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DIAMOND TRIUMPH AUTO GLASS v. SAFELITE GLASS CORPORATION

November 12, 2004.

DIAMOND TRIUMPH AUTO GLASS, INC., Plaintiff
v.
SAFELITE GLASS CORPORATION, Defendant.



The opinion of the court was delivered by: JAMES MUNLEY, District Judge

MEMORANDUM

Presently before the court for disposition is Plaintiff Diamond Triumph Auto Glass, Inc.'s ("Diamond") motion to dismiss (Doc. 242) Defendant Safelite Glass Corporation's ("Safelite") counterclaims II-VII for failure to state a claim upon which relief may be granted. The matter has been fully briefed and is ripe for disposition. For the following reasons, we will deny the motion in part and grant it in part.

Background*fn1

  Both Diamond and Safelite are engaged in the business of repairing and replacing automobile glass. Safelite, in addition, manages the automobile glass replacement programs for numerous insurance companies throughout the country. In conjunction with its handling of the insurance companies' automobile glass replacement programs, Safelite operates one or more telephone call centers to process calls from insured individuals in need of automobile glass repair or replacement. Upon receiving a request at its call center from an insured seeking a repair or replacement job, Safelite refers that job to an automobile glass repair facility. To facilitate its referral of automobile glass repair and replacement jobs, Safelite contracts with a network of shops that provide glass repair and replacement services. Accordingly, after receiving a job request through its call center, sometimes Safelite will refer the work to a Safelite facility, and sometimes the work will be scheduled at another network shop.

  In April 2000, Diamond signed a contract with Safelite, called the "Network Participation Agreement," under which Diamond received, prior to termination of the Agreement, some of these automobile glass referrals from the Safelite call center. On March 29, 2002, Diamond filed a complaint initiating the case sub judice, alleging that Safelite breached the Network Participation Agreement, violated a duty of good faith and fair dealing, engaged in deceptive trade practices, and interfered with prospective contractual relationships. Diamond filed a second amended complaint on February 18, 2004.

  In response, Safelite filed an answer with seven counterclaims on March 8, 2004. These counterclaims arise from two allegedly improper business practices by Diamond. First, in response to Safelite's breach of the network agreement, Diamond allegedly sent letters to the insurance companies, whose glass replacement programs are run by Safelite, maintaining that Safelite stole auto-glass replacement jobs from Diamond. Second, Diamond allegedly provided "push payments" to insurance agents and individuals working with and for insurance companies. These push payments consisted of financial rewards, such as gift certificates or free gasoline cards, provided to insurance agents in exchange for their agreement to refer insured individuals in need of glass replacement to Diamond.

  In Counterclaim I, Safelite alleges that Diamond's letters to Safelite's insurance clients were defamatory. Counterclaim II alleges that the letters constituted false advertising under the Lanham Act, 15 U.S.C. § 1125(a). Counterclaim III alleges that Diamond's push payments constitute commercial bribery under the Robinson-Patman Act, section 3(c), 15 U.S.C. § 13(c). Counterclaim IV avers that Diamond intentionally interfered with Safelite's business relationships by providing the push payments. Counterclaim V maintains that common law unfair competition prohibits Diamond's push payments. Counterclaim VI alleges that the push payments violated various state statutes proscribing deceptive trade practices and commercial bribery. Finally, Counterclaim VII avers that Diamond breached the Network Agreement by making push payments because the Agreement specifically required Diamond to comply with all laws and regulations applicable to its business. On May 6, 2004, Diamond filed the instant motion to dismiss bringing this case to its present posture.

  Jurisdiction

  The Court exercises jurisdiction over this dispute pursuant to its federal question jurisdiction, 28 U.S.C. § 1331, and supplemental jurisdiction, 28 U.S.C. § 1367. Pennsylvania law applies to those claims considered pursuant to supplemental jurisdiction. United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938)). Standard

  When a 12(b)(6) motion is filed, the sufficiency of a complaint's allegations are tested. The issue is whether the facts alleged in the complaint, if true, support a claim upon which relief can be granted. In deciding a 12(b)(6) motion, the court must accept as true all factual allegations in the complaint and give the pleader the benefit of all reasonable inferences that can fairly be drawn therefrom, and view them in the light most favorable to the plaintiff. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997).

  Discussion

  Diamond seeks to dismiss Counterclaims II-VII. We will consider each count in seriatim.

  A) Count II: Lanham Act Claim

  Safelite alleges that Diamond engaged in false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(b), by sending letters to insurance companies that participate in Safelite's claims-management business. In these letters, Diamond accused Safelite of improperly steering customers in what amounted to theft of customers. Diamond asserts that we should dismiss ...


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