the employment contract. The gist of the action doctrine does not bar such claims. iv. Count XIII-Fraud Dr. Erbe maintains, essentially without explanation, that the Court should dismiss the fraud claim under the gist of the action doctrine. Dr. Erbe merely states that the fraud claim encompasses the same breaches of loyalty as those alleged in Counts X and XII. Orthovita argues that because Dr. Erbe fraudulently misrepresented that he remained a loyal employee, the company did not terminate his employment but continued to allow him to participate in meetings involving Orthovita's business strategy. See, Amended Compl. ¶¶ 234-35. The company alleges that Dr. Erbe affirmatively took steps to hide his plot to steal Orthovita's secrets and proprietary information, thus deliberately harming the company. Id. ¶ 44. Pennsylvania courts “generally invoke the gist of the action doctrine to bar a tort claim where the defendant has negligently or intentionally breached a contract.” Greater Philadelphia Health Servs. II Corp. v. Complete Care Servs., L.P., 2000 WL 33711052, at *2 (Pa.Com.Pl. Nov.20, 2000). However, courts have not invoked the doctrine to bar tort suits “when the defendant not only breached the contract, but also made representations about the breach with the intent to deceive the plaintiff, such that the unsuspecting plaintiff continued the contractual relationship or failed to assert its contractual rights against the defendant.” Id. See also, Am. Guarantee & Liab. Ins. Co. v. Fojanini, 90 F.Supp.2d 615, 623 (E.D.Pa.2000) (holding that plaintiffs' fraud claim was not barred by the gist of the action doctrine because plaintiffs “were duped into spending large amounts of time and energy on [defendant's] behalf in reliance upon representations made by [defendant] that [it] had its financial house in order.”); Northeastern Power Co. v. Balcke-Durr, Inc., 1999 U.S. Dist. LEXIS 13437, *37 (E.D.Pa.1999) (holding that the gist of the action doctrine does not bar plaintiff's tort claim because the fraud claim went beyond mere failure to perform under the contract and asserted that defendant made “specific promises and representations that were allegedly made knowingly and/or recklessly with the intent to deceive and defraud [the plaintiff]”). Because Orthovita expressly asserts that Dr. Erbe made misrepresentations which resulted in his continued employment and access to proprietary information, such facts, if proven, are analytically separate from the breach of the contract claim itself. 8 Orthovita's fraud claim against Dr. Erbe reaches beyond the bounds of the employment contract and will not be dismissed on the basis of the gist of the action doctrine. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 77 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 B. Counts II, III, IV and V-Misappropriation of Trade Secrets, Inevitable Disclosure, and Unfair Competition *9 Dr. Erbe asserts that even if they survive application of the gist of the action doctrine, Orthovita's claims for misappropriation of trade secrets, inevitable disclosure, and unfair competition should be dismissed as non-viable. Dr. Erbe first argues that the common law and statutory misappropriation claims must be dismissed because Orthovita asserts that Dr. Erbe disclosed trade secrets “to AST,” but, as Dr. Erbe notes, even Orthovita admits that AST is not yet a legal entity. See, Amended Compl. ¶ 57. However, Dr. Erbe neglects to address Orthovita's allegations that he disclosed trade secrets to potential AST consultants and investors. Accordingly, even if Dr. Erbe could not have revealed information to a non-existent entity, he still could have misappropriated Orthovita information to reveal it to the individuals outside of Orthovita as identified in the Amended Complaint. Dr. Erbe next argues that the Court should dismiss these counts because they lack specific supporting facts. Dr. Erbe seeks to invoke Bell Atlantic Corp., et. al. v. Twombly, et. al., --- U.S. ----, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), a case concerning alleged Sherman Act violations in which the Supreme Court adopted a pleading standard to require that a complaint allege facts plausibly suggesting the existence of prohibited conduct, not merely consistent with such alleged conduct. Id. at 1966. A formulaic recitation of the elements of a cause of action is not sufficient under this standard. Id. In addition, Dr. Erbe again asserts that “no disclosure of trade secrets has taken place, as the only person or entity alleged to have received such disclosures is AST, an entity admitted not to exist.” Motion at 12. Thus, he again neglects to address the allegations that he revealed confidential information to specific individuals in preparation for the incorporation and development of AST. Orthovita disputes the applicability of Twombly. Indeed, while Twombly arguably raises the specificity standard for certain types of pleadings, it remains to be seen whether heightened pleading requirements will be demanded beyond the reach of the causes of action specifically at issue in Twombly. At least one court in the wake of Twombly, when deciding whether a plaintiff has properly pled a claim for misappropriation of trade secrets, has continued to apply the same notice pleading standard for misappropriation claims rather than to require greater specificity. See, Givemepower Corp. v. Pace Compumetrics, Inc., 2007 U.S. Dist. LEXIS 59371, at *26 (S.D.Cal. Aug. 14, 2007) (finding that a plaintiff properly pled misappropriation claim and recognizing that so long as the complaint describes “the trade secret with sufficient particularity to separate it from matters of general knowledge ... and to permit the defendant to ascertain at least the boundaries within which the secret lies ..., one who seeks to protect his trade secrets from wrongful use or disclosure does not have to spell out the details of the trade secret to avoid a demurrer to a complaint.”) (internal citations omitted). Without commenting upon the possible propriety of applying Twombly beyond Sherman Act cases, the Court sees particularly cautionary reasons for declining to apply it here. As Orthovita argues, a plaintiff alleging misappropriation of trade secrets need not plead the details of its trade secrets in a publicly filed complaint, inasmuch as such disclosure would destroy the essential “secrecy” of the claimed trade secret. “[C]ourts are in general agreement that trade secrets need not be disclosed in detail in a complaint alleging misappropriation for the simple reason that such a requirement would result in public disclosure of the purported trade secrets.” Pennfield Precision, Inc. v. EF Precision, Inc., 2000 U.S. Dist. LEXIS 11971, at *10 (E.D.Pa. Aug. 15, 2000) (denying motion to dismiss trade secrets claim). *10 Using conventional pre-Twombly analysis, Orthovita also asserts that it has sufficiently pled the trade secrets at issue to survive a motion to dismiss these claims, as well as the inevitable disclosure claim and unfair competition claim. Orthovita has alleged that Dr. Erbe provided confidential information and trade secrets related to CORTOSS to potential AST investors during a series of presentations. See, Amended Compl. ¶¶ 54, 59, 60-65, 70-76, 79-80, 99-101. In addition, the company asserts that many of these potential investors are associated with Orthovita's direct competitors. Id. ¶¶ 65-66, 68, 71. Accordingly, the Court finds that Orthovita has met its threshold of pleading what types of trade secrets were revealed and to whom, thus meeting the applicable pleading requirements. Dr. Erbe makes a final argument aimed at the dismissal of Orthovita's inevitable disclosure claim. He asserts that while Orthovita's repetition of the term “inevitable” may, at first glance, argue against dismissal at this time, in actuality, alleged inevitability is not sufficient to survive dismissal. The Amended Complaint does not allege that Dr. Erbe actually has taken employment with any competitor of Orthovita and does not allege what, if any, trade secret information Dr. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 78 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 Erbe is believed to have misappropriated. Accordingly, the Court perceives that what Dr. Erbe is arguing is that without some plausible, identifiable link to future conduct, empty allegations of inevitable disclosure should not survive. If this is what Dr. Erbe argues, on the surface there is much to recommend his logic. However, Orthovita responds by noting that at this stage, the Court must take all of its allegations as true and thus may not rely solely on the absence of an allegation that Dr. Erbe is now actively employed with a competing company to dismiss the claim. Orthovita asserts that under the inevitable disclosure doctrine it is entitled to bring claims to ensure that Dr. Erbe is unable to follow through on what might now only be a mere plan for an unincorporated entity. Under the inevitable disclosure doctrine, a former employer is entitled to enjoin even anticipated employment or other business activity that would result in inevitable disclosure in order to protect the former employer's confidential and proprietary information from disclosure. See generally, Air Prods. And Chems ., Inc. v. Johnson, 296 Pa.Super. 405, 442 A.2d 1114, 1119-20 (Pa.Super.Ct.1982) (cited with approval by Sweetzl, Inc. v. Hawk Hill Cookies, 1995 U.S. Dist. LEXIS 13495, at *37-38 (E.D.Pa.1995)). Essentially, Orthovita is arguing that it should not have to wait for the fleeting moment in time when its ex-employee has signed on to a competitor's roster but before actual disclosure has taken place to file a claim because the “inevitable disclosure” cause of action exists so that the vulnerable ex- employer need not be so precariously poised and may file suit earlier in the sequence of likely inevitable events. At least at this juncture, the Court agrees, and Orthovita's claim for inevitable disclosure survives. *11 As for Orthovita's claim for unfair competition, neither Dr. Erbe nor Orthovita addresses the legal requirements of such a claim. In the Amended Complaint, Orthovita alleges that Dr. Erbe “wrongly and unfairly competed with Orthovita by creating AST while still employed by Orthovita, revealing Orthovita's trade secrets and proprietary information to AST and potential consultants for AST and investors in AST, and diverting corporate opportunities to AST while employed by Orthovita.” ¶ 148. “If Dr. Erbe is permitted to own and operate AST, or own, operate, consult or work for any other biomaterials business, Orthovita will suffer irreparable injury that can only be avoided by enjoining” Dr. Erbe from conducting such activities. Id. ¶ 152. As far as the Court can discern, these quoted allegations form the upshot of the unfair competition claim. “A claim of unfair competition under Pennsylvania law requires proof that the defendant has ‘passed off’ the goods of one manufacturer or vendor as those of another, thus creating confusion between his own goods, and those of the rival.” Scanvec Amiable, Ltd. v. Chang, 8 Fed. Appx. 171, 180 (3d Cir.2003) (citing Penn. State Univ. v. Univ. Orthopedics, Ltd., 706 A.2d 863, 870-71 (Pa.Super.Ct.1998) (“The gist of the action lies in the deception practiced in ‘passing off’ the goods of one for that of another”)). The “underlying principle of law of unfair competition is to prevent substitution by deception.” Winthrop Chemical Co. v. Weinberg, 60 F.2d 461, 463 (3d Cir.1932). Accordingly, the “law of unfair competition also requires that a company, entering a field already occupied by a rival of established reputation, ‘must do nothing which will unnecessarily create or increase confusion between his goods or business and the goods or business of the rival .’ ” Penn. State Univ., 706 A.2d at 870-871 (quoting Gamlen Chemical Co. v. Gamlen, 79 F.Supp. 622, 636 (W.D.Pa.1948)). 9 In Count V of the Amended Complaint, by which Orthovita brings its unfair competition claim, Orthovita does not accuse Dr. Erbe of passing its goods off as his own or fostering confusion between his goods and those of his former employer. 10 Orthovita simply accuses Dr. Erbe of misappropriation and misuse of its trade secrets and other confidential information. Accordingly, Orthovita has failed to proffer allegations in the Amended Complaint sufficient to warrant relief for unfair competition under even the most generous reading of the Count that is meant to articulate that claim. Therefore, Orthovita's claims for misappropriation of trade secrets and inevitable disclosure survive dismissal at this time. Orthovita's claim for unfair competition is dismissed without prejudice should Orthovita properly seek leave to amend that Count. C. Counts VI and VII-Trademark Infringement and Violation of § 32 of the Lanham Act Dr. Erbe argues that Orthovita's trademark infringement claims must be dismissed because Orthovita has not alleged that AST has developed any products, much less that it is marketing such products. In addition, Dr. Erbe claims that Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 79 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 Orthovita's allegations regarding the AST PowerPoint 11 presentation demonstrate that any use of the CORTOSS name in the document does not infringe on Orthovita's trademark because the use does not cause likelihood of confusion and does not contain a false description of the origin of any product. See, Motion at 14. *12 Orthovita asserts that Dr. Erbe's use of the trademark CORTOSS in the AST PowerPoint presentation violated trademark law, specifically 15 U.S.C. § 1125. See, Amended Compl. ¶ 154. In addition, Orthovita alleges that Dr. Erbe “used an exact copy or colorable imitation of the mark CORTOSS in connection with the sale, offering for sale, distribution and/or advertising of his products and services, which is likely to cause confusion, mistake and/or deceive members of the public in violation of 15 U.S.C. § 1114.” Amended Compl. ¶ 177. Longstanding conventional case law holds that the essence of a trademark infringement claim is the passing off of the goods of one as those of another. See, Am. Steel Foundries v. Robertson, 269 U.S. 372, 46 S.Ct. 160, 70 L.Ed. 317 (1925). The elements necessary to establish Orthovita's claims under Sections 1114 and 1125 of the Lanham Act are similar. See, A & H Sportwear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir.2000). Pursuant to 15 U.S.C. § 1114, “[t]o prove a trademark infringement, a plaintiff must show that: (1) the mark is valid and legally protectable; (2) the mark is owned by the plaintiff; and (3) the defendant's use of the mark to identify goods or services is likely to create confusion concerning the origin of the goods or services.” Fisions Horticulture, Inc. v. Vigoro Industries, Inc., 30 F.3d 466, 472 (3d Cir.1994). Under 15 U.S.C. § 1125(a), a plaintiff must show that (1) the mark is valid, legally protectable and owned by the plaintiff, and (2) the defendant's use of the mark to identify goods or services causes a likelihood of confusion concerning the origin of the goods or services. See, 15 U.S.C. § 1125(a). Dr. Erbe asserts that Orthovita makes only one specific allegation regarding the PowerPoint presentation: that he showed the presentation “to investors and potential investors and other medical advisors.” See, Amended Compl. ¶ 65. Accordingly, Dr. Erbe argues that there is no allegation that the PowerPoint presentation has been used to market any products, so it is implausible that any potential investors were likely to be confused as to the origin of goods which did not yet exist. Dr. Erbe argues that Counts VI and VII should be dismissed because “it is exceedingly implausible” that investors to whom he made his AST PowerPoint presentations about CORTOSS were “likely to be confused.” Motion at 15. However, he does not further elaborate. In response, Orthovita notes that Dr. Erbe “does not challenge the fact that Orthovita has specifically alleged that it owns the CORTOSS mark, that the CORTOSS mark is valid and legally protectable, or that [Dr.] Erbe in fact used the CORTOSS mark in connection with a PowerPoint presentation to potential investors for a start-up competitive entity, AST.” Opposition at 16. Assuming these allegations and all reasonable inferences arising therefrom as true, Orthovita urges the Court to find that Dr. “Erbe used the CORTOSS mark without Orthovita's permission 1) in connection with the ‘offering for sale’ and ‘advertising’ of goods (in satisfaction of 15 U.S.C. § 1114); and 2) ‘in connection” with goods in commerce (in satisfaction of 15 U.S.C. § 1125).” Id. See, BIEC Int'l, Inc. v. Global Steel Servs., Ltd., 791 F.Supp. 489, 537-38 (E.D.Pa.1992) (“the Lanham Act explicitly prohibits [a defendant] from suggesting that its clients can pass their products off as what has become known in the industry [under a trademark].”); Software Publishers Assoc. v. Scott & Scott, LLP, 2007 U.S. Dist. LEXIS 2666, at *22 (N.D.Tex. Jan. 11, 2007) (use of mark in connection with business “for purposes of trading upon the goodwill” of mark is sufficient allegation of use in commerce to withstand a motion to dismiss). *13 The law does not require as a prerequisite to trademark infringement that goods already have been manufactured. Section 1114 prohibits unauthorized use of a registered trademark “in connection with the sale, offering for sale, distribution, or advertising of goods or services.” 15 U.S.C. § 1114. Therefore, “[a]n offering to sell without more will suffice to establish liability.” Levi Strauss & Co. v. Shilon, 121 F.3d 1309, 1312 (9th Cir.1997). In fact, in Levi Strauss, the court upheld an injunction even where there was insufficient evidence to prove any goods had yet been produced or sold. Id. See also, Vuitton Et Fils S.A. v. Crown Handbags, 492 F.Supp. 1071, 1077 (S.D.N.Y.1979) (because of possibility of injury to plaintiff, injunction is appropriate even if defendant has not yet sold any infringing goods) . Orthovita directs the Court to the BIEC case where the defendants left their former employer to form a competing entity that advertised the flag-ship product of their former employer in an effort to mislead consumers about the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 80 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 source of that product. 791 F.Supp. at 534-37. Instead of suggesting that they could manufacture a product like that of their former employer, the defendants asserted they could manufacture the exact product. Id. at 537. The defendants distributed the promotional materials only weeks after leaving the plaintiff company's employ and well before they had the opportunity to manufacture any products. Id. The BIEC court found that the misleading references to the former employer's product warranted a preliminary injunction. Id. at 538. Orthovita argues that it is not unreasonable to assume that presentations asserting that Dr. Erbe was authorized to sell CORTOSS or a CORTOSS-like product were certainly likely to confuse viewers. “There is nothing inherently implausible about the Chief Science Officer ... of a company claiming to have the right to sell a product offered by his company. Nor is it inherently implausible that a departing Chief Science Officer might have the blessing of his former employer to promote one of his former employer's products .” Opposition at 18-19. To believe Dr. Erbe's attack on the claim is to presume that the viewers of his presentation could not be confused about the “origin, source, sponsorship or approval of Erbe's bioactive bone augmentation materials.” Id. at 19. Because at this stage in the litigation the Court must take as true all well-pleaded allegations, the Court will not substitute its own evaluation of the presentation or opine as to whether someone may or may not have been confused. The plausibility or implausibility of these conclusions will surely be determined or at least aided by discovery. Accordingly, as to the question of whether there are a set of facts under which relief could be granted to Orthovita for the trademark claims, the Court finds that there are. D. Count VIII-Promissory Estoppel *14 Dr. Erbe asserts that the Court must dismiss Orthovita's promissory estoppel claim because Orthovita has pled a breach of contract claim that seeks the same relief. Count I of the Amended Complaint asserts a claim for breach of contract and incorporates Exhibit A, a copy of the written employment contract between Orthovita and Dr. Erbe. See, Motion at 15. Through the doctrine of promissory estoppel, a promise that is not supported by consideration may be enforced by the courts to “remedy a manifest injustice.” Cardamone v. University of Pittsburgh, 253 Pa.Super. 65, 384 A.2d 1228, 1233 (Pa.Super.Ct.1978). Promissory estoppel should not be used to supplement or modify a written, enforceable contract. The doctrine applies in situations where parties failed to satisfy the “formal requirements of contract formation ... and where justice would be served by enforcing a promise.” Carlson v. Arnot-Ogden Memorial Hosp., 918 F.2d 411, 416 (3rd Cir.1990). Logically, a promissory estoppel claim can proceed only where a contract is absent. Iverson Baking Co., Inc. v. Weston Foods, Ltd., 874 F.Supp. 96, 102 (E.D.Pa.1995) (“[I]f the courts finds that a contract exists, the promissory estoppel claim must fail.”) When parties have formed an enforceable contract, “relief under a promissory estoppel claim is unwarranted.” Carlson v. Arnot-Ogden Memorial Hosp., 918 F.2d 411, 416 (3d Cir.1990). However, it is permissible to plead breach of contract and promissory estoppel in the alternative. See, MLEA, Inc. v. Atl. Recycled Rubber, Inc., 2005 U.S. Dist. LEXIS 42260, at *12 (E.D.Pa. May 19, 2005). Thus, the promissory estoppel claim must fail only if and when the court finds that a valid contract exists. Id. Orthovita certainly has pleaded the existence of an employment agreement, and at oral argument this counsel explained candidly that Dr. Erbe does not deny its existence. On this basis, and assuming no issues contrary to these fundamental facts, the promissory estoppel claim likely will not survive. See, Lim v. New York Life Insur. Co., 1998 U.S. Dist. LEXIS 318, at *3 (E.D.Pa. January 13, 1998) (holding that a promissory estoppel claim could not survive a motion to dismiss where a plaintiff plead the existence of a contract, and the defendant did not deny its existence). However, Dr. Erbe has expressed in his motion papers an intent to challenge the scope of the employment contract. 12 The Court also notes that Dr. Erbe has not yet answered the Amended Complaint or raised whatever affirmative defenses he intends. Accordingly, the contract may not provide for all promises at issue in this case. See, Kraus Indust. v. Moore, 2007 U.S. Dist. LEXIS 68869, at *25 (E.D.Pa. September 18, 2007) (the existence of a contract will not bar a promissory estoppel claim “when the alleged promise is distinct from the original contract” (citation omitted)). Because it is permissible to plead breach of contract and promissory estoppel in the alternative, and it is not yet ascertainable whether the parties agree on the scope of the employment contract or the contours of the parties' dispute, the promissory estoppel claim survives dismissal. E. Count X-Breach of Fiduciary Duty Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 81 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 *15 Orthovita asserts that Dr. Erbe breached his fiduciary duty to the company while acting as an officer and an agent of Orthovita. Amended Compl. ¶ 39. Dr. Erbe counters that the Court should dismiss the breach of fiduciary duty claim (Count X) because Pennsylvania law does not strictly impose a fiduciary duty on corporate officers or employees, but rather imposes such a duty only on corporate directors. (Motion at 16-17.) In support of his position, Dr. Erbe cites Pennsylvania Business Corporation Law, 15 Pa.C.S. § 512, which sets forth the relative, but arguably different, duties of corporate officers and directors under Pennsylvania law. As for the duties for directors and officers, the statute provides as follows: § 512 Standard of care and justifiable reliance (a) DIRECTORS.-A director of a domestic corporation shall stand in a fiduciary relation to the corporation and shall perform his duties as a director ... in good faith ... and with such care ... as a person of ordinary prudence would use under similar circumstances. * * * (c) OFFICERS.-Except as otherwise provided in the articles, an officer shall perform his duties as an officer in good faith, in a manner he reasonably believes to be in the best interests of the corporation and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances.... 15 Pa.C.S. §§ 512(a), (c). Orthovita quotes a portion of the “Fiduciary Duty” section of the Chapter of Domestic Business Corporations Law relating to “Officers, Directors and Shareholders,” 15 Pa.C.S. § 1712, in an attempt to challenge Dr. Erbe's position. That section reads: Officers.-Except as otherwise provided in the bylaws, an officer shall perform his duties as an officer in good faith, in a manner he reasonably believes to be in the best interests of the corporation and with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under similar circumstances. A person who so performs his duties shall not be liable by reason of having been an officer of the corporation . Id. This quoted portion, which concerns officers, uses nearly identical language to that found in 15 Pa.C.S. § 512, and thus lacks any direct mention of a “fiduciary relationship.” Orthovita did not include the portion of the statute regarding directors, which also uses nearly identical language as that in 15 Pa.C.S. § 512, and thus does include the phrase “fiduciary relationship. Pennsylvania courts have explained that 15 Pa.C.S. § 1712(a) “imposes a fiduciary duty on a corporate director while Section 1712(c) provides that a corporate officer must act ‘in good faith.’ ” Santoro v. Morse, 781 A.2d 1220, 1231 (Pa.Super.Ct.2001). See also, Village of Camelback Property Owners Assoc., Inc. v. Carr, 371 Pa.Super. 371 Pa.Super. 452, 538 A.2d 528, 536 (Pa.Super.1988). *16 Nonetheless, Orthovita endeavors to bolster its position by citation to Seaboard Indus., Inc. v. Monaco, 442 Pa. 256, 276 A.2d 305, 308 (Pa.1971) (“The controlling principles of equity are well settled. Officers and directors of a corporation are deemed to stand in a fiduciary relation to the corporation.”). However, Seaboard deals with another section of Pennsylvania law entirely, namely, 15 P.S. § 1408, which is no longer Pennsylvania law. Dr. Erbe, as an officer who is not a director of the corporation, had no fiduciary duty to Orthovita under Pennsylvania law. Accordingly, Orthovita's claim in its Amended Complaint for breach of fiduciary duty is not a claim upon which relief could be granted. IV. CONCLUSION For the reasons set forth above, the Court denies the Motion to Dismiss as to Counts II-IV, VI-VIII, IX, and XII-XIII, grants the Motion as to Count X (Breach of Fiduciary Duty) and grants the Motion as to Count V (unfair competition), all as set forth above. An appropriate Order consistent with this Memorandum follows. ORDER AND NOW, this 14th day of February 2008, upon consideration of Defendant's Motion to Dismiss (Docket No. 22), Defendant's Brief in Support of the Motion to Dismiss (Docket No. 23), and Plaintiff's Response in Opposition (Docket No. 26), as set forth in Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 82 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 12 the accompanying Memorandum, IT IS HEREBY ORDERED that the Motion is GRANTED as to Count X (breach of fiduciary duty), GRANTED as to Count V (unfair competition), and DENIED as to Counts II-IV, VI- VIII, IX, and XII-XIII. All Citations Not Reported in F.Supp.2d, 2008 WL 423446 Footnotes 1 The array of claims is as follows: breach of contract (Count I), misappropriate of trade secrets-common law (Count II), misappropriation of trade secrets-12 Pa.C.S.A. § 5302 (Count III), inevitable disclosure (Count IV), unfair competition (Count V), trademark infringement-15 U.S.C. § 1125 (Count VI), violation of § 32 of the Lanham Act-15 U.S.C. § 1114 (Count VII), promissory estoppel (Count VIII), conversion (Count IX), breach of fiduciary duty (Count X), violation of the Computer Fraud and Abuse Act-18 U.S.C. § 1030 (Count XI), breach of duty of loyalty (Count XII), and fraud (Count XIII). 2 Orthovita asserts that the initial decision to terminate Dr. Erbe's employment was based on his lack of loyalty to the company as demonstrated by his repeatedly missing work in May 2007, his failure to affirmatively contribute to a May 14, 2007 management meeting, and his preoccupation with royalty payments. Orthovita discovered Dr. Erbe's additional alleged disloyal activities (i.e. alleged meetings with representatives from competitors and potential AST investors) after giving him 30 days' notice as called for under his employment contract. 3 Mr. Bagga is Orthovita's former Vice President of Product Development. He worked on the development of CORTOSS and ALIQUOT products. Drs. Auerbach and Mauer are orthopedic spine surgeons who serve as consultants to Orthovita and assist with product development. 4 According to Orthovita, this formula is not in the public domain. 5 The Court does not analyze the unfair competition claim under the gist of the action doctrine because the Court has concluded that Count V fails to state a claim under even the most generous reading of Orthovita's pleading. See, infra § III.B. 6 See, infra, § III.E. 7 But see, infra § III.E. 8 Dr. Erbe has cited Interwave Tech. Inc. v. Rockwell Automation, Inc., 2005 U.S. Dist. LEXIS 37980 (E.D.Pa.2005). That case dealt with both fraud in the inducement of a contract and fraud that expressly overlapped a breach of contract claim. Accordingly, the Court held that “for purposes of the motion to dismiss, the plaintiff must allege facts in the complaint that if proven, would amount to fraud in the inducement to enter into the contract, with such facts being analytically separable from allegations of breaches in the performance of the contract.” Id. at *40. In this case, as in Interwave, the fraud claim reaches beyond the confines of mere breach of contract (ever so slightly) due to Dr. Erbe's alleged fraudulent representations about his breach of the contract. Accordingly, this claim can survive dismissal under the gist of the action doctrine, even as defined by the strict limitations of Interwave. 9 As has been alluded to above, Orthovita has presented no evidence that AST is an independent business entity rather than simply Dr. Erbe's idea. In fact, Orthovita admits in its Amended Complaint that Dr. Erbe merely “plans to incorporate an entity called Augmented Spinal Technologies (“AST”).” Amended Compl. ¶ 57. Accordingly, AST cannot yet be considered a company entering the field already occupied by Orthovita. 10 Orthovita makes such allegations only in relation to its trademark infringement claims (Counts VI and VII). If Orthovita wishes to pursue a claim for unfair competition based on Dr. Erbe allegedly using the Orthovita or CORTOSS names in such a manner “that people in the trade of the purchasing public perceive[d] the word or name as standing for the business of a particular company,” see, Penn. State Univ., 706 A.2d at 871, then Orthovita would need to amend Count V to support such a reading of its unfair competition claim. As stated currently, Orthovita's unfair competition claim fails to support such a reading. 11 Dr. Erbe requested that the Court consider the contents of the AST PowerPoint presentation slides when ruling on the Motion to Dismiss. Orthovita did not attach the PowerPoint slides to the Amended Complaint (Docket No. 19), however, and Dr. Erbe did not attach it to his Motion. In fact, the PowerPoint slides were attached only to Orthovita's June 14, 2007 Motion for Leave to File Complaint and Other Documents under Seal (Docket No. 2). It is well settled that “a district court ruling on a motion to dismiss may not consider matters extraneous to the pleadings.” In re Burlington Coat Factory Sex. Litig., 114 F.3d 1410 1426 (3d Cir.1997) (citations omitted). Accordingly, the Court did not consider the contents of the AST PowerPoint. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 83 of 192 Orthovita, Inc. v. Erbe, Not Reported in F.Supp.2d (2008) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 13 12 See, Motion at 13 n. 5. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 84 of 192 EXHIBIT I Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 85 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2014 WL 2154965 Only the Westlaw citation is currently available. United States District Court, W.D. Pennsylvania. Stephen M. PEEK, et al., Plaintiffs, v. Thomas WHITTAKER, et al., Defendants. No. 2:13-cv-O1188. | Signed May 22, 2014. Attorneys and Law Firms Stanley M. Stein, Stanley M. Stein, P.C., Pittsburgh, PA, for Plaintiffs. Michael K. Parrish, John J. Richardson, Matthew Fergus, Goehring Rutter & Boehm, Pittsburgh, PA, for Defendants. OPINION MARK R. HORNAK, District Judge. *1 This case is the latest skirmish in the on-going battle between two carpet-cleaning rivals, and is the federal court spill-over of their hotly-contested Pennsylvania state court lawsuit. Plaintiffs Stephen Peek (“Mr.Peek”), Paul Offutt (“Mr.Offutt”), and Clear Floor Care, LLC (“Clear Floor Care”), a company organized and owned by the individual Plaintiffs, filed this suit against Defendants Thomas Whittaker (“Mr.Whittaker”) and R.E. Whittaker Company (“Whittaker Co.”) 1 , alleging violations of the Dragonetti Act, 42 Pa. Cons.Stat. § 8351 et seq., the Pennsylvania Uniform Trade Secrets Act, 12 Pa Cons.Stat. § 5301 et seq. (“PUTSA”), and the Lanham Act, 15 U.S.C. § 1051 et seq., as well as claims for unfair competition, abuse of process, and fraud. Plaintiffs assert that Mr. Whittaker and his company improperly sued them in Pennsylvania state court without probable cause, obtained a preliminary injunction (“PI”) against their business from that court on the basis of knowingly false testimony and affirmative misrepresentations in and to that court, and then publicized that injunction in the carpet-cleaning world in an effort to further stifle Plaintiffs' ability to compete. Pending before the Court is Defendants' Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6). ECF No. 8. The Court has had the benefit of two oral arguments on the Motion. See ECF Nos. 13, 25. Having considered those arguments, the Amended Complaint (“AC”), ECF No. 14, the parties' briefs, ECF Nos. 9, 11, Plaintiffs' response, ECF No. 12, the parties' supplemental briefs filed at the Court's request, ECF Nos. 16, 18, and Plaintiffs' reply, ECF No. 20, the Court will grant in part and deny in part the Motion to Dismiss. I. BACKG ROUND This protracted litigation campaign has been waged by the parties over more than half a decade with heaping amounts of steadfast resolve. The Court will now briefly recount the tale of the various stages of this multi- jurisdictional clash. 2 For the purposes of the disposition of Defendants' Motion to Dismiss, the essential facts, viewed in the light most favorable to the Plaintiffs, are as follows. Whittaker Co. sells commercial carpet-cleaning machines and fluids to individuals and businesses. AC ¶ 9. Mr. Whittaker is the chief operating officer and majority shareholder of Whittaker Co. Id. ¶ 7. Mr. Offutt was a Whittaker Co. employee from June 21, 2007 to June 21, 2008, when he was terminated. Id. ¶¶ 11, 15. After his termination, Mr. Offutt began discussing the idea of starting a similar carpet-cleaning machine and fluid sales business with Mr. Peek, a Georgia businessman. Id. ¶¶ 18, 12. Unbeknownst to Mr. Peek, Mr. Offutt also discussed the prospect of such a business with Paul Stephenson (“Mr.Stephenson”), another former employee of Whittaker Co. who had been terminated. Id. ¶¶ 19, 10, 16. In furtherance of his discussions with Mr. Peek and Mr. Stephenson, Mr. Offutt contacted several carpet-cleaning machine manufacturers, including an Austrian company called RotoWash. Id. ¶ 20. *2 On October 22, 2008, Whittaker Co. filed suit against Peek, Stephenson, and Offutt on its home turf in the Court of Common Pleas of Lawrence County, Pennsylvania. Id. ¶ 21. That complaint set forth ten (10) causes of action against them. 3 Id. ¶ 22. Just about all of the counts involved the central allegation that they were using trade Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 86 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 secret information that belonged to Whittaker Co. to start a competing business, while the others stemmed from the alleged violation of restrictive covenants pertaining to Mr. Offutt's and Mr. Stephenson's terms of employment with Whittaker Co. Id. ¶ 24; ECF No. 14-4 at 5. Then, on January 13, 2009, Whittaker Co. filed a second Lawrence County lawsuit, this time against Clear Floor Care-an LLC organized and solely owned by Offutt and Peek- related to the same allegations of misappropriation of trade secrets and breach of contracts. 4 Id . ¶ 25. Whittaker Co. then filed a petition for a PI seeking to prevent Clear Floor Care and the individual defendants in the original lawsuit from competing in the carpet-cleaning business. Id. ¶ 26, The state court held a multi-day hearing on the petition, during which Whittaker Co. presented testimony from a number of witnesses supporting its claim that the defendants there stole trade secret information from Whittaker Co. and were using it in competition against them. Id. ¶¶ 27-28. One of the witnesses called by Whittaker Co. was a computer expert named John Sloane (“Mr.Sloane”), who represented that he had investigated the allegation that Mr. Stephenson used external data storage devices to copy a confidential customer list from Whittaker Co.'s computer network. Id. ¶¶ 29-32; ECF No. 9-1 at 21. Mr. Sloane testified that immediately after Mr. Stephenson was terminated, he (Mr. Stephenson) attached an external hard drive (known as a Passport) and a thumb drive both of which Mr. Sloane said were capable of downloading from the network all of the information in Whittaker Co.'s customer databases-to his company laptop computer. Id. f 30. Whittaker Co. also claimed that Mr. Stephenson stole trade secret information when he took with him a number of legal pads he had used to take notes during his employment with the company. Id. ¶ 38. Whittaker Co. further argued at the hearing that the defendants were attempting to use the chemical formulas for its carpet-cleaning fluids-which Whittaker Co. maintained, along with the identity of the manufacturer of the fluids (Scott Labs), were trade secrets-for their own carpet-cleaning fluids. Id. ¶¶ 34-36. Whittaker Co. professed that the identity of its equipment manufacturer, RotoWash, was also a trade secret, and that it was the only authorized distributor of RotoWash machines in the United States, Canada, and Mexico. Id. ¶ 37. In his PI opinion, Lawrence County Common Pleas Judge Dominick Motto concluded that the defendants “engaged in a conspiracy to unlawfully utilize confidential information and trade secrets obtained while Stephenson and Offutt were employed by [Whittaker Co.] and use this information to the advantage of all defendants by engaging in a business competing with [Whittaker Co.].” ECF No. 14-4 at 27. Judge Motto also decided that the defendants misappropriated trade secrets and other property of Whittaker Co. and unlawfully interfered with Whittaker Co.'s business and contractual relationships, and that Mr. Offutt breached the terms of his employment agreement with Whittaker Co. Id. at 27-28. As a result, he entered a PI prohibiting Clear Floor Care and Offutt, Peek, and Stephenson from (1) engaging in any activity that directly or indirectly competed with the business of Whittaker Co., (2) soliciting Whittaker Co.'s customers or employees in any way, and (3) using or disclosing Whittaker Co.'s trade secrets. Id. at 2-3. The PI also enjoined Mr. Offutt from violating the non-competition provisions of his employment agreement with Whittaker Co. Id.; AC ¶ 39. Plaintiffs appealed the PI to the Pennsylvania Superior Court, which adopted the lower court's findings and affirmed the injunctive order. Id. ¶¶ 56-60; ECF No. 9-1. *3 When the case returned to the Lawrence County court for post-PI proceedings, the parties engaged in a substantial amount of discovery. Id. ¶ 61-62. The defendants in that court notably took the depositions of Mr. Whittaker, several other key Whittaker Co. employees, and the computer experts hired by Whittaker Co. Id. ¶ 62. On the strength of the record developed by that discovery, the defendants moved for summary judgment. Id. ¶ 63. Judge Motto granted the motion and dismissed both of Whittaker Co.'s complaints in their entirety. Id. ¶ 64; ECF No. 14-6 at 29. In his summary judgment Opinion, Judge Motto concluded that there was “no evidence that any defendant obtained a compilation of [Whittaker Co.'s] customers and customer data.” ECF No. 14-6 at 15. Judge Motto reached his decision due to an admission by Mr. Whittaker at his deposition (confirmed by Whittaker Co.'s corporate designee at his own deposition) that Mr. Stephenson's laptop did not have access to the databases that contained customer data and could not download or copy information from those databases. Id. at 15- 16. Additionally, the Passport and thumb drive Mr. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 87 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 Stephenson attached to his laptop contained nothing that could be “considered to be trade secret or confidential.” Id. at 16. 5 Judge Motto also found no evidence to support Whittaker Co.'s assertion that Mr. Stephenson's note pads contained any customer lists or other protected information. Id. at 18. As to Whittaker Co.'s other claims of trade secret misappropriation, Judge Motto decided that the identity of Scott Labs as Whittaker Co.'s chemical products manufacturer was not a trade secret and was in fact well known, that the formula for the cleaning fluid Whittaker Co. used in its machines belonged to Scott Labs, not Whittaker Co., and that Whittaker Co. did not even know the formula. Id. at 18-20. In conclusion, Judge Motto wrote, “[Whittaker Co.] has failed to show the existence of any trade secret misappropriated by any [d]efendant,” Id. at 22. After it was established that there was no actionable breach of contract or breach of fiduciary duty by Offutt or Stephenson, Judge Motto held the remaining counts of the complaint “must fail once it is determined that there does not exist evidence that any of the [d]efendants misappropriated any trade secrets or confidential information and that there is no evidence of any damages suffered by [p]laintiff as the result of any conduct of the [d]efendants.” Id. at 26. Judge Motto also observed that “the record presently before the [c]ourt is much different that [sic] the record upon which the [c]ourt relied in issuing its preliminary injunction.” Id. at 28. After the grant of summary judgment in their favor by Judge Motto 6 , Clear Floor Care, Mr. Peek, and Mr. Offutt filed this action against Whittaker Co. and Mr. Whittaker in this Court. The AC contains the following allegations: *4 - Defendants filed both complaints and the PI petition “without probable cause and for an improper purpose,” knowing that their trade secret misappropriation claims were false. AC ¶¶ 73-74. - Defendants “knew when they presented evidence at the preliminary injunction hearing of the existence or ownership of a trade secret, that such evidence was false.” AC ¶ 65. - Mr. Whittaker and other Whittaker Co. employees knew that Mr. Stephenson could not access customer databases from his laptop and that the formulas for their fluids and the identity of the manufacturer of those fluids were not their trade secrets when the company made contrary representations at the hearing. Id. ¶¶ 66, 68-69. - Defendants knowingly and intentionally presented this false evidence and testimony to the Lawrence County court to obtain a PI preventing Plaintiffs from starting a business that would have competed with Whittaker Co. Id. ¶¶ 67, 73. - Immediately following the grant of the PI, Defendants sent copies of the PI order- which contained false information-to third- party carpet manufacturers and customers to persuade them not to do business with Plaintiffs. Id. ¶¶ 77-79. - On the basis of the PI, Mr. Whittaker successfully persuaded Scott Labs not to sell cleaning fluids to Clear Floor Care. Id. ¶ 80. Plaintiffs contend that the Defendants' actions establish liability under the Dragonetti Act for initiating civil proceedings with an improper purpose and without probable cause, PUTSA for filing a trade secret misappropriation action in bad faith and for an improper purpose, the Lanham Act for false advertising, and for unfair competition, abuse of process, and fraud. II. DISCUSSION A. Standard of Review To survive a motion to dismiss under Fed.R.Civ.P. 12(b) (6), a complaint must allege “enough facts to state a claim for relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “The District Court must accept the complaint's well-pleaded facts as true, but may disregard any legal conclusions.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009) (citing Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. In short, a motion to dismiss should be granted only if a party does not allege facts which could, if established at trial, entitle him to relief. See Fowler, 578 F.3d at 211. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 88 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 B. Dragonetti Act The Dragonetti Act, which codifies the common law cause of action for malicious use of civil proceedings, establishes liability on a person who “takes part in the procurement, initiation, or continuation of civil proceedings against another” and in doing so “acts in a grossly negligent manner or without probable cause and primarily for a purpose other than that of securing the proper discovery, joinder of parties or adjudication of the claim in which the proceedings are based.” 42 Pa. Cons.Stat. § 8351(a), (a)(1). The proceedings in question must have terminated in favor of the person against whom they were brought. Id. § 8351(a)(2). Probable cause exists if the person who initiates the action reasonably believes in the existence of the facts upon which the claim is based, and either: *5 (1) Reasonably believes that under those facts the claim may be valid under the existing or developing law; (2) Believes to this effect in reliance upon the advice of counsel, sought in good faith and given after full disclosure of all relevant facts within his knowledge and information; or (3) Believes as an attorney of record, in good faith that his procurement, initiation or continuation of a civil cause is not intended to merely harass or maliciously injure the opposite party. 42 Pa. Const. Stat. § 8352. The existence of probable cause does not automatically defeat a Dragonetti Act claim. Buchleitner v. Perer, 794 A.2d 366, 377-78 (Pa.Super.Ct.2002). “The clear language of Section 8351 permits a cause of action to be based on gross negligence or lack of probable cause.” Bannar v. Miller, 701 A.2d 242, 249 (Pa.Super.Ct.1997). Once a plaintiff has shown either a lack of probable cause or gross negligence by the defendant, he must also demonstrate that the underlying action was filed primarily for an improper purpose. Schmidt v. Currie, 470 F.Supp.2d 477, 480 (E.D.Pa.2005), aff'd, 217 Fed. Appx. 153 (3d Cir.2007); 42 Pa. Cons.Stat. § 8354(4). Therefore, “a party seeking redress under [Dragonetti] bears a heavy burden.” U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 394 (3d Cir., 2002). A court may decide the existence of probable cause, gross negligence, or improper purpose as a matter of law on a motion to dismiss “when the facts are not in dispute.” Schmidt, 217 Fed. Appx. at 155; Higgins, 281 F.3d at 395-96. The first Lawrence County complaint asserted causes of action against Mr. Offutt for breach of contract and breach of fiduciary duty as well as claims arising from his alleged role in the misappropriation of trade secrets. The former claims related to the terms of Mr. Offutt's employment contract with Whittaker Co.-namely, a two- year post-employment restrictive covenant and a two- year confidentiality agreement. ECF No. 14-6 at 21. At summary judgment, Judge Motto found no indication that Mr. Offutt breached any fiduciary duty he owed to Whittaker Co. Id. at 23. But regarding the breach of contract claim, he wrote, “[t]here is ... evidence that clearly shows that Offutt intended to ignore the provisions of the agreement and enter into competition against [p]laintiff. However, the Court enjoined Offutt from doing so before [p]laintiff suffered any damages and before Offutt engaged in any meaningful competition.” Id. at 21. Because the PI had at that point lasted beyond the two years required by Mr. Offutt's employment agreement, Judge Motto dismissed the breach of contract claim. Id. at 21-23. Since there was plainly some evidence that Mr. Offutt was engaging in behavior potentially violative of his non-compete agreement with Whittaker Co., the Court concludes that the Defendants were neither grossly negligent nor lacking in probable cause in bringing a claim for breach of contract against Mr. Offutt. The AC admits that Mr. Offutt was engaged in conversations with Mr. Peek and Mr. Stephenson about forming a competing company and contacted carpet- cleaning machine manufacturers, including RotoWash, the company from which Whittaker Co. bought its machines. AC ¶¶ 18-20. Judge Motto did not dismiss the breach of contract claim because it lacked merit; he did so because the PI's prohibition on competition had prevented Mr. Offutt from violating the non-compete and at that point had eclipsed the duration for which Mr. Offutt had agreed not to compete. “The issue presented in a Dragonetti Act claim is whether there was probable cause to initiate or continue the underlying suit, and not whether there existed probable cause for each and every claim presented.” Bobrick Corp., v. Santana Prods., Inc., 698 F.Supp.2d 479, 494 (M.D.Pa.2010). Because Defendants had probable cause to bring their breach of contract claim against Mr, Offutt and the AC does not plead that (or how) they were grossly negligent in doing so, the Court Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 89 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 will grant Defendants' motion to dismiss the Dragonetti Act claim with respect to Mr. Offutt. *6 On the other hand, the fact that probable cause existed as to at least one claim against Mr. Offutt does not necessarily extinguish the Dragonetti Act claims of Mr. Peek and Clear Floor Care. See Buchleitner, 794 A.2d at 377-78 (allowing a Dragonetti Act claim to proceed where the plaintiff was dismissed from the underlying action on summary judgment but the three other defendants in the case were not). Unlike Mr. Offutt, all of Whittaker Co.'s claims against Mr. Peek and Clear Floor Care were premised on the allegation that they misappropriated and used Whittaker Co.'s trade secrets and confidential information. 7 Judge Motto dismissed all claims against them “[f]or all of the reasons set forth as to why [p]Iaintiff cannot sustain at this juncture a cause of action as to ... the misappropriation of trade secrets and confidential information.” ECF No. 14-6 at 27. The allegation that Plaintiffs misappropriated trade secrets and confidential information is exactly what the AC contends Defendants lacked any probable cause to rest a legally actionable claim upon. The AC specifically avers that Defendants had no probable cause to bring suit against Plaintiffs because Defendants knew that what they represented to the court to be trade secrets were not, and because Defendants knew Mr. Stephenson could not have even downloaded the customer databases that they stated, through expert testimony at the PI hearing, he stole. Plaintiffs support these allegations with deposition testimony from Mr. Whittaker and Whittaker Co.'s corporate designee admitting the latter, as well as the conclusions of Judge Motto on summary judgment that Defendants presented no evidence of any misappropriation of trade secrets, despite their many allegations of such behavior by Plaintiffs. See Ciolli v. Iravani, 625 F.Supp.2d 276, 293-94 (E.D.Pa.2010). The AC suggests that the reason there was such disparity between Judge Motto's findings in his PI opinion and his conclusions at summary judgment was that Defendants' allegations in the state court complaints and their evidence and testimony at the PI hearing were knowingly false. The AC also alleges an improper purpose-that Defendants brought the state court lawsuits to obstruct Plaintiffs' ability to establish a competing business. 8 See Prof ‘l Real Estate Investors v. Columbia Pictures Indus., 508 U.S. 49, 74, 113 S.Ct. 1920, 123 L.Ed.2d 611 (1993) (recognizing the suppression of competition as an improper purpose for bringing an antitrust action). Finally, the Lawrence County court proceedings terminated in favor of Plaintiffs on summary judgment. 9 Taking all the facts alleged in the AC as true, the Court concludes that it establishes a plausible basis for a violation of the Dragonetti Act as to Mr. Peek and Clear Floor Care. Therefore, the Court will deny the motion to dismiss the Dragonetti Act claims of those Plaintiffs, but will grant it as to Mr. Offutt. C. Abuse of Process The common law tort of abuse of process is often confused with malicious prosecution under the Dragonetti Act, but the two are “separate and distinct.” Werner v. Plater- Zyberk, 799 A.2d 776, 785 (Pa.Super.Ct.2002) (citing Hamilton Contracting Co. v. Cowder, 434 Pa.Super. 491, 644 A.2d 188, 191 (Pa.Super.Ct.1994)). Abuse of process is the “use of legal process as a tactical weapon to coerce a desired result that is not the legitimate object of the process.” McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1026 (Pa.1987), superseded by statute on other grounds, Dragonetti Act, P.L. 1296, No. 232, § 1, as recognized in Northwestern Nat'l. Cas. Co. v. Century III Chevrolet, Inc., 863 F.Supp. 247 (W.D.Pa.1999). To state a proper claim for abuse of process under Pennsylvania law, a plaintiff must allege that: (1) the defendant used a legal process against the plaintiff; (2) the action was primarily to accomplish a purpose for which the process was not designed; and (3) harm was caused to the plaintiff. Rosen v. Am. Bank of Rolla, 426 Pa.Super. 376, 627 A.2d 190, 192 (Pa.Super.Ct.1993). *7 A claim for abuse of process does not lie where the defendant simply had cruel intentions or “acted from spite or with an ulterior motive.” Cowder, 644 A.2d at 192 (citing Rosen v. Tesoro Petroleum Corp., 399 Pa.Super. 226, 582 A.2d 27, 32-33 (Pa.Super.Ct.1999)). “There must be an act or threat not authorized by the process, or the process must be used for an illegitimate aim such as extortion, blackmail, or to coerce or compel the plaintiff to take some collateral action.” Id. If the defendant simply carries out the process to its conclusion, even with malicious intent, there is no liability for abuse of process. Id. (citations omitted). The Court concludes that in alleging Defendants obtained a PI with knowingly false evidence for the purpose of hampering Plaintiffs' ability to compete in the carpet- Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 90 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 cleaning industry, which caused harm to Plaintiffs' reputation and future business prospects, Plaintiffs have made out a valid claim for abuse of process. 10 Courts applying Pennsylvania law have previously recognized a baseless petition for a PI as an actionable abuse of process. See Levert v. Phila. Int'l Records, 2005 WL 2789099, at *4-5 (E.D.Pa. Oct.26, 2005). 11 That is precisely what Plaintiffs aver occurred in state court. At oral argument, Defendants responded (similar to their contention as to the Dragonetti Act claim) that Judge Motto's summary judgment opinion demonstrated they at least had a legitimate purpose in requesting a PI as to Mr. Offutt-to prevent him from violating the non compete clause in his employment agreement. 12 However, the test for an abuse of process claim is whether the legal process in question was used “primarily not exclusively to achieve a goal unauthorized by the procedure in question,” Id. (citing Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 305 (3d Cir.2003). Because Plaintiffs allege that the primary aim of Defendants' petition for a PI was to foreclose Plaintiffs' ability to establish a foothold in the carpet-cleaning marketplace by dishonest means, a possibly legitimate alternative or secondary purpose is not enough at this juncture to extinguish the abuse of process claim as to any Plaintiff, even Mr. Offutt. Accordingly, the Court will deny the motion to dismiss to the extent that it seeks to dispose of Plaintiffs' claim for abuse of process. D. PUTSA At Count II of the AC, Plaintiffs levy a claim under Section 5305 of PUTSA. Pursuant to Section 5305, a court may award reasonable attorney's fees, expenses and costs to “the prevailing party” (1) if a claim of misappropriation is made in bad faith; (2) a motion to terminate an injunction is made or resisted in bad faith; or (3) willful and malicious misappropriation exists. 12 Pa. Cons.Stat. § 5305. Plaintiffs contend that in the state court lawsuits, Defendants made bad faith claims for misappropriation of trade secrets, and that they are now entitled to an award of attorney's fees, expenses, and costs under Section 5305 as a result of having to defend those suits. *8 Plaintiffs have not pointed the Court to any case law indicating that Section 5305 creates a standalone cause of action for attorney's fees, expenses, and costs to be recovered in a separate lawsuit, and the Court has not located any such cases in its own research. Instead, courts have routinely considered Section 5305 claims on a motion following either summary judgment or trial in the proceedings where the alleged bad faith conduct occurred. 13 The Court concludes that the language of Section 5305 is plain-it allows a court to award attorney's fees, expenses, and costs to “the prevailing party” on a PUTSA claim in that litigation under the circumstances delineated in subsections (1) through (3). Plaintiffs had an opportunity after the Lawrence County court granted summary judgment to move for such an award under Section 5305 14 , and they conceded at oral argument that they did not do so. As they have proffered nothing to this Court showing that they may recover such an award as a separate standalone claim in separate litigation, the Court concludes that Count II does not state a valid claim for relief and will grant the motion to dismiss as to Count II. 15 E. Lanham Act The Court next considers Plaintiffs' claim under Section 1125(a) of the Lanham Act. Section 1125(a)(1) provides: Any person who, or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which- (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, service, or commercial activities by another person, or (B)in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 15 U.S.C. § 1125(a)(1). Plaintiffs allege that Defendants swiftly sent copies of Judge Motto's PI to their customers and to third party businesses. They claim that because that PI was predicated on Defendants' knowingly false Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 91 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 evidence and testimony, Defendants disseminated false and misleading information in commerce about their own products and about Plaintiffs' commercial activities and business dealings, violating Section 1125(a). The Supreme Court has addressed the scope and application of Section 1125(a): The Lanham Act was intended to make “actionable the deceptive and misleading use of marks,” and “to protect persons engaged in ... commerce against unfair competition.” 15 U.S.C. § 1127. While much of the Lanham Act addresses the registration, use, and infringement of trademarks and related marks ... 15 U.S.C. § 1125(a) is one of the few provisions that goes beyond trademark protection. As originally enacted, [Section 1125(a) ] created a federal remedy against a person who used in commerce either “a false designation of origin, or any false description or representation” in connection with “any goods or services.” (internal citation omitted). [Section 1125(a) ] “does not have boundless application as a remedy for unfair trade practices,” Alfred Dunhill, Ltd. v. Interstate Cigar Co., 499 F.2d 232, 237 (2d Cir.1974). “[B]ecause of its inherently limited wording, [Section 1125(a) ] can never be a ‘federal codification’ of the overall law of ‘unfair competition’... (internal citation omitted), but can apply only to certain unfair trade practices prohibited by its text. *9 Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 28-29, 123 S.Ct. 2041, 156 L.Ed.2d 18 (2003). Courts have commonly recognized that Section 1125(a) provides two bases of liability one under § 1125(a) (1)(A) for “false representations concerning the origin, association, or endorsement of goods or services through the wrongful use of another's distinctive mark, name, trade dress, or other device (‘false association’),” and the other under § 1125(a)(1)(B) for “false representations in advertising concerning the qualities of goods or services (‘false advertising’).” Serbin v. Ziebart Int'l Corp., Inc., 11 F.3d 1163, 1173 (3d Cir.1993) (quoting Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1098-99 (9 th Cir.1992)). While the AC does not specify which type of claim it is asserting, it is apparent to the Court from the factual averments in the AC (and the absence of any allegations related to wrongful use of a trademark or other device) that Plaintiffs seek relief pursuant to § 1125(a)(1)(B) for false advertising. To adequately plead a false advertising claim under § 1125(a)(1) (B), a plaintiff must allege the following; (1) The defendant has made false or misleading statements as to his own product or another's; (2) There is actual deception or at least a tendency to deceive a substantial portion of the intended audience; (3) The deception is material in that it is likely to influence purchasing decisions; (4) The advertised goods traveled in interstate commerce; and (5) There is a likelihood of injury to the plaintiff in terms of declining sales, loss of good will, etc. Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc., 653 F.3d 241, 248 (3d Cir.2011) (citing Warner-Lambert v. Breathasure, 204 F.3d 87, 91-92 (3d Cir.2000). While Plaintiffs' claim may not be a textbook Lanham Act cause of action, the Court has not found, nor been presented with, any case law suggesting that Section 1125(a) contains any sort of prohibition or limitation that would preclude this false advertising claim. Plaintiffs allege that in the state court complaints and at the PI hearing, Defendants made knowingly false statements about their own products-namely that they and information about their origin and manufacture were trade secrets that Plaintiffs misappropriated to start a competing business. According to the AC, those false statements were the basis for Judge Motto's issuance of a PI against Plaintiffs. Defendants then publicized (“advertised”) the PI (which included factual recitations based on allegedly false statements), sending it, as is, to their customers and third party businesses. 16 Plaintiffs contend that Defendants took that action, premised on the PI and cloaked with apparent judicial imprimatur, with the intent to deceive Plaintiffs' prospective customers and business partners (including RotoWash), that the false statements contained in the Order did then deceive the recipients and influenced their purchasing decisions, and that Defendants' actions irreparably hurt Plaintiffs' fledgling business and cost them customers and a substantial amount of good will as they expended resources to correct the false information Defendants had spread. The Court is cognizant of the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 92 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 Supreme Court's admonition that Section 1125(a) does not have “boundless application,” but concludes that Plaintiffs' false advertising claim plausibly states a cause of action for the type of unfair trade practice contemplated by the text of the statute. 17 Therefore, the Court will deny the motion to dismiss as to the Lanham Act count. 18 F. Unfair Competition *10 At Pennsylvania common law, unfair competition is customarily defined as “the ‘passing off of a rival's goods as one's own.” Giordano v. Claudio, 714 F.Supp.2d 508, 521 (E.D.Pa.2010) (citing Scanvec Amiable Ltd. v. Chang, 80 Fed. Appx. 171, 180 (3d Cir.2003)). However, unfair competition is not limited to that definition. Carl A. Colteryahn Dairy, Inc. v. Schneider Dairy, 415 Pa. 276, 203 A.2d 469, 473 (Pa.1964), Instead, “Pennsylvania courts have recognized a cause of action for the common law tort of unfair competition where there is evidence of, among other things, trademark, trade name, and patent rights infringement, misrepresentation, tortious interference with contract, improper inducement of another's employees, and unlawful use of confidential information.” Synthes (U.S.A.) v. Globus Med., Inc., 2005 WL 2233441, at *8 (E.D.Pa. Sept.14, 2005) (citations omitted). “The phrase contextually is limited to claims designed to protect a business from another's misappropriation of its business organization or its expenditure of labor, skill, or money, i.e., injury to reputation, product, manner of doing business, identification and so forth.” USX Corp. v. Adriatic Ins. Co., 99 F.Supp.2d 593, 620 (W.D.Pa.2000) (citing Granite State Ins. Co. v. Aamco Transmissions, Inc., 57 F.3d 316, 320 (3d Cir.1995)). Unfair competition may not be used as “a virtual catch-all for any form of wrongful business conduct.” Id. at 619. The Pennsylvania cause of action for unfair competition is also “coextensive” with the definition of unfair competition contained in the Restatement (Third) of Unfair Competition. Giordano, 714 F.Supp.2d at 521-22 (citations omitted). Section 2 of the Restatement describes the general principle of “Deceptive Marketing,” which is included in the Third Restatement's definition: One who, in connection with the marketing of goods or services, makes a representation relating to the actor's own goods, services, or commercial activities that is likely to deceive or mislead prospective purchasers to the likely commercial detriment of another ... is subject to liability to the other ... Restatement (Third) of Unfair Competition § 2 (1995). This language is nearly identical to that contained in Section 1125(a) of the Lanham Act, and the comments to Section 2 continually cite that federal statutory provision as a basis for the definition and parameters of deceptive marketing. Id. cmts. b, c, f. As stated above, Pennsylvania courts have included “misrepresentation” and resulting injury to “reputation” and “manner of doing business” in the definition of unfair competition. Plaintiffs allege just such a course of conduct and consequent injury to them in the AC. Additionally, Plaintiffs have adequately stated a claim under Section 1125(a) of the Lanham Act, which appears to be a near analog to the Third Restatement's definition of deceptive marketing. On that basis, the Court concludes that Plaintiffs have stated a plausible claim for unfair competition and will deny the motion to dismiss as to Count IV. G. Fraud *11 To establish a claim for fraud or intentional misrepresentation, Plaintiffs must adequately plead the following elements: (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) resulting injury proximately caused by the reliance. Bortz v. Noon, 556 Pa. 489, 729 A.2d 555, 560 (Pa.1999) (citations omitted). The Federal Rules of Civil Procedure implement a heightened pleading requirement for fraud Plaintiffs must state with particularity the circumstances constituting the fraud, but may allege generally conditions of the mind such as malice, intent, and knowledge. Fed.R.Civ.P. 9(b). The fraud claim contained in the AC comes to court with significant flaws. Nowhere does the AC aver that Plaintiffs themselves were the recipients of Defendants' alleged misrepresentations in the state court complaints or at the PI hearing. Nor does it state that Plaintiffs relied, justifiably or not, on any of those alleged misrepresentations. Instead, according to the AC, Defendants “intended that such information be Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 93 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 relied upon by the Court and others”-presumably the customers and other businesses Defendant sent the PI to and “[t]he [j]udge before whom such false testimony was given did rely on it to the detriment of Plaintiffs.” AC ¶¶ 107-08. To sufficiently plead a claim of fraud, a plaintiff must assert that he was the recipient of the misrepresentation, reasonably relied on that misrepresentation, and was damaged as a proximate result of his reliance. Joyce v. Erie Ins. Exch., 74 A.3d 157, 167 (Pa.Super.Ct.2013). As one Pennsylvania court has noted, “It is the fundamental principal [sic] of the law of fraud, regardless of the form of the relief sought, that in order to secure redress, the representee must have relied upon the statement or representation as an inducement to his action or injurious change of position.” Silverman v. Bell Sav. & Loan Ass'n., 367 Pa.Super. 464, 533 A.2d 110, 114 (Pa.Super.Ct.1987) (quoting 37 Am.Jur.2d Fraud & Deceit § 23 (1968)). Under the facts as alleged by Plaintiffs, they neither received misrepresentations from Defendants nor relied upon them in any way. Therefore, they have not stated a plausible claim for fraud. See Joyce, 74 A.3d at 167 (dismissing a fraud claim where the plaintiff failed to allege that the defendant made any misrepresentation to him, or that he relied on any such misrepresentation, but instead claimed that the defendant deceived the federal government, a federal jury, and a federal court in a criminal case against him). The Court will grant the motion to dismiss the fraud count. III. CONCLUSION According to the Plaintiffs' allegations, throughout the underlying state court proceedings, honesty was a lonely word. 19 Based on them, Counts I, III, IV and V of the Amended Complaint may proceed to the next stages of litigation, and for the reasons stated in this Opinion, the Motion to Dismiss is granted in part and denied in part as follows: *12 1) As to the Dragonetti Act claim (Count I), the Court grants the Motion to the extent that Mr. Offutt's claim is dismissed and denies the Motion in all other respects; 2) The Court grants the Motion as to the PUTSA claim (Count II); 3) The Court denies the Motion as to the Lanham Act claim (Count III); 4) The Court denies the Motion as to the claim for unfair competition (Count IV); 5) The Court denies the Motion as to the claim for abuse of process (Count V); and 6) The Court grants the Motion as to the claim for fraud (Count VI). An appropriate Order will follow. All Citations Not Reported in F.Supp.3d, 2014 WL 2154965 Footnotes 1 The Court has jurisdiction over this case under 28 U.S.C. § 1332(a), as there is complete diversity between the parties and the amount in controversy is greater than $75,000, For purposes of diversity jurisdiction, the citizenship of a limited liability company (“LLC”) such as Clear Floor Care is determined by the citizenship of each of its members, “traced through however many layers of partners or members there may be.” Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412, 419-20 (3d Cir.2010). To adequately plead diversity, an LLC plaintiff must include the identity and citizenship of each of its members in the complaint. See Celestial Cmty. Dev. Corp., Inc. v. City of Phila., 901 F.Supp.2d 566, 581- 82 (E.D.Pa.2012). After much jousting on the subject, Plaintiffs filed a declaration at the Court's direction to establish the identity and citizenship of each of the members of Clear Floor Care along with signed declarations from each of its members. ECF No. 26. As both LLC members (Mr. Peek and Mr. Offutt) are citizens of Georgia, and none of the Defendants are Georgia citizens, the Court is satisfied that complete diversity has been properly pled. 2 The case as pled falls within this Court's diversity jurisdiction under 28 U.S.C. § 1332(a), It does not seek to review or call into question the validity of a state-court judgment, so the Rooker-Feldman doctrine does not stand in its way. See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005); Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 167 (3d Cir.2010) (“When the source of the injury is the defendant's actions (and not the state court judgments), the federal suit is independent.”) Nor, if the facts as pled have Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 94 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 legs, is this simply a case of “sour grapes,” which Defendants correctly point out is not a viable standalone cause of action in our jurisprudential system. ECF No. 9 at 3. While the conduct of litigation in a state court is at the core of this lawsuit, neither party has pointed to, nor can the Court divine, any prudential, abstention, federalism or comity principle that would counsel this Court's declination of its statutory jurisdiction. Cf. Farneth v. Wal-Mart Stores, Inc., 2013 WL 6859013 (W.D.Pa. Dec.30, 2013) (jurisdiction declined on comity grounds). 3 Those causes of action were: breach of contract (against Offutt and Stephenson), breach of fiduciary duty (against Offutt and Stephenson), aiding and abetting breach of fiduciary duty (against Peek), misappropriation of trade secrets (against Offutt, Stephenson, and Peek), tortious interference with contractual relations (against all three), tortious interference with business relationships (against all three), tortious interference with employee relationships (against all three), unjust enrichment (against all three), conversion (against all three), and civil conspiracy (against all three). ECF No. 14-1. 4 The complaint against Clear Floor Care asserted causes of action for aiding and abetting breach of fiduciary duty, misappropriation of trade secrets, tortious interference with contractual relations, tortious interference with business relationships, tortious interference with employee relationships, unjust enrichment, conversion, and civil conspiracy. ECF No. 14-2. By the Court's count, this second wave of litigation meant that the state court had to wade through eighteen (18) theories of recovery, against four (4) defendants, all arising from the establishment of exactly one (1) new carpet- cleaning business. This case now piles on six (6) more claims, for an even two dozen. 5 Which would be precisely contrary to the content and plain implication of Mr. Sloane's testimony at the PI hearing. 6 It does not appear that any appeal was taken from that Order. 7 Defendants' supplemental memorandum suggests otherwise, claiming that Mr. Offutt's actions in starting Clear Floor Care with Mr. Peek gave Defendants probable cause for their claims for tortious interference with a contractual relationship against Mr. Peek and Clear Floor Care. ECF No. 15 at 4. However, with the exception of the breach of contract and breach of fiduciary duty claims against Mr. Offutt and Mr. Stephenson, Judge Motto dismissed all of the remaining claims on the grounds that “there is simply no evidence that [d]efendants engaged in any prohibited conduct” related to misappropriation of trade secrets. ECF No. 14-6 at 27. It is plain to the Court from Judge Motto's Opinion that his rationale for dismissing all of the claims against Mr. Peek and Clear Floor Care was the complete lack of evidence that they had stolen or used any trade secrets or confidential information belonging to Whittaker Co. That is enough for the Dragonetti Act claims of Mr. Peek and Clear Floor Care to proceed, at least at this point. Whether they will survive a summary judgment motion, or a trial, may be another matter. 8 An improper purpose may also be inferred if the action is filed without probable cause. Logan v. Salem Baptist Church of Jenkintown, 2010 WL 3364203, at *8 (E.D.Pa. Aug.17, 2010). 9 See Logan, 2010 WL 3364203, at *8 (“The focus [for the purpose of the termination of proceedings requirement under the Dragonetti Act] is not on the result of a preliminary ex parte hearing, but the ultimate outcome of the case.”) 10 While the paragraphs in the AC supporting Count V do not discuss the preliminary injunction but rather the filing of the Lawrence County lawsuits as an “abuse of the litigative process,” the claim does contain an incorporation clause at ¶ 100, so the PI allegations elsewhere in the AC are subsumed within that count. The Court notes that it would have been much clearer pleading-wise to fortify the abuse of process claim itself with the proper allegations, but concludes that the factual averments incorporated by reference into that claim are sufficient to clear the Twombly/Iqbal bar. 11 In Levert, the plaintiffs moved for summary judgment as to the defendants' counterclaim for abuse of process on the grounds that plaintiffs sought an unfounded PI against the sale of an album of unreleased O'Jays songs. 2005 WL 2789099 at *4. The court in Levert concluded that genuine issues of material fact existed as to whether the plaintiffs* primary purpose for seeking the injunction was “not legitimate.” Id. at *5. 12 Defendants again attempted to extend that argument to the other Plaintiffs by contending that they also requested a PI to prevent tortious interference with Mr. Offutt's contract by Mr. Peek and Clear Floor Care. The Court is not moved by that argument for the same reasons articulated as to the Dragonetti Act claim, supra n. 8. 13 See Ozburn-Hessey Logistics, LLC v. 721 Logistics, LLC, 2014 WL 1364506, at *13 (E.D.Pa. Apr.7, 2014); Danois v. i3 Archive Inc., 2013 WL 3556083, at *27 (E.D.Pa. July 12, 2013); Krafft v. Downey, 68 A.3d 329 (Pa.Super.Ct.2013); Hill v. Best Med. Int'l, Inc., 2011 WL 6749036 (W.D.Pa. Dec.22, 2011); Youtie v. Macy's Retail Holding, Inc., 653 F.Supp.2d 612, 630-31 (E.D.Pa.2009). In Arora Eng'rs, Inc. v. George, 2009 WL 6997067 (Pa.Com.Pl. Dec.1, 2009), the plaintiff's complaint asked for attorney's fees under Section 5305, and the court recognized that PUTSA “does provide for attorney's fees” in denying the defendant's motion to strike that request. However, in that case, plaintiffs made a request for attorney's fees in conjunction with a claim for a violation of PUTSA, and invoked Section 5305(3) the “willful and malicious misappropriation” language to request attorney's fees. Here, Plaintiffs make no separate claim of a violation of PUTSA along with their request for attorney's fees under Section 5305(1). Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 95 of 192 Peek v. Whittaker, Not Reported in F.Supp.3d (2014) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 14 Although the Court notes that the state court complaints, while containing claims for misappropriation of trade secrets, do not reference PUTSA. 15 This does not foreclose the possibility that certain of the costs and expenses incurred in defending an allegedly baseless lawsuit may be recoverable damages in another asserted claim. 16 In their supplemental memorandum, Plaintiffs argue that by disseminating the preliminary injunction to such entities, Defendants waived any applicable state law litigation privilege which would bar a claim grounded on statements made in connection with the initiation and prosecution of a lawsuit. As that issue was not raised in Defendants' Motion to Dismiss, the Court need not address it here. 17 Plaintiffs cite to Encompass Ins. Co. of Mass. v. Giampa, 522 F.Supp.2d 300 (D.Mass.2007), as an analogy to the Lanham Act claim in this case. In Giampa, the defendants asserted a § 1125(a)(1)(B) counterclaim for false advertising on the premise that the plaintiff filed a complaint against them without a good faith basis for doing so and then repeated false and misleading allegations from the complaint, as well as other falsehoods, in a press release about the suit that it issued. 522 F.Supp.2d at 306-07, 310. While the Giampa court dismissed the Lanham Act claim because of its failure to allege that defendants competed with plaintiff or had suffered a competitive injury as a result of plaintiff's actions, Plaintiffs in this case argue that “it is clear that the court would not have done so if the counterclaimants would have been able to allege that they were competitors of the party that issued the press release.” ECF No. 18 at 5. The Court is somewhat unconvinced of the clarity of that presumption, but it is worth noting that the allegations in this case that Defendants lied to a court and disseminated an order from that court, carrying the seal and authority of that court and containing findings of fact and conclusions of law based largely on allegedly false statements are far different, more precise, and far more serious than those in Giampa. 18 The Court has conducted a searching review of the AC and found no specific averment that the goods Whittaker Co. allegedly made false representations about traveled in interstate commerce, as required by the fourth prong of the Third Circuit test for a false advertising claim under 15 U.S.C. § 1125(a)(1)(B), cited supra, p. 17. That said, the plain implication of Whittaker's assertions in the PI proceeding regarding the heritage of its chemical products and Austrian-produced carpet-cleaning devices likely fulfill this requirement. Just to be sure, within ten (10) days of the issuance of this Opinion, Plaintiffs shall file a declaration with the Court setting forth the factual basis for concluding (if at all) that such goods have traveled in interstate commerce. The Court will assess the sufficiency of that declaration, and if it concludes that the declaration does not adequately and plausibly assert that such goods traveled in interstate commerce, it will then dismiss the Lanham Act claim. 19 WILLIAM MARTIN JOEL, Honesty, on 52 nd Street (Columbia Records 1978). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 96 of 192 EXHIBIT J Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 97 of 192 Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171 (2003) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Yellow Flag - Negative Treatment Distinguished by Warren Pub. Co. v. Spurlock, E.D.Pa., August 4, 2009 80 Fed.Appx. 171 This case was not selected for publication in the Federal Reporter. Not for Publication in West's Federal Reporter See Fed. Rule of Appellate Procedure 32.1 generally governing citation of judicial decisions issued on or after Jan. 1, 2007. See also Third Circuit LAR, App. I, IOP 5.7. (Find CTA3 App. I, IOP 5.7) United States Court of Appeals, Third Circuit. SCANVEC AMIABLE LIMITED; Scanvec Amiable Inc., v. Jim CHANG; Yuan Chang, also known as Charlie Chang; Randy R. Nepomuceno; Luciana Chang; Amica Software, Inc., also known as Amiable Software, Inc.; Amica China, Inc.; Amica China Co., Ltd. Amica Software, Inc., Jim Chang and Luciana Chang, Appellants (Amended in accordance with Court's Order dated 4/10/03). Nos. 02-4385, 03-1043. | Argued Sept. 16, 2003. | Decided Oct. 15, 2003. Computer software developer brought action charging its former employees and their company with civil conspiracy, misappropriation of trade secrets, and unfair competition. The United States District Court for the Eastern District of Pennsylvania, Petrese B. Tucker, J., entered temporary restraining order (TRO) and preliminary injunction in favor of plaintiff, and defendants appealed. The Court of Appeals, Cowen, Circuit Judge, held that: (1) Court of Appeals could not retroactively increase amount of security imposed during period of expired TRO; (2) developer was likely to succeed on merits of its civil conspiracy and unfair competition claims; and (3) developer satisfied commercial nexus requirement for Lanham Act claim. Affirmed. West Headnotes (6) [1] Injunction Amount Court of Appeals could not retroactively increase amount of security imposed by district court during period of temporary restraining order (TRO), even if district court erroneously failed to justify waiver of security bond, where defendants failed to challenge TRO while it was in effect, and TRO had expired and been replaced by preliminary injunction. Fed.Rules Civ.Proc.Rule 65(c), 28 U.S.C.A. 3 Cases that cite this headnote [2] Antitrust and Trade Regulation Continuing, modifying, vacating, or dissolving District court's decision, in software developer's unfair competition suit against its former employees and their new company, to expand preliminary injunction without second hearing was not abuse of discretion, despite employees' contention that hearing would have resolved inconsistencies in witnesses' testimony, where court's decision arose from motion for reconsideration following six-day hearing on merits of developer's application. 2 Cases that cite this headnote [3] Injunction Non-competition and non-solicitation issues Software developer was likely to succeed on merits of its civil conspiracy claim against its former employees and competing business they formed, and thus was entitled to preliminary injunction preventing competitor from selling its competing product, in light of evidence that developer was fraudulently induced into terminating its distribution network so that competitor could fill void created by developer's exit from market. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 98 of 192 Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171 (2003) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 Cases that cite this headnote [4] Injunction Disclosure or use of trade secrets or confidential information Software developer was not likely to succeed on merits of its claim against its former employees and competing business they formed for misappropriation of trade secrets, for purposes of determining its entitlement to preliminary injunction preventing business from selling competing product, despite evidence that business's product contained references to developer's source code, absent evidence that source code was incorporated into competing product, or that source code was protected trade secret. 1 Cases that cite this headnote [5] Antitrust and Trade Regulation Particular cases Software developer was likely to succeed on merits of its unfair competition claim against its former employees and competing business they formed, and thus was entitled to preliminary injunction preventing competitor from selling its competing product, in light of evidence that competitor willfully converted developer's product while falsifying copyright information to denote competitor as copyright holder, and then sold misbranded product to developer's former customers. 5 Cases that cite this headnote [6] Antitrust and Trade Regulation What law governs Chinese software developer's allegedly wrongful conduct had sufficient effect on domestic commerce to warrant exercise of jurisdiction in competitor's Lanham Act suit, where developer allegedly orchestrated its actions in China from United States, using materials and customers developed in United States to materially further launch of confusingly similar product overseas, resulting in substantial impairment of competitor's business reputation in United States. 8 Cases that cite this headnote *172 On Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. Civil No. 02-cv-06950). District Judge: Hon. Petrese B. Tucker. Attorneys and Law Firms Francis P. Newell, Leonard A. Busby, (Argued), Montgomery, McCracken, Walker & Rhoads, Philadelphia, PA, for Appellants. Michael W. McTigue, Jr., (Argued), Drinker, Biddle & Reath, Philadelphia, PA, for Appellees. *173 Before McKEE, SMITH and COWEN, Circuit Judges. OPINION COWEN, Circuit Judge. **1 Amica Software, Inc., Jim Chang and Luciana Chang (together “Amica”) appeal two orders of the District Court concerning a temporary restraining order and a preliminary injunction entered in favor of appellees Scanvec Amiable Limited and Scanvec Amiable, Inc. (together “Scanvec”). Amica argues that the Court erred by declining to impose retroactive security for the TRO after the order was dissolved by the entry of the preliminary injunction. In a separate appeal, Amica challenges the District Court's decision to expand the preliminary injunction without conducting an evidentiary hearing, or increasing the amount of the security bond. As part of this second appeal, Amica also argues that the District Court's findings concerning civil conspiracy, misappropriation of trade secrets, and unfair competition are erroneous, and that the District Court exceeded its jurisdiction under the Lanham Act. We find no abuse in the District Court's discretionary determinations, and no reversible errors of law in either order. Accordingly, we will affirm. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 99 of 192 Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171 (2003) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 I. This case arises from the establishment of a computer software company by former officers, directors, and employees of Scanvec. Scanvec develops computer programs sold throughout the world. Scanvec's premier product is PhotoPRINT, a program that creates computer images for printing on wide form at digital printers (“WFPs”). Approximately one-third of Scanvec's PhotoPRINT sales are made to original equipment manufacturers (“OEMs”) of WFPs, including Hewlett- Packard and Roland DG Corporation. Scanvec designed private-label versions of PhotoPRINT for these OEMs by, in part, customizing the International Color Consortium Color Profiles (“ICC Profiles”) needed to produce accurate digital reproductions on WFPs. PhotoPRINT was originally designed and sold by Amiable Technologies, a company owned by Defendants Jim Chang and Yuan Chang. In 1998, Amiable merged into Scanvec, and Jim and Yuan became shareholders in, and board members of, the new company. The Changs' employment agreements prohibited both from competing with Scanvec for two years after their departure. In July 1999, Jim Chang was fired from his position as President of Scanvec. In November 2001, Jim and Yuan resigned from Scanvec's board. In May 2001, prior to their resignation, the Changs launched a new software company in China called Amica. Yuan Chang was listed as Amica's legal representative, and Amica used Scanvec's Beijing office as its company address. In the fall of 2001, Jim Chang's wife Luciana brokered an agreement that terminated all of Scanvec's Chinese distributors in favor of an exclusive contract with a company called SunPack. SunPack, however, shared the same office space as Amica (which, as noted, was also Scanvec's space). In November 2001, SunPack changed its name to Jia Peng Si Hai, which was essentially Amica's Chinese trade name. Scanvec's representative to SunPack, Kevin Sun, clandestinely worked for Amica through the end of 2001. **2 In early 2002, Amica hired several of Scanvec's former software engineers and began marketing ColorPRINT, a program (like PhotoPRINT) for printing images on WFPs. Early versions of ColorPRINT, and a similar product called ImaRIP, incorporated hundreds of Scanvec's ICC Profiles. *174 Finally, Jim Chang entered into a contract with Roland DG to produce a private-label version of ColorPRINT (called Roland Select Color, or “RSC”) for Roland's new line of WFPs. One of Roland's requirements for RSC was the creation of a customized rendering intent similar to the one used by Scanvec in PhotoPRINT known as “SpotColor.” Pursuant to this agreement, ColorPRINT's source code included references to SpotColor, although, as discussed further below, the functionality of the rendering intent remains unclear. Scanvec commenced this action on August 27, 2002 by filing a complaint and an ex parte motion for a temporary restraining order. On the same day Judge Berle M. Schiller, sitting as emergency judge, entered the requested TRO without requiring the posting of a security bond, or making any findings as to why a bond was unnecessary. The case was then assigned to Judge Petrese B. Tucker, who conducted a six-day hearing on the requested preliminary injunction between September 6 and September 13. Amica did not object to the continuation of the TRO during the hearing, and pending a ruling on the preliminary injunction. On October 3, 2002, the District Court granted Scanvec's application for a preliminary injunction in part, enjoining Amica from using certain trademarks, trade secrets, and goodwill. The District Court solicited the parties' recommendations on the amount of security, and following their response, set a bond requirement of $390,000 on November 4, 2002. The District Court also determined that no security requirement would be imposed for the period during which the TRO was in place. On October 18, 2002, Scanvec filed an emergency motion for reconsideration of the October 3 order citing newly discovered evidence demonstrating that the Amica defendants had made material misrepresentations during the injunction hearing. On November 12, 2002, following opening and opposition briefs, Scanvec filed a motion for leave to file a reply brief, attaching the proposed brief to the new motion. On November 15, Scanvec sought leave to file an additional supplement. On December 17, 2002, the District Court granted Scanvec leave to file the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 100 of 192 Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171 (2003) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 supplemental materials, and directed that Amica file any opposing materials by December 19. Amica timely filed its response, but argued that it did not have sufficient time to address all of the allegations raised in Scanvec's supplements. On December 23, 2002, the District Court granted Scanvec's motion for reconsideration and expanded the preliminary injunction to prevent Amica from selling ColorPRINT, and its derivative products. The District Court's order stated that the security of $350,000 previously posted by Scanvec was sufficient to support the expanded injunction. **3 Amica filed a motion to stay the expanded injunction on December 30, which the District Court denied on January 6, 2003. On January 10, 2003, Amica filed a motion to stay pending appeal with this Court, which this Court denied on January 27, 2003. II. [1] Amica first appeals 1 the District Court's November 4, 2002 order declining to impose a security bond for the TRO period between August 27 and October 3. We agree that the District Court's failure to justify the waiver of a security bond is erroneous, but conclude that we cannot retroactively increase the amount of security imposed during the period of the now- *175 expired TRO. Accordingly, the District Court's November 4 order will be affirmed. 2 Federal Rule of Civil Procedure 65(c) states that “[n]o restraining order or preliminary injunction shall issue except upon the giving of security by the applicant, in such sum as the court deems proper.” We have strictly interpreted the bond requirement of Rule 65(c), noting that “[w]hile there are exceptions, the instances in which a bond may not be required are so rare that the requirement is almost mandatory.” Frank's GMC Truck Center, Inc. v. Gen. Motors Corp., 847 F.2d 100, 110 (3d Cir.1988). In some instances, strict application of the security requirement may be inappropriate, and “at least in noncommercial cases, the court should consider the possible loss to the enjoined party together with the hardship that a bond requirement would impose on the applicant.” Temple Univ. v. White, 941 F.2d 201, 219 (3d Cir.1991) (quoting Crowley v. Local No. 82 Furniture & Piano, 679 F.2d 978, 1000 (1st Cir.1982)). This exception, however, remains narrow and may only be invoked by the District Court upon specific findings “regarding the relative hardships to each party.” Elliott v. Kiesewetter, 98 F.3d 47, 60 (3d Cir.1996). Waiver of the bond requirement without such findings necessitates a remand for reconsideration. Id.; Temple, 941 F.2d at 220. Nonetheless, reversal of the November 4 order and remand for imposition of an increased security amount is not appropriate. The decisions in both Elliott and Temple involved appeals from then-existing injunctions. In this case, the August 27 TRO has expired, and been replaced by a preliminary injunction. Amica concedes this point, explaining that it seeks to obtain “a retroactive bond in order to satisfy a damages award.” Blue Br. at 42. However, we have recently held that “[a] retroactive increase in the amount of an injunction bond on dissolution or reversal is generally improper.” Sprint Communications Co. v. Cat Communications Int'l, 335 F.3d 235, 241 (3d Cir.2003). In Sprint, the district court entered a preliminary injunction secured by a $250,000 bond. Id. at 238. More than one-year later, the restrained party had accrued significant costs complying with the injunction, and sought to terminate the restraint. Id. at 239. The district court dissolved the injunction, and simultaneously increased the amount of the bond to 4.95 million dollars. Id. **4 We held that the retroactive increase was improper, explaining that the security requirement of Rule 65(c) informs the applicant “the price it can expect to pay if the injunction was wrongfully issued.” Id. at 240 (quoting Instant Air Freight Co. v. C.F. Air Freight, Inc., 882 F.2d 797, 805 (3d Cir.1989)). In this manner, the applicant may base its decision to accept the injunction “on whether it wants to expose itself to liability up to the bond amount.” Id. In contrast, “[i]f a retroactive increase is permissible, the injunction bond is no longer cabined; the bond no longer fixes exposure nor caps liability. A retroactive increase subjects the successful applicant *176 to an unexpected and unanticipated liability.” Id. at 240-41; accord Mead Johnson & Co. v. Abbott Labs., 209 F.3d 1032 (7th Cir.2000). Sprint dictates the same result in this case. Increasing the amount of the security required for the August 27 Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 101 of 192 Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171 (2003) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 TRO, albeit set at zero, after that injunction had been dissolved by the October 3 order would retroactively increase Scanvec's potential liability. Scanvec accepted the injunctive relief ordered by the District Court on the belief that it was not required to post any security; imposing a retroactive increase now would “subject[ ] the successful applicant to an unexpected and unanticipated liability.” Sprint, 335 F.3d at 241. We note, of course, that unlike Sprint the District Court here failed to require any security. However, this error persisted because of Amica's own delay in challenging the TRO. App. at 34 n. 3, 233, 441, 679, 1033 (consenting to continuations of the TRO without bond). Amica could have withheld its consent to the TRO extensions, filed an interlocutory appeal after the expiration of twenty days, and argued that the failure to require security was erroneous. Nutrasweet Co. v. Vit-Mar Enters., Inc., 112 F.3d 689, 692 (3d Cir.1997) (noting that if a TRO is continued for more than twenty days, “[t]he most prevalent view” is that the order will be “treated as the equivalent of a preliminary injunction and thus subject to appellate review”); see also Prof'l Plan Examiners of New Jersey, Inc. v. Lefante, 750 F.2d 282, 288 (3d Cir.1984). Indeed, Amica could have simply informed the District Court that the TRO would not take effect without a determination under Rule 65(c). We have long held that the posting of adequate security is a “condition precedent” to injunctive relief. Hopkins v. Wallin, 179 F.2d 136, 137 (3d Cir.1949); see also Sprint, 335 F.3d at 239 (“Generally, a bond is a condition of preliminary injunctive relief.”); Frank's GMC, 847 F.2d at 103 (noting Rule 65(c) “mandates” that the successful applicant post adequate security). Amica thus had ample authority with which to immediately argue to the District Court that the TRO would not commence until the court determined, and Scanvec posted, adequate security. Amica's failure to challenge the security determination, and its decision to accept continued extensions of the TRO without adequate security, do not justify a departure from Sprint's disapproval of retroactive bond increases. Accordingly, the District Court's decision was not erroneous. III. **5 Amica separately appeals 3 the District Court's December 23, 2002 order granting Scanvec's motion to reconsider the October 3 order, and expanding the preliminary injunction to prohibit all production of ColorPRINT and its derivatives. A. Failure to Conduct a Hearing on the Motion for Reconsideration Amica first argues that the District Court abused its discretion by issuing an expanded injunction without first conducting an evidentiary hearing on the motion for reconsideration. We review this decision only for an abuse of discretion. Elliott, 98 F.3d at 53. A district court cannot issue a preliminary injunction that depends upon the resolution of disputed issues of fact without first holding an evidentiary hearing. Elliott, 98 F.3d at 53; Prof'l Plan Examiners, 750 F.2d at 288. In contrast, an injunction may issue on the basis of affidavits and other documentary evidence “if the facts are undisputed *177 and the relevant factual issues are resolved.” Bradley, 910 F.2d at 53-54. [2] The District Court's decision to expand the injunction without a second hearing was not an abuse of discretion. The Court's decision arose from a motion for reconsideration, and after a six-day hearing on the merits of Scanvec's application. Therefore, the District Court did not issue its order without any hearing, or record testimony. Rather, the District Court's opinion indicates that the documentary evidence offered by Scanvec undermined the credibility of Amica's witnesses, and supported an inference of conspiracy. Amica responds that a hearing would have resolved the inconsistencies in the witnesses' testimony. However, as the District Court reasonably noted: “Amica Defendants' responses to Plaintiffs ... do not even attempt to mount a defense against these serious allegations, contending only that the [new evidence] is ‘irrelevant’ and a ‘peripheral issue’. The only inference that can be drawn from this evidence is that Plaintiffs are correct....” App. at 28. Amica then attempts to argue that the District Court's briefing schedule allowed insufficient time to respond to the new evidence. This argument ignores the fact that Amica had the supplemental materials for some two months prior to the District Court's decision to accept the materials as filed. More significantly, Amica has never identified what it would have demonstrated with more briefing time or a hearing. See Elliott, 98 F.3d at 54-55 Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 102 of 192 Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171 (2003) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 (rejecting conclusory challenge to district court's failure to hold hearing). The District Court's six-day hearing was a sufficient evidentiary background on which to evaluate the supplemental documentary evidence. Further, Amica has not demonstrated what evidence it would have offered in reply. Accordingly, the District Court's decision to enter the expanded December 23 injunction was not an abuse of discretion. B. Denial of Request to Increase the Security Bond Closely related to Amica's argument in appeal number 02-4385 is the claim that the District Court abused its discretion by failing to increase Scanvec's security bond when it granted the motion for reconsideration, and expanded the scope of the preliminary injunction. Amica essentially argues that it is an abuse of discretion not to raise the amount of security when an injunction becomes drastically more restrictive. **6 Amica's argument is without merit. The amount of security required for an injunction under Rule 65(c) is left to the discretion of the district court. Frank's GMC, 847 F.2d at 103. The December 23 order states that the District Court considered whether additional security was required, but declined to increase the bond. App. at 10 (stating “that security of $390,000 already posted by plaintiffs is sufficient”). Moreover, the District Court's November 4, 2002 order calculated the security requirement to include $240,000 in expenses identified by Amica, and an additional $150,000 in recognition of “significant additional losses” at risk in the litigation. App. at 39. The District Court's written decision that this combined amount was sufficient to support the expanded injunction is not an abuse of discretion. C. Basis for the Expanded Preliminary Injunction The substantive heart of Amica's appeal argues that the District Court's findings concerning civil conspiracy, misappropriation of trade secrets and unfair competition are erroneous, or an abuse of discretion. *178 Amica essentially argues that taken separately, each of these three allegations do not sustain the broad injunction entered by the District Court. 1. Civil Conspiracy Under Pennsylvania law, a civil conspiracy requires an agreement with intent to participate in an unlawful act. Scully v. U.S. Watts, Inc., 238 F.3d 497, 516 (3d Cir.2001) (quoting Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466, 472 (1979)). This showing “may be proved by acts and circumstances sufficient to warrant an inference that the unlawful combination had been in point of fact formed for the purpose charged.” Id. (quoting Fife v. Great Atl. & Pac. Tea Co., 356 Pa. 265, 52 A.2d 24, 27 (1947)). [3] Here, the District Court found a likelihood of a civil conspiracy based on Amica's role in cancelling Scanvec's Chinese distribution, Amica's usurpation of Scanvec's Chinese office, Amica's recruitment and hiring of Scanvec programmers, and SunPack's summary termination of its agreement with Scanvec after only two months. The Court concluded that this chain of events demonstrated that Scanvec was fraudulently induced into terminating its distribution network so that Amica could fill the void created by Scanvec's exit from the market. The District Court found that Amica did “not even attempt to mount a defense against these serious allegations,” a conclusion supported by the record. App. at 28. Accordingly, the District Court's finding of a likelihood of success on this point is correct. 2. Misappropriation Amica argues that the District Court erred in relying on evidence of source code copying in finding a likelihood of success on the merits of Scanvec's state law misappropriation claim. Citing the Declaration of a former Scanvec employee, the District Court found that “[t]he ColorPRINT source code lists ‘SpotColor’ as one of the software's rendering intents.” App. at 21. In response to this testimony, the Court found that “Jim Chang did not explain how Scanvec's SpotColor rendering intent was incorporated into the ColorPRINT source code, particularly since the ColorPRINT does not use the feature.” App. at 21. **7 Amica argues that this finding of source code copying is based on an erroneous understanding of the technology used in RIP software. Amica concedes that ColorPRINT contained “references” to the term SpotColor. However, Amica argues that these references were merely placeholders inserted by the programmers to indicate where Amica's own rendering intent would be constructed. In other words, Amica contends that the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 103 of 192 Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171 (2003) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 SpotColor references were not code at all, but merely “notes” to indicate where the as-yet unwritten code would be placed. Jim Chang's declaration explains that: Roland specifically requested from Amica a rendering intent in order to print “spot colors” correctly. Amica included reference to a fifth rendering intent of “SpotColor” in preparation for adding this feature at a later date, when it was intended that ColorPRINT would be adapted to process images in Adobe's Postscript format.... 4 Because the ColorPRINT version analyzed by [Scanvec] was not ready to process Adobe Postscript, no fifth rendering intent was ever used in the ColorPRINT beta version created at that time. App. at 1691. This, Amica argues, entirely explains why “non-functioning code” was *179 included in ColorPRINT: because it wasn't code at all, merely a reference to a feature that would be added at a later time. The District Court's analysis of this issue is problematic. Under Pennsylvania law, the tort of misappropriation of trade secrets requires the disclosure or use of a trade secret. Advanced Power Sys. v. Hi-Tech Sys., 801 F.Supp. 1450, 1454 (E.D.Pa.1992) (citing Den-Tal-Ez, Inc. v. Siemens Capital Corp., 389 Pa.Super. 219, 566 A.2d 1214, 1228-29 (1989)). The District Court did not determine whether the instances of SpotColor contained in ColorPRINT were source code, or simply references to a group of source files containing the source code for a rendering intent. The District Court's findings also lack sufficient factual support for an inference that Amica copied Scanvec's code. Federal cases addressing code copying allegations under the Copyright Act hold that copying may be established by indirect evidence that the defendant had access to the protected materials, and that the two programs demonstrate “substantial similarities.” Whelan Assocs. v. Jaslow Dental Lab., Inc., 797 F.2d 1222, 1231-32 (3d Cir.1986). The court may receive expert and lay testimony to determine whether a substantial similarity exists. Id. at 1232-33. Here, there is no evidence in the record that ColorPRINT's rendering intents were substantially similar to PhotoPRINT. Rather, the declaration submitted by Scanvec shows only that Amica incorporated a substantially similar title reference, and not some functional program element. In addition, the District Court appears to have assumed that the SpotColor reference, and perhaps all of Scanvec's PhotoPRINT source code, was a protected trade secret. Federal courts applying the Copyright Act have constructed an intricate framework for determining whether source code is protected. Once the court has found copying, either express or inferred, it considers whether the copied elements are protected expressions. Id. at 1234-35; 17 U.S.C. § 102(b). We have explained the distinction between protected expressions and unprotected ideas by “reference to the end sought to be achieved by the work in question,” distinguishing between “the purpose or function of a utilitarian work” and “everything that is not necessary to that purpose or function.” Whelan, 797 F.2d at 1236. The District Court did not perform a similarly rigorous analysis of the elements of PhotoPRINT and the allegedly misappropriated portions of ColorPRINT. Instead, the Court based its conclusion on credibility, finding that Jim Changs's testimony merited “little credence.” App. at 25. This finding, however, does not explain whether Scanvec's SpotColor was a protected trade secret, and whether Amica used or disclosed that secret as required for an actionable claim under Pennsylvania law. Hi-Tech Sys., 801 F.Supp. at 1444. **8 [4] Similar problems attain to the District Court's finding that Amica incorporated “hundreds of PhotoPRINT ICC color profiles” and that this incorporation could not be explained away as the result of reverse engineering or mistake. App. at 27. As with the instances of SpotColor, the District Court did not determine whether Scanvec's ICC Profiles were protected as trade secrets, a requirement for misappropriation under Pennsylvania law. For these reasons, the District Court erred in finding a likelihood of success on the merits of Scanvec's misappropriation and copying claims. 3. Unfair Competition The District Court also entered the preliminary injunction based on a likelihood *180 that Scanvec would succeed on the merits of its common law unfair competition claim. Despite the equal importance of this finding to the District Court's analysis, Amica has failed to challenge this finding Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 104 of 192 Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171 (2003) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 on appeal. We have “repeatedly emphasized that failure to raise a theory as an issue on appeal constitutes a waiver,” by ignoring the requirement that briefs contain “statements of all issues presented for appeal, together with supporting arguments and citations.” Int'l Raw Materials, Ltd. v. Stauffer Chem. Co., 978 F.2d 1318, 1327 n. 11 (3d Cir.1992). Amica's statement that it appealed “all aspects” of the District Court's order, and the suggestion that its opening brief cited to “the part of the District Court's Opinion relating to unfair competition,” falls far short of this standard. Amica's briefing does not address the District Court's findings of unfair competition, and does not explain how these findings are erroneous under Pennsylvania law. Moreover, Amica's brief does not cite any authorities explaining the standards for unfair competition, and confines its legal arguments to the issue of misappropriation. Because of these omissions, it is impossible to determine the factual and legal basis for Amica's purported appeal. Nonetheless, even if we were to reach the merits of this issue, the District Court's conclusions are proper. A claim of unfair competition under Pennsylvania law requires proof that the defendant has “passed off” the goods of one manufacturer or vendor as those of another, thus creating confusion between his own goods, and those of the rival. Penn. State Univ. v. Univ. Orthopedics, Ltd., 706 A.2d 863, 870-71 (Pa.Super.Ct.1998) (“The gist of the action lies in the deception practiced in ‘passing off’ the goods of one for that of another.”); see also Louis Vuitton Malletier & Oakley, Inc. v. Veit, 211 F.Supp.2d 567, 582 (E.D.Pa.2002) (noting that common law cause of action for unfair competition in Pennsylvania mirrors the requirements of section 43(a) of the Lanham Act). [5] Here, the District Court found that Amica “willfully converted PhotoPRINT ICC Profiles en masse for use in the various versions of ColorPRINT,” while “falsifying the copyright information for the profiles to denote” Amica as the copyright holder. App. at 27. The District Court then concluded that Amica sold this misbranded product to Scanvec's former customers, resulting in “incalculable damage to Plaintiffs' reputation and goodwill in the RIP software industry.” App. at 29. As Pennsylvania courts have noted, “the trading on another's business reputation by use of deceptive selling practices or other means is enjoinable on the grounds of unfair competition.” Univ. Orthopedics, 706 A.2d at 871 (quoting Morgan's Home Equip. Corp. v. Martucci, 390 Pa. 618, 136 A.2d 838, 848 (1957)). The conduct cited by the District Court supports the conclusion that Amica passed off ColorPRINT as Scanvec's product, using Scanvec's distribution network. Hence, even if we were to address this issue, we would find no error in the District Court's analysis. **9 Accordingly, although the District Court erred in entering the December 23 injunction on the basis of Scanvec's misappropriation claims, the injunction is soundly supported by the findings of civil conspiracy and unfair competition. Therefore, the conduct enjoined by the District Court was not an abuse of discretion, error of law, or clear mistake, and will be affirmed. D. Lanham Act Jurisdiction Amica argues that the District Court erred in exercising jurisdiction under the Lanham Act to enjoin Amica's sales in China. The Lanham Act allows federal courts to enjoin extraterritorial conduct *181 when necessary to prevent harm to commerce in the United States. Steele v. Bulova Watch Co., 344 U.S. 280, 73 S.Ct. 252, 97 L.Ed. 319 (1952). A proper invocation of extraterritorial jurisdiction under the Lanham Act depends on: 1) whether the defendant is a United States citizen; 2) conflicts between the defendant's trademark rights under foreign law and the plaintiff's rights in the United States; and 3) whether the defendant's conduct has a substantial or significant effect on domestic commerce. Atl. Richfield Co. v. ARCO Globus Int'l Co., 150 F.3d 189, 192 (2d Cir.1998); Nintendo of Am., Inc. v. Aeropower Co., 34 F.3d 246, 250-51 (4th Cir.1994); Am. Rice, Inc. v. Ark. Rice Growers Co-op. Ass'n, 701 F.2d 408, 414 (5th Cir.1983) (requiring effect on commerce to be “more than insignificant”); and see Reebok Int'l, Ltd. v. Marnatech Enters., Inc., 970 F.2d 552, 555 (9th Cir.1992) (expanding the conflict of laws analysis into a seven-part inquiry); see also 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 29:58 (West 2003) (collecting cases). Amica has raised only the third of these factors, arguing that Scanvec provided no evidence that the sale of ColorPRINT in China sufficiently affected United States commerce for jurisdiction. [6] The District Court considered the impact of Amica's sales and conspiratorial actions in finding a jurisdictionally sufficient nexus to American commerce. Amica availed itself of business opportunities inside the Unites States. Amica solicited customers at U.S. trade shows, suggesting plans for domestic expansion, App. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 105 of 192 Scanvec Amiable Ltd. v. Chang, 80 Fed.Appx. 171 (2003) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 at 28; 565-67. Amica developed essential elements of its ColorPRINT software, including the disputed ICC Profiles, from Scanvec programs designed in the United States. App. at 27. Finally, the District Court found that the confusingly similar marks and designations contained in ColorPRINT damaged Scanvec's goodwill and reputation within the domestic RIP software market. App. at 29. In all, the record indicates that Amica orchestrated its actions in China from the United States, using materials and customers developed in this country to materially further the launch of a confusingly similar product overseas. These facts show that Amica's domestic activities formed an essential step in carrying out its foreign conspiracy, resulting in the substantial impairment of Scanvec's business reputation in the United States. Accordingly, we are satisfied that Scanvec has satisfied the commercial nexus requirement of Steele. III. **10 For the foregoing reasons, the orders of the District Court entered on November 4, 2002 and December 24, 2002, will be affirmed. All Citations 80 Fed.Appx. 171, 2003 WL 22597067 Footnotes 1 Appeal number 02-4385. 2 Amica argues we may exercise jurisdiction over the November 4 order under the collateral order doctrine. We need not consider this argument, because jurisdiction is also proper under 28 U.S.C. § 1292(a)(1), which governs interlocutory orders “granting, continuing, modifying, refusing, or dissolving injunctions....” The November 4 order modified the October 3 order by imposing a security requirement of $390,000 not previously required. Compare App. at 1544-1549 (October 3 order), with App. at 33-39 (November 4 order); see Sprint Communications Co. v. Cat Communications Int'l, 335 F.3d 235, 239 n. 3 (3d Cir.2003). 3 Appeal number 03-1043. 4 Adobe is a third-party software manufacturer that sells some of the most widely-used software for text and image processing. See www.adobe.com (last visited Aug. 25, 2003). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 106 of 192 EXHIBIT K Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 107 of 192 Schwartz v. OneWest Bank, FSB, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2013 WL 6037078 Only the Westlaw citation is currently available. United States District Court, E.D. Pennsylvania. James E. SCHWARTZ, Plaintiff v. ONEWEST BANK, FSB, Defendant. Civil Action No. 13-0113. | Nov. 13, 2013. Attorneys and Law Firms H. Peter Nelson, Grim Biehn & Thatcher, Perkasie, PA, for Plaintiff. Brett L. Messinger, Arthur R. Armstrong, Duane Morris LLP, Martin C. Bryce, Jr., Rachel Keene, Daniel J.T. Mckenna, Ballard Spahr Andrews and Ingersoll, L.L.P., Philadelphia, PA, for Defendant. MEMORANDUM OPINION NITZA I. QUIÑONES ALEJANDRO, District Judge. INTRODUCTION *1 On March 1, 2013, OneWest Bank, FSB (“Defendant” or “OneWest”), filed a motion to dismiss the amended complaint [ECF 10] pursuant to the provision of Federal Rule of Civil Procedure (Rule) 12(b) (6) for failure to state a claim. On March 29, 2013, James E. Schwartz (“Plaintiff” or “Schwartz”) formally opposed the motion [ECF 13]. On July 18, 2013, this matter was reassigned to the undersigned [ECF 19]. By order dated September 25, 2013 [ECF 20], this Court notified the parties that it was converting pursuant to Rule 12(d), the motion to dismiss and the answer, into cross-motions for summary judgment as to Counts I and II only of the amended complaint and directed the parties to file supplemental briefs in support of their respective position. On October 7, 2013, Plaintiff filed a supplemental brief [ECF 26]. Defendant filed its supplemental brief on October 15, 2013 [ECF 27], and stated that it is “agreeable to the entry of an order confirming that the Mortgage covers only Parcel A.” Accordingly, judgment on Counts I and II only is entered in favor of Plaintiff. In light of this ruling, the remaining matter before the Court is Defendant's motion to dismiss Counts III through VIII of the amended complaint. 1 As to these counts, Plaintiff asserts that OneWest's foreclosure action and the subsequent sheriff's sale listings of a specific real estate property belonging to Plaintiff violated Pennsylvania's Fair Credit Extension Uniformity Act, 73 Pa. Con. Stat. § 2270.1, et seq., (“FCEUA”), and the Unfair Trade Practices and Consumer Protection Law, 73 Pa. Con. Stat. § 201-1, et seq., (“UTPCPL”). Plaintiff further contends that said foreclosure action and sheriff's sale listings give rise to claims of slander of title, abuse of process, and intentional interference with existing and/or prospective contractual relations. For the reasons set forth, this Court grants Defendant's motion to dismiss Counts III through VIII. BACKGROUND For the purpose of ruling on Defendant's motion to dismiss, this Court accepts as true the following summary of the relevant allegations in Plaintiff's amended complaint and attachments: Schwartz is the owner of two parcels of land in Bucks County (hereinafter, referred to as “Parcel A” and “Parcel B”), which he acquired by deed in July 1996. Parcel A is identified as Bucks County Tax Map Parcel No. 44-014-084, and Parcel B is identified as Bucks County Tax Map Parcel No. 44-014-087. On March 14, 2007, Schwartz obtained a loan from IndyMac Bank, FSB, (IndyMac Bank) in the amount of $375,000, and executed a note and a mortgage as security for the loan. In March 2009, OneWest acquired the assets and operations of IndyMac Bank from the Federal Deposit Insurance Corporation. The mortgage executed by Schwartz was recorded by IndyMac Bank on November 25, 2009, and assigned to OneWest on January 3, 2010. The assignment was recorded on February 4, 2010. In the interim, OneWest filed a mortgage foreclosure action against Schwartz in Bucks County Court of Common Pleas, 2 averring that Schwartz had defaulted on the mortgage encumbering the property subject to the mortgage identified as Tax Map Parcel No. 44-014- Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 108 of 192 Schwartz v. OneWest Bank, FSB, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 084 (Parcel A). See Complaint, Exhibit A. In addition, “Exhibit A” attached to the Mortgage document also referenced Tax Map Parcel No. 44-014-084, as the encumbered property. However, within the metes and bounds description of the property, reference is made to “two adjoining tracts of land constituting one farm.” See Defendant's Motion to Dismiss, Exhibit A to Exhibit C. 3 *2 Schwartz failed to respond to the mortgage foreclosure complaint, and on February 2, 2010, OneWest filed a praecipe to enter judgment by default. Following the entry of the default judgment, a sheriff's sale was scheduled for May 14, 2010, which listed the foreclosed property as “Tax Parcel # 44-14-84” (Parcel A). See Amended Complaint, Exhibit 2 (the “Initial Sheriffs Sale Notice”). For unknown reasons, the sheriff's sale was cancelled and re-listed several times During the course of the mortgage foreclosure proceedings, counsel for OneWest advised Schwartz's then counsel that it was OneWest's position that the mortgage encumbered two parcels, Parcels A and B. Specifically, by letter dated October 29, 2010, OneWest's foreclosure counsel wrote “the Mortgage was intended to, and does, encumber both of the two parcels described in plaintiff's writ of execution....” See Amended Complaint, Exhibit 4. This contention was repeated in emails to Schwartz's counsel on February 9, 2011, and July 20, 2011. See Amended Complaint, Exhibit 5. On January 24, 2013, a notice of sale was issued rescheduling the sheriff's sale for February 8, 2013. Like the Initial Sheriff's Sale Notice, this notice referenced only “TAX PARCEL # 44-14- 84” (Parcel A). However, unlike the Initial Sheriffs Sale Notice, the January 24, 2013 Notice included a description of the property involved which referenced “two adjoining tracts of land constituting one farm.” This language was identical to that contained in Exhibit A attached to the Mortgage. Schwartz alleges that on August 12, 2010, he entered into an Agreement of Sale for both parcels with Schmidt Properties, LLC (“Schmidt”), intending to transfer the parcels under a short sale and to use the proceeds to pay off the mortgage with OneWest. Plaintiff contends that he was unable to close the transaction due to unspecified actions of OneWest. Schwartz further alleges that sometime in 2011, he applied to sell the development rights to both parcels to Tinicum Township as part of a land conservancy program. He claims that the transaction failed because OneWest refused to subordinate its mortgage to the conservation easement Tinicum Township would place on the property in conjunction with the sale of the development rights. LEGAL STANDARD When considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), the court “must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009). The court must then determine “whether the facts alleged in the complaint are sufficient to show that the plaintiff has a ‘plausible claim for relief.’ ” Id. at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). The complaint must do more than merely allege the plaintiff's entitlement to relief; it must “show such an entitlement with its facts.” Id. (citations omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show [n]’-‘that the pleader is entitled to relief.’ ” Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)) (alterations in original). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice.” Id. To survive a motion to dismiss under Rule 12(b)(6), “a plaintiff must allege facts sufficient to ‘nudge [his]claims across the line from conceivable to plausible.’ ” Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir.2008) (quoting Twombly, 550 U.S. at 570). *3 In deciding motions to dismiss, “courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint, and matters of public record.” Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993) (citations omitted); see also Sands v. McCormick, 502 F.3d 263, Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 109 of 192 Schwartz v. OneWest Bank, FSB, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 268 (3d Cir.2007). The court may consider “undisputedly authentic document[s] that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the [attached] document[s].” Pension Benefits, 998 F.2d at 1196. Documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may also be considered. Pryor v. Nat'l Collegiate Athletic Ass'n, 288 F.3d 548, 560 (3d Cir.2002) (citation omitted); see also U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir.2002) (“Although a district court may not consider matters extraneous to the pleadings, a document integral to or explicitly relied upon in the complaint may be considered without converting the motion to dismiss into one for summary judgment.”) (internal quotation omitted). DISCUSSION Plaintiff's Slander of Title Claim At Count III of the amended complaint, Plaintiff asserts a claim for slander of title based on Defendant's alleged false representations of its interest in Parcel B. Plaintiff relies on the following assertions in support of his contentions: (1) statements made in Defendant's legal filings in the mortgage foreclosure action; (2) statements made by Defendant's foreclosure counsel in a letter and in two emails to Plaintiff's foreclosure counsel during the course of the mortgage foreclosure action; and (3) representations made in the sheriffs sale notices of 2010 and 2011. Defendant rebuts Plaintiff's slander of title claim and argues that the claim fails since it is based entirely upon representations that are subject to an absolute privilege. 4 Disparagement or slander of title is the false and malicious representation of the title or quality of another's interest in goods or property. Forman v. Cheltenham National Bank, 348 Pa.Super. 559, 502 A.2d 686, 688 (Pa.Super.1985). To assert a claim for slander of title, a plaintiff must allege: (1) a publication of a false statement; (2) the publisher either intends the publication to cause pecuniary loss or reasonably should recognize that the publication will result in pecuniary loss; (3) a pecuniary loss does in fact result; and (4) the publisher either knows that the statement is false or acts in reckless disregard of its truth or falsity. Pro Golf Manufacturing, Inc. v. Tribune Review Newspaper Company, 570 Pa. 242, 809 A.2d 243, 246 (Pa.2002). Under Pennsylvania law, it is well-settled that “[a]ll communications pertinent to any stage of a judicial proceeding are accorded an absolute privilege which cannot be destroyed by abuse ... Thus, statements by a party, a witness, counsel, or a judge cannot be the basis of a defamation action whether they occur in the pleadings or in open court.” Binder v. Triangle Publications, Inc., 442 Pa. 319, 275 A.2d 53, 56 (Pa.1971); see also Triester v. 191 Tenants Assoc., 272 Pa.Super. 271, 415 A.2d 698, 702 (Pa.Super.1979) (recognizing extension of absolute privilege to claim for slander of title). This absolute privilege “extends not only to communications made in open court, but also encompasses pleadings and even less formal communications such as, preliminary conferences and correspondence between counsel in furtherance of the client's interest.” Richmond v. McHale, 35 A.3d 779, 785 (Pa.Super.2012) (citations omitted). In addition, the existence of the privilege does not depend upon the motive of the defendant in making the alleged statement. Greenberg v. Aetna Ins. Co., 427 Pa. 511, 235 A.2d 576, 578 (Pa.1967). All reasonable doubts as to whether the alleged communications were pertinent and material to the relief or redress sought are to be resolved in favor of pertinency and materiality. Id. at 577-578. *4 Here, Plaintiff alleges that Defendant slandered the title to Parcel B by filing the mortgage foreclosure action and seeking to foreclose on the property described in the mortgage document attached to the complaint. Because all representations made in pleadings are subject to an absolute privilege, the representations made in the mortgage foreclosure complaint cannot form the basis of a claim for slander of title. Plaintiff's argument is, therefore, without merit. Next, Plaintiff contends that Defendant slandered the title to Parcel B by communications made by OneWest's foreclosure counsel to Plaintiff's counsel “in the Foreclosure Action.” In the correspondences, attached as Exhibits 4 and 5 to the amended complaint, OneWest's foreclosure counsel advised Plaintiff's counsel that OneWest believed both parcels were intended to be encumbered by the mortgage, as evidenced by its reference to the “two adjoining tracts.” It is clear from the content and timing of the statements, however, that these were made in connection with counsel's Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 110 of 192 Schwartz v. OneWest Bank, FSB, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 representation of OneWest in the judicial foreclosure proceeding; to wit: the October 29, 2010 letter identifies the foreclosure action by caption in the subject line of the letter, and the email correspondences specifically refer to the October 29, 2010 letter. Further, in the amended complaint, Plaintiff acknowledged that these correspondences were made “in the Foreclosure Action.” See Amended Complaint ¶¶ 43 and 44. Based upon these arguments and acknowledgment, this Court finds that the communications are absolutely privileged and cannot form the basis of a claim for slander of title. See Smith v. Griffiths, 327 Pa.Super. 418, 476 A.2d 22, 25 (Pa.Super.1984) (affirming application of absolute privilege to written communications of attorney on behalf of his client during the course of judicial proceedings). Plaintiff also contends that Defendant slandered the title to Parcel B by “schedul[ing] a sheriff sale ....” Amended Complaint ¶¶ 24 and 28. Specifically, Plaintiff points to two sheriff's sale notices, attached to the amended complaint as Exhibits 2 and 3, which he contends Defendant “lists both of Mr. Schwartz's properties” for sale. Even assuming OneWest was responsible for the language contained in the sheriff's sale notices, the notices were posted in connection with and as a result of the state court's entry of judgment in the foreclosure action. Because each of the representations on which Plaintiff's slander claim is based was made in the course of and in connection to a judicial proceeding, i.e., the foreclosure action, the representations are absolutely privileged and cannot support a claim for slander of title. 5 Plaintiff's Fair Credit Extension Uniformity Act Claim At Count IV, Plaintiff asserts a claim under Pennsylvania's Fair Credit Extension Uniformity Act (the “FCEUA”), 73 Pa. Con. Stat. § 2270.1, et seq., which prohibits unfair or deceptive acts or practices with regard to the collection of debts. In support of his FCEUA claim, Plaintiff relies upon the same representations and conduct on which his slander of title claim is based. Because these representations are subject to an absolute privilege (see supra discussion), these cannot form the basis of Plaintiff's claim under the FCEUA. See e.g., Moses v. McWilliams, 379 Pa.Super. 150, 549 A.2d 950, 957-58 (Pa.Super.1988) (recognizing the extension of absolute privilege by Pennsylvania courts to torts other than defamation). *5 Notwithstanding, Plaintiff contends that Defendant engaged in unfair or deceptive debt collection practices “[b]y attempting to foreclose upon” Parcel B. Plaintiff fails, however, to allege facts that could be deemed unfair or deceptive debt collection acts or practices. At best, Plaintiff points to the commencement of the mortgage foreclosure action as constituting Defendant's wrongful debt collection action. Notably, Plaintiff provides no legal support for his contention that a lender's commencement of foreclosure proceedings constitutes an unfair or deceptive debt collection practice. Assuming that the commencement of a foreclosure action could constitute an unfair or deceptive debt collection practice, a review of OneWest's mortgage foreclosure complaint shows that OneWest merely sought to foreclose on the property identified in the mortgage document attached to the foreclosure complaint. See Foreclosure Complaint, Exhibit C to Defendant's Motion to Dismiss (“The premises subject to said mortgage is described in the mortgage attached as Exhibit A and is known as 118 Hollow Horn Road, Erwinna, Pennsylvania 18920.”). OneWest did not make any representations in that pleading as to its rights in Parcel B, but rather simply asserted rights in the property identified in the mortgage. This court filing cannot be deemed deceptive or improper. Plaintiff's Unfair Trade Practices and Consumer Protection Law Claim At Count V, Plaintiff asserts a claim under the Unfair Trade Practices and Consumer Protection Law (the “UTPCPL”), 73 Pa. Con. Stat. § 201-1, et seq. The UTPCPL prohibits “unfair methods of competition” and “unfair or deceptive acts or practices” in the conduct of trade or commerce. 73 Pa. Con. Stat. § 201-3. The UTPCPL provides various definitions of unfair practices, including a catch-all provision. See Id. § 201- 2(4). 6 “The statute creates a private right of action in persons upon whom unfair methods of competition and unfair or deceptive acts or practices are employed and who, as a result, sustain an ascertainable loss.” Hunt v. U.S. Tobacco Co., 538 F.3d 217, 221 (3d Cir.2008) (internal quotations omitted). Thus, to assert a viable claim under the UTPCPL, a plaintiff must allege, inter alia, “that he justifiably relied on the defendant's wrongful conduct or representation and that he suffered Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 111 of 192 Schwartz v. OneWest Bank, FSB, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 harm as a result of that reliance.” Id. at 224 (finding “the justifiable-reliance standing requirement to apply to all substantive subsections of the Consumer Protection Law ....”) (emphasis in original). As the basis of his UTPCPL claim, Plaintiff alleges that Defendant made “false and/or misleading statements of fact concerning the applicability of the Mortgage Copy,” engaged in “fraudulent conduct which created a likelihood of confusion and/or misunderstanding regarding the impact of the Mortgage Copy,” and engaged “in acts of fraudulent conduct concerning the applicability of the Mortgage Copy.” See Amended Comp. ¶ 80. The only facts alleged in support of these otherwise bald contentions, however, are those relating to the statements made by Defendant in the course of the foreclosure action. For the reasons discussed above, all of these alleged representations are subject to an absolute privilege and cannot, therefore, form the basis of liability under the UTPCPL. *6 Further, nowhere in the amended complaint does Plaintiff allege facts as to how he justifiably relied upon Defendant's alleged misrepresentations to his detriment. Plaintiff does not allege any action he undertook to his detriment in reliance upon Defendant's purported misrepresentations as to the encumbrance of Parcel B. Having failed to allege any such facts, Plaintiff's claim is dismissed. See Hunt, 538 F.3d at 227. In addition, Defendant argues that Plaintiff's UTPCPL claim is barred by the economic loss doctrine because it is based entirely upon a contract, i.e., the mortgage, and Plaintiff's only alleged losses are economic in nature. Plaintiff counters that his UTPCPL claims are not barred by the economic loss doctrine because these claims are based on Defendant's alleged misrepresentations as to Defendant's interest in Parcel B made in court filings, the sheriff's sale notices, and the correspondence from Defendant's counsel, and are, therefore, independent of the mortgage. The economic loss doctrine provides that “no cause of action can be maintained in tort for negligence or strict liability where the only injury was an ‘economic loss'- that is, loss that is neither physical injury nor damage to tangible property.” 2-J Corp. v. Tice, 126 F.3d 539, 541 (3d Cir.1997). Within the Third Circuit, this doctrine has been expanded and applied in multiple contexts, including claims brought under the UTPCPL. See Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir.2002) (holding that plaintiff's UTPCPL claim was barred by the economic loss doctrine). In Werwinski, the Third Circuit held that Pennsylvania law made no exception to the economic loss doctrine for intentional tort or UTPCPL claims. Id. at 674. The court further held that where the allegedly fraudulent misrepresentations concerned the subject of a contract, the tort claims are clearly intertwined with, rather than extraneous to, the contract claims. Id. at 678. Thus, the court concluded that the economic loss doctrine barred such claims. Id. 7 Similarly, resolution of Plaintiff's claims turns on the construction of the language of the mortgage with regard to the encumbered property. Specifically, any claims based on the alleged misrepresentations as to Defendant's interest in Parcel B are necessarily interwoven with the mortgage itself. Because Plaintiff's UTPCPL claim is dependent upon a determination as to whether the mortgage also encumbered Parcel B, the claim is inextricably tied in with the mortgage and, thus, barred by the economic loss doctrine. In addition, Plaintiff has alleged nothing more than purely economic loss. He does not allege any injury to himself or to his tangible property. As such, this claim cannot be maintained in tort and Plaintiff's UTPCPL claim is barred. Plaintiff's Abuse of Process Claim At Count VI, Plaintiff asserts a claim for abuse of process. “The gist of an action for abuse of process is the improper use of process after it has been issued, that is, a perversion of it.” McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1023 (Pa.1987) (citations omitted). An abuse of process is “use of legal process as a tactical weapon to coerce a desired result that is not the legitimate object of the process.” Id. at 1026. In order to state a cause of action for abuse of process, a plaintiff must allege that the defendant used a legal process to accomplish a purpose for which the process was not designed. Rosen v. American Bank of Rolla, 426 Pa.Super. 376, 627 A.2d 190, 192 (Pa.Super.1993). It is not enough that the defendant had bad or malicious intentions or that the defendant acted from spite or with an ulterior motive. Rosen v. Tesoro Petroleum Corp., 399 Pa.Super. 226, 582 A.2d 27, 32-33 Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 112 of 192 Schwartz v. OneWest Bank, FSB, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 (Pa.Super.1990). Rather, there must be an act or threat not authorized by the process, or the process must be used for an illegitimate aim such as extortion, blackmail, or to coerce or compel the plaintiff to take some collateral action. Id. “[T]here is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions.” Shaffer v. Stewart, 326 Pa.Super. 135, 473 A.2d 1017, 1019 (Pa.Super.1984); see also Rosen, 627 A.2d at 192 (“ ‘[T]here is no action for abuse of process when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant ....’ ”) (quoting Restatement (Second) of Torts § 682 cmt. b). “Liability is reached when the utilization of the procedure for the purpose for which it was designed becomes so lacking in justification as to lose its legitimate function as a reasonably justifiable litigation procedure.” Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 308 (3d Cir.2003). *7 Here, Plaintiff alleges that Defendant engaged in an abuse of process by “filing the foreclosure action” and, therein, “attempt[ing] to unlawfully gain ownership of South 20 Parcel,” i.e., Parcel B. Amended Comp. ¶ 83. As pled, this claim fails as a matter of law because such a claim cannot be based upon the commencement of legal proceedings, but rather must be based upon the “improper use of process after it has been issued.” McGee, 535 A.2d at 1023 (emphasis added); see also In re Larsen, 532 Pa. 326, 616 A.2d 529, 592-93 (Pa.1992) (“Abuse of process differs from malicious prosecution in that the gist of the tort is not commencing an action or causing process to issue without justification, but misusing, or misapplying process justified in itself for an end other than that which it was designed to accomplish.”). At most, Plaintiff has alleged that Defendant commenced the underlying foreclosure action for an improper purpose, although he has never objected to the foreclosure action as it relates to Parcel A. Such allegation is insufficient to support a claim for abuse of process. See Rosen v. Tesoro Petroleum Corp., 399 Pa.Super. 226, 582 A.2d 27, 33 (Pa.Super.1990) (affirming dismissal of abuse of process claim where plaintiff merely alleged that defendant commenced litigation for a wrongful purpose). Plaintiff's abuse of process claim is, therefore, dismissed. Tortious Interference with Existing and Prospective Contracts At Counts VII and VIII, Plaintiff alleges that Defendant tortiously interfered with an existing agreement of sale with Schmidt and/or a prospective contract with Tinicum by engaging in conduct aimed at preventing the sales. To maintain an action for intentional interference with contractual relations, whether existing or prospective, a plaintiff must allege the following: (1) the existence of a contractual, or prospective contractual relation between the complainant and a third party; (2) purposeful action on the part of the defendant, specifically intended to harm the existing relation, or to prevent a prospective relation from occurring; (3) the absence of a privilege or justification on the part of the defendant; and (4) the occasioning of actual damage as a result of the defendant's conduct. Advent Systems Ltd. v. Unisys Corp., 925 F.2d 670, 673 (3d Cir.1991); Ira G. Steffy & Son, Inc. v. Citizens Bank of Pennsylvania, 7 A.3d 278, 288-89 (Pa.Super.2010); Pelagatti v. Co hen, 370 Pa.Super. 422, 536 A.2d 1337, 1343 (Pa.Super.1987) (citing Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466, 471 (Pa.1979)). In support of his tortious interference claims, Plaintiff relies upon the same facts as those underlying his other claims, i.e., the alleged misrepresentations made during the course of the foreclosure action as to the encumbrance of Parcel B. As previously stated, these representations are absolutely privileged, and, therefore, cannot provide any basis for a tortious interference claim. See Pelagatti, 536 A.2d at 1343 (affirming the dismissal of tortious interference claims that were based upon representations made in the course of litigation on the basis that those communications were absolutely privileged). The claims are, therefore, dismissed. CONCLUSION *8 For the foregoing reasons, this Court grants Defendant's motion to dismiss Counts III through VIII of the amended complaint. Two orders consistent with this memorandum follow. ORDER Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 113 of 192 Schwartz v. OneWest Bank, FSB, Not Reported in F.Supp.2d (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 AND NOW, this 13th day of November 2013, upon consideration of Defendant's Motion to Dismiss First Amended Complaint [ECF 10], Plaintiff's Answer to Motion to Dismiss First Amended Complaint [ECF13], and the allegations contained in the First Amended Complaint [ECF 7], it is hereby ORDERED that Defendant's motion with respect to Counts III through VIII of the First Amended Complaint is GRANTED, and Counts III through VIII are hereby DISMISSED. A memorandum opinion setting forth the reasons for this Order is filed herewith. All Citations Not Reported in F.Supp.2d, 2013 WL 6037078 Footnotes 1 Procedurally, on December 10, 2012, Plaintiff filed a complaint against Defendant in the Court of Common Pleas Bucks County [ECF 1]. Defendant removed the matter on January 9, 2013, pursuant to 28 U.S.C §§ 1332 and 1441 arguing the court's diversity jurisdiction [ECF 1]. On January 15, 2013, Defendant filed a motion to dismiss the complaint [ECF 6], In response, on February 5, 2013, Plaintiff filed an amended complaint [ECF 7], which precipitated the instant motion to dismiss. 2 While Plaintiff did not attach a copy of the foreclosure action complaint to his amended complaint, this Court may consider the foreclosure complaint because: (1) it is a publicly available document and Plaintiff has referenced it in his amended complaint; and (2) Defendant has attached a copy of the foreclosure complaint to its motion, as Exhibit C. 3 Plaintiff attached an identical copy of the mortgage to his amended complaint as Exhibit 1. 4 In his sur-reply, Plaintiff contends that the slander of title claim is also based upon the incorrect description of the encumbered property in the assignment of the mortgage from IndyMac to OneWest. Plaintiff's amended complaint, however, contains no such allegations or, more importantly, facts to support such a claim. 5 Moreover, the first sheriff's sale notice attached to Plaintiff's Amended Complaint merely identifies the tax parcel number for Parcel A as being the subject of the sheriff's sale. See Exhibit 2. As such, the initial notice provides, at most, what Plaintiff has admitted was true, i.e., Parcel A was properly the subject of a sheriff's sale. While the notice for the February 8, 2013 sheriff's sale references “two adjoining tracts” and the tax parcel number for Parcel A, it merely parrots the language contained in the mortgage and attached to the foreclosure complaint. Compare Exhibit 3 and Exhibit 1. As such, the representation, even if deemed to be that of Defendant, does not meet the requirements for slander. 6 Plaintiff has not identified which of the specifically enumerated unfair practices Defendant has allegedly engaged. Plaintiff, instead, alleges generally fraudulent misrepresentations. As such, this Court assumes Plaintiff brings his claim under the catchall provision, which precludes “any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.” 73 Pa. Con. Stat. § 201-2(4)(xxi). 7 Plaintiff's argument that this Court should not follow the Third Circuit's decision in Werwinski because it has been rejected by various state courts in Pennsylvania is misplaced as Werwinski is the law of this Circuit and, therefore, binding on this Court. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 114 of 192 EXHIBIT L Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 115 of 192 Schwartz v. OneWest Bank, FSB, 614 Fed.Appx. 80 (2015) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 614 Fed.Appx. 80 This case was not selected for publication in West's Federal Reporter. See Fed. Rule of Appellate Procedure 32.1 generally governing citation of judicial decisions issued on or after Jan. 1, 2007. See also U.S.Ct. of Appeals 3rd Cir. App. I, IOP 5.1, 5.3, and 5.7. United States Court of Appeals, Third Circuit. James E. SCHWARTZ, Appellant v. ONEWEST BANK, FSB. No. 13-4680. | Submitted Under Third Circuit LAR 34.1(a) June 4, 2015. | Filed: June 5, 2015. Synopsis Background: Mortgagor, who owned two parcels of land, brought action against mortgage assignee, asserting claims under state law for quiet title, slander of title, violation of the Fair Credit Extension Uniformity Act (FCEUA), violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL), abuse of process, and intentional interference with existing and prospective contractual relations, arising from assignee's attempts to foreclose on parcel of land that was not subject to the mortgage. The United States District Court for the Eastern District of Pennsylvania, Nitza I. Quinones Alejandro, J., 2013 WL 6037078, granted summary judgment in mortgagor's favor on quiet title claim and dismissed remaining claims for failure to state a claim. Mortgagor appealed. Holdings: The Court of Appeals, Shwartz, Circuit Judge, held that: [1] assignee's allegedly improper communications were protected by absolute judicial privilege, and [2] mortgagor failed to state abuse of process claim. Affirmed. West Headnotes (2) [1] Antitrust and Trade Regulation Communications, representations, and notices; debtor's response Libel and Slander Defenses Torts Contracts in general Allegedly improper communications made by mortgage assignee or its attorneys with respect to parcel of land that assignee claimed was subject to mortgage were made in connection with foreclosure action, and thus were protected by absolute judicial privilege under Pennsylvania law, such that they could not be used as a basis for mortgagor's claims alleging slander of title, violation of the Fair Credit Extension Uniformity Act (FCEUA), violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL), and intentional interference with existing and prospective contractual relations. 73 P.S. §§ 201-1 et seq., 2270.1. 1 Cases that cite this headnote [2] Process Pleading Mortgagor's allegation that mortgage assignee commenced foreclosure action for the improper purpose of attempting to unlawfully gain ownership of parcel of land that was not subject to mortgage was insufficient to state a claim for abuse of process under Pennsylvania law, absent allegations that the process was pursued to achieve an unauthorized purpose. 1 Cases that cite this headnote Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 116 of 192 Schwartz v. OneWest Bank, FSB, 614 Fed.Appx. 80 (2015) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 *81 Appeal from the United States District Court for the Eastern District of Pennsylvania, (D.C. No. 2-13-cv- 00113), District Judge: Hon. Nitza I. Quinones Alejandro. Attorneys and Law Firms H. Peter Nelson, Esq., Grim, Biehn & Thatcher, Perkasie, PA, for Appellant. Martin C. Bryce, Jr., Esq., Daniel McKenna, Esq., Ballard Spahr, Brett L. Messinger, Esq., Brian J. Slipakoff, Esq., Duane Morris, Philadelphia, PA, for OneWest Bank, FSB. Before: FISHER, JORDAN, and SHWARTZ, Circuit Judges. OPINION * SHWARTZ, Circuit Judge. James Schwartz brought Pennsylvania state law claims against OneWest Bank, FSB (“OneWest”), based on statements OneWest allegedly made in connection with foreclosure proceedings on Schwartz's property. The District Court dismissed Schwartz's claims, holding that OneWest's statements were protected by Pennsylvania's absolute judicial privilege and that Schwartz's abuse of process claim was inadequately pled. We will affirm. I We draw the following facts from Schwartz's First Amended Complaint (“FAC”), accepting them as true in accordance with our standard of review. Schwartz owns two parcels of land in Tinicum Township, Pennsylvania: approximately thirty acres on the north side of Hollow Horn Road (the “North 30 Parcel”) and approximately twenty acres on the south side of Hollow Horn Road (the “South 20 Parcel”). Schwartz executed a note and mortgage on the North 30 Parcel in 2007, and OneWest acquired the mortgage by assignment in 2010 (the “Assignment”). OneWest filed a foreclosure action against Schwartz in Pennsylvania state court, asserting that the mortgage “covers both the South 20 Parcel and the North 30 Parcel,” and OneWest's counsel “continu[ed] to assert this position” in communications to Schwartz's counsel. *82 App. 31. OneWest sought a default judgment against Schwartz and a “Sheriff Sale” of Schwartz's properties in connection with the foreclosure action, “not recognizing that only the North 30 Parcel is subject to the” mortgage. App. 30. The FAC alleges that OneWest's actions thwarted Schwartz's attempted sale of the parcels to Schmidt Properties, LLC, and of development rights on the properties to Tinicum Township. Based on these facts, Schwartz asserted the following causes of action: quiet title and a “declaratory judgment,” seeking a declaration “that the only property subject to the [mortgage] is the North 30 Parcel” (Counts I & II), App. 31-32; slander of title (Count III); violation of the Fair Credit Extension Uniformity Act (“FCEUA”), 73 Pa. Stat. Ann. § 2270.1 et seq. (Count IV); violation of the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa. Stat. Ann. § 201-1 et seq. (Count V); abuse of process (Count VI); and intentional interference with existing and prospective contractual relations (Counts VII & VIII). OneWest moved to dismiss the FAC in its entirety for failure to state a claim, and Schwartz cross-moved for summary judgment as to Counts I and II. The District Court entered judgment in favor of Schwartz on Counts I and II, concluding that, as OneWest conceded, the mortgage applied only to the North 30 Parcel, and granted OneWest's motion to dismiss Counts III through VIII. The District Court reasoned with respect to all but the abuse of process claim that Schwartz's causes of action depended on “alleged misrepresentations made during the course of the foreclosure action,” including the filing of the foreclosure action itself and the communications between OneWest's counsel and Schwartz's counsel, and that these alleged misrepresentations were not actionable under Pennsylvania's absolute judicial privilege. App. 19. With respect to the abuse of process claim, the District Court reasoned that the FAC failed to state a claim under Pennsylvania law because it merely alleged that OneWest commenced the foreclosure action for an improper purpose, and commencement of an action alone does not provide a basis for an abuse of process claim. Schwartz appeals. 1 II Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 117 of 192 Schwartz v. OneWest Bank, FSB, 614 Fed.Appx. 80 (2015) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 A [1] We first address the District Court's dismissal of all claims but the abuse of process claim on the ground that they depended on communications protected by Pennsylvania's absolute judicial privilege. “The judicial privilege ... extends to ‘communications [ (1) ] which are issued in the regular course of judicial proceedings and [ (2) ] which are pertinent and material to the redress or relief sought.’ ” Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 311 (3d Cir.2003) (quoting Post v. Mendel, 510 Pa. 213, 507 A.2d 351, 355 (1986)). This privilege sweeps broadly to protect “[a]ll communications pertinent to any stage of a judicial proceeding,” Binder v. Triangle Publ'ns, Inc., 442 Pa. 319, 275 A.2d 53, 56 (1971), including “not only ... communications made in open court, but also ... pleadings and even less formal communications such as preliminary conferences and correspondence between counsel in furtherance of the client's interest,” Richmond v. McHale, *83 35 A.3d 779, 785 (Pa.Super.Ct.2012) (internal quotation marks and emphasis omitted). Although the judicial privilege most often bars defamation suits, Pennsylvania courts have applied the privilege broadly to confer “immunity from civil liability in the context of judicial proceedings.” Moses v. McWilliams, 379 Pa.Super. 150, 549 A.2d 950, 956-57 (1988). Here, all of Schwartz's claims arise from the foreclosure action and communications that occurred in connection with that action, namely the foreclosure complaint, the related sale notices posted as a result of the state court judgment in the foreclosure action, see Pa. R. Civ. P. 3129.1, and communications between OneWest's and Schwartz's attorneys that directly pertained to the foreclosure action, see App. 29-30, 33. 2 These communications reflected counsel's efforts to share their clients' litigation positions regarding OneWest's assertion that the mortgage covered both parcels, and thus were “pertinent and material to the redress or relief sought” in the foreclosure case. Post, 507 A.2d at 355; see, e.g., Richmond, 35 A.3d at 784, 786 (holding statement “made by one attorney to another during a discussion regarding discovery in a pending case” was privileged, as it “was made in connection with [the attorney's] representation of his client in a judicial proceeding”). Thus, we will affirm the District Court's dismissal of all claims, other than the abuse of process claim, on the ground that the allegedly improper communications that form the basis for these claims are protected by the judicial privilege. 3 B [2] We next address the District Court's dismissal of the abuse of process claim. Under Pennsylvania law, “abuse of process is the improper use of process after it has been issued.” McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1023 (1987) (internal quotation marks omitted). Thus, merely “initiati [ng] ... litigation for a wrongful purpose” alone is not actionable. Rosen v. Tesoro Petroleum Corp., 399 Pa.Super. 226, 582 A.2d 27, 33 (1990) (internal quotation marks omitted) (concluding plaintiffs failed to state a claim for abuse of process where they “merely complain that ‘defendant issued and served process on the plaintiffs' for various improper and ulterior purposes” but did not include “any allegation of a coercive use of the process”). Here, Schwartz's abuse of process claim relies entirely on OneWest's filing of the foreclosure action itself, asserting that it was filed for the improper purpose of “attempt[ing] to unlawfully gain ownership of [the] South 20 Parcel.” App. 39. An abuse of process claim bars the use of process invoked “to coerce a desired result that is not the legitimate object of the process.” McGee, 535 A.2d at 1026. The *84 purpose of the process was to foreclose on the property, an authorized goal of the procedure. Schwartz has not alleged any act “not authorized by” or that perverted the process. Rosen, 582 A.2d at 32 (internal quotation marks omitted); see also Gen. Refractories, 337 F.3d at 304 (“A perversion of legal process occurs when a party uses the process primarily to accomplish a purpose for which the process was not designed.” (internal quotation marks omitted)). Thus, even if the foreclosure action was based on incorrect facts, the allegations in the FAC do not demonstrate that the process was pursued to achieve an unauthorized purpose. See Gen. Refractories, 337 F.3d at 304. Thus, Schwartz fails to state a claim for abuse of process. C Finally, we address Schwartz's argument that the District Court abused its discretion by failing to offer him leave to amend the FAC, despite the fact that, as Schwartz concedes, he did not request leave to amend before the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 118 of 192 Schwartz v. OneWest Bank, FSB, 614 Fed.Appx. 80 (2015) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 District Court. In this non-civil rights case, the District Court is not required to sua sponte offer an amendment. Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247, 252-53 (3d Cir.2007). Thus, Schwartz's claim that the District Court erred by not allowing him to amend his complaint fails. III For the foregoing reasons, we will affirm the judgment of the District Court. All Citations 614 Fed.Appx. 80 Footnotes * This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. 1 The District Court had jurisdiction under 28 U.S.C. § 1332. This Court has jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over the District Court's grant of OneWest's motion to dismiss, accepting the facts alleged in the FAC as true. Nichole Med. Equip. & Supply, Inc. v. TriCenturion, Inc., 694 F.3d 340, 350 (3d Cir.2012). 2 In his brief, Schwartz also contends that statements made in the Assignment, which are unconnected to any judicial proceeding, are not privileged. Although the Assignment is attached to the FAC, the FAC includes no allegations based upon it and mentions it only once in passing to explain why OneWest may be liable for claims associated with the mortgage. Thus, the District Court did not err by declining to consider the Assignment as a basis for liability. Cf. Frederico v. Home Depot, 507 F.3d 188, 201 (3d Cir.2007) (declining to consider factual allegations in plaintiff's briefs that provided more specificity than her complaint, as “we do not consider after-the-fact allegations in determining the sufficiency of ... complaint[s]”). 3 We need not decide whether the judicial privilege applies to the tort of abuse of process based upon these communications, see Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 312 (3d Cir.2003), as we will affirm with respect to that claim on a different basis, as discussed in II.B. infra. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 119 of 192 EXHIBIT M Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 120 of 192 Sheare v. Borough of Olyphant, Not Reported in F.Supp.2d (2012) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2012 WL 2527022 Only the Westlaw citation is currently available. United States District Court, M.D. Pennsylvania. Jacqueline SHEARE and Trevor R. Sheare, Plaintiffs, v. BOROUGH OF OLYPHANT and Officer Lewis Kline, Defendants. Civil Action No. 3:11-CV-1639. | June 29, 2012. Attorneys and Law Firms Harry T. Coleman, Law Office of Harry Coleman, Carbondale, PA, for Plaintiffs. Patrick J. Boland, III, Marshall, Dennehey, Warner, Coleman & Goggin, Scranton, PA, for Defendants. MEMORANDUM A. RICHARD CAPUTO, District Judge. *1 Presently before the Court is the Motion to Dismiss Plaintiffs' Amended Complaint (Doc. 15) filed by Defendants Borough of Olyphant (“Olyphant”) and Officer Lewis Kline. Jacqueline Sheare (“Mrs.Sheare”) alleges that she was falsely arrested for criminal trespass after money went missing from her sister's home. According to Mrs. Sheare, Officer Kline commenced criminal proceedings against her based on numerous known falsehoods that were necessary to establishing probable cause. As such, Mrs. Sheare and her husband commenced this action asserting a 42 U.S.C. § 1983 false arrest claim against Officer Kline and a Monell claim against Olyphant. Plaintiffs also assert state law claims for abuse of process, intentional infliction of emotional distress, and loss of consortium. Defendants have moved to dismiss the action in its entirety. Because Plaintiffs have adequately stated claims for false arrest, intentional infliction of emotional distress, and loss of consortium, Defendants' motion will be granted in part and denied in part. BACKGROUND The facts as alleged in the Amended Complaint (Doc. 14) are as follows: The Sheares are residents of Susquehanna County, Pennsylvania. (Am. Compl., ¶ 1) Olyphant is a political subdivision of the Commonwealth of Pennsylvania. (Id. at ¶ 2.) Olyphant manages law enforcement in the borough through the Olyphant Police Department, and Lewis Kline is an officer with the department. (Id. at ¶¶ 3-7.) In early November 2010, Mrs. Sheare made plans with her sister Kathleen Zinskie, to travel together to Elizabethtown, Pennsylvania to visit their sister Colleen. (Id. at ¶ 12.) They were all then to travel together to Maryland for a family gathering at their sister Mary's home. (Id.) Around noon on November 7, 2010, Mrs. Sheare arrived at Kathleen's home in Olyphant. (Id. at ¶ 20.) She saw both of the family's trucks in the driveway and assumed they were home. (Id. at ¶ 21.) She then went in the unlocked garage and knocked on the interior door. (Id. at ¶ 22.) Finding no one home, she assumed they were running errands. (Id. at ¶ 23.) She used the bathroom and then sat on a couch and read a magazine, waiting for their return. (Id. at ¶ 24.) Prior to November 7, 2010, Kathleen's sister would routinely welcome Mrs. Sheare into her home. (Id. at ¶ 13.) And, on November 7, 2010, Mrs. Sheare had express permision to enter the Zinskie home. (Id.) About thirty minutes later, Mrs. Sheare's nephew, Nicholas Zinskie, came home and told her that Kathleen and her husband had already left for Elizabethtown and had left a note for her on the garage door. (Id. at ¶ 25.) They went out to the garage and Mrs. Sheare then read the note and left. (Id. at ¶ 26.) She met up with Kathleen, Colleen, and their husbands in Elizabethtown. (Id. at ¶ 28.) They all left for Maryland that evening. (Id. at ¶ 31.) *2 A few days later, Kathleen called Mrs. Sheare to ask her if she had been in the upstairs of the Zinskie home or seen any money lying around. (Id. at ¶ 35.). Mrs. Sheare told her she had not. (Id.) Kathleen then told her $1,000 was missing from an envelope in her husband Harry's office. (Id.) Case 3:14-cv-00853- DM Document 325-1 Filed 04/03/17 Page 121 of 192 Sheare v. Borough of Olyphant, Not Reported in F.Supp.2d (2012) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 About a week later, Officer Kline called Mrs. Sheare and asked her some questions about the missing money. (Id. at ¶¶ 38-39) He then asked her to come to the police station for an interview. (Id. at ¶ 40.) When she arrived, she was taken into an interview room and was advised she could leave at any time. (Id. at ¶ 41.) Officer Kline immediately confronted Mrs. Sheare, accusing her of lying repeatedly about her relationship with her sister, how frequently she was at the Zinskie home, and even what magazine she had read while waiting for them to return home. (Id. at ¶¶ 44-45.) He told Mrs. Sheare he was good friends with Harry Zinskie and that he knew she had taken the money. (Id. at ¶ 46.) He also said that Nicholas Zinskie had stated that he first saw Mrs. Sheare as she was exiting the garage, and that she seemed to be in a hurry. (Id. at ¶ 53.) Officer Kline said that if she did not return the money, she would be charged with a felony that would hurt her employment with the United States Postal Service. (Id. at ¶ 47.) Mrs. Sheare continually denied taking anything from the Zinskie home. (Id. at ¶ 49.) Due to Officer Kline's threatening and abusive manner, Mrs. Sheare was extremely shaken up by the interview. (Id. at ¶¶ 57-58.) The next day, she was taken to the hospital and underwent a cardiac catherization after experiencing chest pain. (Id. at ¶ 58.) Several days later, she was charged with criminal trespass under 18 Pa.C.S. § 3503(A) (1)(i). (Id. at ¶ 62.) The charge was later dismissed by an Assistant Lackawanna County District Attorney prior to a preliminary hearing. (Id.) In the Affidavit of Probable Cause completed by Officer Kline, he states that he was called to the Zinskie home on November 15, 2010 on a reported theft of money and that both Mr. and Mrs. Zinskie suspected Mrs. Sheare of the theft. (Doc. 17, Br. Supp. Mot. Dismiss Am. Compl., Ex. 1.) The Affidavit also states that Nicholas Zinskie arrived home on November 7, 2010 to find Mrs. Sheare walking out of the garage. (Id.) After being asked where his parents were, Nicholas pointed to a “rather prominent note” on the garage door. (Id.) Officer Kline further states in the Affidavit that the Zinskies both told him repeatedly that Mrs. Sheare “did not have their permission to enter the residence on Sunday, 11/7/10.” (Id.) The Sheares initiated this action in August of 2011. (Doc. 1.) In the complaint, Mrs. Sheare alleged a false arrest claim against Officer Kline and a Monell claim against Olyphant, both under 42 U.S.C. § 1983 (Counts One and Two). She also alleged abuse of process and intentional infliction of emotional distress under state law (Counts Three and Four). Finally, her husband alleged loss of consortium against Officer Kline and Olyphant (Count Five). Olyphant and Officer Kline then filed a motion to dismiss. (Doc. 7.) The Court granted the motion to dismiss the federal claims and declined to exercise supplemental jurisdiction over the remaining state law claims. (Doc. 13.) Subsequently, Plaintiffs filed an Amended Complaint asserting the same five causes of action. On February 27, 2012, Defendants filed a motion to dismiss the Amended Complaint. (Doc. 15.) The motion has been briefed and is ripe for review. LEGAL STANDARD *3 Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, for failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(6). When considering a Rule 12(b) (6) motion, the Court's role is limited to determining if a plaintiff is entitled to offer evidence in support of their claims. See Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir.2000). The Court does not consider whether a plaintiff will ultimately prevail. See id. A defendant bears the burden of establishing that a plaintiff's complaint fails to state a claim. See Gould Elecs. v. United States, 220 F.3d 169, 178 (3d Cir.2000). “A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a). The statement required by Rule 8(a)(2) must give the defendant fair notice of what the ... claim is and the grounds upon which it rests. Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Detailed factual allegations are not required. Twombly, 550 U.S. at 555. However, mere conclusory statements will not do; “a complaint must do more than allege the plaintiff's entitlement to relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir.2009). Instead, a complaint must “show” this entitlement by alleging sufficient facts. Id. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009). Case 3:14-cv-00853- DM Document 325-1 Filed 04/03/17 Page 122 of 192 Sheare v. Borough of Olyphant, Not Reported in F.Supp.2d (2012) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 As such, the inquiry at the motion to dismiss stage is “normally broken into three parts: (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged.” Malleus v. George, 641 F.3d 560, 563 (3d Cir.2011). Dismissal is appropriate only if, accepting as true all the facts alleged in the complaint, a plaintiff has not pleaded “enough facts to state a claim to relief that is plausible on its face,” Twombly, 550 U.S. at 570, meaning enough factual allegations “ ‘to raise a reasonable expectation that discovery will reveal evidence of’ ” each necessary element. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir.2008) (quoting Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 129 S.Ct. at 1949. “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 129 S.Ct. at 1949. *4 In deciding a motion to dismiss, the Court should consider the allegations in the complaint, exhibits attached to the complaint, and matters of public record. See Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993). The Court may also consider “undisputedly authentic” documents when the plaintiff's claims are based on the documents and the defendant has attached copies of the documents to the motion to dismiss. Id. The Court need not assume the plaintiff can prove facts that were not alleged in the complaint, see City of Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 263 & n. 13 (3d Cir.1998), or credit a complaint's “ ‘bald assertions' ” or “ ‘legal conclusions.’ ” Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997) (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir.1997)). DISCUSSION Defendants seek to dismiss Plaintiffs' Amended Complaint in its entirety for failure to state a claim upon which relief can be granted. The Court will address the sufficiency of each Count of Plaintiffs' Amended Complaint in seratim. I. False Arrest Pursuant to 42 U.S.C. § 1983 Defendants seek to dismiss Mrs. Sheare's false arrest claim and assert that the claim lacks facial plausibility. Pennsylvania's criminal trespass statute, 18 Pa.C.S.A. § 3503, states, in pertinent part, that a person is guilty of criminal trespass if, “knowing that he is not licensed or privileged to do so, he enters, gains entry by subterfuge or surreptitiously remains in any building or occupied structure or separately secured or occupied portion thereof.” 18 Pa.C.S.A. § 3503(a)(1)(i). A “crucial element” of the crime of criminal trespass is “the lack of permission or privilege to enter.” Commonwealth v. McBride, 528 Pa. 153, 158, 595 A.2d 589, 591 (1991). Section 1983 of Title 42 of the United States Code provides: Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State ..., subjects, or causes to be subjected, any citizen of the United States ... to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.... In order to bring a successful § 1983 claim, a plaintiff must demonstrate (1) that the challenged conduct was committed by a person acting under color of state law, and (2) that the conduct deprived the plaintiff of a right, privilege, or immunity secured by the Constitution or federal law. See Carter v. City of Philadelphia, 989 F.2d 117, 119 (3d Cir.1993). In Count One, Mrs. Sheare alleges that Officer Kline violated her Fourth Amendment rights under 42 U.S.C. § 1983 by falsely arresting her. The central issue in determining liability in a § 1983 action based on a claim of false arrest is “whether the arresting officers had probable cause to believe the person arrested had committed the offense.” Dowling v. City of Phila., 855 F.2d 136, 141 (3d Cir.1988). Whether the person actually committed the charged offense is irrelevant, id., as is the outcome of the Case 3:14-cv-00853- DM Document 325-1 Filed 04/03/17 Page 123 of 192 Sheare v. Borough of Olyphant, Not Reported in F.Supp.2d (2012) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 prosecution of the state court charges. See Roa v. City of Bethlehem, 782 F.Supp. 1008, 1015 (E.D.Pa.1991). *5 It is well-settled that probable cause to arrest generally exists when a police officer makes an arrest pursuant to a warrant which meets the requirements of the Fourth Amendment. See Baker v. McCollan, 443 U.S. 137, 144, 99 S.Ct. 2689, 61 L.Ed.2d 433 (1979). A section 1983 plaintiff who challenges the validity of a warrant by asserting that law enforcement agents submitted a false affidavit to the issuing judicial officer must satisfy the two-part test developed by the Supreme Court in Franks v. Delaware, 438 U.S. 154, 155-56, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978). See Lippay v. Christos, 996 F.2d 1490, 1502, 1504 (3d Cir.1993). This is true whether the alleged falsehood is an affirmative misrepresentation or a material omission. See, e.g., United States v. Frost, 999 F.2d 737, 742-43 n. 2 (3d Cir.1993). Under Franks and its progeny, the plaintiff must prove, by a preponderance of the evidence, (1) that the affiant knowingly and deliberately, or with a reckless disregard for the truth, made false statements or omissions that create a falsehood in applying for a warrant; and (2) that such statements or omissions are material, or necessary, to the finding of probable cause. See Franks, 438 U.S. at 171-72; Frost, 999 F.2d at 742-43. Here, unlike the Sheares' original complaint, Plaintiffs have adequately alleged facts supporting the false arrest claim. Under the Franks test, the Sheares allege Officer Kline “knowingly stated deliberate falsehoods” and “acted with a reckless disregard for the truth.” The specific falsehoods alleged by Mrs. Sheare are that Officer Kline misrepresented in the Affidavit of Probable Cause that: (1) Plaintiff did not have their permission to enter the residence on Sunday, November 7, 2010; (2) Plaintiff said she did not have permission to enter and remain in the residence; (3) Plaintiff entered the Zinskie residence without permission in the summer of 2010; and (4) he was informed by Kathleen Zinskie that Plaintiff lacked permission to enter the Zinskie residence. (Am. Compl., ¶¶ 44, 65.) And, these false facts all concern a crucial element of the criminal trespass statutethe permission or privilege of Mrs. Sheare to enter the Zinskie residencewhich was necessary to Officer Kline's finding of probable cause. In addition, Officer Kline raises the defense of qualified immunity in moving to dismiss Plaintiffs' Amended Complaint. Under the doctrine of qualified immunity, government officials are immune from suit for damages where their conduct did not violate “clearly established statutory or constitutional rights of which a reasonable person would have known.” Pearson v. Callahan, 555 U.S. 223, 231, 129 S.Ct. 808, 172 L.Ed.2d 565 (2009) (internal quotations omitted) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982)). Qualified immunity protects government officials whether they have made a mistake of law, a mistake of fact, or a mistake based on mixed questions of law and fact. Id. To determine whether qualified immunity applies, a court must examine “whether the facts that a plaintiff has alleged or shown make out a violation of a constitutional right” and “whether the right at issue was ‘clearly established’ at the time of defendant's alleged misconduct.” Id. at 232 (internal citations omitted). A court may exercise its discretion in choosing which prong to address first, considering the circumstances of the particular case. Id. at 236. *6 As detailed above, the Court has already concluded that Mrs. Sheare has plausibly alleged that the Affidavit of Probable Cause contained material misrepresentations that, if otherwise not included, would not have established probable cause. As a result, because Mrs. Sheare alleged that at the time Officer Kline completed the Affidavit “he knew facts that should have changed his assessment of probable cause, the complaint adequately alleges that Defendant [Kline] did not act reasonably but, rather, unreasonably disregarded known, exculpatory information.” Anderson v. Goga, No. 11-528, 2011 WL 4737569, at *7 (W.D.Pa. Oct.5, 2011); see also Lippay, 996 F.2d at 1504. The Court, therefore, will not dismiss Mrs. Sheare's claim against Officer Kline at this stage based on qualified immunity, and she will be permitted to proceed on her false arrest claim. II. Monell Claim Defendants seek dismissal of Mrs. Sheare's failure to train claim against Olyphant. In Monell v. Dep't of Soc. Serv., 436 U.S. 658, 690-91, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), the Supreme Court held that a municipality will not be found liable for the unconstitutional acts of a state actor unless the conduct that caused the harm was pursuant to a government policy, custom, or practice. Instead, a § 1983 claim against a municipality requires the Case 3:14-cv-00853- DM Document 325-1 Filed 04/03/17 Page 124 of 192 Sheare v. Borough of Olyphant, Not Reported in F.Supp.2d (2012) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 plaintiff to: (1) identify a policy or custom that deprived him of a federally protected right, (2) demonstrate that the municipality, by its deliberate conduct, acted as the “moving force” behind the alleged deprivation, and (3) establish a direct causal link between the policy or custom and the plaintiff's injury. See Bd. of Cnty. Comm'rs v. Brown, 520 U.S. 397, 404, 117 S.Ct. 1382, 137 L.Ed.2d 626 (1997). Alternatively, “[i]n the absence of an unconstitutional policy, a municipality's failure to properly train its employees and officers can create an actionable violation of a party's constitutional rights under § 1983.” Reitz v. County of Bucks, 125 F.3d 139, 145 (3d Cir.1997) (citing City of Canton v. Harris, 489 U.S. 378, 388, 109 S.Ct. 1197, 103 L.Ed.2d 412 (1989)). “The inadequacy of police training may serve as the basis for § 1983 liability only where the failure to train amounts to deliberate indifference to the rights of persons with whom the police come into contact.” City of Canton, 489 U.S. at 388. Thus, failure to train can be the basis for liability if the failure reflects a deliberate or conscious choice by the municipality. See id. at 389. To attach liability to a municipality, the identified deficiency in the training program must be closely related to the ultimate injury. See id. at 391. Proving that an injury could have been avoided if a police official had better or more training is not enough to show municipal liability. See id. Otherwise, “[s]uch a claim could be made about almost any encounter resulting in injury.” Id. Additionally, “adequately trained officers occasionally make mistakes; the fact that they do says little about the training program or the legal basis for holding the city liable.” Id. at 391. “Failure to train ... municipal employees can ordinarily be considered deliberate indifference only where the failure has caused a pattern of violations.” See Berg v. County of Allegheny, 219 F.3d 261, 276 (3d Cir.2000) (per curiam) (citing Bd. of Cnty. Comm'rs, 520 U.S. at 408-09). And, as the Supreme Court recently emphasized, “[a] municipality's culpability for a deprivation of rights is at its most tenuous where a claim turns on a failure to train.” Connick v. Thompson, ---U.S. ----, 131 S.Ct. 1350, 1359, 179 L.Ed.2d 417 (2011). *7 Here, Plaintiffs allege that Olyphant “does not adequately train its officers in the preparation of and in the advancement of criminal proceedings,” (Am. Compl., ¶ 75), and “does not adequately train its officers that they may only charge a person with a crime if there is probable cause to believe that a person committed the crime.” (Id. at ¶ 76.) Based on this lack of training, Olyphant “has been subject to numerous lawsuits concerning its officers and their lack of proper and adequate training.” (Id.) In addition, Plaintiffs assert that “Defendant Borough does not train its police officers at all and instead simply utilizes the Chief of Police without assuring that the Department uses its police powers appropriately and Constitutionally and provide adequate training and oversight to its police officers.” (Am. Compl., ¶ 77). The allegations in the Amended Complaint are insufficient to state a Monell claim against Olyphant for its failure to adequately train its police officers. First, Plaintiffs do not identify “any history of cognate violations allegedly committed by [Olyphant] employees.” Halterman v. Tullytown Borough, No. 10-7166, 2011 WL 2411020, at *8 (E.D.Pa. June 14, 2011). Instead, Plaintiffs simply allege that Olyphant has been subject to “numerous lawsuits” without facts identifying that these suits were similarly related to the Borough's alleged failure to train its officers that a suspect may only be charged with a crime if supported by probable cause. Furthermore, Plaintiffs fail to set forth any non-conclusory allegations of “deliberate indifference for purposes of failure to train.” Connick, 131 S.Ct. at 1360. Rather, the allegations of deliberate indifference are “little more than a ‘naked assertion,’ or ‘a formulaic recitation of the elements of a cause of action.’ ” Dempsey v. Bucknell Univ., No. 11-1679, 2012 WL 1569826, at *24 (M.D.Pa. May 3, 2012) (quoting Iqbal, 129 S.Ct. at 1949). Ultimately, Plaintiffs' Monell claim is based on the “if they had trained better, this would not have happened” variety that the Court previously found insufficient in dismissing Plaintiffs' original complaint. As such averments are insufficient to state a Monell claim, Count Two will be dismissed. And, because Plaintiffs have previously been given leave to amend the Monell claim, it will be dismissed with prejudice. 1 III. Abuse of Process Claim Officer Kline seeks to dismiss Mrs. Sheare's abuse of process claim because she fails to allege any facts that he perverted the legal process after process was initiated. To state a claim for abuse of process under Pennsylvania law, “the plaintiff must allege that the defendant: (1) used a legal process against the plaintiff; (2) primarily to accomplish a purpose for which the process was Case 3:14-cv-00853- DM Document 325-1 Filed 04/03/17 Page 125 of 192 Sheare v. Borough of Olyphant, Not Reported in F.Supp.2d (2012) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 not designated, and (3) harm has been caused to the plaintiff.” Douris v. Schweiker, 229 F.Supp.2d 391, 404 (E.D.Pa.2002). *8 According to the Pennsylvania Supreme Court: The gist of an action for abuse of process is the improper use of process after it has been issued, that is, a perversion of it. An abuse is where the party employs it for some unlawful object, not the purpose which it is intended by the law to effect; in other words, a perversion of it ... On the other hand, legal process, civil or criminal, may be maliciously used so as to give rise to a cause of action where no object is contemplated ... other than its proper effect and execution. Malicious use of civil process has to do with the wrongful initiation of such process, while abuse of civil process is concerned with a perversion of a process after it is issued. McGee v. Feege, 517 Pa. 247, 253, 535 A.2d 1020, 1023 (1987) (citing Publix Drug Co. v. Breyer Ice Cream Co., 347 Pa. 346, 350, 32 A.2d 413 (1943)) (internal citations omitted) (emphasis added). “ ‘There is no cause of action for abuse of process if the claimant, even with bad intentions, merely carries out the process to its authorized conclusion.’ ” Douris, 229 F.Supp.2d at 404 (quoting Cameron v. Graphic Mgmt. Assocs., Inc., 817 F.Supp. 19, 21 (E.D.Pa.1992)). Here, Plaintiffs fail to state a claim for abuse of process under Pennsylvania law. In particular, the allegations against Officer Kline all encompass events that transpired before criminal proceedings commenced against Mrs. Sheare on November 21, 2010-the day with which she was charged with criminal trespass. (Am. Compl., ¶ 62.) Specifically, Plaintiffs allege that on November 17, 2010 Officer Kline called Mrs. Sheare and asked her to come to the police station. (Id. at ¶ 40.) At the station, Officer Kline accused Mrs. Sheare of stealing the money, and he also informed her that he was good friends with Harry Ziniskie. (Id. at ¶ 46.) And, based on this information, Plaintiffs aver “that Defendant Kline advanced criminal charges here as an attempt to wrongfully recover money from the Plaintiff that was allegedly taken from the Zinskie home.” (Id.) These allegations are not that the legal process was abused after criminal proceedings were commenced against Mrs. Sheare. Instead, the Plaintiffs argue that the criminal proceedings were wrongfully or maliciously initiated without justification. Thus, because Plaintiffs claim is based on the alleged improper commencement of criminal action against her and not on “the pervasion of process after it issued,” Plaintiffs fail to state an abuse of process claim. And, because the facts as alleged all relate to Officer Kline's conduct before the criminal charges were filed, no claim for abuse of process could be stated on these facts, and the abuse of process claim will be dismissed with prejudice. IV. Intentional Infliction of Emotional Distress Claim In order to state a claim for intentional infliction of emotional distress (“IIED”) in Pennsylvania, the plaintiff must establish four elements: (1) the conduct of the defendant was intentional or reckless; (2) the conduct was extreme and outrageous; (3) the conduct caused emotional distress; and (4) the distress was severe. See Walker v. N. Wales Borough, 395 F.Supp.2d 219, 232 (E.D.Pa.2005) (citing Chuy v. Phila. Eagles Football Club, 595 F.2d 1265, 1273 (3d Cir.1979)). For a plaintiff to recover for IIED, “the conduct must be so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society.” Cox v. Keystone Carbon Co., 861 F.2d 390, 395 (3d Cir.1988) (quoting Buczek v. First Nat'l Bank of Mifflintown, 366 Pa.Super. 551, 531 A.2d 1122, 1125 (1987)). *9 While “mere allegations of criminal conduct are insufficient to establish that a person acted in an extreme or outrageous manner,” United States ex rel. Magid v. Wilderman, No. 96-4346, 2005 WL 469590, at *5 (E.D.Pa. Feb.28, 2005), and “the filing of false charges and false arrest are generally not found so extreme and outrageous,” Griffin v. Municipality of Kingston, No. 08-2290, 2009 WL 1794775, at *11 (M.D.Pa. June 23, 2009), allegations that a plaintiff was arrested by officers, knowing that the accusations against the accused were false, and knowing that they lacked probable cause are “types of allegations that have survived a motion to dismiss in other cases in Pennsylvania.” Dempsey v. Bucknell Univ., No. 11-1679, 2012 WL 1569826, at *24 (M.D.Pa. May 3, 2012) (citing Walker, 395 F.Supp.2d at Case 3:14-cv-00853- DM Document 325-1 Filed 04/03/17 Page 126 of 192 Sheare v. Borough of Olyphant, Not Reported in F.Supp.2d (2012) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 232; Banyas v. Lower Bucks Hosp., 293 Pa.Super. 122, 437 A.2d 1236 (Pa.Super.1981)). Here, Mrs. Sheare alleges that Officer Kline commenced criminal charges against her knowing that they were false and without probable cause. (Am. Compl., ¶¶ 51, 62.) And, as a result of these criminal accusations, Mrs. Sheare is alleged to have suffered severe distress. (Id. at ¶¶ 57-59, 83, 437 A.2d 1236.) While Mrs. Sheare will face a more exacting burden at later stages in this litigation, the allegations that Officer Kline commenced criminal proceedings against Mrs. Sheare knowing that the information was false and without probable cause are sufficient to support a claim that Officer Kline's conduct was extreme and outrageous. See Dempsey, 2012 WL 1569826, at *24. And, although Mrs. Sheare will have to produce objective proof of emotional distress at summary judgment or trial, see id. (citing Bougher v. Univ. of Pittsburgh, 882 F.2d 74, 80 (3d Cir.1989)), these allegations at the motion to dismiss stage are sufficient to allow her to proceed on her IIED claim. Thus, Officer Kline's motion to dismiss the IIED claim will be denied. V. Loss of Consortium Claim Defendants also seek dismissal of Mr. Sheare's loss of consortium claim because it is merely derivative of Mrs. Sheare's other claims. A loss of consortium claim is intended to compensate one for the “ ‘loss of the services, society, and conjugal affection of one's spouse.’ ” Adam C. v. Scranton Sch. Dist., No. Civ.A.07- 532, 2011 WL 996171, at *7 (M.D.Pa. Mar. 7, 2011) (quoting Smalls v. Pittsburgh-Corning Corp., 843 A.2d 410, 417 (Pa.Super.2004)). A claim for loss of consortium, however, is derivative of the validity of the injured spouse's claim. See Jensen v. United States, No. Civ.A.09-2977, 2009 WL 4117357, at *3 (E.D.Pa. Nov.24, 2009). But, given that Mrs. Sheare's § 1983 false arrest and IIED claims will be permitted to proceed, Defendants' request to dismiss the derivative consortium claim will be denied. See, e.g., Watson v. Haverford Police Dep't, No. 10-6731, 2012 WL 1900629, at *18 (E.D.Pa. May 25, 2012). CONCLUSION *10 For the above stated reasons, Plaintiffs will be permitted to proceed on the § 1983 false arrest claim, the IIED claim, and the loss of consortium claim. However, the Monell and abuse of process claims will be dismissed with prejudice. An appropriate order follows. All Citations Not Reported in F.Supp.2d, 2012 WL 2527022 Footnotes 1 Moreover, because it is well-settled that “a municipality is immune from punitive damages under 42 U.S.C. § 1983,” City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 271, 101 S.Ct. 2748, 69 L.Ed.2d 616 (1981); Smith v. Borough of Dunmore, 633 F.3d 176, 183 (3d Cir.2011), Plaintiffs request for punitive damages against Olyphant fails to state a claim. And, to the extent that Plaintiffs' Amended Complaint asserts a Monell claim against the Olyphant Police Department, it fails to state a claim because “a police department is merely a subunit of the local government and is not amenable to suit under § 1983.” Golya v. Golya, No. 05-100, 2007 WL 2301085, at *9 (M.D.Pa. Aug.9, 2007). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853- DM Document 325-1 Filed 04/03/17 Page 127 of 192 EXHIBIT N Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 128 of 192 Synthes (U.S.A.) v. Globus Medical, Inc., Not Reported in F.Supp.2d (2007) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2007 WL 1001587 Only the Westlaw citation is currently available. United States District Court, E.D. Pennsylvania. SYNTHES (U.S.A.), et al., Plaintiffs v. GLOBUS MEDICAL, INC., et al., Defendants. Civil Action No. 04-1235. | March 29, 2007. Attorneys and Law Firms Anthony B. Haller, Matthew J. Siembieda, Scott E. Coburn, Blank Rome LLP, Diane Siegel Danoff, Dechert Price & Rhoads, Jeffrey S. Edwards, Kevin M. Flannery, Robert W. Ashbrook, Jr., Robert C. Heim, Jacob Gantz, Dechert L.L.P., Norman E. Greenspan, Blank Rome Comisky & McCauley, Philadelphia, PA, for Plaintiffs. Frederick A. Tecce, John P. McShea, McShea Tecce PC, Anthony J. Dimarino, III, A.J. Dimarino, III P.C., Philadelphia, PA, for Defendants. MEMORANDUM STENGEL, J. *1 The plaintiffs in this case have moved to strike two of the defendants' affirmative defenses and to dismiss five of the defendants' counterclaims. For the following reasons, I will grant this motion in part and deny it in part. I. BACKGROUND 1 The plaintiffs have asked me to bar the defendants from employing their ninth 2 and fifty-first 3 affirmative defenses which relate to the disbanded “Return on Investment Program (‘ROI’)” of the plaintiffs. They contend that this is the third time that the defendants have tried to inject this theory into the case notwithstanding my previous rulings against it. The plaintiffs also seek the dismissal of Counts I through IV 4 of the defendants' counterclaims because they rely upon statements which I previously found to be incapable of a defamatory meaning, and upon the plaintiffs' conduct in this litigation. II. DISCUSSION Rule 12(f) of the Federal Rules of Civil Procedure provides that the court may order stricken from any pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. While motions to strike are generally disfavored, they do serve a useful purpose by eliminating insufficient defenses and saving the time and expense which would otherwise be spent in litigating issues that would not affect the outcome of the case. United States v. Union Gas Co., 743 F.Supp. 1144, 1150 (E.D.Pa.1990); see also McInerney v. Moyer Lumber & Hardware, Inc., 244 F.Supp.2d 393, 402 (E.D.Pa.2002) (the purpose of a motion to strike is to clean up the pleadings, streamline litigation, and avoid unnecessary forays into immaterial matters); Cameron v. Graphic Mgmt. Assoc., Inc., 817 F.Supp. 19, 22 (E.D.Pa.1992) (the court may grant a motion to strike a legally insufficient defense so the parties to the suit do not needlessly waste time and money in preparation of trial). A motion to strike under Rule 12(f) is the primary procedure for objecting to an insufficient affirmative defense. Union Gas, 743 F.Supp. at 1150; United States v. Marisol, Inc., 725 F.Supp. 833, 836 (M.D.Pa.1989). The court, however, should not grant a motion to strike a defense unless the insufficiency of the defense is clearly apparent. Cipollone v. Liggett Group, Inc., 789 F.2d 181, 188 (3d Cir.1986). An affirmative defense is insufficient if as a matter of law it cannot succeed under any circumstances, In re Sunrise Sec. Litig., 818 F.Supp. 830, 840 (E.D.Pa.1993), and the moving party is prejudiced by the presence of the allegations in the pleading. Great West Life Assurance Co. v. Levithan, 834 F.Supp. 858, 864 (E.D.Pa.1993); see also Miller v. Group Voyagers, Inc., 912 F.Supp. 164, 168 (E.D.Pa.1996) (motions to strike will generally be denied unless the material bears no possible relation to the matter at issue and may result in prejudice to the moving party); North Penn Transfer, Inc. v. Victaulic Co. of America, 859 F.Supp. 154, 158 (E.D.Pa.1994) (same). Finally, a motion to strike should not be granted when the sufficiency of the defense depends upon disputed issues of fact or unclear questions of law. Marisol, 725 F.Supp. at 836. *2 Here, the defendants have included veiled references to the plaintiff's disbanded ROI program and violations of the Medicare Criminal Fraud and Abuse Statute (the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 129 of 192 Synthes (U.S.A.) v. Globus Medical, Inc., Not Reported in F.Supp.2d (2007) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 “Anti-Kickback provision”) 5 in both their ninth and fifty-first affirmative defenses. Given my earlier decisions regarding this issue, it is the defendants' continued characterization of the ROI program as involving illegal activity which I find most troubling. For example, the defendants allege that the plaintiffs' damages are not a result of the defendants' actions but of the plaintiffs' own actions when they failed “to act reasonably, appropriately, lawfully, and in accordance with its duties and obligations under applicable laws, regulations, and statutes, including but not limited to Synthes' violation of federal statutes aimed at protecting the public and healthcare consumers, or Synthes' discontinuance of its violation of those federal statutes.” (emphasis added). The defendants further allege that the plaintiffs' revenues were adversely affected, not by the defendants, but “by the existence or termination of an unlawful program of paying money or unrestricted research grants to physicians to use its products.” (emphasis added). In an earlier decision, I struck all paragraphs related to the plaintiffs' ROI program as superfluous and immaterial with respect to the defendants' counterclaims. See Synthes, et al. v. Globus Medical, et al., 2005 U.S. Dist. LEXIS 19962, *32 (E.D.Pa. September 14, 2005): The mere fact the Anti-Kickback provision prohibits Synthes' conduct does not mean that the same conduct cannot provide a basis for civil liability under another state or federal statute. The question then is whether the underlying conduct violates Pennsylvania state law. I find that it does not. Absent the Anti-Kickback implications, the underlying conduct itself-i.e., sponsoring conferences, providing research grants, and offering promotional incentives-is not inherently unfair or tortious. Id. at *18. The defendants properly contend that my earlier decision struck references to the ROI program only with respect to their counterclaims. They argue that these references should be allowed to support affirmative defenses because they prove that when the ROI program existed, the plaintiffs' sales increased, and when the program was discontinued, the plaintiffs' revenues decreased. However, the language of these affirmative defenses is in direct contradiction to my earlier decision regarding the defendants' counterclaims. Allowing the two affirmative defenses to stand as currently written would threaten to confuse the matters that are legitimately in dispute, and inflict substantial prejudice upon the plaintiffs. The defendants' newly-added fifty-third 6 affirmative defense accomplishes what the ninth and fifty-first affirmative defenses attempt without the characterization of the ROI program as unlawful or violative of federal and/or state law. Thus, I will strike the defendants' ninth and fifty-first affirmative defenses in their entirety. *3 Next, Synthes again asks that I dismiss four of Globus' counterclaims to the extent that they are grounded on certain statements. The purpose of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is to test the legal sufficiency of a Complaint. Sturm v. Clark, 835 F.2d 1009, 1011 (3d Cir.1987). The court may grant a motion to dismiss only where it appears beyond a reasonable doubt that the non-moving party can prove no set of facts in support of his claim that would entitle him to relief. Carino v. Stefan, 376 F.3d 156, 159 (3d Cir.2004) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). In deciding a motion to dismiss, the court must construe the complaint liberally, accept all factual allegations in the complaint as true, and draw all reasonable inferences in favor of the non-moving party. Id.; see also D.P. Enters. v. Bucks County Cmty. Coll., 725 F.2d 943, 944 (3d Cir.1984). Three of the four statements in question here were determined to be incapable of defamation in a previous Memorandum of this court. See Synthes, et al. v. Globus, et al., 2005 U.S. Dist. LEXIS 19962 (E.D.Pa. May 14, 2005). In addition, I found that these statements could not serve as the basis for Globus' claims of defamation, trade libel, tortious interference with prospective contractual relationships, and unfair competition. These statements, properly characterized as bluster, are currently found in the twenty-second paragraph of the Amended Answer to the Third Complaint (Document # 144), filed on September 5, 2006: Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 130 of 192 Synthes (U.S.A.) v. Globus Medical, Inc., Not Reported in F.Supp.2d (2007) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 1) [A Synthes representative] in an effort to dissuade Walden from leaving Synthes, told Mr. Walden that Synthes was planning to “drop a bomb” on Globus; 2) As a means of influencing a prominent former Synthes Regional Manager in sales, Daniel Pontecorvo, to reconsider his decision to leave Synthes and form a distributorship for Globus products, a Synthes division President told Mr. Pontecorvo that the judge assigned to this action was “wired” in favor of Synthes, and that Synthes was going to “crush” Globus in litigation costs and expenses; 3) [A Synthes representative] expressed to others that the chairman and majority owner of Synthes, Hanjorg Wyss, had a personal vendetta against David Paul; furthermore, since Mr. Wyss has a estimated net worth of $5 billion, he would spare no expense in attempting to drown Globus in legal fees and drive it out of business. Nevertheless, I found that Globus had, in fact, pleaded sufficient facts to support these four counterclaims separate and apart from the three non-defamatory statements. That finding has not changed. Thus, I will deny the portion of Synthes' motion which seeks the dismissal of the four counterclaims. The fourth statement now in question, “Mr. Wyss told others that he would not rest until the doors at Globus were closed,” was first added by Globus in its Answer filed on August 4, 2006 (Document # 138), and retained in its Amended Answer filed on September 5, 2006 (Document # 144). Like the other three, this statement also cannot reasonably be construed as defamatory because it is merely an expression of Synthes' anticipated actions, and does not suggest that the speaker is aware of undisclosed facts that may be defamatory. Thus, this fourth statement likewise cannot serve as the basis for Globus' four counterclaims. *4 Accordingly, because these four statements are irrelevant to any of Globus' counterclaims, I will strike them as superfluous, immaterial, and so unrelated to Globus' claims as to be unworthy of any consideration. Lakits, 258 F.Supp. at 409. Synthes also asks that I dismiss Globus' abuse of process counterclaim as one that fails to state a claim upon which relief may be granted. 7 The tort of abuse of process is defined as the use of the legal process against another “primarily to accomplish a purpose for which it is not designed.” See Restatement (Second) of Torts § 682 (1977); see also Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 304 (3d Cir.2003). The Supreme Court of Pennsylvania has said that “the gist of an action for abuse of process is the improper use of process after it has been issued, that is, a perversion of it.” McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1023 (Pa.1987) (emphasis added). Generally speaking then, to recover under this theory, a counterclaim-plaintiff must show that the counterclaim-defendant used the legal process in a way that constituted a perversion of that process and caused harm to the counterclaim-plaintiff. This requires that the plaintiff offer some proof of a “definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process.” Godshalk v. Borough of Bangor, 2004 U.S. Dist. LEXIS 7962, at *13 (E.D.Pa. May 5, 2004). There is no cause of action for abuse of process if the counterclaim-defendant, even with bad intentions, merely carries out the process to its authorized conclusion. Id. at *14. Further, that judicial process was initiated with a bad motive is not enough; an allegation of coercive use of the process is required. Internet Billions Domain v. Venetian Casino Resort, LLC, 2002 U.S. Dist. LEXIS 11805, at *3 (E.D.Pa. May 31, 2002). In its abuse of process counterclaim, Globus alleges that Synthes has abused and perverted the process of the instant litigation in that “subsequent to the issuance of the process, Synthes has perversely, coercively, and improperly used the process.” See ¶ 124. It further alleges that the abuse “has been undertaken in bad faith and with unlawful or ulterior purpose,” namely, “anti-competitive purposes, efforts to thwart Globus' growth, and wrongful efforts to drive Globus out of business.” See ¶ 126-127. After carefully reviewing the entire Amended Answer filed on September 5, 2006, I uncovered no allegation which would satisfy the requirements of a claim of abuse of process. Even the stricken statements discussed above refer to statements made prior to the litigation. As such, they are not demonstrative of an improper use of process after it has been issued. Further, as shown above, there can be no cause of action for abuse of process if Synthes, even with bad intentions, merely carries out the process to its authorized conclusion. Globus points to no post-Complaint litigation conduct which gives rise to a claim of abuse of process. Moreover, I find no Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 131 of 192 Synthes (U.S.A.) v. Globus Medical, Inc., Not Reported in F.Supp.2d (2007) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 perversion of the process or evidence that Synthes has used this litigation as a tactical weapon to coerce a desired result. Gen. Refractories Co., 337 F.3d at 307 (quoting McGee, 535 A.2d at 1026)). The Third Circuit has held that an abuse of process claim would be valid where a party “intentionally withheld critical documents, ignored court orders, permitted false testimony at depositions and misrepresented facts to opposing counsel and the court. Id. at 301. Without some proof of such a definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process, Globus' abuse of process counterclaim must fail. I will dismiss it in its entirety. *5 Synthes requests that I strike two particular paragraphs of the Amended Answer which allege the improper use of the litigation. In paragraph 57, Globus alleges: Counterclaim Defendants' Third Amended Complaint is objectively baseless, and has been brought for improper purposes. Counterclaim Defendants have used this litigation to stifle competition from Globus by, among other things, attempting to deter people from dealing with Globus by informing customers, investors, and others that Globus would not survive this litigation. In paragraph 78, Globus alleges: Synthes has wrongfully and intentionally attempted to thwart Globus' rise in the spinal implant device business by engaging in a continuous course of conduct involving disseminating false and malicious information about Globus' personnel and products, employing a scorched earth litigation strategy in connection with an objectively baseless litigation aimed at intimidating and stifling Globus, wrongfully obtaining trade secret and other confidential information from Globus, and unfairly competing in the spinal implant device business by, inter alia, making false and disparaging statements concerning Globus and its products. Because I find that Globus' counterclaims contain no factual allegations that Synthes has used, or even attempted to use, this litigation for any purpose other than to assert its rights and protect its interests, the two above paragraphs in Globus' Amended Answer are irrelevant to any of Globus' remaining counterclaims. Accordingly, I will strike them as superfluous, immaterial, and so unrelated to Globus' claims as to be unworthy of any consideration. Lakits, 258 F.Supp. at 409. An appropriate Order follows. ORDER AND NOW, this 29th day of March, 2007, upon consideration of the plaintiffs' motion to strike certain of the defendants' affirmative defenses and to dismiss the defendants' counterclaims (Document # 143), the defendants' response thereto (Document # 145), the plaintiffs' reply (Document # 148), and after a hearing on the motion with all parties present, it is hereby ORDERED that the motion is GRANTED in part and DENIED in part, in accordance with the Memorandum. All Citations Not Reported in F.Supp.2d, 2007 WL 1001587 Footnotes 1 I write for the parties, who are familiar with the facts and procedural history of this case, and therefore include only the background information that is relevant to the disposition of this motion. 2 The defendants' ninth affirmative defense: “Synthes' claims against Defendants and the alleged damages it seeks are barred in whole or in part by Synthes' failure to act reasonably, appropriately, lawfully, and in accordance with its duties and obligations under applicable laws, regulations, and statutes, including but not limited to Synthes' violation of federal Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 132 of 192 Synthes (U.S.A.) v. Globus Medical, Inc., Not Reported in F.Supp.2d (2007) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 statutes aimed at protecting the public and healthcare consumers, or Synthes' discontinuance of its violation of those federal statutes.” 3 The defendants' fifty-first affirmative defense: “Plaintiffs' alleged damages, if any, are unrelated to defendants' conduct, and, to the extent they exist at all, may have resulted from various other factors, including, but not limited to, the fact that for several years before defendant Globus was formed, Synthes' sales revenues were affected, in part, by the existence or termination of an unlawful program of paying money or unrestricted research grants to physicians to use its products.” 4 Count I alleges defamation; Count II alleges trade libel; Count III alleges tortious interference with prospective contractual relationships; and Count IV alleges unfair competition. 5 See 42 U.S.C. § 1320a-7b. 6 The defendants' fifty-third affirmative defense: “Synthes' alleged losses were directly and proximately caused by factors unrelated to Globus or any of the allegations against Globus, which factors include, but are not limited to, the alleged discontinuation of the Return on Investment program in or about February 2003, market forces, and/or Synthes' own actions and business strategies.” 7 Synthes originally brought this claim as a request to dismiss the four counterclaims to the extent they were based on allegations of an allegedly wrongful use of the litigation process. After the motion was filed, Globus filed its Amended Answer and included an additional counterclaim for abuse of process. In its reply, Synthes properly re-focused its claim as a request to dismiss the newly-added counterclaim. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 133 of 192 EXHIBIT O Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 134 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2016 WL 97923 United States District Court, E.D. Pennsylvania. Vizant Technologies, LLC, et al. v. Julie P. Whitchurch, et al. CIVIL ACTION NO. 15-431 | Signed 01/08/2016 Attorneys and Law Firms Edward T. Kang, Gregory H. Mathews, Jason Powell, Kang Haggerty & Fetbroyt LLC, Philadelphia, PA, for Plaintiff. Julie P. Whitchurch, Woodstock, GA, pro se. Jamie Davis, Marietta, GA, pro se. MEMORANDUM Bartle, J. *1 Plaintiffs Vizant Technologies, LLC (“Vizant”) and its chief executive officer (“CEO”) Joseph Bizzarro (“Bizzarro”) have filed this action against Julie P. Whitchurch (“Whitchurch”) and Jamie Davis (“Davis”), both of whom are former Vizant employees. Plaintiffs' ten- count complaint alleges: two violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968; breach of contract; misappropriation of trade secrets in violation of the Delaware Uniform Trade Secrets Act (“DUTSA”), Del. Code Ann. tit. 6, §§ 2001 et seq.; defamation; tortious interference with existing and prospective contractual relationships; abuse of process; conversion; fraud; and civil conspiracy. 1 We have subject matter jurisdiction over plaintiffs' RICO claims under 28 U.S.C. § 1331 and supplemental jurisdiction over their remaining claims under 28 U.S.C. § 1367. 2 In April 2015, in response to a motion by Vizant and after a hearing, we issued a preliminary injunction against both defendants. See Preliminary Injunction dated April 29, 2015 (Doc. # 60). Plaintiffs subsequently claimed that defendants had violated that injunction. This prompted a second hearing which resulted in a finding that defendants were in contempt. See Order dated June 2, 2015 (Doc. # 82). The court sanctioned defendants by ordering them to reimburse Vizant for the legal fees and costs it had incurred in connection with the contempt proceedings. Each defendant was also ordered to pay a sanction of $300 for each day of noncompliance with the preliminary injunction, starting on June 3, 2015. This sanction was never implemented as defendants came into compliance with the preliminary injunction before June 3, 2015. Now before the court is the motion of plaintiffs for summary judgment on the claims for breach of contract, violations of DUTSA, tortious interference with existing and prospective contractual relationships, and defamation; a final money judgment; and issuance of a permanent injunction. Defendants have also filed a cross- motion for summary judgment on all ten of plaintiffs' claims. I. Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 3 A dispute is genuine if the evidence is such that a reasonable factfinder could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). Summary judgment is granted where there is insufficient record evidence for a reasonable factfinder to find for the nonmovant. Id. at 252. “The mere existence of a scintilla of evidence in support of the [nonmoving party]'s position will be insufficient; there must be evidence on which the jury could reasonably find” for that party. Id. *2 When ruling on a motion for summary judgment, we may only rely on admissible evidence. See, e.g., Blackburn v. United Parcel Serv., Inc., 179 F.3d 81, 95 (3d Cir. 1999). We view the facts and draw all inferences in favor of the nonmoving party. In re Flat Glass Antitrust Litig., 385 F.3d 350, 357 (3d Cir. 2004). However, “an inference based upon a speculation or conjecture does not create a material factual dispute sufficient to defeat entry of Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 135 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 summary judgment.” Robertson v. Allied Signal, Inc., 914 F.2d 360, 382 n.12 (3d Cir. 1990). A party asserting that a particular fact “cannot be or is genuinely disputed” must support its assertion by “citing to particular parts of materials in the record” or by “showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). In reviewing a motion for summary judgment, the court may consider any materials in the record but is not required to look beyond those materials cited by the parties. Fed. R. Civ. P. 56(c)(3). It is not the responsibility of the court to “comb the record in search of disputed facts.” N.J. Carpenters Pension Fund v. Hous. Auth. & Urban Redevelopment Agency of the City of Atl. City, 68 F. Supp. 3d 545, 549 (D.N.J. 2014). Our Court of Appeals has emphasized that “[j]udges are not like pigs, hunting for truffles buried in briefs.” Doeblers' Pa. Hybrids, Inc. v. Doebler, 442 F.3d 812, 820 n.8 (3d Cir. 2006) (quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991)). II. The following facts are undisputed. 4 Vizant is a financial consulting firm organized under the laws of Delaware with its principal place of business in Chadds Ford, Pennsylvania. At all times relevant hereto, Vizant's CEO has been plaintiff Bizzarro and its chief financial officer has been David Jablonski (“Jablonski”). Its three-member Board of Directors includes its chair Frank Seidman (“Seidman”) as well as Lane Wiggers (“Wiggers”). *3 Vizant is owned in part by Capital Solutions, Inc. (“Capital Solutions”), an entity founded by Seidman which is engaged to monitor various portfolio companies. Vizant is among those companies monitored by Capital Solutions. Wiggers is a former Capital Solutions employee. Vizant works with clients in both the for-profit and nonprofit sectors and operates on a national level. Among other things, Vizant's expertise lies in identifying strategies for its clients to reduce the costs and fees associated with inbound payments such as the percentages clients are charged by credit card companies. Vizant develops these strategies by assessing its clients' finances and then applying its knowledge of the operating methodologies of credit card companies. It can take up to several months for Vizant to complete its initial process of collecting a client's financial data. Once it has finished gathering data from a client, Vizant conducts a detailed assessment of this information and generates a document known as a “cost reduction report.” Each cost reduction report contains background information about the client, including its sales and volume of inbound credit card payments. The cost reduction report then provides comprehensive information about the relevant costs being incurred by the client at the time the report is generated and defines “cost reduction opportunities.” These “opportunities” are essentially Vizant's recommendations as to how the client can reduce the charges associated with processing incoming credit card payments. These recommendations are in part the result of Vizant's negotiations with credit card providers to lower the client's rates. The recommendations also stem from Vizant's analytical processes, for which the company holds several patents. Vizant is paid on a “results basis,” that is it shares with its clients any savings they obtain by implementing the recommendations identified by Vizant in the cost reduction report. Vizant treats its methodologies, strategies, client information, pricing practices, and internal financial data as sensitive and highly confidential. It does so because its clients have an interest in ensuring that their own financial information is not disclosed to their competitors. Likewise, Vizant has an interest in keeping confidential the rates it negotiates with its various clients and with credit card companies on its clients' behalf. For these reasons, Vizant goes to great lengths to maintain the confidentiality of the contents of its cost reduction reports as well as its methodology and its pricing strategies. For example, the company restricts the means through which customers may submit data and maintains a robust network security infrastructure. In addition, Vizant requires all of its employees to sign agreements governing the use and distribution of information generated by the company. Vizant hired defendant Julie Whitchurch in August 2011 as a Business Development Manager, a sales position. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 136 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 Whitchurch was later promoted to the supervisory role of National Director of Business Development. Her sister, defendant Jamie Davis, became a Vizant employee in May 2012, also in the role of Business Development Manager. At all relevant times both defendants resided in Georgia. Each defendant, upon commencing her employment with Vizant, signed a document styled “Confidentiality, Non-Competition and Assignment Agreement” 5 (the “employment agreement”). The agreements contained detailed provisions regarding the handling of material that Vizant considered confidential. They defefined “Confidential Information” as follows: *4 “Confidential Information” means any of the proprietary or confidential information, technical data, trade secrets or know- how of the Company, in any form or format, including but not limited to product information; financial information; internal procedures and operations; marketing information and strategy; information regarding existing and potential customers; information on suppliers and sources with which the Company does business, including affiliates of suppliers and sources; the Company's manner of operation, strategies and plans; software, including all source and object code, whether completed or in development; inventions, whether or not patented or patentable; discoveries; improvements; processes; and other proprietary and commercial information. The employment agreements further provided in relevant part: Employee...acknowledges that all Confidential Information is required to be maintained in confidence for the continued success of the Company and its business. Therefore, Employee covenants and agrees that Employee will not disclose any Confidential Information to anyone who is not employed by the Company or who does not have a reasonable need to know such Confidential Information, either directly or indirectly, during the Service Term, or at any time thereafter, nor will Employee, directly or indirectly, use or permit others to use Confidential Information for any purpose other than in discharging Employee's duties as an employee for the exclusive benefit of the Company. In addition, the agreements set forth an employee's obligations upon separation from Vizant: At the end of the Service Term, Employee shall deliver to the Company, and shall not keep in his or her possession nor deliver to anyone else, the originals or copies, whether hard copies or electronic copies, of any and all Confidential Information. Employee agrees to cooperate with Company in all procedures that Company may adopt to assure that no Confidential Information is retained on computers and storage media belonging to or used by Employee. The employment agreements included a section entitled “Non-competition and Non-solicitation.” In relevant part, that section stated: 2.1.1 During the period beginning on the Effective Date and ending on the date that is two years following the termination of the Service Term, Employee shall not, directly or indirectly, anywhere in the United States or any other geographic area in which Company markets or has marketed its products or services during the one- year period preceding the end of the Service Term: 2.1.1.1 Encourage any employee to terminate his or her employment with the Company...or in any way interfere with the Company's relationship with its employees; Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 137 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 2.1.1.2 Encourage or induce any customers or suppliers of the Company to terminate business activities with the Company; 2.1.1.3 engage in any diversion of good-will regarding the business as conducted by the Company; [or] 2.1.1.4 otherwise engage in the Business or assist any person or entity that engages in the Business. The term “Business” was defined as “the business of the Company as conducted by the Company (including any business for which the Company has devoted meaningful development activities) during the period from the Effective Date until the end of the Service Term.” A section of the employment agreements specified that they were to be “governed and construed in accordance with the internal laws of the State of Delaware without regard to its choice or conflicts of law provisions.” They also provided for contract damages: “Should it become necessary for the Company or Employee to file suit to enforce the covenants or other provisions contained herein, the prevailing party shall be entitled to recover, in addition to all other damages provided for herein, the costs incurred in conducting the suit, including reasonable attorneys' fees.” *5 Upon being promoted in July 2013, Whitchurch reported directly to Bizzarro. Among the salespeople supervised by Whitchurch were defendant Davis and Elizabeth Aeron Sharp (“Sharp”), who now serves at Vizant's National Director of Business Development. Shortly after Whitchurch was promoted, Vizant began to experience cash flow issues. Vizant's payroll and certain commissions to salespeople were slightly delayed on occasion during this period. Several of the salespeople supervised by Whitchurch contacted her to complain about the delayed payment of these funds. At around the same time, certain payments by Vizant to its employees' health insurance provider were slightly delayed. As a result, some employees received notices from the insurer indicating that their coverage had been cancelled. At least one employee faced temporary difficulty in obtaining coverage for certain medical services. Upon learning of this, Whitchurch conveyed the concerns of her team members to Bizzarro and to Vizant's human resources staff. In early December 2013, Whitchurch phoned a former Vizant employee and told him that members of Vizant's upper management were engaged in fraud. The former employee reported the conversation to Seidman, who in turn relayed the information to Wiggers. Shortly thereafter, Wiggers contacted Whitchurch, who repeated her accusations directly to him. She insisted that Vizant's management team was engaging in fraud, neglecting to pay its employees, and maintaining a Ponzi scheme. 6 Wiggers directed Whitchurch to contact human resources about any payroll and benefits concerns. He then spoke to Bizzarro and Jablonski, who denied the allegations. Jablonski also informed him that Whitchurch was a likely candidate for termination. Wiggers reported to the Board of Directors that he had conducted an investigation and had found no evidence of fraud or of a Ponzi scheme. He also communicated his conclusion that Whitchurch was merely a disgruntled employee. On December 4, 2013, within approximately one day after Wiggers' investigation ended, Whitchurch was discharged from her position at Vizant. Davis was fired the next day. On December 5, 2013, Vizant's outside counsel, Bruce Kasten (“Kasten”), sent Whitchurch a “cease and desist” letter. That letter stated that Whitchurch had been terminated the prior day “for poor performance and inappropriate conduct.” It went on: Shortly thereafter, you called the Company's President, Joseph Bizzarro, and left a voice mail message threatening to contact all of Vizant's customers and partners for the purpose of “badmouthing” Vizant, including the comment that you intended to “make my way through the customer list and call people and act like a 'crazy woman.”' You also admitted that you have already “trashed” Vizant to current employees, and the Company has received numerous reports today that you contacted Company employees and made disparaging comments to them about the Company and Joe personally. Finally, you sought to interfere with the relationship between the President of Vizant and the Company's Board of Directors in an attempt to induce the Company to breach its contract with the President. The letter demanded that Whitchurch “immediately cease and desist from making additional threats or making disparaging comments regarding Vizant, its personnel, and its business.” Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 138 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 Within a day or two, 7 in response to the “cease and desist” letter, Whitchurch sent a letter directed to Kasten, Bizzarro, Seidman, and Wiggers. The letter stated in relevant part: *6 Yes, Yes, I reached out to the board. Yes, I am still reaching out to the Board. YES, this is me screaming from the mountain top. Houston we have a problem!!!!!!!!!!!! Does no one have a fiduciary duty to ring the alarm when they see and can prove gross financial misconduct by C Legel Executives, in private as well as public companies? ...I could and will quote the CFO verbatim telling me how hard it was to come up with a lie for the employees every 2 weeks as to why payroll is/was late and or missing....I am just as mortified today as I was sitting in his office listening to him whine about having to come up with a lie every 2 weeks. What a pansy. The email continued: Should I have continued to watch us use vendors [sic] services, with no intention of paying them?...Should I have continued to do nothing and watch him [apparently Bizzarro] play the “float” with things as important as our health insurance?...Should I have continued to let him fire employees that asked too many times for their owed commissions?...Should I have not continued to take the calls and emails for our Alliance Partners that we're not paying? Should I just do what Joe [Bizzarro] does, ignore the call, make up a story about being on a plane, being in an all-day meeting, leave a voicemail after hours...[?] Of Bizzarro, Whitchurch added: I believe he has no moral floor, no moral compass, he's a liar, and he's a cheat. There is little doubt in my mind that he has “enhanced” his reporting to the board so the true financial state of the company is far more positive than the reality.... [L]ying is engrained in his person, and it is who he is. Whitchurch also claimed in her email that she had “attached 10 recent Cost Reduction reports.” Whitchurch again emailed members of Vizant's Board on January 2, 2014. Her email stated in relevant part: I'm Julie Whitchurch and up until Dec 4th I was the National Director of Business Development at Vizant. I'm going to forward you several emails, it should bring you up to speed. The cliff notes: • You've got a monkey as the CEO of Vizant • The monkey is burning the people's money. (not his money, not your money, the investor's [sic] money) • I reached out to Frank & Lane to report the GROSS and ILLEGAL financial misconduct of the monkey. • I was terminated 3 hours later • My sister, Jamie Davis, was terminated 8 hours later • Frank is complacent • Lane is scrambling to cover his ASSet ... [Frank], Joe, and Lane have wronged Jamie and me in ways that would be incomprehensible to any reasonable person. You have behaved shamefully, despicable [sic], and quite possibly, illegally. On January 5, 2014, Whitchurch emailed Bizzarro and members of Vizant's Board yet again. She wrote: Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 139 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 Below you will find an email from a Vizant sales rep asking Joe, the equivalent of “where are my commissions, where is the money you owe me” and Joe's reply “you're unprofessional, and fired”. ILLEGAL Joe, how long was [the sales rep] with the company, 5+ years?...You fucking idiot. Who do you think pays for that piece of shit, Mike the “situation” worthy, bedazzled truck of your [sic] ??? Not you, not strolling into the office at 9:30 and out by 5:00. You arrogant fool, no CEO (no human being) that has any decency goes out and buys a new car when they cant [sic] pay their employees. You know what your troops are/were thinking...“nice truck asshole, where's my money.” The next day, Davis sent an email to a list of recipients that included Seidman, Wiggers, Whitchurch, and various employees of Vizant. Among other things, she wrote: Do you realize that you have let this monkey destroy a perfectly respectable and viable company?...Have y'all read the article on Vizant's “VP and LEGAL COUNSEL”, Dave Askinas?...Really? This is who is advising the company in legal matters? This is who they had ILLEGALLY fire me and Julie??...Lane, are you at all familiar with the internet? Are you not completely appalled and embarrassed?? Because you should be...you definitely should be. I shudder to think how much you have “earned” for “watching” that asset....You payed [sic] $500K of your investors' hard-earned money for a fucking name change?!...What the fuck is wrong with you people?? Regardless of what that clown Joe Bizzarro has said about Julie or me, we have proven beyond a shadow of a doubt that he is a liar...and cannot drive a car...and I am sure that he does not have the incriminating emails that we have to back up whatever horse shit he's trying to peddle... THE TONS AND TONS of incriminating emails that we have...seriously gentlemen, we could write a novel...a good one....[S]o far everyone that I've told this story to, and I do mean EVERYONE, can't believe that you have treated us so poorly...Julie did you a favor you arrogant pricks. But instead, you decide to let the both of us be fired (by the way, I have 4 month old twins, a 2 year old, and a 10 year old, so FUCK YOU) and keep letting that idiot burn through whatever money is left...you people are disgusting. I am determined to put a stop to you all letting that monkey ruin people (and not just Vizant's employees but it's [sic] shareholders as well) because you jackasses didn't do your due diligence...I am determined to get this story and these emails out to the general public through whatever news and social media outlet I can...I am going to blog, tweet, Facebook and Instagram this story until this matter gets some attention… I am going to keep adding people onto these email chains so that your colleagues know exactly what kind of people they are getting in bed with when they work with Capital Solutions. I wonder what general public opinion is going to be...however, gauging from the 30 or so people I have already told, the public shares my and Julie's opinion. *7 On January 8, 2014, Kasten sent a “cease and desist” letter to Davis. In it, Kasten noted that Davis had sent an “unsolicited communication to members of Vizant's Board of Directors, to whom...Bizzarro directly reports.” Kasten recounted the contents of the January 6, 2014 email sent by Davis. Kasten demanded that Davis “immediately cease and desist from making additional threats or making disparaging comments regarding Mr. Bizzarro, Mr. Askinas and Vizant, its personnel and its Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 140 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 business.” Kasten also demanded that Davis return to Vizant her company-issued laptop computer and certain other materials that she purportedly had in her possession. Also on January 8, 2014, Whitchurch sent an email to a group of recipients including Seidman, Wiggers, and Kurimura. She threatened to “stop by [Vizant's] offices” and stated that she intended to “[s]hame you into doing the right/legal thing using phone calls, emails, and in person visits”; “[t]ell my story at www.nocapitalsolutions.com purchased the website yesterday. Hope that I...can reach the investors through the website, instagram, linkedin, twitter, and/or facebook. Hope that anyone that is considering giving Frank/Cap Solutions a $ to invest, will think twice.” True to their word, defendants launched a website, www.nocapitalsolutions.com (the “website”), on or about January 17, 2014. The site referenced Vizant, Bizzarro, Seidman, and Wiggers by name. Nowhere, however, did the website mention the name of either Whitchurch or Davis, its creators. Whitchurch, as the author of some of the website's content, stated on the version of the site that was live as of March 12, 2015 that she was “National Director of Business Development for a private company which is owned by Capital Solutions, INC” and that she “reported directly to the CEO, Joseph Bizzarro. He reports directly to the Vizant Technologies Board, which is comprised of Frank Seidman, Lane Wiggers, and Dick Corl.” (Italics in original.) The website's text continued: For over 8 months, I watched Joseph Bizzarro withhold sales reps [sic] commissions, withhold alliance partners [sic] commissions, over bill the clients, pay employees late, terminate employees that asked for their owed monies, not pay his vendors, not pay the employee's [sic] health insurance preimum [sic]. Seriously, this guy is a real pig. After 8 months, 328 emails addressing these concerns, and too many conversations with the CEO, CFO and HR to count, I reached out to help....I was fired within 3 hours. My sister, who also worked for Vizant and who had just returned from maternity leave, was terminated the next day. Seriously, these men are pigs. ... Frank Seidman and Lane Wiggers are the guys that get the money from people like you, to invest in companies like this, they have a legal fiduciary duty to put your money's best interest before their own. They have not. ... You can't imagine how much money (investor's money) they've spent in an effort to get this website down and stop me from saying “Frank, you're not doing your job. Frank, you hired a monkey as the CEO of one of your portfolio companies. Frank, that same monkey put two other companies into bankruptcy. Frank, pay me the $15+K owed.” If I had to guess, I'd say Frank has spent close to $100K of his investors [sic] money. I wonder do they know. Pathetic. The website additionally contained the following text: EXHIBIT in a court of law. If you're a past/present employeee [sic] or a past/present investor, and it comes to you suing these jackasses for owed wages or a breach of fiduciary duty, know that I will make myself available for depositions and trial. You can reach me anytime at joebizzarrowhereismymoney @yahoo.com. *8 Defendants also declared: “The F*cking Monkey is Joseph N Bizzarro, the CEO of Vizant Technologies.” Defendants reprinted on their website the text of several of the emails they had sent to Vizant's leadership and investors, including the letter sent by Whitchurch in response to Kasten's “cease and desist” letter making reference to defendants' retention of Vizant's cost reduction reports. The actual content of the cost reduction reports was apparently not accessible to viewers of the website. Defendants also quoted from “an email to Frank around late Jan 2014” which had purportedly stated: “I would expect that everyone would tell the truth. Fuck Frank, that's what I've been counting on. The truth. These are libel statements, I'm holding you liable, personally....Seriously, I think you're breaking PA Law just by saying [Dave Askinas is] 'general counsel.”' The website also contained the text of at least one email apparently sent by Bizzarro to several Vizant employees. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 141 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 On the website, defendants had annotated the text of the email, calling Bizzarro's statements into question. They had added remarks such as: “You have no intention of paying the full commissions, never have”; “You Lie, and Lie, and Lie”; and “I'm calling you out, you're a liar & a cheat Joe Bizzarro.” In addition, the website included a message apparently directed to Seidman. It stated in relevant part: It's now been 6 months since I made you aware of your culpable neglect hiring of Joseph Bizzarro. You are well aware he's a fraud, his resume and credentials are fabricated, he's bankrupted (or played a major role in the bankruptcy) of two of his previous employers, and he's a pathological liar. Vizant continues to decline under his leadership, or lack there of [sic]. Sales have steadly [sic] declined, there isn't enough money in reserve for ADP to run the payroll, sales reps havent [sic] received their expense checks in months, commissions aren't being paid, Alliance Partners arent [sic] being paid and if they are, it is far less than what they're owed, and customers are being over billed. Again Frank [Seidman], stop thinking about FRANK. Start thinking about your investors, employees, and clients. FIRE HIM [referring to Bizzarro]. Bankrupting Vizant can't be that far off, WTF are you going to tell the investors then? You could tell them “we were never able to maximize our square footage.” That was his reasoning for bankrupting Reading China. What a monkey, what does that even mean, sounds like code for “I don't know what the f*ck I'm doing because I'm a monkey.” ... Frank, YOU'RE IN GROSS BREACH OF YOUR FIDUCIARY DUTIES TO THE INVESTORS OF VIZANT TECHNOLOGIES. In the same section of the site, defendants stated: Joseph, [y]ou've got no moral compass. You're an embarrassment to Vizant. You've single handly [sic] ruined that company. There is noone [sic] else to blame, it's you. You're the problem, you've been the problem from the beginning. You're a fraud. Defendants also stated on their website that shortly after the site was created, “we launched a Direct Mail campaign, postcards. This made their blood boil....I didn't get the response I was looking for; my money. So, I got on a plane and headed that way....” This statement about “my money” was in apparent reference to the claim made by defendants on a number of occasions following their termination that Vizant owed them money, including compensation for accrued paid time off and reimbursement for expenses they had paid out of pocket. *9 The website had a section dedicated to debunking Bizzarro's resume. It also recited a message to potential investors in Vizant: “If you've given these guys your money to invest, you might want to check on it. Two of these men are in gross breach of their fiduciary duties to their investors.” The same section of the site referred to Seidman as “a jackass” and to Wiggers as “the biggest ass of all.” An additional section characterized Vizant as “litigious” and listed a number of lawsuits in which the company has been involved. Another section of the website addressed the topic of Ponzi schemes. It asserted: “I'm pretty sure that at least one of Capital Solution's [sic] portfolio companys [sic] is dangerously close to fitting the bill.” Finally, defendants' website contained links to a series of videos created by Whitchurch and uploaded to YouTube. These videos depicted Whitchurch going about her daily routine while engaged in lengthy and expletive- laden monologues (repeatedly using the “F” word) to “Frank” (presumably Seidman) about the money she claims she is owed. The videos also made reference to a purported Ponzi scheme. While Whitchurch's image was not identifiable in any of these videos, her voice was. Defendants have not disputed that both of them maintained control over the website such that either defendant could upload and edit material. Nor have they disputed that they are jointly responsible for all of the online material at issue. During her testimony before the court in April 2015, Whitchurch stated that she is “the person that posts and updates the information on the website.” She later reiterated: “It is my website.” Davis, when asked whether she “approve[s] of everything that's Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 142 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 on the [website] and has been on the [website] along with Ms. Whitchurch,” responded in the affirmative. In the days following her termination, Whitchurch returned to Vizant a company laptop computer which had been issued to her. However, the defendants retained for some time additional Vizant-issued property, including Davis' laptop and a printer. In the meantime, claiming that defendants had not returned all confidential information in their possession and in response to certain communications initiated by Whitchurch and Davis, Vizant filed a lawsuit (the “Georgia action”) against them in the Superior Court of Cobb County in Georgia in January 2014. Vizant's complaint in the Georgia action included claims of defamation, tortious interference with business relations, and misappropriation of trade secrets. Within days of filing that complaint, Vizant moved for a temporary restraining order and a preliminary injunction against Whitchurch and Davis in the Georgia state court. Vizant sought to prevent the two from retaining and disseminating any confidential information and to bar them from “communicating with, threatening, intimidating and harassing Vizant's employees, officers and directors and their family members.” (Emphasis in original.) At the January 2014 hearing in Georgia on Vizant's motion for a preliminary injunction, Whitchurch delivered to Vizant's counsel: Davis' Vizant-issued laptop computer; a printer; a bin containing documents, a cell phone, and a flash drive; and a second box containing marketing materials. Ultimately, the Georgia state court granted Vizant's motion for a temporary restraining order and then a preliminary injunction. During the months following their termination, defendants continued to contact Vizant's leadership and board members. For example, they sent postcards to the home of Bizzarro making negative comments about him and about the company. On or about September 16, 2014, Bizzarro received a postcard which displayed a photograph of him next to photographs of monkeys, along with the words “This is not over yet Joe Bizzarro. You are a monkey and liar.” Another postcard addressed to Bizzarro's home contained the words “I know Joe Bizzarro to be a liar.” Wiggers also received what he later described as “multiple contacts of...many e-mails, postcards to my home...all sorts of disparaging remarks.” The emails Wiggers received from defendants “used a lot of foul language and... called everybody names and said we were a fraud and that we were a Ponzi scheme.” Seidman also received a postcard at his home, and recalled that the postcards he had seen “were not nice. They were not pleasant.” *10 Following the issuance of the preliminary injunction in the Georgia action, Vizant filed in October 2014 a motion for contempt against defendants on the ground that they had harassed Vizant's officers and directors in violation of the injunction. While its motion was pending, however, Vizant filed a notice of voluntary dismissal in the Georgia action. It elected instead to institute the instant action in the Eastern District of Pennsylvania. Pursuant to Vizant's notice, the state court dismissed the Georgia action in February 2015. Defendants, meanwhile, appended to their website copies of a number of documents that had already been filed in Georgia state court. Among the filings replicated on the website was defendants' “Memorandum in Opposition to Plaintiff's Notice of Voluntary Dismissal without Prejudice,” which stated in relevant part: For the past ten (10) months [Vizant], Frank Seidman, Lane Wiggers, Joseph Bizzarro, Dick Corl, Jonathan Kalman, and the law firm of Elarbee Thompson [Vizant's counsel in the Georgia action] have engaged in a vicious, calculated, and illegal conspiracy to accuse, frame, and victimize the defendants. They have manufactured evidence, extorted the Defendants, committed perjury and subornation of perjury, threatened a witness, and sought the illegal incarceration of the Defendants. Defendants also appended to their website the text of their response to a motion for contempt filed by Vizant in the Georgia action. This text included an assertion that Bizzarro was “in gross violation of his duties as a CEO” and was “stealing from his employees, stealing from his clients, stealing from his alliance partners, misrepresenting Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 143 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 himself to the investors of Vizant Technologies, and committing a fraud on the Georgia court system.” In addition to their company-issued computers and other electronic devices, defendants retained in electronic form certain files which belonged to Vizant. As noted above, defendants reprinted on their website a statement indicating that they had the capability to attach “10 cost reduction reports” to an email and to forward “TONS AND TONS of incriminating emails.” In addition, during the April 2015 preliminary injunction hearing, Whitchurch admitted that a number of cost reduction reports resided in defendants' email accounts as attachments to previously-sent messages. Whitchurch conceded that by accessing her Gmail account she could call up those messages and the attached PDF scans of cost reduction reports. In connection with this litigation, counsel for Vizant retained a forensic information technology firm, IT Acceleration, to analyze the laptop computers returned to Vizant by Whitchurch and Davis following the termination of their employment. David Yarnall (“Yarnall”), IT Accelleration's President and Director of Forensic Computing, prepared a forensic report concerning the company's review of the computers and of electronic storage devices returned by defendants to Vizant. He subsequently testified at the April 2015 preliminary injunction hearing about the contents of his report. 8 *11 It was Yarnall's updisputed testimony that after Whitchurch's termination a person using her company- issued laptop computer accessed certain files housed on that device after Whitchurch was terminated by Vizant. Yarnall also determined that on December 9, 2013 a USB storage device was inserted into the computer and files belonging to Vizant were transferred onto that device. Although defendants returned a USB storage device to Vizant on January 22, 2014, Yarnall found that this was not the same device that had been inserted into Whitchurch's laptop on December 9, 2013. This led Yarnall to conclude that there is a USB storage device that was inserted into Whitchurch's company-issued laptop after her termination and that has not been surrendered to Vizant. Yarnall was also able to determine that files belonging to Vizant had been opened on Whitchurch's company-issued laptop after the date of her termination. In examining the USB storage device that was returned to Vizant on January 22, 2014, Yarnall also observed that no record existed of that device ever having been inserted into the corporate laptops of Whitchurch or Davis. However, the device contained information belonging to Vizant which was copied onto it after December 9, 2013. This led Yarnall to conclude “within a reasonable degree of scientific certainty” that “there is at least one other computer that has copied data to that...USB stick [received by Vizant] that we were not provided for examination.” 9 Clients and prospective clients of Vizant have discovered defendants' website and have raised concerns about the allegations contained therein. For example, Vizant was engaged in marketing negotiations with Amtrak when Amtrak became aware of defendants website. Bizzarro, who was involved in the negotiations, was compelled to expend time discussing the website with Amtrak's representatives and assuaging their concerns. Ultimately, Vizant did enter into a contract with Amtrak but only after lowering its compensation rate. Bizzarro testified that the treasurer of “one of [Vizant's] large clients” had contacted him after finding out about the website. According to Bizzarro, “we explained it and we got over it, but it came up.” Bizzarro added that “I don't know how many deals we've lost because they've seen the [website]. If you search Vizant, it comes up. Clearly it comes up, because our name is on” the website. In addition, Bizzarro testified that the existence of defendants' website gave rise to concerns when Vizant attempted to refinance with a new bank and during recent attempts by Vizant's leadership to explore the possibility of selling the business. Bizzarro concluded that the website “has intruded in every aspect of our business.” In addition, at least one potential investor, West Capital Management, became aware of defendants' website and thereafter declined to do business with Vizant. A representative of West Capital Management sent an email to Wiggers in which he stated that he was not able to recommend you working with our firm given the information that is published about you and the work you are associated with....We reviewed the website [www.nocapitalsolutions.com] and the accusations in the site. Even Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 144 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 though you and I spoke about the site, I am not able to recommend using your services to clients or to my partners unless the accusations in the site are resolved. The website's existence has also had an adverse effect on Vizant's relationships with its employees and board members. Bizzarro testified that “[w]e have had to do a lot of damage repair in our sales team the year [Whitchurch] was gone” and that the actions of defendants have “absolutely impacted my relationship with our board.” Sharp, who was part of the sales team supervised by Whitchurch and now serves as Vizant's National Director of Business Development, testified that she thinks defendants' website has had an impact on the morale of Vizant's employees because of the risk that the company will lose sales opportunities due to defendants' claims. According to Sharp, “even if they don't say it directly to you [that the lost opportunity is due to the website], that's a loss of sale, that's money right out of their pocket.... So I think the morale is down because of that.” *12 Defendants also created an email address which was apparently designed to look as if it belonged to Jonathan Kalman (“Kalman”), who was at the time a member of Vizant's Board. Defendants used this email address to send emails reiterating their claims about the purported malfeasance of Vizant and its leadership. Kalman subsequently resigned from the Board. Defendants have produced no evidence of a Ponzi scheme, fraud, perjury, or “cheating” on the part of plaintiffs which defendants have claimed on their website. III. We first discuss whether Vizant is entitled to summary judgment on its breach-of-contract claim. Each defendant, as an employee of Vizant, entered into a multi- faceted employment agreement with the company. The terms of those agreements are detailed in the preceding section. As noted above, the parties agreed to the application of Delaware law. In order to succeed on a breach of contract claim under Delaware law, a plaintiff “must prove: '1) a contractual obligation; 2) a breach of that obligation by the defendant; and 3) a resulting damage to the plaintiff.”' In re G-I Holdings, Inc., 755 F.3d 195, 202 (3d Cir. 2014) (quoting H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 140 (Del. Ch. 2003)). Defendants do not dispute that their employment agreements with Vizant give rise to contractual obligations. See id. The record 10 reveals undisputed material facts establishing defendants' breach of their obligations under the employment agreements. See id. First, Whitchurch has acknowledged that she retained access to a number of cost reduction reports for an extended period of time after her termination. Indeed, at the preliminary injunction hearing which took place nearly a year and a half after she was fired, Whitchurch conceded that cost reduction reports remained accessible to her as attachments saved in her email account. By retaining these cost reduction reports, Whitchurch breached the provision of her employment agreement requiring her to “deliver to the Company” and “not keep in... her possession...the originals or copies, whether hard copies or electronic copies, of any and all Confidential Information” following her separation from the company. Similarly, the uncontradicted testimony of Yarnall makes clear that files belonging to Vizant were transferred from defendants' company-issued laptop computers and retained elsewhere after they were fired by Vizant. The names of the transferred files confirm that at least some of them contained cost reduction reports and other confidential information. Again, by retaining these files, defendants breached their contractual obligations. Whitchurch and Davis subsequently reprinted on their website the claim that they had attached cost reduction reports to an email. Thus, they communicated that they still had access to those reports. Reprinting this statement on the website had no purpose related to their duties as employees of Vizant. This act therefore violated section 1.2 of the employment agreements, which proscribed the defendants “use” of “Confidential Information for any purpose other than in discharging [their] duties as...employee[s] for the exclusive benefit of the Company.” *13 Defendants urge that the record contains no evidence that Davis played a role in the retention or use of cost reduction reports following her termination. It is true that the email that was purportedly accompanied by 10 cost reduction reports was sent by Whitchurch and not Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 145 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 12 Davis. However, that email was subsequently reprinted on the website, which Davis and Whitchurch jointly controlled. Davis, like Whitchurch, breached her contract with Vizant through her role in publishing statements about the cost reduction reports on the website. 11 Defendants insist that they are not in breach of their contractual obligations because any information retained by them did not constitute “confidential information” within the meaning of the employment agreement. We disagree. The employment agreement defined “confidential information” to include “proprietary or confidential information, technical data, trade secrets or know-how of the Company...including but not limited to” financial information, “marketing information and strategy,” information about customers and prospective customers, information about Vizant's suppliers and sources, and “the Company's manner of operation, strategies and plans,” as well as “other proprietary and commercial information.” There is no dispute that the cost reduction reports consist of financial data about clients and potential clients and the details of Vizant's strategies for cutting a particular client's costs. This material falls squarely within the scope of the employment agreement's definition of “confidential information.” In addition to retaining and using confidential information, defendants also breached sections 2.1.1.1, 2.1.1.2, and 2.1.1.3 of their employment agreements. Section 2.1, entitled “Covenant Not to Compete,” prohibited defendants for two years following their separation from the company from encouraging any Vizant employee “to terminate his or her employment with the Company,” from “in any way interfer[ing] with the Company's relationship with its employees,” from “[e]ncourag[ing] or induc[ing] any customers or suppliers of the Company to terminate business activities with the Company,” and from “engag[ing] in any diversion of good-will regarding the business as conducted by the Company.” As noted above, the actions of defendants have significantly damaged morale among Vizant's employees, specifically its sales employees. Similarly, defendants' actions engendered doubts among Vizant's clients and potential clients about the stability of the company and whether it had the ability to keep clients' data secure. Further, defendants “engage[d] in a[ ] diversion of good-will” regarding Vizant by damaging its relationships with its employees, with its clients and potential clients, and with its Board and investors. 12 In order to prevail on its breach-of-contract claim, Vizant must demonstrate that it suffered damage as a result of defendants' breach of their contractual obligations. See id. Vizant points to its lost business, to the fact that it has been forced to reduce its rates in order to secure the business of potential clients concerned about defendants' allegations, to the damaged morale among its sales representatives, and to the time and effort expended by Bizzarro and other management personnel in reassuring investors and board members about the state of the company. Defendants, meanwhile, urge that Vizant has not pointed to facts indicative of a “resulting damage.” According to defendants, they - and not Vizant - are entitled to summary judgment on the breach-of-contract claim. *14 The record reveals undisputed evidence that Vizant suffered “resulting damages” in the form of harm to employee morale, harm to the relationship between the company and its leadership and investors, time and energy expended in reassuring parties who were concerned about the company, and damage to certain business relationships. Uncontroverted testimony in the record makes clear that Vizant's relationship with Amtrak, a current client, was harmed when Amtrak representatives became aware of the website. 13 Vizant was forced to spend time reassuring Amtrak and chose to lower its compensation rate in an effort to secure a contract with the company. Vizant has also lost at least one potential investor, West Capital Management, because of the website and has encountered hurdles in its attempts to refinance and to sell the business. The actions of defendants have also adversely affected Vizant's relationships with its employees and board members. However, there is a genuine dispute as to whether Vizant suffered any “resulting damage” to its relationship with one of its prospective clients, Tacoma Screw Products. Vizant has pointed to the testimony of one of its sales representatives that the company's relationship with Tacoma Screw Products was damaged after representatives of the company became aware of the website. In response, defendants have submitted the declaration of John Wolfe, the Executive Advisor of Tacoma Screw Products, who has declared that the company declined to enter into a service agreement with Vizant after considering “the scope of Vizant's service offerings, the terms of the professional agreement, and the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 146 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 13 Company's...need for such services” as well as “our own internal operations.” Thus, a dispute of fact exists as to the reasons the relationship was discontinued. We will deny Vizant's motion for summary judgment on its breach- of-contract claim only insofar as that claim is premised on purported harm to Vizant's business relationship with Tacoma Screw Products. Defendants have also moved for summary judgment in their favor on Vizant's breach-of-contract claim. They argue that there is no evidence in the record of Davis' involvement in any breach of contract or any resulting damages, that Whitchurch did not breach her contract because her actions were “authorized by the plain meaning of the contract,” and that Vizant has not pointed to adequate evidence of resulting damage. As discussed above, these arguments lack merit, with the exception of their argument that they did not breach their contracts by communicating their concerns to Vizant's Board. As to the latter, Vizant does not argue to the contrary. We therefore conclude that defendants are not entitled to summary judgment in their favor on Vizant's claim for breach of contract, except insofar as that claim is based on defendants' conduct in sending emails to Vizant's officers and board members about their suspicions of malfeasance and fiscal mismanagement. In sum, we will grant Vizant's motion for summary judgment on its breach-of-contract claim except insofar as that claim is premised on damage to Vizant's relationship with Tacoma Screw Products and on defendants' conduct in contacting Vizant's Board regarding their concerns about financial mismanagement within the company. We will deny defendants' motion for summary judgment on Vizant's breach-of-contract claim except to the extent that defendants seek summary judgment on Vizant's claims that they breached their contracts by communicating their concerns to Vizant's leadership. IV. We next address Vizant's claim for misappropriation of trade secrets. Vizant has pleaded this claim under Delaware law, pursuant to the terms of the employment agreements, which state: “This agreement shall be governed and construed in accordance with the internal laws of the State of Delaware without regard to its choice or conflicts of law provisions.” Broadly-phrased provisions like the one contained in the employment agreements are deemed to encompass “all tort claims that may arise from the [a]greement.” Sullivan v. Sovereign Bancorp., Inc., 33 F. App'x 640, 642 (3d Cir. 2002). We have previously applied Delaware law to Vizant's misappropriation of trade secrets claim. See Memorandum dated April 29, 2015 (Doc. # 59). We do so again here. *15 In order to prevail on a misappropriation of trade secrets claim under the DUTSA, a plaintiff must establish the following elements: The acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means, or alternatively, the disclosure or use of a trade secret of another without express or implied consent by a person who either: (1) acquired the secret by improper means; (2) knew or had reason to know that their knowledge of the trade secret was (A) derived by another who acquired it by improper means, (B) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, or (C) acquired by accident or mistake. Mattern & Assocs., L.L.C. v. Seidel, 678 F. Supp. 2d 256, 269 (D. Del. 2010) (internal citations omitted). “Trade secret,” in turn, is defined by the DUTSA as: information, including a formula, pattern, compilation, program, device, method, technique or process, that: a. Derives independent economic value, actual or potential from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 6 Del. Code Ann. § 2001(4); see also Mattern & Assocs., L.L.C., 678 F. Supp. 2d at 269. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 147 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 14 The content of Vizant's cost reduction reports amounts to a “trade secret” within the meaning of the DUTSA. The reports contain information, including a “method, technique or process.” See 6 Del. Code Ann. § 2001(4). Further, said information “[d]erives independent economic value” from the fact that it is not readily ascertainable. See id. Finally, Vizant undertakes efforts to maintain this information as secret. See id. Under the circumstances, these efforts - such as the use of employment agreements governing the use and distribution of the information, the implementation of precautions for the sharing of client data, and the reliance on network security measures - are reasonable. See id. In sum, the content of Vizant's cost reduction reports is a “trade secret” pursuant to Delaware law. 14 Defendants' conduct with respect to this material amounted to a misappropriation of trade secrets as defined by the DUTSA. Both defendants “use [d]” the trade secrets “without express or implied content” when they stated on their website that they had retained cost reduction reports in order to threaten Vizant and to deter third parties from doing business with the company. See Mattern & Assoc., L.L.C., 678 F. Supp. 2d at 269. The trade secrets “use[d]” in this manner were “acquired...by improper means” in that defendants retained them in violation of their employment agreements following their termination. See id. The conduct of defendants also satisfied an alternative element of the DUTSA in that both Whitchurch and Davis “knew or had reason to know that their knowledge of” the trade secrets was “[a]cquired under circumstances given rise to a duty to maintain [the secrets'] secrecy or limit [their] use,” those circumstances being the employment agreements. See id. Defendants point to no record evidence to the contrary. Further, we note that a defendant need not disclose a trade secret in order to be liable under the DUTSA. See Mattern & Assocs., L.L.C., 628 F. Supp. 2d at 269. In sum, the evidence establishes without dispute the liability of defendants to Vizant for misappropriation of trade secrets under Delaware law. *16 According to defendants, Vizant's claim for misappropriation of trade secrets is barred by Pennsylvania's “gist of the action” doctrine or by the related doctrine of economic loss. 15 The “gist of the action” doctrine is “designed to maintain the conceptual distinction between breach of contract claims and tort claims.” Frank C. Pollara Grp., LLC v. Ocean View Inv. Holding, LLC, 784 F.3d 177, 186 (3d Cir. 2015) (quoting eToll, Inc. v. Elias/Savion Advert., Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002)). It arises from the notion that “tort recovery should not be permitted for breaches of contract.” Id. (internal citations omitted). There appears to be no equivalent under Delaware law. Defendants cite only Pennsylvania law, notwithstanding that we are required by the terms of the employment agreements to analyze the misappropriation of trade secrets claim under Delaware law. The Pennsylvania authority cited by defendants is inapposite. Even if we were to apply Pennsylvania law, the DUTSA claim would not be foreclosed by Pennsylvania's “gist of the action” doctrine. Our Court of Appeals has reasoned that claims for misappropriation of trade secrets like the one now before us “sound[ ] primarily in tort” and are not covered by that legal framework. Toledo Mack Sales & Serv., Inc. v. Mack Trucks, Inc., 530 F.3d 204, 229 (3d Cir. 2008). Meanwhile, the economic loss doctrine “prohibits plaintiffs from recovering in tort economic losses to which their entitlement flows only from a contract.” Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 618 (3d Cir. 1995). It bars claims arising from “negligence that results solely in economic damages unaccompanied by physical or property damage.” Sovereign Bank v. BJ's Wholesale Club, Inc., 533 F.3d 162, 175 (3d Cir. 2008). The theory underlying the economic loss doctrine is that enabling a plaintiff to recover for a such “purely economic” loss would “open the door to every person in the economic chain of the negligent person or business to bring a cause of action.” Adams v. Copper Beach Townhome Communities, L.P., 816 A.2d 301, 307 (Pa. Super. Ct. 2003) (citations omitted). We remind defendants that we are applying Delaware law, not Pennsylvania law. Courts in Delaware have declined to apply the economic loss doctrine to most intentional torts, including misappropriation of trade secrets. See, e.g., Commonwealth Constr. Co. v. Endecon, Inc., No. 08C-01-266, 2009 WL 609426, at *5 (Del. Super. Ct. Mar. 9, 2009); cf. Getty Refining & Mktg. Co. v. MT FADI B, 766 F.2d 829, 830 (3d Cir. 1985). We note that defendants also seek summary judgment on the misappropriation of trade secrets claim. However, their argument consists simply of their reliance on Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 148 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 15 Pennsylvania's “gist of the action” doctrine. Insofar as defendants seek summary judgment on Vizant's misappropriation of trade secrets claim, their motion will be denied. V. We turn next to the claim of both plaintiffs for defamation. Pennsylvania law 16 recognizes a claim for defamation where a plaintiff establishes: 1) the defamatory character of the communication; 2) its publication by the defendant; 3) its application to the plaintiff; 4) an understanding by the reader or listener of its defamatory meaning; 5) an understanding by the reader or listener of an intent by the defendant that the statement refer to the plaintiff; 6) special harm resulting to the plaintiff from its publication; [and] 7) abuse of a conditionally privileged occasion. *17 E.g., Mzamane v. Winfrey, 693 F. Supp. 2d 442, 476 (E.D. Pa. 2010) (citing 42 Pa. Cons. Stat. Ann § 8343(a)). A statement is defamatory if it “tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.” U.S. Healthcare, Inc. v. Blue Cross of Greater Phila., 898 F.2d 914, 923 (3d Cir. 1990). A corporation can be defamed by allegations against its “officers, agents or stockholders [which] also reflect discredit upon the method by which the corporation conducts its business.” Restatement (Second) of Torts § 561 cmt. b.; see also Gordon v. CBS Broad., Inc., No. 3132 EDA 2013, 2014 WL 7920780, at *8 (Pa. Super. Ct. Dec. 8, 2014). It is for the court to decide whether a statement is defamatory. U.S. Healthcare, Inc., 898 F.2d at 923. In doing so, the court “must view the statements in context and determine whether the communication seems 'to blacken a person's reputation or expose him to public hatred, contempt, or ridicule, or to injure him in his business or profession.”' Emekekwue v. Offor, 26 F. Supp. 2d 348, 359 (M.D. Pa. 2014) (quoting Baker v. Lafayette Coll., 532 A.2d 399, 402 (Pa. 1987)). “[M]ere insult[s],” such as “expressions of opinion, without more,” and those that are “no more than rhetorical hyperbole or a vigorous epithet” are not defamatory. Id. (internal citations omitted). As noted above, a plaintiff must generally show “special harm” in order to make out a prima facie defamation claim. See, e.g., Mzamane, 693 F. Supp. 2d at 476. “Special harm” is “harm of a material and generally of a pecuniary nature” and “result[s] from conduct of a person other than the defamer or the one defamed which conduct is itself the result of the publication or repetition of the slander.” Restatement (First) of Torts § 575 cmt. b; U.S. Healthcare, Inc., 898 F.2d at 923. Damage such as “loss of reputation” and “lowered social standing and its purely social consequences,” without accompanying “material” harm, is not “special harm.” Restatement (First) of Torts § 575 cmt. b. A plaintiff need not establish special harm, however, if the communications at issue are defamatory per se. NTP Marble, Inc. v. AAA Hellenic Marble, Inc., 799 F. Supp. 2d 446, 452 (E.D. Pa. 2011). The defamation per se doctrine originated “to provide a remedy for a person whose reputation was damaged by the very utterance of...defamatory words, even though the person could not point to a specific pecuniary loss.” Synygy, Inc. v. Scott- Levin, Inc., 51 F. Supp. 2d 570, 581 n.9 (E.D. Pa. 1999). Words imputing a criminal offense fall into this category, as do those imputing “business misconduct.” Id. at 580. 17 If a plaintiff is the target of per se defamation, he or she is merely required to “make a showing of general damage, i.e., proof of reputational harm” or of “personal humiliation.” Id. at 581. The truth of the purportedly defamatory communications is an affirmative defense to a charge of defamation. See 42 Pa. Cons. Stat. Ann. § 8343(b)(1). The same is true of conditional privilege, which relieves a defendant of liability upon a showing that “circumstances are such as to lead any one of several persons having a common interest in a particular subject matter correctly or reasonably to believe that facts exist which another sharing such common interests is entitled to know.” Emekekwue, 26 F. Supp. 2d at 364. 18 Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 149 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 16 *18 Plaintiffs have identified a number of statements that they characterize as defamatory. It is undisputed that all of those statements were made by defendants. Of the statements identified by plaintiffs, the record reveals no dispute that at least the following are defamatory statements: 1. “I'm calling you out. You're a ...cheat Joe Bizzarro” 2. “You have no intention of paying the full commissions, never have.” 3. Bizzarro “has 'enhanced' his reporting to the board so the true financial state of the company is far more positive than the reality.” 4. Bizzarro is “a cheat.” 5. Bizzarro is “a fraud [and] his resume and credentials are fabricated.” 6. Bizzarro “is stealing from his employees, stealing from his clients, stealing from his alliance partners...and committing a fraud on the Georgia court system.” 7. Vizant, Seidman, Wiggers, Bizzarro, other Vizant employees, and Vizant's counsel “have engaged in a vicious, calculated, and illegal conspiracy to accuse, frame, and victimize the defendants. They have manufactured evidence, extorted the Defendants, committed perjury and subornation of perjury, threatened a witness, and sought the illegal incarceration of the Defendants.” 19 8. References contained in the YouTube videos created by defendants and on the website to the existence of a Ponzi scheme at Vizant. Further, there is no dispute in the record that each of these statements was published by defendants, 20 each applied to plaintiffs, and the reader of each statement would understand it to be defamatory and to be made in reference to plaintiffs. See, e.g., Mzamane, 693 F. Supp. 2d at 476. Further, to the extent that the statements impute criminal offenses and business misconduct to plaintiffs, there is undisputed evidence in the record that plaintiffs experienced general harm. See Synygy, Inc., 51 F. Supp. 2d at 581. Meanwhile, the evidence is undisputed that those statements that do not amount to defamation per se have resulted in special harm. See, e.g., Mzamane, 693 F. Supp. 2d at 476. Defendants have pointed to no evidence that the statements above are true, nor have they identified a dispute of material fact as to the possibility that the a conditional privilege applies. See 42 Pa. Cons. Stat. Ann. § 8343(b)(1); Emekekwue, 26 F. Supp. 2d at 364. In sum, plaintiffs are entitled to summary judgment on their defamation claim insofar as that claim is based on the statements listed above. Plaintiffs have identified several additional statements which, according to them, support their claim for defamation. There remain genuine disputes of material fact as to whether plaintiffs have made out a defamation claim based on these remaining statements. To the extent that plaintiffs seek summary judgment on their defamation claim based on statements other than those listed above, their motion will be denied. *19 Defendants urge that plaintiffs' defamation claim is barred by the “gist of the action” doctrine or by the doctrine of economic loss. We conclude that neither doctrine precludes plaintiffs' defamation claim, which is unrelated to the employment agreements. Defendants also seek summary judgment in their favor on the defamation claim. They urge that there is no evidence in the record to support this allegation against them. To the extent we have not granted summary judgment in favor of plaintiffs, there are genuine disputes of material fact. Defendants' motion for summary judgment on Count V will therefore be denied. VI. This brings us to the claim of both plaintiffs for tortious interference with existing and prospective business relationships. It is plaintiffs' contention that defendants improperly interfered with: Vizant's existing relationships with its employees; the relationship between Vizant and Bizzarro, its CEO; the relationships between Vizant and its existing clients; the relationship between Vizant and its bank; and prospective relationships between Vizant and potential clients and investors. In order to prevail on a claim for tortious interference with a contractual relationship under Delaware law, 21 a plaintiff must satisfy the terms of § 766 of the Restatement (Second) of Torts. ASDI, Inc. v. Beard Research, Inc., 11 A.3d 749, 751 & n.3 (Del. 2010). That section requires a Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 150 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 17 plaintiff to show the existence of “(1) a contract, (2) about which defendant knew and (3) an intentional act that is a significant factor in causing the breach of such contract (4) without justification (5) which causes injury.” Anderson v. Wachovia Mortg. Corp., 497 F. Supp. 2d 572, 583 (D. Del. 2007). A related section of the Restatement (Second) of Torts, § 766A, applies to situations in which a defendant renders a plaintiff's performance of his own contract “more expensive or burdensome.” While the Delaware Supreme Court has not had occasion to pass upon § 766A, a Delaware Superior Court, in a well-reasoned opinion, has recently endorsed it. Allen Family Foods, Inc. v. Capital Carbonic Corp., 2011 WL 1295138, at *5 (Del. Super. Ct. Mar. 31, 2011); but see Anderson, 497 F. Supp. 2d at 583. In our Memorandum dated April 29, 2015, we predicted that the state's Supreme Court would do the same. See Doc. # 59; Nationwide Mut. Ins. Co. v. Buffetta, 230 F.3d 634, 637 (3d Cir. 2000). Finally, Delaware courts recognize liability for wrongful interference with prospective contractual relations as set forth in § 766B of the Restatement. Empire Fin. Servs., Inc. v. Bank of N.Y., 900 A.2d 92, 98 (Del. 2006). Such liability requires proof of “(a) the reasonable probability of a business opportunity, (b) the intentional interference by defendant with that opportunity, (c) proximate causation, and (d) damages.” Id. at 98 n.19 (quoting DeBonaventura v. Nationwide Mut. Ins. Co., 428 A.2d 1151, 1153 (Del. 1981)). Defendants contend that plaintiffs' tortious interference claim is barred by the “gist of the action” doctrine. Again, defendants rely on Pennsylvania law, but we have previously made clear that our analysis of the tortious interference claim is governed by Delaware law. See Memorandum dated April 29, 2015 (Doc. # 59); Sullivan, 33 F. App'x at 642. *20 The undisputed facts in the record demonstrate defendants' liability for tortious interference with existing and prospective contractual relationships. There is uncontradicted evidence that opportunities existed for Vizant to do business with certain entities, specifically Amtrak and West Capital Management, and defendants point to nothing to the contrary. Defendants interfered intentionally with these opportunities when they used their website to urge potential business partners not to develop relationships with Vizant. Indeed, defendants have admitted that it was their goal to deter Vizant's potential clients and investors. Furthermore, the evidence shows without dispute that defendants' actions proximately caused harm to plaintiffs. For example, Vizant lost the investment of West Capital Management and lowered its compensation rate for Amtrak. Again, defendants insist otherwise but have pointed to no record evidence to support their position. 22 There is also uncontradicted evidence that the conduct of defendants made plaintiffs' performance of its contracts “more oppressive or burdensome” as set forth in § 766A of the Restatement (Second) of Torts. For example, the actions of defendants placed a burden on the contract between Bizzarro and Vizant by forcing Bizzarro to expend time explaining himself to the company's Board and working to reestablish its trust in him. Performance of the contracts between Vizant and its sales personnel was also rendered more burdensome in that those salespeople had to expend time reassuring clients who had become aware of defendants' allegations. Members of the sales team have also had to take additional steps to maintain relationships with existing clients and to build relationships with prospective clients. For example, Bizzarro testified that he and members of the sales team spent time working to convince Amtrak to enter into a service agreement. Vizant also lowered its compensation rate in an effort to secure Amtrak's business. As noted above, defendants urge that summary judgment on the tortious interference claim should be entered in their favor and not in favor of Vizant. In support of this position they argue merely that the “gist of the action” doctrine bars Vizant's claim. We have explained that defendants may not assert the “gist of the action” doctrine here. In sum, no genuine dispute of material fact exists with respect to plaintiffs' claim for tortious interference with existing and prospective contractual relationships, except insofar as this claim rests on the allegation that defendants' conduct caused Tacoma Screw Products to decline to enter into a service agreement with Vizant. Accordingly, we will grant summary judgment in favor of plaintiffs on this claim except with respect to Tacoma Screw Products. We will deny the motion of defendants for summary judgment in their favor on this claim. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 151 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 18 VII. Whitchurch and Davis also seek summary judgment in their favor and against plaintiffs on the first two counts of the complaint. Count I pleads that defendants violated 18 U.S.C. § 1962(c), a RICO provision which bars any individual “employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce” from conducting or participating “directly or indirectly[ ] in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.” Count II pleads a violation by defendants of 18 U.S.C. § 1962(d), the RICO provision making it “unlawful for any person to conspire to violate” the other provisions of § 1962, including § 1962(c). Section 1964(c) of RICO, meanwhile, provides in relevant part that a party “injured...by reason of a violation of [§] 1962 ...may sue therefore in any appropriate United States district court.” *21 To succeed on a § 1962(c) claim, a plaintiff must establish: (1) the existence of an enterprise affecting interstate commerce; (2) that the defendant was employed by or associated with the enterprise; (3) that the defendant participated..., either directly or indirectly, in the conduct or the affairs of the enterprise; and (4) that he or she participated through a pattern of racketeering activity. United States v. Irizarry, 341 F.3d 273, 285 (3d Cir. 2003). An “enterprise” is defined as “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” 18 U.S.C. § 1961(4); Irizarry, 341 F.3d at 285. An entity “associated in fact” as set forth in § 1961(4) must in turn have “a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise's purpose.” Boyle v. United States, 556 U.S. 938, 946 (2009). Meanwhile, a “pattern of racketeering activity” as set forth in § 1962(c) consists of “at least two acts of racketering activity.” Section 1961(1), in turn, defines “racketeering activity” as “any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance or listed chemical.” “Racketeering activity” also includes “any act which is indictable under” any one of a long list of provisions of Titles 18, and 29 of the United States Code, as well as certain other indictable offenses. The predict acts must be related and must “amount to or pose a threat of continued criminal activity.” Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1412 (3d Cir. 1991) (quoting H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 239 (1989)). Plaintiffs, in attempting to support their § 1962(c) claim, have failed to point to any evidence in the record that defendants engaged in a “pattern of racketeering activity.” As discussed above, § 1961(1) defines “racketeering activity” to include “an act or threat involving” any one of a list of crimes which includes bribery and extortion, as well as a number of indictable acts. There is no evidence that the conduct of defendants satisfies these criteria. Plaintiffs simply assert, without support, that Whitchurch “engaged in wire fraud in furtherance of the Defendants' scheme to defraud and extort money from Vizant,” and that certain communications made by defendants following their termination constitute “predicate acts of mail and/or wire fraud.” Plaintiffs do not explain how this conduct amounted to “extortion” or how it satisfies the elements of 18 U.S.C. §§ 1341 or 1343, the mail and wire fraud provisions mentioned in § 1961(a). In short, there is no evidence in the record to support plaintiffs' § 1962(c) claim, and defendants are therefore entitled to summary judgment on Count I. In Count II, plaintiffs allege that the conduct of defendants violated 18 U.S.C. § 1962(d), which makes it a crime “to conspire to violate any of the provisions of subsection (a), (b), or (c) of § 1962.” Plaintiffs have failed to identify any evidence in the record establishing a violation of § 1962 since they have not identified any record evidence of “racketeering activity.” Similarly, plaintiffs have not called our attention to any evidence that defendants conspired to commit a violation of § 1962(c). As a result, we will grant the motion of defendants for summary judgment on Count II. VIII. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 152 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 19 *22 We turn next to the argument of defendants that they are entitled to summary judgment on Count VII. That Count specifies that defendants engaged in abuse of process by emailing Bizzarro and other Vizant officers in order to threaten to file a RICO action against Vizant and by continuing to file motions and briefs, as well as a counterclaim, in the Georgia action after Vizant had filed a notice of voluntary dismissal. In Pennsylvania, 23 a plaintiff seeking to establish liability for abuse of process must show that the defendant “(1) used a legal process against the plaintiff, (2) primarily to accomplish a purpose for which the process was not designed[,] and (3) harm has been caused to the plaintiff.” Shiner v. Moriarty, 706 A.2d 1228, 1236 (Pa. Super. Ct. 1998) (internal citation omitted); see also Langman v. Keystone Nazareth Bank & Trust Co., 502 F. App'x 220, 224 (3d Cir. 2012). Abuse of process involves “the perversion of the particular legal process for a purpose of benefit to the defendant, which is not an authorized goal of the procedure.” Shiner, 706 A.2d at 1236 (citations omitted). An abuse-of-process plaintiff “must show some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process.” Id. A defendant who “has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions,” is not liable. Id. Plaintiffs direct our attention to an email sent by Whitchurch in September 2014 to Wiggers, Bizzarro, other Vizant officers, and Vizant's counsel. Whitchurch attached to the email a draft of an “Ammended [sic] Counterclaim Complaint” that she and Davis apparently intended to file in the Georgia action. That draft contained a civil RICO claim against Vizant and certain of its officers, including Bizzarro. Whitchurch wrote that she planned to file the amended pleading within days. She added: “If you are not, and were not a Director, you will need to let me know. I realize the implications of my actions in filing a RICO claim and I have NO interest in naming an uninterested and innocent party.” She also declared: “I understand the implications of a claim of this nature far more than the prevailing law. But under no circumstances will I have you continue to disrespect me.” Whitchurch's September 2014 email does not give rise to an abuse-of-process claim. There is no indication that Whitchurch threatened a RICO claim to accomplish a purpose other than that for which the RICO process was designed. See Shiner, 706 A.2d at 1236. Plaintiffs aver that the email acknowledged that defendants “knew it would damage Vizant's reputation even if the suit were without merit,” but this mischaracterizes the email. 24 Further, plaintiffs point to no evidence that “harm has been caused to” them as a result of the message. See id. *23 Plaintiffs also support their abuse-of-process claim by pointing to two filings made by defendants in the Georgia action. After Vizant had docketed a notice of voluntary dismissal, defendants attempted to file an “amended counterclaim” (although no counterclaim had previously been filed). Defendants then attempted to appeal the voluntary dismissal of the action. Again, plaintiffs point to no evidence that these filings were made “primarily to accomplish a purpose for which the process was not designed.” See Shiner, 706 A.2d at 1236. Although plaintiffs appear to be suggesting that defendants persisted in filing documents in order to extort money from Vizant, they do not direct our attention to anything in the record that would support this theory. Plaintiffs add that “additional acts also constituting abuse of process have been identified during the course of this case.” They focus on the fact that Whitchurch uploaded those documents to the state court's public docket in response to an order of the Georgia state court directing her to forfeit certain documents belonging to Vizant. However, Whitchurch insists that she did so inadvertently, and plaintiffs point to no evidence that she acted with an ulterior purpose. Plaintiffs also aver that in the instant matter, defendants “have engaged in continuing abuse of process by repeatedly filing meritless motions, motions for reconsideration, second versions of previously denied motions, and new motions raising the same arguments previously rejected by the Court.” This conduct had not occurred at the time the complaint was filed and cannot be used to defeat summary judgment. In sum, we will grant defendants' motion for summary judgment on Count VII. We need not reach defendants' argument that this claim is barred by the “gist of the action” doctrine. IX. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 153 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 20 In Count VIII, Vizant alleges that defendants engaged in conversion by refusing to return confidential information to Vizant following the termination of their employment. In their brief in opposition to defendants' motion, plaintiffs note, among other things, that Whitchurch has admitted to retaining ten cost reduction reports as attachments in her email account. Because Vizant's conversion claim “arise[s] from” defendants' employment agreements, we analyze it under Delaware law. See Sullivan, 33 F. App'x at 642. Delaware law defines conversion as an “act of dominion wrongfully exerted over the property of another, in denial of his right, or inconsistent with it.” Arnold v. Soc'y for Sav. Bancorp, Inc., 678 A.2d 533, 536 (Del. 1996) (citation omitted). In order to prevail on a conversion claim, a plaintiff must establish “precisely what property the defendant converted and that his interest in the property was viable at the time of the conversion.” E.g., CIT Comm's Fin. Corp. v. Level 3 Comm's, LLC, No. 06C-01-236, 2008 WL 2586694, at *2 (Del. Super. Ct. June 6, 2008). In order to raise a conversion claim and a breach of contract claim in the same complaint, a plaintiff “must generally allege that the defendant violated an independent legal duty, apart from the duty imposed by contract.” Kyle v. Apollomax, LLC, 987 F. Supp. 2d 519, 525 (D. Del. 2013) (quoting Kuroda v. SPJS Holdings, L.L.C., 971 A.2d 872, 889 (Del. Ch. 2009)). A conversion claim that is “duplicative” of an accompanying breach of contract claim “cannot be sustained.” Id. Here, the conversion alleged by Vizant arises exclusively from the duties imposed on defendants by the agreements at the heart of the breach of contract claim. It is therefore “duplicative” of Vizant's claim for breach of contract. See id. 25 *24 Accordingly, we will grant summary judgment in favor of defendants on Vizant's conversion claim. X. Count IX of the complaint alleges fraud. Plaintiffs plead that defendants' fraudulent representations included statements about Vizant's alleged mismanagement of its investors' money and of employee payroll and benefits, as well as averments that the company was not financially sound. Plaintiffs also identify as fraudulent defendants' characterizations of Bizzarro as “immoral” and “dishonest” and their claims that Vizant owed them money. In addition, plaintiffs claim that defendants fraudulently concealed the fact that these representations “were made solely for the purpose of intimidating and harassing Plaintiffs, family members and friends in order to obtain money to which they were not entitled.” To succeed on a claim for fraud or fraudulent misrepresentation under Pennsylvania law, a plaintiff must establish the existence of: (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance Gibbs v. Ernst, 647 A.2d 882, 889 (Pa. 1994). Fraud claims “are meaningless epithets unless sufficient facts are set forth which will permit an inference that the claim is not without foundation or offered simply to harass the opposing party and to delay the pleader's own obligation.” Presbyterian Med. Ctr. v. Budd, 832 A.2d 1066, 1072-73 (Pa. Super. Ct. 2003) (quoting Bata v. Central-Penn Nat'l Bank of Phila, 224 A.2d 174 (Pa. 1967)). In opposition to defendants' motion for summary judgment on the fraud claim, plaintiffs simply urge that “[d]efendants have made numerous exorbitant monetary demands of Plaintiffs, while they have offered no proof that they are entitled to any amount of money from Plaintiffs.” To defeat defendants' summary judgment motion, plaintiffs must point to a genuine dispute of material fact. See Fed. R. Civ. P. 56(c)(1). They have not done so. They simply insist that defendants' statements were demonstrably false, without addressing the additional requirements of a fraud claim: materiality, knowledge of or recklessness as to the falsity of the representation, intent, justifiable reliance, and harm. See Gibbs, 647 A.2d at 889. Plaintiffs also fail to cite any authority in support of their fraud claim. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 154 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 21 For the foregoing reasons, we will grant the motion of defendants for summary judgment on Count IX, that is plaintiffs fraud claim. We need not reach defendants' argument that this claim is barred by the doctrine of economic loss. XI. This brings us to Count X, which pleads civil conspiracy. Plaintiffs allege that defendants conspired to defraud them and to extort money from Vizant through unlawful means, including fraud, conversion, misappropriation of trade secrets, tortious interference, and abuse of process. A civil conspiracy claim under Pennsylvania law requires a showing that “two or more persons combined or agreed with intent to do an unlawful act or to do an otherwise lawful act by unlawful means.” Skipworth by Williams v. Lead Indus. Ass'n, Inc., 690 A.2d 169, 174 (Pa. 1997). Malice, that is “intent to injure,” is “essential in proof of a conspiracy.” Id. (citation omitted). *25 To withstand summary judgment on a civil conspiracy claim, a plaintiff must produce “evidence which would establish that [defendants] acted in concert to commit an unlawful act or do a lawful act by unlawful means, and that they acted with malice.” Id. Plaintiffs have failed to do so. Instead, they merely assert (without citing to the record) that defendants “combined and agreed with intent to defraud Plaintiffs and extort money from them to engage in unlawful means, including fraud, misappropriation of trade secrets, tortious interference and abuse of process.” They support this claim by citing to the complaint, which, as discussed above, does not contain facts in which we may rely in deciding a motion for summary judgment. What is more, plaintiffs have not identified evidence that defendants acted with malice. Though the existence of malice is fact- specific, the Pennsylvania Supreme Court has upheld the entry by a trial court of summary judgment on a civil conspiracy claim on the ground that no malice had been demonstrated in the record. See id. Accordingly, defendants are entitled to summary judgment on the civil conspiracy claim. XII. Plaintiffs ask the court to enter a final monetary judgment in their favor and against defendants in the amount of $5,052,352.42. This sum consists of: $733,036.42 in legal fees and costs incurred by Vizant; $4,219,316 in compensatory damages corresponding to Vizant's alleged lost revenue; and $100,000 in compensatory and exemplary damages to which plaintiffs claim Bizzarro is entitled. 26 There remain genuine disputes of material fact as to whether plaintiffs are entitled to the amount of damages set forth in their motion. For this reason, insofar as the motion of plaintiffs seeks final monetary judgment, it will be denied. XIII. Finally, plaintiffs seek to convert the preliminary injunction of April 29, 2015 into a permanent injunction. Our Court of Appeals has held that “[t]he standard for a preliminary injunction is essentially the same as for a permanent injunction with the exception that [in the preliminary injunction context] the plaintiff must show a likelihood of success on the merits rather than actual success.” Ferring Pharms., Inc. v. Watson Pharms., Inc., 765 F.3d 205, 215 n.9 (3d Cir. 2014). Thus, a plaintiff seeking a permanent injunction has the burden of establishing: (1) success on the merits; (2) that it will suffer irreparable harm if the injunction is denied; (3) that a grant of injunctive relief will not result in even greater harm to the nonmoving party; and (4) that the public interest favors such relief. See id.; Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir. 2004). Stated differently, the issuance of a permanent injunction is appropriate where “(1) the plaintiff successfully proves the merits of the case, (2) no available remedy at law exists, and (3) the balance of the equities favors granting such relief.” Subacz v. Sellars, No. 96-6411, 1998 WL 720822, at *2 (E.D. Pa. Sep. 21, 1998). The requirements for a permanent injunction are “generally less stringent” than those for a preliminary injunction, but they “require certainty on the merits.” Brennan Petroleum Prods. Co., Inc. v. Pasco Petroleum Co., Inc., 373 F. Supp. 1312, 1316 (D. Ariz. 1974). Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 155 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 22 Accordingly, a permanent injunction is normally issued “only after a full trial on the merits.” Chappell & Co. v. Frankel, 367 F.2d 197, 203 (2d Cir. 1966). However, some decisions in this district “have treated preliminary injunction hearings as final hearings on the merits permitting entry of a permanent injunction when additional proceedings were unnecessary to rule on plaintiff's claims.” United States v. Berks Cty., Pa., 277 F. Supp. 2d 570, 578 (E.D. Pa. 2003). Courts adopting this approach must take care to recast their findings through the lens of the standard applicable to permanent injunctions. Ciba-Geigy Corp. v. Bolar Pharm. Co., Inc., 747 F.2d 844, 847 (3d Cir. 1984). *26 Here, plaintiffs have satisfied the first element of the permanent injunction analysis in that they have succeeded on the merits. As discussed above, we have granted partial summary judgment in favor of plaintiffs on the same claims that served as the basis for the preliminary injunction. In our decision dated April 29, 2015, we found that Vizant had shown that it would “suffer irreparable harm if the injunction is denied,” that a grant of injunctive relief would “not result in even greater harm to the nonmoving party,” and “that the public interest favors such relief.” See Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir. 2004). Since that time, no new evidence has been presented by any party that would call our findings into question. Recognizing our obligation to recast our findings in the context of the standard applicable to permanent injunctions, we nonetheless conclude that the requirements for a permanent injunction have been satisfied. See Ciba-Geigy Corp., 747 F.2d at 847. Section 2.1 of the employment agreements placed certain restrictions on defendants for two years following their separation from Vizant. Specifically, during that period defendants were barred from “[e]ncourag[ing] any employee to terminate his or her employment with” Vizant, “[e]ncourag[ing] or induc[ing] any customers or suppliers” to terminate their relationships with Vizant, and “engag[ing] in any diversion of good-will regarding the business as conducted” by Vizant. Since we issued the preliminary injunction, the two-year period set forth in section 2.1 has expired. As a result, were they to engage in the conduct described in section 2.1, defendants would no longer be in breach of their contracts. However, such conduct would still amount to tortious interference under Delaware law, as described above. It is therefore appropriate to convert the preliminary injunction to a permanent injunction, notwithstanding that its basis in Vizant's breach-of-contract action has expired. Defendants assert, without support, that “the court should first order plaintiff to identify an alleged secret.” They appear to refer to Vizant's misappropriation-of- trade-secrets claim and to the assertion that some of the material retained by defendants amounts to confidential information. When we issued the preliminary injunction, we found that the cost reduction reports did contain confidential information and that the information set forth in those reports “clearly constitute[d] 'trade secrets.”' Defendants have called to our attention nothing in the record to contradict the evidence that supported those findings. In effect, without any new evidence, defendants are merely asking us to revisit the findings we made at the preliminary injunction stage. 27 We decline to do so. Plaintiffs have shown that a permanent injunction is warranted. We will convert paragraphs 4, 5, and 7 28 of our preliminary injunction of April 29, 2015 into a permanent injunction. All Citations Not Reported in F.Supp.3d, 2016 WL 97923, 2016 IER Cases 4642 Footnotes 1 The claims of breach of contract, misappropriation of trade secrets, and conversion are brought by Vizant alone against both defendants. Both plaintiffs bring the remaining counts against both defendants. 2 It also appears that there is diversity of citizenship under 28 U.S.C. § 1332(a). 2. Rule 56(c)(1) states: A party asserting that a fact cannot be or is genuinely disputed must support the assertion by...citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations..., admissions, interrogatory answers, or other materials; or...showing that the materials Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 156 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 23 cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact. Fed. R. Civ. P. 56(c)(1). 4 Defendants object to much of the factual background relied on by plaintiffs on the ground that it is taken from plaintiffs' complaint. That complaint was accompanied by a “verification” by plaintiff Bizzarro that the matters set forth therein were “true and correct to the best of [his] knowledge, information and belief.” The “verification” also contained the statement “under penalty of perjury that the foregoing statements made by me are true.” While a verified complaint may serve as part of the summary judgment record, it must be made under penalty of perjury and “based on personal knowledge.” See, e.g., Hart v. Hairston, 343 F.3d 762, 765 (5th Cir. 2003); Moran v. Selig, 447 F.3d 748, 759 n.16 (9th Cir. 2006); Lantac, Inc. v. Novell, Inc., 306 F.3d 1003, 1019 (10th Cir. 2002). “Knowledge, information and belief” statements such as the one contained in Bizzarro's verification do not establish personal knowledge. E.g., Hicks v. Baines, 593 F.3d 159, 167 (2d Cir. 2010); Boyer-Liberto v. Fontainebleau Corp., 752 F.3d 350, 355 (4th Cir. 2014), rev'd on other grounds en banc, 786 F.3d 264 (4th Cir. 2015); Doe v. Aliquippa Hosp. Ass'n, No. 93-570, 1994 WL 579843, at *3 (W.D. Pa. Sep. 29, 1994). The facts set forth herein appear elsewhere in the record and are not taken from the complaint. 5 The record contains a document signed by Whitchurch and a separate document signed by Davis. Aside from the dates and signatures, the two documents appear to be identical. 6 Black's Law Dictionary defines a “Ponzi scheme” as a fraudulent investment scheme in which money contributed by later investors generates artificially high dividends or returns for the original investors, whose example attracts even larger investors. Money from the new investors is used directly to repay or pay interest to earlier investors, usu[ally] without any operation or revenue-producing activity other than the continual raising of new funds. Ponzi scheme, Black's Law Dictionary (10th ed. 2014). 7 It is not clear whether Whitchurch sent this letter on December 5, 2013 or on December 6, 2013. 8 Defendants have objected on several occasions to plaintiffs' reliance on Yarnall's report and to his testimony, but they point to no materials in the record that would contradict his testimony. Here, we rely only on his testimony, and not on the report itself. We have previously denied defendants' requests to strike Yarnall's testimony and report. Defendants have also raised general questions about the chain of custody of their company-issued computers and electronic storage devices. Again, they have presented no evidence that this equipment was tampered with. 9 Yarnall conceded on cross-examination that the dates corresponding to the use of the devices were based upon the computer's clock. By manually changing the date on the computer, Yarnall stated, a user could change the apparent date of file removal. There is no evidence, however, that the dates were manipulated. 10 In support of their contention that they are entitled to partial summary judgment, plaintiffs cite the findings of fact and conclusions of law reached by the court in its memorandum accompanying the April 29, 2015 preliminary injunction. Such findings are not properly considered on a motion for summary judgment to the extent that those findings were based on disputed evidence or if subsequent discovery resulted in facts that could be said to call those findings into question. See Doebler's Pa. Hybrids, Inc., 442 F.3d at 820. We base our conclusions here on the record before us, and not on the findings and conclusions we reached in April 2015 insofar as those findings were based on disputed evidence. 11 We reiterate that Davis, in an email, also claimed to have “TONS AND TONS of incriminating emails” that she could use to “write a novel.” 12 Defendants urge that they did not breach their employment agreements by voicing their concerns about Vizant's financial management to its Board of Directors because they did so for Vizant's ultimate benefit. Whitchurch adds that when she emailed Vizant's officers and board members, she was “acting with good faith.” Vizant does not argue that it is entitled to summary judgment based on these communications. 13 We have previously rejected defendants' arguments that the evidence offered by plaintiffs concerning Vizant's relationship with Amtrak should not be considered here. See, e.g., Order dated Aug. 31, 2015 (Doc. # 156); Order dated Aug. 19, 2015 (Doc. # 145); Order dated Aug. 19, 2015 (Doc. # 144). 14 Defendants have insisted throughout this litigation that Vizant has not properly identified the “trade secret” giving rise to its DUTSA claim. However, Vizant has presented evidence that the information at issue falls within the relevant definition of “trade secrets,” and defendants have pointed to no record evidence to the contrary. 15 Defendants treat these two doctrines as though they are virtually interchangeable, which they are not. See, e.g., Kimberton Healthcare Consulting, Inc. v. Primary PhysicianCare, Inc., No. 11-4568, 2011 WL 6046923, at *7 (E.D. Pa. Dec. 6, 2011). Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 157 of 192 Vizant Technologies, LLC v. Whitchurch, Not Reported in F.Supp.3d (2016) 2016 IER Cases 4642 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 24 16 Unlike the preceding claims, plaintiffs' defamation claim does not “arise from the” employment agreements. See Sullivan, 33 F. App'x at 642. As a result, the choice-of-law provision contained in those agreements does not extend to the defamation claim, which we will analyze under Pennsylvania law. 17 The other categories of statements that constitute defamation per se are imputations of “loathsome disease” and “serious sexual misconduct.” Synygy, Inc., 51 F. Supp. 2d at 580. 18 Although “abuse of a conditionally privileged occasion” is technically part of a plaintiff's prima facie defamation case, a defendant bears the burden “to first establish the existence of a privileged occasion.” Wilson v. Slatalla, 970 F. Supp. 405, 418 (E.D. Pa. 1997); see also Pa. Cons. Stat. Ann. §§ 8343(a)(7), (b)(2). 19 Perjury is “[t]he act or an instance of a person's deliberately making material false or misleading statements while under oath; esp [ecially], the willful utterance of untruthful testimony under oath or affirmation, before a competent tribunal, on a point material to the adjudication.” Perjury, Black's Law Dictionary (10th ed. 2014). It is a crime under both federal and Pennsylvania law. See 18 U.S.C. § 1621; 18 Pa. Cons. Stat. Ann. § 4902. 20 As noted above, all of these statements were published on the website www.nocapitalsolutions.com, over which defendants shared control. 21 We have previously applied Delaware law to plaintiffs' tortious interference claim, and we do so again here. See Memorandum dated April 29, 2015 (Doc. # 59); Sullivan, 33 F. App'x at 642. 22 However, as noted above, defendants have identified a genuine dispute of material fact as to whether their conduct caused Tacoma Screw Products to decline to do business with Vizant. We will deny plaintiffs' motion for summary judgment on their tortious interference claim only insofar as that claim is based on the theory that defendants tortuously interfered with the prospective contractual relationship between Vizant and Tacoma Screw Products. 23 Plaintiffs cite Delaware law in discussing their abuse-of-process claim, apparently in reliance on the choice-of-law provision contained in the employment agreements. It does not appear that the abuse-of-process claim is a “tort claim[ ] aris[ing] from the [a]greement.” See Sullivan, 33 F. App'x at 642. The same is true of plaintiffs' claims for fraud (Count IX) and conspiracy (Count X). 24 Plaintiffs also cite to their complaint. As noted above, we do not consider the statements made in the complaint to be part of the record. In any event, those statements merely describe the contents of the email, which is a part of the record. 25 Defendants argue as much, noting that the “conversion claims are not independent of plaintiff's BREACH OF CONTRACT claim and the defendants' contractual obligations.” 26 In their motion, plaintiffs initially requested an award of $4,992,496.45. They subsequently revised this number on the grounds that their demand for legal fees had inadvertently been inflated and that they had accidentally neglected to include the $100,000 in exemplary damages in the total. 27 Indeed, defendants conclude their argument on this point by “request[ing] the Court reconsider the preliminary injunction.” 28 The remaining paragraphs ordered defendants to take certain steps by specific dates (which have since passed) and directed Vizant to give security in accordance with Rule 65(c) of the Federal Rules of Civil Procedure. These paragraphs are not relevant to the permanent injunctive relief sought by plaintiffs. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 158 of 192 EXHIBIT P Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 159 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2009 WL 4884204 Only the Westlaw citation is currently available. NOT FOR PUBLICATION United States District Court, E.D. Pennsylvania. Ali WARIS, Plaintiff, v. Leslie MACKEY, Sara A. Begley, Miriam Edelstein, Reed Smith LLP, Eric Kraeutler, Susanna Henderson, Morgan Lewis & Bockius, Keystone Health Plan East, Gerald Dugan, John Does 1-100, Heartland Home Care, and Paul Ormond, Defendants. Civil No. 09-1103 (RBK). | Docket Nos. 9, 15, 19, 20, 28, 30, 35. | Dec. 15, 2009. Attorneys and Law Firms Ali Waris, Newtown Square, PA, pro se. Tammy D. Cummings, Lamb McErlane, PC, West Chester, PA, Henry F. Reichner, Reed Smith, LLP, Brady L. Green, Eric Kraeutler, Susannah R. Henderson, Morgan, Lewis & Bockius, Gerald J. Dugan, John D. Brinkmann, Dugan, Brinkman, Maginnis and Page, Philadelphia, PA, for Defendants. ORDER ROBERT B. KUGLER, District Judge. *1 THIS MATTER having come before the Court upon the following motions: (1) Motion to Dismiss by Defendant Gerald Dugan (Docket No. 9); (2) Motion to Dimiss by Defendants Keystone Health Plan East, Eric Kraeutler, Susannah Henderson, and Morgan Lewis & Bockius (Docket No. 15); (3) Motion to Dismiss by Defendants Sara Begley, Miriam Edelstein, and Reed Smith (Docket No. 19); (4) Motion for Pre-Filing Injunction by Defendants Begley, Edelstein and Reed Smith (Docket No. 19); (5) Motion to Dismiss by Defendants Leslie Mackey, Paul Ormond, and Heartland Home Care (Docket No. 20); (6) Motion to File a Sur- Reply by Plaintiff Ali Waris (Docket No. 28); (7) Motion to Recuse by Plaintiff (Docket No. 30); and (8) Motion to Strike by Plaintiff (Docket No. 35); and the Court having considered the moving papers and the responses thereto; and for the reasons expressed in the Opinion issued this date; IT IS HEREBY ORDERED that the Motion to Dismiss by Defendant Gerald Dugan (Docket No. 9) is GRANTED; and it is further ORDERED that the Motion to Dismiss by Defendants Keystone Health Plan East, Eric Kraeutler, Susannah Henderson, and Morgan Lewis & Bockius (Docket No. 15) is GRANTED; and it is further ORDERED that the Motion to Dismiss by Defendants Sara Begley, Miriam Edelstein, and Reed Smith (Docket No. 19) is GRANTED; and it is further ORDERED that the Motion for Pre-Filing Injunction by Defendants Begley, Edelstein, and Reed Smith (Docket No. 19) is DENIED; and it is further ORDERED that the Motion to Dismiss by Defendants Leslie Mackey, Paul Ormond, and Heartland Home Care (Docket No. 20) is GRANTED; and it is further ORDERED that the Motion to File a Sur-Reply by Plaintiff Ali Waris (Docket No. 28) is DENIED; and it is further ORDERED that the Motion to Recuse by Plaintiff (Docket No. 30) is DENIED; and it is further ORDERED that the Motion to Strike by Plaintiff (Docket No. 35) is GRANTED; and it is further ORDERED that Plaintiff is DENIED leave to amend the Amended Complaint; and it is further ORDERED that Defendants John Does 1-100 are DISMISSED; and it is further ORDERED that this matter, Civ. No. 09-1103, is CLOSED. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 160 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 OPINION Even a casual reading of the procedural history in this dispute reveals that Plaintiff is engaged in a conscious war of attrition. It is apparently his hope that should he sue enough of the bench, the bar, and the affiliates of the original party defendants for long enough, he will one day be rewarded. What a sufficient reward would be the Court has no idea, but what the Court is clear about is that the war has waged long enough. Presently before the Court are a number of motions: 1) a Motion to Dismiss by Defendant Gerald Dugan (Docket No. 9); 2) a Motion to Dismiss by Defendants Keystone Plan East, Eric Kraeutler, Susannah Henderson, and Morgan Lewis & Bockius (Docket No. 15); 3) a Motion to Dismiss and for a Pre-Filing Injunction by Defendants Sara Begley, Miriam Edelstein, and Reed Smith LLP (Docket No. 19); 4) a Motion to Dismiss by Defendants Leslie Mackey, Paul Ormond, and Heartland Home Care; 5) a Motion to Recuse by Plaintiff Ali Waris (Docket No. 30); and 6) a Motion to Strike by Plaintiff (Docket No. 35). 1 Plaintiff has also attempted to withdraw his state law claims with a Notice of Withdrawal at Docket No. 36. Defendants have opposed that withdrawal to the extent that it is without prejudice. See Docket No. 37. *2 For the reasons discussed below, Defendants' Motions to Dismiss are granted and Plaintiff's Motion to Recuse is denied, and the Motion to Strike is granted. The Motion for Pre-Filing Injunction is denied. Finally, the Court finds that the state law claims are not withdrawn. I. BACKGROUND The background of this case is expansive and ever- growing. The parties in the present case have known each other for some time and this case represents one of at least seven 2 installments of a drama that neither the Defendants nor the Court finds entertaining. What should be noted at the outset is that Plaintiff has yet to prevail on any substantive issue before any court. Because of the voluminous history in this case, below is a considerably abridged version of the underlying events, adopted in part from this Court's Opinion in Waris v. Ormond, No. 08-5709, 2009 WL 2385891, at *1-2 (E.D.Pa. July 29, 2009). As is discussed below, the Ormond matter and the pending matter are substantially identical and arise out of the same events. Plaintiff alleges that the defendants and the attorneys who represented the defendants in HCR Manor Care, No. 07- 3344, Keystone, No. 05-12718, and Frick, No. 06-5189, engaged in misconduct during the course of the litigation. The Ormond case began on October 14, 2008, when Plaintiff filed a complaint in the Chester County Court of Common Pleas against Defendants Paul Ormond, Sara Begley, and Reed Smith LLP. The complaint contained only state law claims and related to conduct during the Manor Care case. On November 3, 2008, those defendants filed preliminary objections. On November 19, 2008, Plaintiff filed an amended complaint. Plaintiff added Defendants Lesley Mackey and Miriam Edelstein, who had been involved in the Manor Care case as attorneys for the defendant. Plaintiff also added defendants Eric Kraeutler; Susannah Henderson; Morgan Lewis & Bockius LLP; Keystone Health Plan East, Inc.; and Gerald Dugan, who had all been involved in the Keystone case and/or the Frick case. Plaintiff also added federal claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq.; the Hobbs Act, 18 U.S.C. § 1951 et seq.; and the Civil Rights Act, 42 U.S.C. § 1985. On December 9, 2008, the defendants in Ormond filed a Notice of Removal. The removed case was docketed in the Eastern District of Pennsylvania and assigned to the Honorable Michael Baylson on December 9, 2008. 3 Because Plaintiff had attempted to dismiss the federal claims in the Ormond Chester County case before it was removed, Plaintiff filed a motion to remand the matter on December 12, 2008. During the pendency of his motion to remand, Plaintiff filed a nearly identical complaint to the Ormond matter, this matter (Waris v. Mackey ), on March 12, 2009. Plaintiff later amended the complaint on April 17, 2009 such that all of the Defendants in Ormond were now also defendants in Mackey, and they faced substantially identical allegations. The Ormond matter was subsequently remanded because this Court found that Plaintiff discontinued his federal claims before the matter was removed. See Waris v. Ormond, No. 08-5709, 2009 WL 2385891 (E.D.Pa. July 29, 2009). Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 161 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 *3 Between May and December of 2009, the parties in this case filed and briefed the respective motions mentioned above. Also during this period, this Court entered an Order in Waris v. Frick, No. 06-5189, Docket Nos. 159-60 (E.D.Pa. Aug. 18, 2009), permanently enjoining Plaintiff from filing any new actions, without leave of the Court, against Gerald Dugan; Gregory Lepore; Dugan, Brinkman, Maginnis and Pace; Keystone Health Plan East, Inc.; the Board of Directors of Keystone Health Plan East, Inc.; Joseph Frick; Michael Zipfel; Anya Pollard; Eric Kraeutler; Susanna Henderson; or Morgan Lewis & Bockius. This injunction followed on the heels of the Third Circuit's opinion in Waris v. Frick in which it described Waris' litigious history against those parties as “vexatious” and in which it described his continued filing of lawsuits against the parties and their counsel as “harassing behavior.” 304 Fed. Appx. at 977. 4 It is in this context that the Court now turns to a review of the pending motions. II. DISCUSSION A. Motion to Recuse The initial motion for consideration is Plaintiffs Motion to Recuse pursuant to 28 U.S.C. §§ 144, 455(a). Docket No. 30. In his Motion, Plaintiff alleges that recusal is appropriate because Judge Scirica has an undue influence on the Court and because the Court has a possible “anti-Muslim bent of mind.” See Docket No. 30 at 14 (affidavit). As with much of Plaintiff's allegations however, he offers no factual support for these allegations, and the Court must deny the Motion. Section 144 requires recusal where the moving party files an affidavit that is “legally sufficient to support a charge of bias or prejudice.” 5 Cooney v. Booth, 262 F.Supp.2d 494, 501 (E.D.Pa.2003) (citing Mims v. Shapp, 541 F.2d 415, 417 (3d Cir.1976)), aff'd, 108 Fed. Appx. 739 (3d Cir.2004). To be “legally sufficient,” the facts must “ ‘give fair support to the charge of a bent of mind that may prevent or impede impartiality of judgment.’ ” Id. (quoting Berger v. United States, 255 U.S. 22, 33-34, 41 S.Ct. 230, 65 L.Ed. 481 (1921)). The court must accept all facts alleged in the affidavit as true, but need not accept the moving party's conclusions, conjecture, speculation or surmises. Id. Under § 455(a), “[a]ny justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” 28 U.S.C. § 455(a). Such disqualification is crucial to maintaining “ ‘the public's confidence in the judiciary, which may be irreparably harmed if a case is allowed to proceed before a judge who appears to be tainted.’ ” Alexander v. Primerica Holdings, Inc., 10 F.3d 155, 162 (3d Cir.1993) (quoting In re Sch. Asbestos Litig., 977 F.2d 764, 776 (3d Cir.1992)). Consequently, even where the judge is not “subjectively biased or prejudiced,” he must recuse himself under § 455 “so long as he appears to be so.” See Liteky v. United States, 510 U.S. 540, 553 n. 2, 114 S.Ct. 1147, 127 L.Ed.2d 474 (1994). In other words, “if a ‘reasonable man, were he to know all the circumstances, would harbor doubts about the judge's impartiality’ ... then the judge must recuse.” In re Cmty. Bank of N. Virginia, 418 F.3d 277, 320 (3d Cir.2005) (quoting United States v. Antar, 53 F.3d 568, 574 (3d Cir.1995)). *4 Although the law demands recusal both where a reasonable man would question the judge's fair mindedness and where a party files an affidavit setting forth specific allegations of partiality, Plaintiff has provided no supported facts suggesting a bias or prejudice that would merit recusal. Plaintiff generally believes that this Court is in a cabal with Judge Scirica for the purpose of supporting members of the bench and the bar to the detriment of the Plaintiff. See Docket No. 30 at 5-7. He further believes, though he does not support, that this Court is biased against Muslims simply because this Court previously sentenced the Fort Dix defendants to life sentences. See Docket No. 30 at 8. These conclusory allegations are insufficient to raise a reasonable inference of bias. Plaintiff has simply failed to provide any support such that a reasonable man, knowing all the circumstances, would harbor doubts about this Court's objectivity. Moreover, his affidavit is insufficient to support recusal because he has not attested to facts within his personal knowledge, rather he has based his affidavit on conjecture and unfounded belief. Therefore, the Court denies Plaintiff's Motion to Recuse. 6 B. Withdrawal of Claims Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 162 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 Before analysis can turn to the Motions to Dismiss, the Court must address which claims in the Amended Complaint are properly subject to the Motions. On November 30, 2009, Plaintiff entered what he captioned “Plaintiff's Notice of Withdrawal of State Claims .” Docket No. 36. All Defendants joined in a single brief opposing the withdrawal as improper under Federal Rule of Civil Procedure 41, but offered to stipulate to dismissal with prejudice. See Docket No. 37. Plaintiff responded by suggesting that this Court could not decide the matter until it addressed the pending Motion to Recuse. Docket No. 38. The Court finds that Plaintiff's attempted withdrawal of the state law claims is improper and further finds that since the parties have not stipulated to a dismissal, those claims are still validly before the Court. Though Plaintiff has not stated the procedural basis on which he asserts the “Notice of Withdrawal,” it appears that his attempt is under Federal Rule of Civil Procedure 41. Under Rule 41, the plaintiff may dismiss “an action” without a court order by filing a notice of dismissal before the opposing party serves an answer or files a motion for summary judgment, or by a stipulation of dismissal. Fed.R.Civ.P. 41(a)(1)(A)(i)-(ii). However, Rule 41 does not apply where the plaintiff attempts to dismiss individual “claims,” since Rule 41 only applies to “an action.” See ECASH Technologies, Inc. v. Guagliardo, 35 Fed. Appx. 498, 499 (9th Cir.2002); Sudnick v. Dep't of Defense, 474 F.Supp.2d 91, 95 n. 3 (D.D.C.2007); New West Urban Renewal Co. v. Viacom, Inc., 230 F.Supp.2d 568, 571 n. 4 (D.N.J.2002). The proper procedure for dismissing less than all of the claims in an action is a motion to amend under Federal Rule of Civil Procedure 15(a). New West Urban, 35 Fed. Appx. at 499; 9 Charles Allen Wright & Arthur R. Miller, Federal Practice and Procedure § 2362, at 413-14 (3d ed.2008). *5 Because Plaintiff has not sought leave to amend and because his attempted withdrawal is otherwise improper under Rule 41, Plaintiff cannot unilaterally withdraw his state law claims. Further, based on Plaintiff's response at Docket No. 38, the parties have not reached a stipulation of withdrawal. Therefore, all of the claims in the Amended Complaint are still before the Court and subject to the Motions to Dismiss. C. Motions to Dismiss The four Motions to Dismiss now pending with the Court generally allege two grounds for dismissal: the first group asserts that dismissal is proper under Federal Rule of Civil Procedure 12(b)(6) because of res judicata or claim preclusion (Docket Nos. 9, 15, 19) 7 and the second group asserts that dismissal is proper because Plaintiff has failed to state a claim (Docket Nos. 9, 19, 20). The Court agrees with both groups and will grant all of the Motions to Dismiss. 1. Res Judicata/Claim Preclusion Defendants Keystone Health Plan East, Kraeutler, Henderson, and Morgan Lewis & Bockius (the Keystone Defendants) argue that dismissal is proper because Plaintiff's claims are precluded by the summary judgment decision in Waris v. Frick, No. 06-5189, Docket No. 118 (E.D.Pa. Sept. 25, 2007), aff'd, 304 Fed. Appx. 975 (3d Cir.2008). 8 See Docket No. 15 at 11-18. Defendant Gerald Dugan also argues that dismissal is proper based on Waris v. Frick. See Docket No. 9 at 7 (citing Ormond, No. 08-5709, Docket No. 6 at 16). Similarly, Defendants Begley, Edelstein, and Reed Smith (the Reed Smith Defendants) argue that dismissal is proper because Plaintiff's claims are precluded by the summary judgment decision in Waris v. HCR Manor Care, No. 07-3344, 2009 WL 330990 (E.D.Pa. Feb.10, 2009), appeal filed, No. 09- 1904 (3d Cir. Apr. 27, 2009). See Docket No. 19 at 1. As is relevant, Plaintiff argues that res judicata is an insufficient defense because the Defendants have not demonstrated how the facts of this case satisfy the elements for such a defense. See Docket No. 23 at 13. Plaintiff also argues that res judicata does not apply to the Frick matter in particular because he could not have known at the time of filing that case that Defendants would behave inappropriately. See Docket No. 25 at 2 . 9 The Court finds that Plaintiff's claims against the Keystone Defendants and against Gerald Dugan are precluded by Frick; however, his claims against the Reed Smith Defendants are not precluded by HCR Manor Care. Res judicata, or claim preclusion, bars a subsequent suit where there has been “(1) a final judgment on the merits in a prior suit involving (2) the same claim and (3) the same parties or their privies.” Equal Employment Opportunity Comm'n v. United States Steel Corp., 921 F.2d 489, 493 (3d Cir.1990). The defense prevents litigation of grounds for recovery that were previously available, even if not Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 163 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 asserted. Brown v. Felsen, 442 U.S. 127, 131, 99 S.Ct. 2205, 60 L.Ed.2d 767 (1979). In fact, even if a plaintiff is not aware of a claim's existence at the time of the prior suit, it is nevertheless barred. See Harnett v. Billman, 800 F.2d 1308, 1313 (4th Cir.1986); Harrington v. Lauer, No. 93- 3166, 1995 WL 569619, at *4 (D.N.J. May 17, 1995). By barring re-litigation of previous grounds for recovery, res judicata “encourages reliance on judicial decisions, bars vexatious litigation, and frees the courts to resolve other disputes.” Brown, 442 U.S. at 131. a. Preclusive Effect of Waris v. Frick: Keystone Defendants *6 The Keystone Defendants argue that the present suit is barred by Waris v. Frick, Of the three elements above, elements two (same claim) and three (same parties or privies) are at issue. Since Frick has been affirmed by the Third Circuit after motions for summary judgment, it is a final judgment on the merits. See Hubicki v. ACF Indus., Inc., 484 F.2d 519, 524 (3d Cir.1973). Whether subsequent suits involve the same claim does not depend on the legal theory invoked, but rather “ ‘the essential similarity of the underlying events giving rise to the various legal claims.’ “ Elkadrawy v. Vanguard Group, Inc., 584 F.3d 169, 173 (3d Cir.2009) (quoting Davis v. U.S. Steel Supply, 688 F.2d 166, 171 (3d Cir.1982)); Lubrizol Corp. v. Exxon Corp., 929 F.2d 960, 963 (3d Cir.1991). In making this determination, the court must focus on three things: 1) “ ‘whether the acts complained of were the same,’ “ 2) “ ‘whether the material facts alleged in each suit were the same,’ “ and 3) “ ‘whether the witnesses and documentation required to prove such allegations were the same.’ “ Elkadrawy, 584 F.3d at 173 (quoting United States v. Athlone Indus., Inc., 746 F.2d 977, 984 (3d Cir.1984)). Even if the subsequent suit alleges “new and discrete” events, it is subject to res judicata: “A claim extinguished by res judicata ‘includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction or series of connected transactions, out of which the action arose.’ “ Id. (quoting Restatement (Second) of Judgments § 24(1) (1982)); see also Merritt Logan. Inc. v. Fleming Foods of Pennsylvania, Inc. ., 138 B.R. 15, 25 (E.D.Pa.1992) (citing Restatement (Second) of Judgments § 24). In considering acts that occurred over a period of time, the court should look to whether they were substantially the same and “similarly motivated.” Restatement (Second) of Judgments § 24 cmt. d. It is within this context that the Court now turns to Plaintiff's claims in Frick and in Mackey. Within the prolix allegations in the Frick Complaint, 10 the essence of the claims against the Board of Directors of Keystone Health Plan East can be equitably summarized in this way: Keystone engaged in a multi-faceted effort to unfairly deny reimbursements. See Frick, No. 06-5189, Docket No. 1 at ¶¶ 3-4. This effort included improper influence over the judiciary and abusive litigation tactics, including, inter alia, mail and wire fraud. See Frick, No. 06-5189, Docket No. 1 at ¶¶ 30, 105, 106. Notably, Plaintiff claimed that Keystone's attorney Gerald Dugan was intimately involved in the enterprise to defraud him of the value of his claim. See Frick, No. 06-5189, Docket No. 1 at ¶¶ 66-71. In sum, Plaintiff alleged that Keystone adopted “a secret scheme, artifice or plan to unlawfully reduce the property value of the litigation against [it] to their advantage and to the detriment of the Plaintiff.” See Frick, No. 06-5189, Docket No. 1 at ¶ 130. *7 In this action, Plaintiffs claim against Keystone, Dugan, and Keystone's attorneys in Frick (Kraeutler, Henderson, and Morgan Lewis) are indistinguishable. Plaintiff once again alleges that the Keystone Defendants adopted “a secret scheme, artifice or plan to unlawfully extort the property value of the litigation against to [sic] their advantage and to the detriment of the Plaintiff.” Amd. Compl. at ¶ 166. Plaintiff once again alleges a multi-faceted effort to deny him what he was owed. Amd. Compl. at 17. Plaintiff once again alleges an improper influence over the judiciary and the intimate involvement of Keystone's attorneys in that abuse. Amd. Compl. at ¶¶ 10, 14. At most, Plaintiffs Amended Complaint in this matter alleges additional events and abuses that occurred during prosecution of the Frick complaint and alleges a broader conspiracy. See Amd. Compl. at ¶¶ 119, 138, 139, 140. However, claims regarding litigation abuses during a prior suit based on essentially the same underlying acts are barred in a subsequent suit. Cf. Keith v. Aldridge, 900 F.2d 736, 740 (4th Cir.1990) (holding defendant's withholding of notes in first suit part of same transaction as second suit). Moreover, merely broadening a conspiracy claim does not make the second suit a new claim. Cf. Gambocz v. Yelencsics, 468 F.2d 837, 842 (3d Cir.1972) (barring second suit where merely added new defendants to conspiracy alleged in first suit). Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 164 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 Plaintiff cannot escape that the pursuit of this action would involve largely the same acts (e.g., denial of his initial claim and subsequent litigation abuses), the same material facts (e.g., the parties were involved in a multi-faceted conspiracy to abuse Plaintiff) and would involve the same evidence (e.g., the “edited” tapes). See Elkadrawy, 584 F.3d at 173. Merely because Plaintiff has pled a broader conspiracy and added additional purported abuses does not mean that this Amended Complaint is not barred by his complaint in Frick. See King v. Union Oil Co. of California, 117 F.3d 443, 445 (10th Cir.1997) (barring subsequent suit where suits had “a substantial overlap of related facts”); Gonzalez v. Banco Cent. Corp., 27 F.3d 751, 756 (1st Cir.1994) (“[A]ppellants' claims stem from the same series of transactions as the claims asserted in the initial litigation. Although the individual sales contracts are different, all of them arise out of a single course of conduct undertaken by a band of allied defendants.”); Gambocz, 468 F.2d at 842; see also Harnett, 800 F.2d at 1313 (holding for res judicata purposes, a plaintiff need not even be aware that a claim existed at the time of the prior suit); Harrington, 1995 WL 569619, at *4 (holding same). Therefore, this suit involves the same claim as the Frick suit. Thus, the Court must determine whether Keystone Health Plan East, Eric Kraeutler, Susannah Henderson, and Morgan Lewis & Bockius are in privity with the Board of Directors of Keystone Health Plan East. *8 Res judicata may be invoked by a non-party to a prior suit where a plaintiff has “asserted essentially the same claim against different defendants” and “there is a close or significant relationship between successive defendants.” Gambocz, 468 F.2d at 841. With businesses, their employees and attorneys are in privity with the business. See Zahran v. Frankenmuth Mut. Ins. Co., 114 F.3d 1192 (Table), 1997 WL 205381, at *3 (7th Cir. Apr.22, 1997): Henry v. Farmer City State Bank, 808 F.2d 1228, 1235 n. 6 (7th Cir.1986); see also Haefner v. N. Cornwall Twp., 40 Fed. Appx. 656, 657 n. 2 (3d Cir.2002) (finding corporation's attorney in privity with corporation). Here, Keystone East itself undoubtedly has a close or significant relationship with its own board of directors, 11 the defendant in the prior suit, and is thus in privity with them. Moreover, based on the just cited authority, Keystone's attorneys in the Frick action are also in privity with the Board of Directors. Thus, because Plaintiff's claims in this suit involve the same claims as those in Frick upon which a final judgment on the merits was reached, and because the Keystone Defendants here are in privity with the defendant in the prior suit, Plaintiff's claims against the Keystone Defendants are barred by res judicata. Therefore, the Court grants the Motion to Dismiss by Defendants Keystone Health Plan East, Eric Kraeutler, Susannah Henderson, and Morgan Lewis & Bockius as to all counts. b. Preclusive Effect of Waris v. Frick: Defendant Dugan As to Defendant Gerald Dugan, the above analysis applies with equal force. He was included as a party defendant in the prior suit, and the allegations against him here are merely re-treads of the claims against him in Frick. Compare Frick, No. 06-5189, Docket No. 1 at ¶¶ 76-107, with Amd. Compl. at ¶¶ 49-65. Those claims having been fully heard on the merits cannot be revisited now. Therefore, the Court grants the Motion to Dismiss by Defendant Gerald Dugan as to all counts. c. Preclusive Effect of Waris v. HCR Manor Care: Reed Smith Defendants Unlike the Keystone Defendants and Gerald Dugan, the Reed Smith Defendants cannot benefit from res judicata. In Waris v. HCR Manor Care, No. 07- 3344, Plaintiff's complaint largely pled employment discrimination. The motivation for that alleged act was an intent to discriminate. Alternatively here, Plaintiff alleges that the Reed Smith Defendants perpetrated a coordinated cover-up of the discrimination during the course of the HCR Manor Care litigation. See Amd. Compl. at ¶ 111. The motivation for those alleged acts was not further discrimination, but intent to cover up. Given that the two complaints allege different acts with different motivations, they cannot be said to be essentially similar. See Elkadrawy, 584 F.3d at 173. Further, while the two actions rely on many of the same material facts, compare HCR Manor Care, No. 07-3344, Docket No. 1, Ex. A at ¶¶ 10-21, with Amd. Compl. at ¶¶ 101-08, the acts complained of are different (e.g, discrimination v. cover-up) and the evidence used to prove each claim is different (e.g., pretext evidence v. proof of litigation Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 165 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 abuses). See Elkadrawy, 584 F.3d at 173. Thus, this action is not precluded by HCR Manor Care. *9 The Reed Smith Defendants' Motion, therefore, cannot be granted on preclusion grounds. 2. Failure to State a Claim Having determined the preclusive effect of the prior actions, the Court now turns to a review of the sufficiency of the claims in the Amended Complaint. Defendants Begley, Edelstein, Reed Smith, Mackey, Ormond, and Heartland Home Care all respectively assert that Plaintiff has failed to state any claim and that dismissal is appropriate under Federal Rule of Civil Procedure 12(b) (6). See Docket No. 19 at 1; Docket No. 20 at 7- 18. 12 Plaintiff generally argues that he has stated facts in support of his nine claims against the remaining Defendants. See, e.g., Docket No. 26 at 2. The Court agrees with Defendants and finds that Plaintiff has failed to sufficiently plead any of the nine claims. Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss an action for failure to state a claim upon which relief can be granted. With a motion to dismiss, “ ‘courts accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.’ “ Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009) (quoting Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir.2008)). In other words, a complaint survives a motion to dismiss if it contains sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In making this determination, a court must engage in a two part analysis. Ashcroft v. Iqbal, --- U.S. ----, ---- - ----, 129 S.Ct. 1937, 1949-50, 173 L.Ed.2d 868 (2009); Fowler, 578 F.3d at 210-11. First, the court must separate factual allegations from legal conclusions. Iqbal, 129 S.Ct. at 1949. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Second, the court must determine whether the factual allegations are sufficient to show that the plaintiff has a “plausible claim for relief.” Id. at 1950. Determining plausibility is a “context-specific task” that requires the court to “draw on its judicial experience and common sense.” Id. A complaint cannot survive where a court can only infer that a claim is merely possible rather than plausible. See id. Notably, a court is required to construe a pro se litigant's allegations “liberally.” McNeil v. United States, 508 U.S. 106, 113, 113 S.Ct. 1980, 124 L.Ed.2d 21 (1993). However, this liberal review does not mean that a pro se litigant does not have to comply with the rules of civil procedure. Id. Thus, even a pro se litigant must pled the essential elements of a claim. Smith v. Soc. Sec. Admin., 54 F Supp.2d 451, 454 (E.D.Pa.1999). With these standards in mind, the Court now examines the sufficiency of the Amended Complaint. Nine counts in all are pled against differing groupings of the remaining Defendants. 13 Those counts are: (1) Restatement (Second) of Torts § 682; (2) Civil Conspiracy to Abuse Process; (3) Negligence; (4) RICO, 18 U.S.C. § 1962(c); (5) RICO Conspiracy, 18 U.S.C. § 1962(d); (6) Hobb's Act Violation; (7) Conspiracy to Interfere with Civil Rights, 42 U.S.C. § 1985(2); (8) Conspiracy to Interfere with Civil Rights, 42 U.S.C. § 1985(3); and (9) Tortious Interference with Prospective Contractual Relations. Amd. Compl. at ¶¶ 200-253. 14 a. Count One: Restatement (Second) of Torts § 682 (Heartland Home Health Care, Leslie Mackey, Reed Smith, Sara Begley, Miriam Edelstein ) *10 Restatement (Second) of Torts § 682 states: “One who uses a legal process, whether criminal or civil, against another primarily to accomplish a purpose for which it is not designed, is subject to liability to the other for harm caused by the abuse of process.” Under Pennsylvania law, “[t]he gist of an action for abuse of process is the improper use of process after it has been issued, that is, a perversion of it.” McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1023 (Pa.1987). A “perversion” of legal process occurs when a party uses process “ ‘primarily to accomplish a purpose for which the process was not designed.’ “ Gen. Refractories Co. v. Fireman's Fund Ins. Co., 337 F.3d 297, 304 (3d Cir.2003) (quoting Dumont Television & Radio Corp. v. Franklin Elec. Co. of Phila., 397 Pa. 274, 154 A.2d 585, 587 (Pa.1959)). The purpose need not be “collateral” to the underlying dispute, rather the purpose must not be the “authorized goal” of the procedure allegedly abused. Id. at 305 (citing Werner v. Plater-Zyberk, 799 A.2d 776, 785 (Pa.Super.Ct.2002)). Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 166 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 Plaintiff's claim here fails because he has not pled sufficient facts to support an abuse of process claim. While he has pled that the Defendants engaged in improper litigation tactics “to extort the property value of Plaintiff's employment claim” and has pled many facts showing purported improper litigation tactics, see Amd. Compl. at ¶ 147(a)-(j), he did not plead any facts showing the Defendants had a purpose to extort. Extortion in and of itself would be an improper purpose for using legal process. See Matter of Larsen, 532 Pa. 326, 616 A.2d 529, 593 (Pa.1992). However, extortion is a legal conclusion, not a fact. Under Iqbal, Plaintiff's legal conclusion is insufficient to state a claim; he must plead facts supporting his legal conclusion. See 129 S.Ct. at 1949-50. He has failed to plead any facts here showing how he determined that Defendants' purpose in the prior litigation was to extort the value of his claim. Therefore, the Court grants the Motions to Dismiss by Defendants Heartland Home Health Care, Leslie Mackey, Reed Smith, Sara Begley, and Miriam Edelstein as to Count One. b. Count Two: Civil Conspiracy to Abuse Process (against Reed Smith, Begley, and Edelstein ) Because the Court finds that Plaintiff has failed to state a claim for abuse of process, Plaintiff's claim for conspiracy to abuse process cannot survive. See Pelagatti v. Cohen, 370 Pa.Super. 422, 536 A.2d 1337, 1341-42 (Pa.Super.Ct.1987) (“[A]bsent a civil cause of action for a particular act, there can be no cause of action for civil conspiracy to commit that act.”). Therefore, the Court grants the Motion to Dismiss by Defendants Reed Smith, Sara Begley, and Miriam Edelstein as to Count Two. c. Count Three: Negligence (against Paul Ormond ) In a claim for negligence, a plaintiff must establish that the defendant owed a duty to the plaintiff, the defendant breached that duty, plaintiff was injured by the breach, and the plaintiff suffered an actual loss or damage. Martin v. Evans, 551 Pa. 496, 711 A.2d 458, 461 (Pa.1998). Plaintiff alleges that Defendant Ormond owed and breached at least three duties: 1) “a duty to defend Plaintiff's claim in accordance with the laws of the land,” 2) “a duty to investigate the attorneys that his corporation was hiring to defend Plaintiff's claim against Heartland,” and 3) “a duty to monitor the developments in the case against Heartland and control the conduct of the attorneys representing Heartland.” Amd. Compl. at ¶¶ 209-11. Plaintiff seemingly alleges these duties arise because Ormond was the CEO of Heartland. See Amd. Compl. at ¶ 209. *11 However, Plaintiff has not directed the Court's attention to, nor can the Court find, any authority that holds that a corporate officer owes any of these alleged duties. Moreover, even if such a duty existed as a matter of law, Plaintiff has not plead any facts to support that Ormond breached his duties. Plaintiff's conclusory allegation that Ormond “slept at the switch” is insufficient. He must plead some fact to show that Ormond breached his duty. As the Amended Complaint exists now, he has stated a mere “the-defendant- unlawfully-harmed-me accusation.” See Iqbal, 129 S.Ct. at 1949. Therefore, the Court grants Defendant Paul Ormond's Motion to Dismiss as to Count Three. d. Count Four: RICO § 1962(c) (against Heartland Home Health iCare, Leslie Mackey, Reed Smith, Sara Begley, Miriam Edelstein ) A violation of 18 U.S.C. § 1962(c) requires “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Sedima, S.P.R.I. v. Imrex Co., 473 U.S. 479, 496 (1985); In re Ins. Brokerage Antitrust Litig., 579 F.3d 241, 269 (3d Cir.2009). A plaintiff only has standing to bring a claim if “he has been injured in his business or property by the conduct constituting the violation.” 15 Sedima, 473 U.S. at 496. The injury must be both actually and proximately caused by the defendant's violation. See Maio v. Aetna, Inc., 221 F.3d 472, 483 (3d Cir.2000). Further, “ ‘a showing of injury requires proof of a concrete financial loss and not mere injury to a valuable intangible property interest.’ ” Id. (quoting Steele v. Hosp. Corp. of Am., 36 F.3d 69, 70 (9th Cir.1994)). In this case, Plaintiff's claimed injury appears to be loss of “the property value of the litigation” he had pending against Heartland. See Amd. Compl. at ¶ ¶ 7, 214, 220. However, under RICO, the loss of an opportunity to pursue an unliquidated tort claim is not an injury to business or property. See Magnum v. Archdiocese Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 167 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 of Philadelphia, No. 06-2589, 2006 WL 3359642, at *6 (E.D.Pa. Nov.17, 2006), aff'd, 253 Fed. Appx. 224 (3d Cir.2007). Thus, Plaintiff has not suffered a cognizable injury and lacks standing to assert a RICO claim. Therefore, the Court grants the Motions to Dismiss by Defendants Heartland Home Health Care, Leslie Mackey, Reed Smith, Sara Begley, and Miriam Edelstein as to Count Four. 16 e. Count Five: RICO Conspiracy § 1962(d) (against Heartland Home Health Care, Leslie Mackey, Reed Smith, Sara Begley, Miriam Edelstein ) Under 18 U.S.C. § 1962(d), it is “unlawful for any person to conspire to violate any of the provisions of [section 1962].” Because Plaintiff lacks standing to bring a claim under § 1962(c), he cannot sustain a claim under § 1962(d). See Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1191 (3d Cir.1993) (“Any claim under section 1962(d) based on a conspiracy to violate the other subsections of section 1962 necessarily must fail if the substantive claims are themselves deficient.”). *12 Therefore, the Court grants the Motions to Dismiss by Defendants Heartland Home Health Care, Leslie Mackey, Reed Smith, Sara Begley, and Miriam Edelstein as to Count Five. f. Count Six: Hobb's Act (against Heartland Home Health Care, Paul Ormond, Leslie Mackey, Reed Smith, Sara Begley, Miriam Edelstein ) Plaintiff's claim for relief in Count Six for violation of the Hobb's Act, 18 U.S.C. § 1951, must be dismissed because no private right of action exists under the Act. See Waris v. Frick, No. 06-5189, 2007 WL 954108, at *5 (E.D.Pa. Mar.28, 2007) (citing cases). Therefore, the Court grants the Motions to Dismiss by Defendants Heartland Home Health Care, Paul Ormond, Leslie Mackey, Reed Smith, Sara Begley, and Miriam Edelstein as to Count Six. g. Count Seven: Conspiracy to Interfere with Civil Rights, 42 U.S.C. § 1985(2) (against Heartland Home Health Care, Leslie Mackey, Reed Smith, Sara Begley, Miriam Edelstein ) Section 1985(2) “prohibits conspiracies to prevent witnesses from testifying in court, injuring witnesses who have testified, or attempting to influence or injure grand or petit jurors.” Guarrasi v. Gibbons, No. 07-5475, 2008 U.S. Dist. LEXIS 81632, at *29 n. 11, 2008 WL 4601903 (3d Cir. Oct. 15, 2008). The elements for a claim under § 1985(2) are “(1) a conspiracy, (2) to deter testimony by force or intimidation, and (3) injury to the plaintiff.” Brever v. Rockwell Int'l Corp., 40 F.3d 1119, 1126 (10th Cir.1994); see also Malley-Duff & Assocs., Inc. v. Crown Life Ins. Co., 792 F.2d 341, 356 (3d Cir.1986). In Count Seven, Plaintiff alleges “[t]he named Defendants, using their proximity to the court, (1) conspired with Keystone and other Conspirators to intimidate and (2) deter Plaintiff from properly prosecuting his federal claims and testifying in court against the Defendants and (3) as a result Plaintiff was injured.” Amd. Cmpl. at ¶ 242. While Plaintiff has pled the bare legal elements of a § 1985(2) claim, he has not pled sufficient facts to support it. For example, he does not plead even a single instance where he (or any other witness) was deterred from giving testimony. Further, while he alleges that the Defendants were in a conspiracy together, he has not plead any facts evidencing that conspiracy. See Black & Yates v. Mahogany Ass'n, 129 F.2d 227, 231 (3d Cir.1941) (“A general allegation of conspiracy without a statement of the facts is an allegation of a legal conclusion and insufficient of itself to constitute a cause of action.”). Without such factual allegations, the rote pleading of “conspiracy” is insufficient to state a claim. See Twombly, 550 U.S. at 556 (dismissing complaint alleging conspiracy where not enough factual allegations to show an agreement was made). Therefore, the Court grants the Motions to Dismiss by Defendants Heartland Home Health Care, Leslie Mackey, Reed Smith, Sara Begley, and Miriam Edelstein as to Count Seven. h. Count Eight: Conspiracy to Interference with Civil Rights, 42 U.S.C. § 1985(3) (against Heartland Home Health Care, Paul Ormond, Leslie Mackey, Reed Smith, Sara Begley, Miriam Edelstein ) *13 Section 1985(3) provides a cause of action for a plaintiff injured by a conspiracy formed “ ‘for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws.’ ” Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 168 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 Guarrasi, 2008 U.S. Dist. LEXIS 81632, at *28, 2008 WL 4601903. To state a claim for violation of § 1985(3), a plaintiff must allege and prove four elements: “(1) a conspiracy; (2) for the purpose or depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or equal privileges and immunities under the laws; and (3) an act in furtherance of the conspiracy; (4) whereby a person is either injured in his person or property or deprived of any right or privilege of a citizen of the United States.” United Bhd. of Carpenters & Joiners of Am., Local 610, AFL-CIO v. Scott, 463 U.S. 825, 828-29, 103 S.Ct. 3352, 77 L.Ed.2d 1049 (1983). Section 1985(3) does not create any substantive rights; rather, it is a mechanism for enforcing federal rights and privileges “defined elsewhere.” Brown v. Phillip Morris Inc., 250 F.3d 789, 805 (3d Cir.2001). With an action against private conspirators, the Supreme Court has only recognized two rights protected by § 1985(3): the right to be free from involuntary servitude and the right to interstate travel. Id. Plaintiff has not sufficiently pled a claim under § 1985(3). As discussed with the § 1985(2) claim, he has insufficiently pled a conspiracy. Furthermore, the rights Plaintiff complains he was deprived of are “equal protection of the law and of equal privileges and immunities under the law.” Amd. Compl. at ¶ 245. Thus, he has not pled a violation of either of the rights protected against private conspirators: protection from involuntary servitude or the right to interstate travel. Therefore, the Court grants the Motions to Dismiss by Heartland Home Health Care, Paul Ormond, Leslie Mackey, Reed Smith, Sara Begley, and Miriam Edelstein as to Count Eight. i. Count Nine: Tortious Interference with Prospective Contractual Relations (against Sara Begley and Reed Smith ) The elements for a claim for tortious interference with prospective contractual relations are “(1) a prospective contractual relation; (2) the purpose or intent to harm the plaintiff by preventing the relation from occurring; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual damage resulting from the defendant's conduct.” Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466, 471 (Pa.1979). A prospective contract is “something less than a contractual right, something more than a mere hope.” Id. The test for prospective contracts is an objective one. See id. The contract must be reasonably likely or probable. See id. (quoting Glenn Point Park Coll., 441 Pa. 474, 272 A.2d 895, 898-99 (Pa.1971)). Plaintiff's claim for tortious interference fails for at least two reasons. First, he has not pled sufficient facts to show that he had a prospective contractual relation. At best, he has pled that he made an offer of settlement to Heartland through Reed Smith. Amd. Compl. at ¶ 114(O). He has not pled any fact to show that the prospect of Heartland entering into the agreement was reasonably likely or probable. As it is pled now, the offer was his mere hope. Second, he has not pled facts to support that Defendants Begley and Reed Smith had a purpose or intent to harm Plaintiff. He has pled a mere conclusory allegation that Reed Smith “[i]n all likelihood [ ] failed to communicate [the offer] to the client,” seemingly for the purpose of increasing its bill. Amd. Compl. at ¶ 114(O). Without support, this allegation is insufficient to satisfy the required second element of a tortious interference claim. *14 Therefore, the Court grants the Motion to Dismiss by Defendants Begley and Reed Smith as to Count Nine. 3. Leave to Amend Having dismissed each count of the Amended Complaint, the Court must now address whether to grant leave to amend. Where a complaint is dismissed for failure to state a claim, leave to amend should normally be granted. Shane v. Fauver, 213 F.3d 113, 115 (3d Cir.2000). However, the rule is not absolute: Leave to amend is inappropriate where it would cause undue delay, the amendment is motivated by bad faith or a dilatory motive, the amendment would cause prejudice, or the amendment is futile. In re Burlington Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir.1997). The Court finds that leave to amend should not be granted here because this entire action was motivated by bad faith. Plaintiff's motivation for filing this action was that he was unsatisfied with the pace at which Judge Baylson was deciding the Ormond matter. In Plaintiff's own words: “When Judge Baylson stalled Plaintiff's Motion to Remand [08-5709] for over 4 months, Plaintiff filed the instant case.” Docket No. 23 at 10. Plaintiff's purpose to avoid a judge with whom he is dissatisfied is not a good faith basis for filing a second, nearly identical Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 169 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 action. To permit Plaintiff to further pursue his claims in this action would encourage any litigant dissatisfied with the presiding judge to simply re-file. This cannot be countenanced. This is not a good faith basis for filing a suit, regardless of the potential merits of the inadequately pled claims. Therefore, the Court denies Plaintiff leave to amend the Amended Complaint. D. Motion for a Pre-Filing Injunction Defendants Begley, Edelstein, and Reed Smith filed a Motion for a Pre-Filing Injunction, seeking that Plaintiff be enjoined from filing any new action or motion against any Defendant named in the current action. Docket No. 19. The Court is not clear that these three Defendants can seek an injunction for the protection of all Defendants, thus the Court will limit its review here to just Begley, Edelstein, and Reed Smith. The Court finds that a pre- filing injunction is not appropriate as to these Defendants. Pursuant to the All Writs Act, 28 U.S.C. § 1651(a), a district court may enter a pre-filing injunction “to preclude abusive, groundless and vexatious litigation.” Brow v. Farrelly, 994 F.2d 1027, 1038 (3d Cir.1993). However, “the District Court should not restrict a litigant from filing claims absent exigent circumstances, such as a litigant's continuous abuse of the judicial process by filing meritless and repetitive actions.” Id. Moreover, “[i]f the circumstances warrant the imposition of an injunction, the District Court must give notice to the litigant to show cause why the proposed injunctive relief should not issue.” Id. Finally, “the scope of the injunctive order must be narrowly tailored to fit the particular circumstances of the case before the District Court.” Id. *15 While Plaintiff has no doubt repeatedly filed against Heartland Home Care, he has only filed suit twice against Defendants Begley, Edelstein and Reed Smith: the Ormond action and this one. Neither of these filings have determined the merits of the underlying claims, at least not that the Court is aware of. 17 The dismissal here is for failure to state a claim, not a review of the claims against available evidence. This is unlike the summary judgment motions in Waris v. Frick where the Judge Katz reviewed Plaintiff's claims and found them unsustainable in light of the evidence before the court. See Waris v. Frick, No. 06-5189, Docket Nos. 118, 119 (E.D.Pa. Aug. 25, 2007). A determination that a party's multiple filings are meritless seems an a priori condition to granting a pre-filing injunction, at least where the exigent circumstances for seeking the injunction are abuse of the judicial process. Cf. Brow, 994 F.2d at 1038 (holding exigent circumstances exist where party abuses process by filing “meritless and repetitive actions”); In re Oliver, 682 F.2d 443, 445 (3d Cir.1982) (holding All Writs Act permits injunction restricting filing of “meritless cases”); Matter of Packer Avenue Assocs., 884 F.2d 745, 746 (3d Cir.1989) (citing Oliver and holding same). This is not to suggest that a pre-filing injunction is only appropriate where a party has lost at summary judgment or trial, but it is to suggest that the first dismissal on a pleading deficiency, for example, does not make that dismissal proof of meritless filings. However, should Plaintiff file identical claims (or claims subject to preclusion) in a new action, revisiting the pre-filing injunction as to the Reed Smith Defendants would be quite appropriate. As it stands now, the Court is not convinced that a pre-filing injunction is warranted as to Defendants Begley, Edelstein, and Reed Smith. Therefore, the Court denies the Motion for Pre-Filing Injunction by Defendants Begley, Edelstein, and Reed Smith.. E. John Does 1-100 Finally, the Amended Complaint lists as defendants, John Does 1-100, but does not state any claims against them in any count. Under Federal Rule of Civil Procedure 21, “the court may at any time, on just terms, add or drop a party.” A court may drop John Doe defendants under this rule. See Blakeslee v. Clinton County, 336 Fed. Appx. 248, 250 (3d Cir.2009). Because Plaintiff has failed to state any claims against the John Doe defendants, the Court dismisses them. See Silverstein v. Percudani, 422 F.Supp.2d 468, 473 n. 3 (M.D.Pa.2006) (dismissing John Doe defendants sua sponte where plaintiffs advanced no claims against them), aff'd, 207 Fed. Appx. 238 (3d Cir.2006). III. CONCLUSION For the foregoing reasons, the Court DENIES Plaintiff's Motion to Recuse (Docket No. 30). To the extent that it is a motion, the Court DENIES Plaintiff's Motion to File a Sur-Reply (Docket No. 28). The Court GRANTS Plaintiff's Motion to Strike (Docket No. 35). The Court GRANTS the Motion to Dismiss by Defendant Gerald Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 170 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 12 Dugan (Docket No. 9). The Court GRANTS the Motion to Dismiss by Defendants Keystone Health Plan East, Eric Kraeutler, Susannah Henderson, and Morgan Lewis & Bockius (Docket No. 15). The Court GRANTS the Motion to Dismiss by Defendants Sara Begley, Miriam Edelstein, and Reed Smith (Docket No. 19). The Court GRANTS the Motion to Dismiss by Defendants Leslie Mackey, Paul Ormond, and Heartland Home Care (Docket No. 20). The Court DENIES Plaintiff leave to amend the Amended Complaint. The Court DENIES the Motion for a Pre-Filing Injunction by Defendants Begley, Edelstein, and Reed Smith (Docket No. 19). Finally, the Court DISMISSES Defendants John Does 1-100. All Citations Not Reported in F.Supp.2d, 2009 WL 4884204 Footnotes 1 Plaintiff also filed a motion captioned as “Omnibus Motion to Address Defendants' Arguments and Summarize Response Thereto.” Docket No. 28. The “motion” however is really just a sur-reply to Defendants' pending motions. Thus, to the extent the entry at 28 is to be construed as a motion, it is a motion for leave to file an additional brief under Local Civil Rule 7.1(c), and the motion is DENIED. 2 (1) See Waris v. Keystone Health Plan East, No. 05-12718 (Delaware Cty. C.P.2005), aff'd, 972 A.2d 571 (Pa.Super.Ct.2009); (2) Waris v. Frick, No. 06-5189, Docket Nos. 118, 119, 120 (E.D.Pa. Sept. 25, 2007), aff'd, 304 Fed. Appx. 975 (3d Cir.2008); (3) Waris v. HCR Manor Care, No. 07-3344, 2009 WL 330990 (E.D.Pa. Feb.10, 2007), on appeal to, No. 09-1904 (3d Cir. Apr. 27, 2009); (4) In re Waris, 324 Fed. Appx. 156 (3d Cir.2009); (5) Waris v. Ormond, No. 08-5709 (E.D.Pa.2008), on remand to, No. 08-11441 (Chester Cty. C.P.2008); (6) Waris v. Heartland Home Health Services, Inc., No. 09-0297 (E.D.Pa.2009), on remand to, No. 08-14190 (Chester Cty. C.P.2008). 3 Judge Baylson later recused himself and the Ormond matter was re-assigned to this Court. 4 Notwithstanding this admonition from the Third Circuit, none of the Defendants here sought sanctions under Rule 11(b)(1). 5 More expansively, section 144 provides for recusal “[w]henever a party to any proceeding in a district court makes and files a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party.” 28 U.S.C. § 144. 6 Related to the Motion to Recuse, Plaintiff filed a Motion to Strike under Local Civil Rule 7.1(c). Docket No. 35. Plaintiff seeks to strike the response to the Motion to Recuse by Defendants Keystone Health Plan East, Eric Kraeutler, Susanna Henderson, Heartland Home Health Services, Leslie Mackey, and Paul Ormond as being untimely filed. Local Civil Rule 7.1(c) requires a response to a motion to be filed within 14 days after service of the motion. Plaintiff filed and served the Motion to Recuse on August 27, 2009. Docket No. 30; Docket No. 35. The above referenced Defendants filed a response on September 18, 2009, approximately one week late. Docket Nos. 33, 34. Under the Local Rules, this response was untimely. As a matter of consequence, striking the response has no effect on the above recusal analysis. As a matter of procedure, the motion to strike is proper and is GRANTED. 7 Defendant Gerald Dugan's Motion incorporates by reference his Motion to Dismiss in Ormond. See Docket No. 9 at 7 (citing Ormond, No. 08-5709, Docket No. 6). In the Ormond Motion, Defendant Dugan asserts the preclusive effect of Waris v. Frick. See Ormond, No. 08-5709, Docket No. 6 at 16. Thus, that defense is properly before this Court. See Buck v. Hampton Twp. Sch. Dist. ., 452 F.3d 256, 260 (3d Cir.2006) (holding court may consider in motion to dismiss “ ‘matters incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, [and] items appearing in the record of the case’ ” (quoting 5B Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed.2004))). Even if the preclusion defense were not properly before the Court, for the reasons discussed below, dismissal would also be appropriate as to Defendant Dugan because of Plaintiff's failure to state a claim. 8 Many of the Defendants argued that the Mackey action should be stayed or dismissed based on Plaintiff's identical claims in Ormond, then pending in the Eastern District at the time of the motions. See, e.g., Docket No. 20 at 5. However, because the Court remanded the Ormond action in the interim and it is still seemingly pending, staying or dismissing this action on the basis of its sister case is not warranted. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 171 of 192 Waris v. Mackey, Not Reported in F.Supp.2d (2009) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 13 9 Plaintiff also argues that res judicata cannot be raised on a motion to dismiss because it is an affirmative defense. See Docket No. 23 at 13. This argument is meritless. See Connelly Found. v. Sch. Dist. of Haverford Twp., 461 F.2d 495, 496 (3d Cir.1972). 10 Numbering 38 pages and in excess of 202 paragraphs. See Frick, No. 06-5189, Docket No. 1. 11 Assuming that a company's board of directors is even a separate legal entity from the company itself. 12 Defendant Dugan also argues that Plaintiff has failed to state a claim. See Docket No. 9 at 8. Since his Motion is granted on preclusion grounds, his arguments regarding the sufficiency of the Amended Complaint are not addressed here. Nevertheless, his Motion could also have been granted for failure to state a claim. 13 Where appropriate below, the Court has noted against whom the counts are alleged. As an aside, Plaintiff has pled claims against Sara Begley and Miriam Edelstein in their personal and professional capacities. See Amd. Compl. at ¶ 26(E)-(H). Assuming that such a distinction carries any meaning here, the discussion below relates to the claims against them in both capacities. 14 What is perhaps noticeably absent from the discussion of this case so far is a detailed recounting of the specific allegations in the Amended Complaint. The Court's omission on this point is purposive. The Amended Complaint and supporting briefs are rife with unsubstantiated shadow conspiracies and vitriol that are unworthy of republication. In fact, were the Court convinced that the Amended Complaint could survive a motion dismiss, the Court would feel compelled to exercise its authority under Rule 12 to strike the legion spurious and scandalous allegations. See Fed.R.Civ.P. 12(f)(1). 15 Standing for a civil RICO claim is viewed as a question under Rule 12(b)(6), rather than as a question of jurisdiction under Rule 12(b)(1). See Anderson v. Ayling, 396 F.3d 265, 269 (3d Cir.2005). 16 The Court also harbors doubt about whether the Amended Complaint contains sufficient non-conclusory allegations of a RICO enterprise vis-a-vis the alleged “Arlen Specter RICO Enterprise.” See United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981) (defining enterprise as “a group of persons associated together for a common purpose of engaging in a course of conduct”). 17 The parties have not discussed the status of the Ormond case on remand. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 172 of 192 EXHIBIT Q Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 173 of 192 Williams v. Borough of Olyphant, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2016 WL 595394 Only the Westlaw citation is currently available. United States District Court, M.D. Pennsylvania. Chelsea Williams and Nicholas Williams, Plaintiffs, v. Borough of Olyphant, et al., Defendants. 3:13-CV-02945 | Filed 02/12/2016 Attorneys and Law Firms Harry T. Coleman, Law Office of Harry Coleman, Carbondale, PA, for Plaintiffs. Michael Zicolello, Schemery & Zicolello, Williamsport, PA, Paul Gregory Lees, Marshall, Dennehey, Warner, Coleman & Goggin, Allentown, PA, for Defendants. MEMORANDUM OPINION Robert D. Mariani, United States District Judge I. INTRODUCTION *1 On December 9,2013, Plaintiffs Chelsea Williams and Nicholas J. Williams filed a Complaint against Defendants John Gilgallon, Dean Argenta, and the Borough of Olyphant (“Olyphant Defendants”). (Doc. 1). Plaintiffs filed an Amended Complaint on March 14, 2014 against the Olyphant Defendants, also adding as defendants Officer Katie Fallon, Officer Mackey, and the Borough of Dickson City. (Doc. 10). Upon consideration of a Motion to Dismiss the Amended Complaint filed by the Olyphant Defendants (Doc. 17), a Motion to Dismiss the Amended Complaint filed by Dickson City (Doc, 29), and related briefs, United States Magistrate Judge Carlson issued a Report and Recommendation of February 24, 2015 (Doc, 46). The Court adopted the Report and Recommendation by way of Order dated March 30, 2015 (Doc. 48). Relevant to this Opinion, the Court dismissed Counts XIII and XIV of Plaintiffs' Amended Complaint with leave to amend, (see Doc. 48), because they alleged federal common law abuse of process claims though no such federal common law claim exists, (see Doc. 46 at 6, n.1). Plaintiffs filed a Second Amended Complaint on April 13, 2015 (Doc. 49). On April 29, 2015, the Olyphant Defendants 1 filed a Motion to Dismiss Count IX, and only Count IX, of the Second Amended Complaint (Doc. 54). Count IX is stylized as “Abuse of Process (State)” by “Chelsea Williams v. Defendants.” (Doc. 49 at 28). Defendant's Motion (Doc. 54) has been fully briefed and is ripe for decision. For the reasons set forth below, the Court will grant the Motion to Dismiss (Doc. 54) with respect to the Borough of Olyphant and dismiss Count IX with prejudice. The Court will grant the Motion with respect to Defendant Argenta with leave to amend to allege a claim for malicious prosecution. II. FACTUAL ALLEGATIONS Because the Court writes primarily for the parties, who are at this point in the litigation well versed in the factual averments made by Plaintiffs, the Court will only briefly summarize the relevant allegations. After Plaintiffs' wedding and reception on June 23, 2012, Plaintiffs and other family members arrived at the home of Plaintiff Chelsea Williams' sister on Susquehanna Avenue in Olyphant. (Doc. 49 at ¶¶ 13, 18-25). A family dispute arose at the house, prompting a neighbor to contact the police. (Id. at ¶ 26). Defendant Argenta, an officer of the Olyphant Police Department, was the first officer to arrive on scene. (Id. at ¶¶ 27-28). According to the Second Amended Complaint, Defendant Argenta made no inquiry as to what had occurred, instead approaching Plaintiff Nicholas Williams and hitting him “with his police baton in the left leg area.” (Id. at ¶¶ 31-32). Plaintiffs further allege that Defendant Argenta shouted profanities at Plaintiff Nicholas Williams, dragged him from a vehicle, slammed him against a car, and handcuffed him. (Id. at ¶¶ 34-36). While handcuffed, Plaintiff Nicholas Williams alleges that he was subjected to further taunting and beating by Defendant Argenta, and was then tasered by either Defendant Argenta, or by one of the two Dickson City police officers who had arrived on the scene, Defendants Fallon and Mackey. (Id. at ¶¶ 29, 37-42). *2 While attempting to prevent further assault to her husband, Plaintiff Chelsea Williams alleges that she was thrown from the area where she was standing by Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 174 of 192 Williams v. Borough of Olyphant, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 Defendant Argenta. (Doc. 49 at ¶¶ 50-51). When she then kneeled down to assist her husband, it is alleged that Defendant Argenta threw her into a nearby bush. (Id. at ¶ 52). When she emerged from the bush, she was restrained by her sister. (Id. at ¶¶ 53-54). Defendant Argenta allegedly approached her, grabbed her from her sister, stating “you want some of this too” and slamming her against a police car. (Id. at 54). The top of Plaintiff Chelsea Williams' wedding dress had fallen down and Defendant Argenta allegedly refused to allow her to fix it, ordering her not to move; when she attempted to fix her dress, she alleges that she was tasered by either Defendant Argenta or Defendants Fallon and Mackey. (Id. at ¶ 55). The Second Amended Complaint further alleges that, when another officer attempted to intervene on behalf of Plaintiff Chelsea Williams to prevent her arrest, noting that she had done nothing wrong and that it was her wedding day, Defendant Argenta stated, “no she's fucking going,” and that she was then transported to the Olyphant Police Department headquarters for booking. (Id. at ¶¶ 56-58). At the police department, she alleges that she passed a breathalyzer test with a score of 0.00. (Doc. 49 at ¶ 59). During later transport to the City of Scranton, Defendant Argenta is alleged to have further taunted her by chanting the wedding march. (Id. at ¶ 63). According to the Complaint, Plaintiff Chelsea Williams was held at the Lackawanna County Courthouse overnight and was charged by Defendant Argenta with disorderly conduct, resisting arrest, and obstruction of law enforcement activities under the Pennsylvania Crimes Code. (Id. at ¶ 64-65). Defendant Argenta later withdrew the criminal charges on August 14, 2012. (Id. at ¶ 69). Plaintiff Chelsea Williams was pregnant at the time of her June arrest, and, upon experiencing abnormal bleeding and reporting to an emergency room the day after the arrest, was informed by medical personnel that she had miscarried. (Id. at ¶¶ 71-74). III. STANDARD OF REVIEW A complaint must be dismissed under Federal Rule of Civil Procedure 12(b)(6), if it does not allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The plaintiff must aver “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Though a complaint 'does not need detailed factual allegations,... a formulaic recitation of the elements of a cause of action will not do.”' DelRio-Mocci v. Connolly Prop, Inc., 672 F.3d 241, 245 (3d Cir. 2012) (citing Twombly, 550 U.S. at 555). In other words, “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Covington v. Int'l Ass'n of Approved Basketball Officials, 710 F.3d 114, 118 (3d Cir. 2013) (internal citations and quotation marks omitted). A court “take[s] as true all the factual allegations in the Complaint and the reasonable inferences that can be drawn from those facts, but ... disregard[s] legal conclusions and threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Ethypharm S.A. France v. Abbott Laboratories, 707 F.3d 223, 231, n.14 (3d Cir. 2013) (internal citations and quotation marks omitted). Twombly and Iqbal require [a district court] to take the following three steps to determine the sufficiency of a complaint: First, the court must take note of the elements a plaintiff must plead to state a claim. Second, the court should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Finally, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief. Connelly v. Steel Valley Sch. Dist, 706 F,3d 209, 212 (3d Cir. 2013). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not show [n]-that the pleader is entitled to relief.” Iqbal, 556 U.S. at 679 (internal citations and quotation marks omitted). This “plausibility” determination will be a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 175 of 192 Williams v. Borough of Olyphant, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 *3 However, even “if a complaint is subject to Rule 12(b)(6) dismissal, a district court must permit a curative amendment unless such an amendment would be inequitable or futile.” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 245 (3d Cir. 2008). [E]ven when plaintiff does not seek leave to amend his complaint after a defendant moves to dismiss it, unless the district court finds that amendment would be inequitable or futile, the court must inform the plaintiff that he or she has leave to amend the complaint within a set period of time. Id. IV. ANALYSIS Defendants argue that the Plaintiffs' abuse of process claim in Count IX should be dismissed as to the remaining two Olyphant Defendants, Dean Argenta and the Borough of Olyphant. With respect to the Borough, Defendants' argue that the Count should be dismissed because the Borough is not liable for the alleged intentional tort of Defendant Argenta under the Pennsylvania Political Subdivision Tort Claims Act, 42 Pa. Cons. Stat. Ann. § 8541, et seq. (Brief in Support of Motion to Dismiss, Doc. 55 at 5-6). Plaintiffs “concede[ ] that the Motion to Dismiss of the Borough of Olyphant relative to the abuse of process claim should be granted.” (Brief in Opposition to Motion to Dismiss, Doc. 56 at 12). The Court agrees that the Borough of Olyphant may not be held liable for Defendant Argenta's alleged intentional tort of abuse of process and will therefore dismiss this count with prejudice as to the Borough of Olyphant. The Court will now consider the Olyphant Defendants' challenge to Count IX as it pertains to Defendant Argenta. “The tort of 'abuse of process' is defined as the use of legal process against another 'primarily to accomplish a purpose for which it is not designed.”' Rosen v. Am. Bank of Rolla, 627 A.2d 190, 192 (Pa. Super. Ct. 1993) (quoting Restatement (Second) of Torts, § 682). The gravamen of the misconduct for which the liability stated [under this tort] is imposed is not the wrongful procurement of legal process or the wrongful initiation of criminal or civil proceedings; it is the misuse of process, no matter how properly obtained, for any purpose other than that which it was designed to accomplish. Id. (quoting Restatement (Second) of Torts, § 682, cmt. a) (emphasis added). To succeed on an abuse of process claim, the plaintiff must show some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process ... ; and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions. Lernerv. Lerner, 954 A.2d 1229, 1238 (Pa. Super. Ct. 2008) (quoting Shiner v. Moriarty, 706 A.2d 1228, 1236 (Pa. Super. Ct. 1998)) (internal alterations omitted). When read as a whole, the portions of the Second Amended Complaint pertaining to Plaintiff Chelsea Williams focus on the allegations that Defendant Argenta used excessive force in his interactions with her, that he wrongfully initiated criminal charges against her, and that these events caused her physical and emotional harm, It is in that context that the Court reads her abuse of process claim, which, after realleging all previous allegations, reads in its entirety: *4 114. Defendant Argenta used criminal legal process against the Plaintiff Chelsea Williams resulting in her arrest. 115. Defendant Argenta's purpose in using such legal process was primarily to accomplish a purpose for which it was not designed. Specifically, the filing of the criminal charges here were merely a tool to mask the conduct of Argenta on June 23, 2012 and designed to intimidate the Plaintiff Chelsea Williams. There was no conduct by the Plaintiff Chelsea Williams on June 23, 2012 that would evenly remotely approach criminal conduct. The later withdrawal of all charges against Mrs. Williams confirms this fact. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 176 of 192 Williams v. Borough of Olyphant, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 116. The use of such legal process proximately caused damage to Plaintiff Chelsea Williams. (Doc. 49 at ¶¶ 114-16). Plaintiff Chelsea Williams appears to confuse two separate and distinct actions; abuse of process and malicious use of process. The crux of an abuse of process claim is the “improper use of process after it has been issued, that is, a perversion of it,” McGee v. Feege, 517 Pa. 247, 535 A.2d 1020, 1023 (Pa. 1987) (citations omitted). Under Pennsylvania law, “abuse of process” and “malicious use of process” are similar to, but ultimately distinct from one another. Kauffman v. Barhagello, No. 1:13-cv-00659, 2013 WL 6388487, at *14 (Dec. 5, 2013 M.D. Pa. 2013). As the Supreme Court of Pennsylvania characterized the two torts: The gist of an action for abuse of process is the improper use of process after it has been issued, that is, a perversion of it: Mayer v. Walter, 64 Pa. 283; Annotation, 80 A.L.R. 581. “An abuse is where the party employs it for some unlawful object, not the purpose which it is intended by the law to effect; in other words, a perversion of it ... On the other hand, legal process, civil or criminal, may be maliciously used so as to give rise to a cause of action where no object is contemplated ... other than its proper effect and execution”; Mayer v. Walter, supra, p. 285; Johnson v. Land Title B. & T. Co., 329 Pa. 241, 241, 242,198 A. 23. McGee v. Feege, 535 A.2d 1020, 1023 (Pa. 1987) (citing Publix Drug Co. v. Breyer Ice Cream Co., 32 A.2d 414, 415 (Pa. 1943)) (emphasis added). The allegations of Plaintiff Chelsea Williams contained in the Second Amended Complaint appear to better fit the tort of malicious criminal prosecution; they do not appear to involve process being perverted in some unlawful way, as required to state a claim for the tort of abuse of process, but simply allege that criminal process was initiated for malicious or unlawful purposes. A malicious prosecution claim under Pennsylvania law requires proof that the defendant “instituted proceedings against the plaintiff (1) without probable cause, (2) with malice, and (3) the proceedings must have terminated in favor of the plaintiff.” Kelley v. Gen. Teamsters, Chauffeurs, and Helpers, Local Union 249, 544 A.2d 940, 941 (Pa, 1988), Here, Plaintiffs' believe that Chelsea Williams has stated a claim for abuse of process “because Argenta initiated criminal proceedings against [her] without probable cause,” (Doc, 56 at 11) (emphasis added), reciting a specific element from a different tort. Along these same lines Plaintiffs further argue that Argenta did so “solely to mask his constitutionally improper conduct in the use of excessive force against both Nicholas Williams and Chelsea Williams.” (Id.). Thus, Plaintiff Chelsea Williams' claim is based on the alleged wrongful initiation of criminal proceedings against her by Defendant Argenta, not on the perversion of a legal process already underway. *5 Plaintiff Chelsea Williams cannot sustain a claim for abuse of process and the Court will dismiss this Count with prejudice. These allegations, while insufficient for the tort of abuse of process, do state a cause of action for malicious criminal prosecution. Plaintiffs will be granted time to amend their Complaint to recast their allegations as a cause of action for malicious prosecution against Defendant Argenta with respect to Chelsea Williams, should the Plaintiffs so wish. V. CONCLUSION For the foregoing reasons, the Court will grant the Motion to Dismiss (Doc. 54) with respect to the Borough of Olyphant and dismiss Count IX with prejudice. The Court will grant the Motion with respect to Defendant Argenta and dismiss Count IX with leave to amend to allege a claim for malicious prosecution. A separate Order follows. All Citations Slip Copy, 2016 WL 595394 Footnotes 1 By way of previous Order, this Court dismissed Defendant John Gilgallon from the action. (Doc. 48 at 1). As such, the remaining Olyphant Defendants are Dean Argenta and the Borough of Olyphant. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 177 of 192 Williams v. Borough of Olyphant, Slip Copy (2016) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 178 of 192 EXHIBIT R Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 179 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2013 WL 12142353 Only the Westlaw citation is currently available. United States District Court, W.D. Pennsylvania. The York Group, Inc., Milso Industries Corporation, and Matthews International Corporation, Plaintiffs, v. Scott Pontone, Harry Pontone, Pontone Casket Company, LLC and Batesville Casket Company, Inc., Defendants. No. 10-1078 | Filed 05/22/2013 Attorneys and Law Firms Brian T. Himmel, David B. Fawcett, III, Reed Smith LLP, Pittsburgh, PA, Danielle J. Marlow, Steven I. Cooper, Reed Smith LLP, New York, NY, for Plaintiffs. Mindy J. Shreve, DeForest Koscelnik Yokitis Skinner & Berardinelli, A. Patricia Diulus-Myers, Jackson Lewis P.C., Pittsburgh, PA, Valeria Calafiore Healy, Healy LLC, New York, NY, John R. Maley, Larry A. Mackey, Barnes & Thornburg LLP, Indianapolis, IN, Kathleen M. Anderson, Barnes & Thornburg LLP, Fort Wayne, IN, for Defendants. MEMORANDUM OPINION AND ORDER CONTI, District Judge I. Introduction *1 Pending before the court is a motion for judgment on the pleadings filed by plaintiffs Matthews International Corporation (“Matthews”), The York Group (“York”), and Milso Industries Corporation (“Milso” and together with Matthews and York, “plaintiffs”). (ECF No. 390.) On August 16, 2010, plaintiffs filed a five-count complaint against defendants Scott Pontone and Batesville Casket Company, Inc. (“Batesville”) for alleged violations of state laws related to wrongful solicitation of plaintiffs' employees and customers. (ECF No. 1.) On the same day, plaintiffs filed a motion for preliminary injunction, based upon Scott Pontone and Batesville “improperly soliciting Plaintiffs' customers, goodwill, and business opportunities.” (ECF No. 2 ¶ 7.) On September 10, 2010, Batesville filed an answer to the complaint. (ECF No. 25.) On December 9, 2010, plaintiffs filed a motion to withdraw the motion for preliminary injunction. (ECF No. 48.) On December 14, 2010, the court granted the motion to withdraw. (ECF No. 50.) On February 28, 2011, plaintiffs filed an amended complaint naming Scott Pontone, Harry Pontone, Pontone Casket Company, LLC (“Pontone Casket” and together with Scott Pontone and Harry Pontone, the “Pontone defendants”) and Batesville as defendants. (ECF No. 70.) On April 20, 2011, Batesville filed an answer to the amended complaint. (ECF No. 96.) On April 25, 2012, Batesville filed counterclaims against plaintiffs alleging, among other things, counterclaims for abuse of process and malicious prosecution. (ECF No. 236.) On May 16, 2012, plaintiffs filed a motion to dismiss Batesville's claims for abuse of process and malicious prosecution and a brief in support of the motion. (ECF Nos. 247, 248.) On the same day, plaintiffs filed an answer to Batesville's counterclaims. (ECF No. 249.) On June 11, 2012, Batesville filed a response in opposition to plaintiff's motion to dismiss. (ECF No. 261.) On the record at a hearing held on August 14, 2012, the court granted plaintiffs' motion to dismiss Batesville's claims for abuse of process and malicious prosecution. With respect to the claim for abuse of process, the court explained: The courts have noted that where an abuse of process claim asserts the process abused with the litigation itself and the continuation of the pending legal proceedings as a whole, that the abuse of process claims raised in the counterclaims are not ripe for adjudication. ... And as the Court reads the basis for the counterclaim that was asserted by Batesville in this case, it has to do with initiation of the lawsuit and proceeding with the lawsuit to improperly limit Batesville in the marketplace. And there is a reference to using-seeking a preliminary injunction and an expedited discovery, but there's no averment that those processes were used for purposes for which they were not designed. Rather, the Court's view is the view of the counterclaim as a whole, is that it rests generally on the nature of the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 180 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 Plaintiff's having initiated the proceeding, this lawsuit, and proceeding with the lawsuit. *2 And so the Court would find that it's-based on Access Financial, Citizens Bank, Giordano, the rationale of those courts, that this claim is not ripe. So it's not dismissed on the merits, but would be dismissed without prejudice. (H.T. 8/14/12 (ECF No. 337) at 6-7.) On August 17, 2012, the Pontone defendants each filed an answer to the amended complaint. (ECF Nos. 305, 306, 307.) On the same day, they filed counterclaims against plaintiffs. (ECF No. 308.) On September 10, 2012, plaintiffs filed an answer to the counterclaims filed by the Pontone defendants. (ECF No. 327.) On October 2, 2012, the Pontone defendants filed amended counterclaims against plaintiffs alleging claims for breach of contract, breach of implied covenant of good faith and fair dealing, tortious interference with prospective business advantage, unjust enrichment, unfair competition, misappropriation of name, image, and likeness, defamation, abuse of process, intrusion upon seclusion, false and misleading advertising, and seeking, among other things, declaratory and injunctive relief. (ECF No. 333.) On November 30, 2012, plaintiffs filed an answer to the amended counterclaims filed by the Pontone defendants. (ECF No. 388.) On the same day, plaintiffs filed a motion for judgment on the pleadings seeking dismissal of the Pontone defendants' claims for abuse of process. (ECF No. 390.) On January 18, 2012, the Pontone defendants filed a response in opposition to plaintiffs' motion for judgment on the pleadings. (ECF No. 436.) On February 13, 2013, after receiving leave of court, plaintiffs filed a reply brief in further support of their motion for judgment on the pleadings. (ECF No. 451.) On February 23, 2013, after receiving leave of court, the Pontone defendants filed a sur-reply brief in opposition to the motion for judgment on the pleadings filed by plaintiffs. (ECF No. 454.) On March 14, 2013, the Pontone defendants filed a Notice Regarding Plaintiffs' Partial Rule 12(C) Motion in which they argued plaintiffs' motion for judgment on the pleadings was rendered moot in light of plaintiffs on March 8, 2013 filing a motion for summary judgment with respect to, among other counterclaims, the counterclaims for abuse of process. (ECF No. 492.) On March 18, 2013, plaintiffs filed a response to the Pontone defendants' notice arguing the notice was filed “without basis in procedural or substantive law.” (ECF No. 495.) Plaintiffs' motion for judgment on the pleadings and the submissions related to the motion for judgment on the pleadings are now before the court. II. Factual Allegations in the Amended Counterclaims, which are assumed to be true for the purpose of ruling on the motion for judgment on the pleadings 1 *3 Harry Pontone is Scott Pontone's father. (ECF No. 333 ¶ 24.) They are residents of New York. (Id.) Pontone Casket is a New York limited liability corporation formed by Scott Pontone. (Id. ¶ 25.) Since June 24, 2010, Pontone Casket has been engaged in the business of marketing and selling caskets manufactured by Batesville to licensed independent funeral homes in the New York Metropolitan area. (Id.) Batesville is the industry leader in the manufacture and distribution of death care products and has been for many decades. (Id. ¶ 39.) Matthews is a corporation located in Pittsburgh, Pennsylvania. (ECF No. 333 ¶ 26.) York is a corporation located in Pittsburgh, Pennsylvania and is a wholly owned subsidiary of Matthews. (Id. ¶ 27.) Milso is a wholly- owned subsidiary of York. (Id. ¶ 28.) The New York metropolitan casket market is a key market for the sale and marketing of caskets because it has the largest concentration of funeral homes in the country. (ECF No. 333 ¶ 35.) The three primary casket suppliers in the casket industry are Batesville, Matthews, and Aurora Casket Company. (Id. ¶ 36.) Batesville and Matthews are the primary casket suppliers in the New York Metropolitan area. (Id.) Matthews entered the casket business in 2001 when it acquired York. (Id. ¶ 45.) At the time of the acquisition, York was the second largest casket and funerary product manufacturer in the United States after Batesville. (Id.) Matthews became the second largest casket manufacturer in the country because of its acquisition of York. (ECF No. 333 ¶ 46.) Following the York acquisition, Matthews acquired other smaller casket suppliers and distributors. (Id.) These acquisitions increased Matthew's dominant market share in certain key regions and eliminated smaller competitors. (Id.) Milso Industries (“Old Milso”) was one of the smaller casket suppliers and distributors acquired by Matthews. (Id. ¶ 47.) Prior to the acquisition in 2005, Old Milso was a successful family-run business based in Brooklyn, New York. (Id. ¶ 49.) Old Milso was founded by Harry Pontone's family in 1931. (Id.) After becoming a licensed Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 181 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 funeral director, Harry Pontone operated Old Milso first with his eight brothers and then with his son, Scott Pontone. (ECF No. 333 ¶ 46.) According to the Pontone defendants, Harry Pontone is considered a “living legend” in the casket industry. (Id. ¶ 52.) In 2005, Matthews offered to purchase the assets of Old Milso. (Id. ¶ 54.) The offer was accepted based upon Matthews' promise that following the acquisition, Harry Pontone and Scott Pontone would operate Old Milso without interference. (Id.) After Matthews purchased Old Milso's assets, Harry Pontone and Scott Pontone were appointed officers and directors of Matthews' casket business, which was being operated through York and Milso. (Id.) On or about May 28, 2005, York and one of its subsidiaries, Midnight Acquisitions, agreed to purchase Old Milso's assets by entering into an asset purchase agreement (“APA”). (ECF No. 333 ¶ 55.) Midnight was renamed Milso Industries Corporation (“Milso”) pursuant to the APA. (Id.) Under the terms of the APA, York and various members of the Pontone family, including Scott Pontone and Harry Pontone, entered into key employee employment agreements (“KEEAs”). (Id. ¶ 58.) Pursuant to the APA and the KEEAs, following the sale of Old Milso's assets to York, Scott Pontone became the executive vice president and a member of the board of directors of York and Milso, and Harry Pontone became the president and a member of the board of directors of York and Milso. (Id. ¶ 59.) Scott Pontone's KEEA provided that he would automatically succeed his father as president of Milso and York. (Id. ¶ 60.) In the APA, Scott Pontone and Harry Pontone agreed “to defer receipt of a substantial monetary amount and to condition receipt of that amount on the achievement of various financial targets” in exchange for autonomy in leading and operating York and Milso. (ECF No. 333 ¶ 61.) *4 According to the Pontone defendants and unbeknownst to them at the time, Joseph Bartolacci (“Bartolacci”), the chief executive officer of Matthews, and other officers of Matthews and its subsidiaries had no intention of fulfilling their contractual obligations to Harry Pontone and Scott Pontone; instead, they intended to oust them from them from York and Milso. (Id. ¶ 62.) Although Scott Pontone and Harry Pontone worked to build the businesses of York and Milso, Bartolacci and the other officers of Matthews continually interfered with their work and impeded their progress. (Id. ¶ 64.) As a result of the interference by Bartolacci and the other officers of Matthews, Scott Pontone and Harry Pontone “were forced to assert their rights through a legal proceeding against York.” (Id. ¶ 65.) The lawsuit filed by Scott Pontone and Harry Pontone ended in an out-of- court settlement in 2007 (the “2007 settlement”) in which York agreed to make an accelerated earn-out payment to Scott Pontone and Harry Pontone. (Id. ¶ 66.) According to the Pontone defendants, Matthews had a pre-existing obligation under the APA to make the earn-out payments to Scott Pontone and Harry Pontone because of its contractual breaches. (ECF No. 333 ¶ 66.) Despite the pre-existing obligation, plaintiffs insisted that in return for making the earn-out payment to Scott Pontone and Harry Pontone, Scott Pontone resign from York and Milso and relinquish his right to succeed his father as president. (Id.) According to the Pontone defendants, the settlement agreement was the first time Scott Pontone and Harry Pontone were exposed to Matthews' strategy of abusing legal process in order to obtain results to which Matthews was not otherwise entitled. (Id. ¶ 67.) In connection with the 2007 settlement, Scott Pontone agreed to an amendment to his KEEA and the APA. (Id. ¶ 68.) The amendment included a three-year non-compete provision. (Id.) In exchange for Scott Pontone's agreement to not compete against plaintiffs, York agreed to pay him $300,000 per year for the three years the noncompete clause was applicable. (ECF No. 333 ¶ 67.) According to the Pontone defendants, the noncompete clause lapsed in May 2010. (Id. ¶ 70.) At that time, Scott Pontone was legally entitled to reenter the casket industry and solicit customers. (ECF No. 333 ¶ 70.) As part of the 2007 settlement, Harry Pontone agreed to a substantial reduction in his base salary and guaranteed compensation. (Id. ¶ 70.) Following the 2007 settlement, Matthews worked to diminish Harry Pontone's ability to operate in full capacity as the chairman of the board of directors of York, as a member of the board of directors of Milso, and as a member of the executive committee of both York and Milso. (Id. ¶¶ 73, 75.) For example, Harry Pontone was not kept current on the meetings and activities of the board of directors. (Id. ¶ 75.) During the same time period and despite his “exceptional performance,” Harry Pontone did not receive bonus compensation from plaintiffs. (Id. ¶ 77.) Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 182 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 According to the amended counterclaims, Matthews “has spent millions of dollars over the last several years on the ruthless pursuit of vexatious litigation in an unlawful attempt to preserve and further increase its dominant share of the market for the sale of caskets to independent funeral homes in the New York Metropolitan area.” (ECF No. 333 ¶ 1.) The Pontone defendants allege that Bartolacci created a business strategy for Matthews in which it does not compete in the industry based upon “product design, service, innovation or leadership;” instead, Matthews seeks to acquire regional casket firms and then to use exclusionary and anti-competitive practices, including filing “sham litigation” to preserve its market share in the casket industry. (Id. ¶¶ 3-4.) According to the Pontone defendants, “[b]y entangling its key competitors in expensive litigation, Matthews seeks to intimidate potential and existing competitors by demonstrating it will stop at nothing to prevent them from taking away its market share.” (Id. ¶ 5.) Matthews' sham- litigation strategy also works to “force its competitors, under the cover of settlement negotiations, to agree to restrict their competition with Matthews in order to avoid the costs of Matthews' sham litigation.” (Id. ¶ 6.) Bartolacci's business strategy for Matthews involves using the discovery process to gain access to competitively sensitive information from its direct competitors to which it would not otherwise be privy. (Id. ¶ 7.) With respect to the present lawsuit, the Pontone defendants assert that in February 2010 executives of Matthews planned to sue Scott Pontone after the expiration of the noncompete provision in his KEEA even if his actions upon reentry to the New York casket market did not violate that provision. (Id. ¶¶ 10-11.) The Pontone defendants assert Matthews would have filed the present lawsuit “regardless of the facts, on whatever pretext Matthews could dream up.” (Id.) According to the Pontone defendants, Matthews made numerous claims in the complaint filed in this case based upon “allegations for which Matthews had no basis whatsoever” and “to punish and intimidate those who had the audacity to compete with it.” (ECF No. 333 ¶¶ 12, 13.) The Pontone defendants allege that Matthews' purposes in filing and litigating the lawsuit currently before the court are: *5 • To distract and harass Scott and Pontone Casket, thereby limiting their effectiveness in soliciting casket purchases by independent funeral homes in the New York market; • To intimidate Harry and any manufacturer or distributor of caskets that otherwise would be pleased to hire him to assist in building or expanding its New York market casket business; • To punish Batesville for undertaking a business relationship with Scott and Pontone Casket, thus deterring Batesville from further competitive acts and potentially intimidating Batesville into limiting the extent of its competition or else facing the unreasonable financial burden of having to defend against Matthews' sham litigation; and • To issue subpoenas, depose witnesses, and seek discovery solely in order to obtain Scott Pontone's and Pontone Casket's confidential, proprietary, and trade secret information by seeking injunctive relief solely for the purpose of obtaining expedited discovery. (ECF No. 333 ¶¶ 9, 270.) The Pontone defendants allege that plaintiffs abused legal process to accomplish these goals by • filing this litigation without a reasonable factual basis to do so; • declining to gather discovery from customers in issue in this litigation; • filing a motion for a preliminary injunction without a factual basis and for the improper purpose of engaging in a fishing expedition and imposing inordinate costs of expedited and broad ranging discovery on the defendants; • continuing to prosecute this litigation despite Matthews' and other witnesses denial of all allegations of wrongful conduct; • repeatedly making false statements of fact to the Court, including by falsely representing to the Court positions or statements taken by the Pontone Defendants; • submitting untrue testimony of its executives, including its General Counsel, to preserve legal positions when those positions were about to put an end to this litigation; Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 183 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 • violating a Court order requiring the sequestration of a witness, resulting in the witness changing his testimony to ensure that the Court would give credit to Matthews newly advanced legal position to preserve continuation of this litigation; • repeatedly misrepresenting the law to the Court, requiring the defendants to have to spend substantial time and resources to respond to these misstatements; • repeatedly filing vexatious motions in front of the wrong Court and without any standing to do so, even after the Court expressly told Matthews' counsel that it had no jurisdiction to decide certain discovery motions relating to nonparties; and • using the discovery process for purposes unrelated to the litigation, including for purposes of obtaining the confidential and proprietary information of its competitors and to obtain information about Scott Pontone's personal telephone calls. (ECF No. 333 ¶¶ 122-35, 282; ECF No. 436 at 6-7.) The Pontone defendants allege plaintiffs brought “baseless claims in the instant lawsuit” in support of their counterclaims for breach of implied covenant of good faith and fair dealing (counterclaim counts three and four), tortious interference with prospective business advantage (counterclaim counts five and six), unjust enrichment (counterclaim counts seven and eight), unfair competition (counterclaim counts nine and ten), and abuse of process (counterclaim counts thirteen and fourteen). (Id. ¶¶ 191, 199, 205, 213, 220, 227, 234, 241, 268-78.) *6 Plaintiffs dispute the pertinent factual and conclusory allegations made by the Pontone defendants with respect to their amended counterclaims. (ECF No. 388.) III. Standard of Review The court must decide, as a matter of law, whether the amended counterclaims for abuse of process asserted by the Pontone defendants can be dismissed by a motion for judgment on the pleadings. DiCarlo v. St. Mary Hosp., 530 F.3d 255, 262 (3d Cir. 2008). [A] Rule 12(c) motion is designed to provide a means of disposing of cases when the material facts are not in dispute between the parties and a judgment on the merits can be achieved by focusing on the content of the competing pleadings.... The motion ... only has utility when all material allegations of fact are admitted or not controverted in the pleadings and only questions of law remain to be decided by the district court. 5C CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1367, at 206-08 (3d ed. 2004). Courts disfavor motions for judgment on the pleadings and apply a very restrictive standard when ruling on such motions. See Id. § 1368 at 222-23. When a motion for judgment on the pleadings alleges the claimant's failure to state a claim upon which relief can be granted, the appropriate standard for deciding such a motion is the same as the standard used to decide a motion pursuant to Rule 12(b)(6). Bangura v. Phila., 338 Fed.Appx. 261, 264 (3d Cir. 2009); Turbe v. Gov't of V.I., 938 F.2d 427, 428 (3d Cir. 1991); Rose v. Bartle, 871 F.2d 331, 342 (3d Cir. 1989). A motion to dismiss tests the legal sufficiency of the complaint or counterclaim-complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In deciding a motion to dismiss, the court is not opining on whether the claimant will be likely to prevail on the merits; rather, when considering a motion to dismiss, the court accepts as true all well-pled factual allegations in the complaint or counterclaim-complaint and views them in a light most favorable to the claimant. U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002). While a complaint or counterclaim-complaint does not need detailed factual allegations to survive a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss, it must provide more than labels and conclusions. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A “formulaic recitation of the elements of a cause of action will not do.” Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Factual allegations must be enough to raise a right to relief above the speculative level” and “sufficient to state a claim for relief that is plausible on its face.” Id. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009) (citing Twombly, 550 U.S. at 556). Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 184 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully.... Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’ ” Iqbal, 556 U.S. at 667 (quoting Twombly, 550 U.S. at 556) (internal citations omitted). Two working principles underlie Twombly. Iqbal, 556 U.S. at 667. First, with respect to mere conclusory statements, a court need not accept as true all the allegations contained in a complaint. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). Second, to survive a motion to dismiss, a claim must state a plausible claim for relief. Id. at 679. “Determining whether a complaint states a plausible claim for relief will...be a context- specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. “But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]-that the pleader is entitled to relief.’ ” Id. (quoting FED. R. CIV. P. 8(a)(2)). A court considering a motion to dismiss may begin by identifying allegations that are not entitled to the assumption of truth because they are mere conclusions. *7 While legal conclusions can provide the framework of the complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Id. The court may grant a plaintiff leave to amend a complaint under Federal Rule of Civil Procedure 15, which provides: “The court should freely give leave [to amend] when justice so requires.” FED. R. CIV. P. 15. Rule 15, however, “does not permit amendment when it would be futile. Futility “ ‘means that the complaint, as amended, would fail to state a claim upon which relief could be granted.’ ” Kenny v. United States, 489 Fed.Appx. 628, 633 (3d Cir. 2012) (citing Burtch v. Millberg Factors, Inc., 662 F.3d 212, 231 (3d Cir. 2011)). “The standard for deciding whether claims are futile for the purpose of granting leave to amend a complaint is the same as a motion to dismiss.” Markert v. PNC Fin. Servs. Grp., Inc., 828 F.Supp.2d 765, 771 (E.D. Pa. 2011). “[I]f the court determines that plaintiff has had multiple opportunities to state a claim but has failed to do so, leave to amend may be denied.” See 6 CHARLES A. WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 1487 (2d ed. 2010). IV. Discussion A. Plaintiffs did not waive the defense of failure to state a claim upon which relief can be granted. 2 The Pontone defendants argue that plaintiffs filing a Rule 12(c) motion for judgment on the pleadings based upon failure to state a claim upon which relief can be granted after the close of fact discovery is improper. (ECF No. 454 at 2.) They explain that “[p]lantiffs had many opportunities to challenge the sufficiency of the Pontone Defendants' Abuse of Process Counterclaims” and “[i]f Plaintiffs desired to do so, they were required to bring such motion together with their first Rule 12 Motion ... in which they specifically address the Abuse of Process Counterclaims.” (Id.) In support of their argument, the Pontone defendants cite Federal Rule of Civil Procedure 12(g)(2), which provides: *8 Limitation on Further Motions. Except as provided in Rule 12(h)(2) or (3), a party that makes a motion under this rule must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion. FED. R. CIV. P. 12(g)(2). Essentially, the Pontone defendants argue that plaintiffs waived the defense of failure to state a claim upon which relief can be granted because plaintiffs did not raise the defense in their Rule 12(f) motion to strike the amended counterclaims (ECF No. 339), in which they argued, among other things, that the allegations contained in the abuse of process counterclaims with respect to settlement discussions should be stricken from the counterclaim-complaint. The Pontone defendants' argument does not have merit. Rule 12(h)(2), which is an exception to Rule 12(g)(2), provides: (2) When to Raise Others. Failure to state a claim upon which relief can be granted, to join a person required by Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 185 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 Rule 19(b), or to state a legal defense to a claim may be raised: (A) in any pleading allowed or ordered under Rule 7(a); (B) by a motion under Rule 12(c); or (C) at trial. FED. R. CIV. P. 12(h)(2). Under this provision and according to the advisory committee notes to Rule 12, the defense of failure to state a claim upon which relief can be granted is not waived by a party's failure to raise the defense prior to the close of fact discovery or by failing to raise the defense in another motion relating the claims in issue. The advisory committee notes to Rule 12(h)(2) provide: It is to be noted that while the defenses specified in subdivision (h)(1) are subject to waiver as there provided, the more substantial defenses of failure to state a claim upon which relief can be granted, failure to join a party indispensable under Rule 19, and failure to state a legal defense to a claim (see Rule 12(b)(6), (7), (f)), as well as the defense of lack of jurisdiction over the subject matter (see Rule 12(b) (1)), are expressly preserved against waiver by amended subdivision (h)(2) and (3). FED. R. CIV. P. 12(h)(2) advisory committee's notes (1966) (emphasis added). It follows that plaintiffs did not waive the defense of failure to state a claim upon which relief can be granted by filing their motion for judgment on the pleadings after the close of fact discovery or failing to raise the defense in their motion to strike under Rule 12(f). Rule 12 does not mandate the denial of plaintiffs' motion and the Pontone defendants did not cite any authority in support of a contrary result. Under those circumstances, the court finds plaintiffs may raise the defense of failure to state a claim upon which relief can be granted in their Rule 12(c) motion for judgment on the pleadings. 3 B. Scott Pontone and Harry Pontone failed to state a claim for abuse of process upon which relief can be granted. 4 *9 Under Pennsylvania law, the elements of a claim for abuse of process are: “(1) the use of a legal process; (2) primarily to accomplish a purpose for which the process was not designed; (3) a harm resulting therefrom.” Rosen v. Am. Bank of Rolla, 627 A.2d 190, 192 (Pa. Super. Ct. 1993). “To recover under a theory of abuse of process, plaintiff must show that the defendant used the legal process against him in a way that constituted a perversion of that process and caused harm to the plaintiff.” In re Finney, 184 Fed.Appx. 285, 289 (3d Cir. 2006) (citing Gen. Refractories Co., v. Fireman's Fund Ins. Co., 337 F.3d 297, 304 (3d Cir 2003)). “ ‘The term ‘use,’ in the context of an abuse of process claim requires that a party actively seek and employ a legal process.' ” Gen. Refractories, 337 F.3d at 311 (quoting Hart v. O'Malley, 647 A.2d 542, 551-52 (Pa. Super. Ct. 1994)). “ ‘The word process as used in the tort of abuse of process has been interpreted broadly, and encompasses the entire range of procedures incident to the litigation process.’ ” Shiner v. Moriarty, 706 A.2d 1228, 1237 (Pa. Super. Ct. 1998) (quoting Rosen, 627 A.2d at 192). Process includes, among others, “ ‘discovery proceedings, the noticing of depositions and the issuing of subpoenas.’ ” Gen. Refractories, 337 F.3d at 310 (quoting Pellegrino Food Prods. Co., Inc. v. Warren, 136 F.Supp.2d 391, 407 (W.D. Pa. 2000)). The use of a legal process for purposes of an abuse of process claim does not include “failing to comply with court orders, failing to seek a stay, and failing to provide copies of subpoenaed documents.” Gen. Refractories, 337 F.3d at 310. Pennsylvania state courts have explained the act of perversion as “ ‘an act or threat not authorized by the process, or the process must be used for an illegitimate aim such as extortion, blackmail, or to coerce or compel the plaintiff to take some collateral action.’ ” Giordano v. Claudio, 714 F.Supp.2d 508, 533 (E.D. Pa. 2010) (quoting Al Hamilton Contracting Co. v. Cowder, 644 A.2d 188, 192 (Pa. Super. 1994)). “A ‘perversion’ of legal process occurs when a party uses the process ‘primarily to accomplish a purpose for which the process was not designed.’ ” Gen. Refractories, 337 F.3d at 304 (quoting Dumont Television & Radio Corp. v. Franklin Elec. of Phila., 154 A.2d 585, 587 (Pa. 1959)). The Third Circuit Court of Appeals has instructed that the Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 186 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 court must look at the legal process used and decide whether it was used primarily “to benefit someone in achieving a purpose which is not the authorized goal of the procedure in question,” Werner v. Plater-Zyberk, 799 A.2d 776, 785 (2002) (emphasis added), not whether it was used to achieve a purpose or advantage unrelated or “collateral” to the entire underlying litigation proceeding. Gen. Refractories, 337 F.3d at 305. “ ‘The significance of [the word ‘primarily’] is that there is no action for abuse of process when the process is used for the purpose for which it is intended, but there is an incidental motive or spite or an ulterior purpose of benefit to the defendant.' ” Id. at 305 n.2 (quoting Rosen, 627 A.2d at 192). The court of appeals commented: We pause to add a note of caution. We recognize that causing financial and emotional injury to, as well as weakening the resolve of, opposing parties in the context of ongoing litigation are somewhat nebulous concepts, and when utilizing most litigation procedures an attorney is aware of the possibility that his actions could have one of these results. We do not, here, mean to predict that the Supreme Court of Pennsylvania would allow for liability simply because an attorney acts with these possibilities in mind. Rather, the point of liability is reached when “the utilization of the procedure for the purpose for which it was designed becomes so lacking in justification as to lose its legitimate function as a reasonably justifiable litigation procedure.” [Nienstedt v. Wetzel, 651 P.2d 876, 882 (Ariz. Ct. App. 1982)]. Only at that point could the legal process be considered to have been perverted. Gen. Refractories, 337 F.3d at 308. Unlike a claim for wrongful use of civil proceedings, “a claim for abuse of process does not include an element that proceedings have terminated.” Access Fin. Lending Corp. v. Keystone State Mortg. Corp., No. 96-191, 1996 WL 544425, at *3 (W.D. Pa. Sept. 4, 1996). Federal courts within the Third Circuit applying Pennsylvania law have found, however, that where an abuse of process claim asserts the process abused was the initiation and continuation of the pending legal proceedings as a whole, abuse of process claims raised in counterclaims are not ripe for adjudication. In Access Financial, the court held: *10 The assertion, by way of a counterclaim, that the underlying litigation as a whole constitutes an abuse of process fails to state a claim which is ripe for adjudication. By definition, a lawsuit in its entirety cannot constitute an abuse of process when it has not yet been concluded. Access Fin., 1996 WL 544425, at *5; accord Giordano, 714 F.Supp.2d at 533-34 (finding “since the Amended Counterclaim refers only to [plaintiff's] initiation of the lawsuit and not to any discrete portions of the lawsuit (such as a subpoena or a discovery request), we cannot adjudicate [defendants'] abuse of process claim until the completion of [plaintiff's] lawsuit”); Citizens Bank of Pa. v. Exec. Car Buying Servs., Inc., No. 10-478, 2010 WL 4687922, at *5 (D.N.J. Nov. 10, 2010) (applying Pennsylvania law and finding even if defendants had adequately plead an abuse of process claim, such a claim would be dismissed as premature because it was based on the filing of the lawsuit, which was pending). To state a claim for abuse of process, the alleged abusive process must be “completed so that the factfinder can determine the primary reason for its use. Hence, that process, whether it allegedly encompasses the entire litigation, or a portion thereof, must have been completed.” Access Fin., 1996 WL 544425, at *6 n.3. The overarching allegation in the amended counterclaims is that the present lawsuit is part of plaintiffs' business strategy to use expensive and “vexatious litigation in an unlawful attempt to preserve and further increase its dominant share of the market for the sale of caskets to independent funeral homes in the New York Metropolitan area.” (ECF No. 333 ¶ 1.) The Pontone defendants repeatedly allege that the lawsuit pending before the court is baseless, improper, a “sham,” and an attempt by plaintiffs to use expensive and vexatious litigation to preserve market share by forcing the Pontone defendants to agree to refrain from competing with Matthews in the casket industry. (Id. ¶¶ 4, 6, 9, 12.) As discussed above, the initiation and continuation of pending litigation cannot support a claim for abuse of process. The abuse of process counterclaims based upon these allegations will be dismissed because they are unripe. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 187 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 The Pontone defendants support their allegations that the initiation and continuation of the lawsuit presently before the court is an abuse of legal process by pointing to specific acts by the plaintiffs taken in the course of this case “intended to increase the cost of litigation.” (ECF No. 333 ¶¶ 126-135.) They describe those actions, including making false representations to the court, filing motions, and conducting discovery, as “EVIDENCE OF THE ABUSIVE NATURE OF THIS LITIGATION.” (ECF No. 333 at 27.) Specific acts taken during the course of litigation, as opposed to the filing and continuation of the litigation as a whole, may support a cause of action for abuse of process. See e.g. Giordano, 714 F.Supp.2d at 533-34. The court will address each of the acts allegedly taken by plaintiffs against Scott Pontone and Harry Pontone to determine whether any act constitutes a “use of process,” and if so, whether there are factual allegations sufficient for a plausible finding that a perversion of the implicated process occurred. 1. Filing a motion for a preliminary injunction 5 (ECF No. 333 ¶¶ 117, 128, 269) *11 The Pontone defendants allege plaintiffs filed the motion for preliminary injunction (ECF No. 2) “without a factual basis and for the improper purpose of engaging in a fishing expedition and imposing inordinate costs of expedited and broad ranging discovery on the defendants.” (ECF No. 333 ¶ 128.) Plaintiffs filed a motion for preliminary injunction against Scott Pontone and Batesville on August 16, 2010 alleging, among other things, that they would suffer irreparable harm if the court did not enjoin Scott Pontone from breaching his KEEA. (ECF No. 2.) The filing of a motion for preliminary injunction is a “use of process.” Hart, 647 A.2d at 551 n.2 (“A preliminary injunction is a process in civil litigation.”). Scott Pontone could allege a claim for abuse of process based upon the perversion of that process. Harry Pontone, however, cannot base his claim for abuse of process upon the filing of the motion because he was not a named defendant in the motion and, thus, legal process was not used against him. See Naythons v. Stradley, Ronan, Stevens & Young LLP, 339 Fed.Appx. 165, 167 (3d Cir. 2009) (“Under Pennsylvania law, the District Court correctly dismissed Naythons's claims of abuse of process and wrongful use of civil proceedings. Stradley did not “use legal process” against Naythons. Naythons was the arbitrator in the state proceeding, not a party to the action, and the fact that he was named as a respondent in one of the state court petitions is of no import.”). Having concluded filing a motion for preliminary injunction is a use of legal process, the court must determine whether Scott Pontone set forth factual allegations sufficient for a plausible claim that plaintiffs perverted the process with an improper purpose. Filing a motion to drain an opposing party's resources may constitute a perversion of that process. Gen. Refractories, 337 F.3d at 308-09. This factor, however, does not end the court's inquiry. The court must be satisfied that plaintiffs filed the motion for preliminary injunction primarily to drain Scott Pontone's resources as opposed to achieving the legitimate legal purpose of such a motion, i.e., seeking the court's intervention to prevent irreparable harm. At this stage of the proceedings, the court cannot determine there is a plausible claim that the primary reason plaintiffs filed the motion for preliminary injunction was for an improper purpose. Although the motion for preliminary injunction was withdrawn and technically the legal process with respect to the filing of the motion ended, the legal and factual issues raised in the motion for preliminary injunction are still pending before the court. Plaintiffs in the amended complaint allege a claim substantially identical to the claim in the motion for preliminary injunction, i.e., Scott Pontone breached the APA and KEEA and caused them harm. (ECF No. 70 ¶¶ 123-32, 196(a)(i).) Scott Pontone argues the motion for preliminary injunction was filed “without a factual basis” and solely for the purpose of causing him harm. It follows that the court cannot assess the validity of this argument, i.e., whether the motion was filed “without a factual basis,” without assessing the validity of the claims contained in the amended complaint. At this stage in the proceedings, such an analysis would be premature. For those reasons, the abuse of process claim based upon the filing of the motion for preliminary injunction against Scott Pontone is unripe and will be dismissed without prejudice. Scott Pontone may assert the claim if the issues raised in the amended complaint are resolved in a manner which would implicate abuse of process. 2. Repeatedly making false statements of fact to the Court, including by falsely representing Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 188 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 to the Court positions or statements taken by the Pontone Defendants (ECF No. 333 ¶¶ 130); Submitting untrue testimony of its executives, including its General Counsel, to preserve legal positions when those positions were about to put an end to this litigation (Id. ¶ 131); and Repeatedly misrepresenting the law to the Court, requiring the defendants to have to spend substantial time and resources to respond to these misstatements (Id. ¶ 133) Scott Pontone's and Harry Pontone's allegations that throughout the proceedings related to the lawsuit presently before the court plaintiffs made false statements of fact, submitted untrue testimony, and misrepresented the law are too general to support a claim for abuse of process because they do not identify a legal process used; rather, the allegations support Scott Pontone's and Harry Pontone's claims that the underlying proceedings as a whole are actionable because they are baseless and intended to stymie the Pontone defendants' ability to compete in the casket industry. If plaintiffs filed the amended complaint without factual basis, they would have to make false representations to the court in order to maintain their case and avoid dismissal. To the extent Scott Pontone's and Harry Pontone's claims for abuse of process are based upon plaintiffs making false statements of fact, submitting untrue testimony, and misrepresenting the law throughout the litigation, the claims must be dismissed for failing to identify a legal process used by plaintiffs other than the filing and continuation of the litigation presently before the court. 3. Violating a Court order requiring the sequestration of a witness, resulting in the witness changing his testimony to ensure that the Court would give credit to Matthews' newly advanced legal position to preserve continuation of this litigation (ECF No. 333 ¶ 132) *12 The Third Circuit Court of Appeals has concluded that if faced with the issue, the Pennsylvania Supreme Court would find the use of a legal process for purposes of a state law abuse of process claim does not include “failing to comply with court orders.” Gen. Refractories, 337 F.3d at 310. It follows that to the extent Scott Pontone and Harry Pontone rely upon plaintiffs violating a court order to support their claims for abuse of process, those claims must fail because violating a court order cannot support a claim for abuse of process as a matter of law. Id. 4. Repeatedly filing vexatious motions in front of the wrong Court and without any standing to do so, even after the Court expressly told Matthews' counsel that it had no jurisdiction to decide certain discovery motions relating to nonparties (ECF No. 333 ¶ 134) Filing a motion is a use of legal process. The Pontone defendants' allegations with respect to plaintiffs filing “vexatious motions,” however, are conclusory and insufficient to state a claim for relief under Iqbal and Twombly, which require “more than labels and conclusions.” Twombly, 550 U.S. at 554. Although the Pontone defendants allege the motions were filed to increase the cost of litigation, the amended counterclaims do not identify which motions are in issue, or why they were vexatious. The general allegation that plaintiffs “[r]epeatedly filed vexatious motions” supports Scott Pontone's and Harry Pontone's unripe claims for abuse of process based upon the initiation and continuation of the litigation currently pending before this court, but it does not support a claim for abuse of process solely based upon filing the motions for an improper purpose. 6 5. Using scorched earth discovery tactics to gain access to competitively sensitive information from its direct competitors that Matthews and its lawyers CEO should not be permitted to access. For instance, in this case, after putting at issue 37 New York funeral home customers, Matthews has repeatedly sought to use legal process to gain confidential information regarding what these customers were doing with other defendants, including by incredibly seeking to intrude upon these customers private telephone calls with the defendants (ECF No. 333 ¶ 7) Using the discovery process for purposes unrelated to the litigation, including for purposes of obtaining the confidential and proprietary information of its competitors (Id. ¶¶ 135) The allegations that plaintiffs used “discovery tactics” and that “Matthews has repeatedly sought to use legal process to gain confidential information” are too vague to support Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 189 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 a plausible claim for abuse of process. “ ‘The term ‘use,’ in the context of an abuse of process claim requires that a party actively seek and employ a legal process.' ” Gen. Refractories, 337 F.3d at 311 (quoting Hart, 647 A.2d at 551-52). Alleging that a plaintiff used “discovery tactics” and “sought to use legal process” without identifying specific processes used, e.g. filing a motion or making a request for production, is insufficient to state a plausible claim for relief under Iqbal and Twombly. Under those circumstances, Scott Pontone and Harry Pontone failed to set forth factual allegations sufficient to support a plausible claim for abuse of process based upon the use of “discovery tactics” and “legal process.” 6. Issuing subpoenas, including by subpoena to nonparties, depose witnesses, and seek discovery solely in order to obtain the Pontone defendants' confidential, proprietary, and trade secret information (Id. ¶¶ 270, 282) *13 Noticing a deposition and issuing a subpoena are uses of legal process. The Pontone defendants' allegations with respect to plaintiffs issuing subpoenas, deposing witnesses, and seeking discovery, however, are conclusory and insufficient to state a claim for relief under Iqbal and Twombly. Although the Pontone defendants in the amended counterclaims allege plaintiffs' purpose in seeking discovery was to obtain confidential information to which they would not otherwise be privy, they do not identify the subpoenas or depositions used to accomplish this purpose. A reading of the amended counterclaims suggests the Pontone defendants did not identify the subpoenas and depositions in issue because their claims as stated are based upon the “sham” litigation as a whole, which includes the entire discovery phase of the proceedings. Under those circumstances, and in light of the general and conclusory nature of the allegations, Scott Pontone and Harry Pontone failed to state a claim for relief based upon plaintiffs issuing subpoenas, deposing witnesses, and seeking discovery. 7. Declining to gather discovery from customers in issue in this litigation (Id. ¶¶ 122-24) To the extent Scott Pontone and Harry Pontone seek to support their claims of abuse of process by alleging that plaintiffs declined to gather discovery, this allegation does not implicate the active use of any legal process, such as a motion, a notice of deposition, or an issuance of a subpoena. Under those circumstances, the allegation that plaintiffs declined to gather discoverable materials from customers in issue in this litigation does not support a claim for abuse of process. C. Factual Allegations with respect to the “Baseless Litigation” in other claims Plaintiffs argue that along with Scott Pontone's and Harry Pontone's abuse of process claims based upon the initiation and continuation of the litigation presently before the court, “those aspects of the Pontone Defendants' Amended Counterclaims which are based on allegations of Plaintiffs' improper motives in bringing the instant action, are not viable and must be dismissed.” (ECF No. 390 at 1.) As mentioned above, the Pontone defendants allege plaintiffs “bringing baseless claims in the instant lawsuit” in support of their counterclaims for breach of implied covenant of good faith and fair dealing (counterclaim counts three and four), tortious interference with prospective business advantage (counterclaim counts five and six), unjust enrichment (counterclaim counts seven and eight), unfair competition (counterclaim counts nine and ten), and abuse of process (counterclaim counts thirteen and fourteen). (Id. ¶¶ 191, 199, 205, 213, 220, 227, 234, 241, 268-78.) To the extent the resolution of these claims involves a determination with respect to the validity of the claims asserted by plaintiffs against the Pontone defendants in this litigation, those claims in that respect are premature. The Pontone defendants at this time cannot rely upon the invalidity of any claim presently pending before the court as a basis for recovery in this case. Allegations with respect to the current lawsuit being “baseless” are conclusory and will not be afforded any weight by the court. V. Conclusion Based upon the foregoing, Harry Pontone and Scott Pontone failed to state claims for abuse of process upon which relief may be granted. To the extent the amended counterclaims set forth claims for abuse of process relating to this lawsuit, those claims are based upon the filing and continuation of the lawsuit presently pending before the court. The allegations with respect to individual legal processes used by plaintiffs are too general to state a claim Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 190 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 12 for relief under Iqbal and Twombly. The counterclaims for abuse of process will be dismissed without prejudice, and the allegations with respect to the current lawsuit being “baseless” will be disregarded at this time because they cannot serve as a basis for relief while the lawsuit is ongoing. 7 VI. Order *14 AND NOW, this 22 nd day of May, 2013, upon consideration of the motion for judgment on the pleadings filed by plaintiffs (ECF No. 390) and the submissions by the parties related to the motion, IT IS HEREBY ORDERED that the motion for judgment on the pleadings is GRANTED. The amended counterclaims set forth in counts thirteen and fourteen are dismissed without prejudice. IT IS FURTHER ORDERED that at this time the allegations with respect to the current lawsuit being “baseless” will not be afforded any weight by the court. All Citations Slip Copy, 2013 WL 12142353 Footnotes 1 The motion for judgment on the pleadings filed by plaintiffs based upon the defense of failure to state a claim and the briefing filed in response to the motion reference only the factual allegations set forth in the amended counterclaims. For that reason, the court provides a recitation of the factual allegations contained in the amended counterclaims and does not refer to other pleadings filed in this case. The recitation for purpose of clarity also includes references to conclusions which need not be accepted as true for the purposes of resolving the instant motion. Snyder v. Daughtery, 899 F.Supp.2d 391, 400 (W.D. Pa. 2012) (“When reviewing a motion for judgment on the pleadings, a court must view the facts in the plaintiff's complaint as true and draw all reasonable inferences in the plaintiff's favor.”) (emphasis added); see Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009) (conclusory statements need not be accepted as true when determining whether the claimant failed to state a claim). 2 In the Pontone defendants' Notice Regarding Plaintiffs' Partial Rule 12(c) Motion, they argue that in light of plaintiffs filing a motion for summary judgment with respect to the abuse of process counterclaims, the motion for judgment on the pleadings is moot. (ECF No. 492 at 1-2.)They explain: • Because a Rule 56 Motion permits both the moving and nonmoving parties to go beyond the pleadings, and to rely on “particular parts of materials in the record,” Fed. R. Civ. P. 56(c), Plaintiffs' Rule 56 Motion supersedes and renders Plaintiffs' pending Rule 12(c) Motion moot. • Accordingly, the Pontone Defendants respectfully submit that Plaintiffs' Rule 12(c) Motion should be denied for the additional reasons that it is now moot. (Id. at 2.) The court has not ruled on plaintiffs' motion for summary judgment or reviewed the exhibits with respect to that motion in consideration of plaintiffs' motion for judgment on the pleadings. The Pontone defendants, furthermore, do not cite any authority for their argument that the filing of a motion for summary judgment renders the motion for judgment on the pleadings moot. Under those circumstances, the court declines to find the motion for judgment on the pleadings moot. 3 The Pontone defendants argue filing a Rule 12(c) motion for judgment on the pleadings after the close of discovery is improper. (ECF No. 454 at 2-3 n.2.) They argue they should be granted leave to amend the amended counterclaims “because the ‘the fact of the lateness of this motion is a result of [Plaintiffs'] strategic decision to file a delayed motion under Rule 12(c) and not Rule 12(b)(6).’ ” (Id.) (quoting Lapella v. Atlantic City, No. 10-2454, 2012 WL 2962411, at *11 (D.N.J. July 18, 2012)). The Pontone defendants' argument ignores the procedural posture of this case. This action was initiated by plaintiffs on August 16, 2010. (ECF No. 1.) The amended counterclaims were filed more than two years later -October 2, 2012-towards the end of a contentious and litigious discovery process. (ECF No. 33.) Plaintiffs' answer to the amended counterclaims and their motion for judgment on the pleadings were filed two months later on November 30, 2012. (ECF No. 390.) The delay, if any, caused by plaintiffs filing a motion for judgment on the pleadings under Rule 12(c), instead of a motion to dismiss under Rule 12(b)(6), is de minimis in light of the history of this case and is not a basis upon which to deny plaintiffs' motion for judgment on the pleadings. In contrast to this case, in Lapella, the defendants did not file their motion for judgment on the pleadings until five months after the plaintiff filed her amended complaint. Lapella, 2012 WL 2962411, at *2, *11. The Pontone defendants are not prohibited from filing a motion for leave to file second amended counterclaims. As noted in the background section, Batesville raised certain counterclaims, which are similar to those raised by the Pontone defendants. The court dismissed those counterclaims without prejudice. Even if Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 191 of 192 York Group, Inc. v. Pontone, Slip Copy (2013) © 2017 Thomson Reuters. No claim to original U.S. Government Works. 13 the Pontone defendants are permitted to file second amended counterclaims for abuse of process, in the interests of judicial efficiency, the court may sever the second amended counterclaims for abuse of process and consider them, if appropriate, with any similar or related claims filed by Batesville. FED. R. CIV. P. 42(b); see infra note 7. 4 Plaintiffs argue that “[i]n ruling on Batesville's Counterclaims, this Court clearly determined that any claims for which abuse of process allegations form the general basis are not ripe for adjudication and must be dismissed without prejudice.” (ECF No. 390 at 6.) Plaintiffs argue under the law of the case doctrine, that the Pontone defendants' counterclaims for abuse of process should likewise be dismissed because they are unripe for adjudication. (Id.) The Pontone defendants respond that the court's ruling on August 14, 2012 did not preclude the filing of counterclaims for abuse of process; rather, “the Court simply ruled on what was presented before her for decision.” (ECF No. 436 at 4-5.) The Third Circuit Court of Appeals has described the law of the case doctrine as follows: “ ‘[W]hen a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.’ ” In re Pharmacy Benefit Managers Antitrust Litig., 582 F.3d 432, 439 (3d Cir. 2009) (quoting Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983)). In the absence of extraordinary circumstances, this Court should generally adhere to its own prior rulings arising out of the same case. See, e.g., id. Benjamin ex rel. Yock v. Dep't of Pub. Welfare of Pa., 701 F.3d 938, 948-49 (3d Cir. 2012). Under the law of the case as set forth on the record on August 14, 2012 and as discussed below, claims for abuse of process based upon the initiation and continuation of the litigation as a whole are unripe for adjudication. Batesville's counterclaim for abuse of process was dismissed on that basis. The ruling did not preclude the filing of all abuse of process counterclaims; rather, it set forth the court's view that the law in Pennsylvania requires the dismissal of counterclaims for abuse of process based upon the initiation and continuation of litigation as a whole. The court will undertake an independent review of the factual allegations set forth in Scott Pontone's and Harry Pontone's abuse of process counterclaims to determine whether they should likewise be dismissed on this basis. 5 Scott Pontone and Harry Pontone allege plaintiffs “use the ruse of litigation to seek to impose settlements in which the competitor is required to limit or completely end its competitive activities.” (ECF No. 333 ¶¶ 99, 100.) To the extent Scott Pontone and Harry Pontone attempt to set forth claims for abuse of process based upon the 2007 settlement among Scott Pontone, Harry Pontone, and plaintiffs, the claims are barred by the two-year statute of limitations. 42 PA. CONS. STAT. § 5524(1). 6 The court notes that plaintiffs, counsel for plaintiffs, Reed Smith LLP, and Pontone defendants have filed motions for costs in the course of this litigation claiming the opposing party's discovery motions were baseless. (See e.g. ECF Nos. 239, 255, 381.) 7 The court notes the Pontone defendants did not file a motion for leave to amend the amended counterclaims. If the Pontone defendants file a motion for leave to file second amended counterclaims and their second amended counterclaims set forth abuse of process claims upon which relief may be granted, the court is inclined to sever those claims from the other counterclaims asserted in this case under Federal Rule of Civil Procedure 42(b) in order to promote the expeditious resolution of the claims currently pending before the court. FED. R. CIV. P. 42(b) (“For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims.”). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 3:14-cv-00853-RDM Document 325-1 Filed 04/03/17 Page 192 of 192
