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Pitney Bowes, Inc. v. ITS Mailing Systems

March 17, 2010


The opinion of the court was delivered by: Buckwalter, S.J.


Currently before the Court are Defendants ITS Mailing Systems, Inc., Gary Shank, and Martin Klagholz's ("ITS Defendants") Motion to Dismiss Alleged Lanham Act Violations (Count VI of the Complaint), and Plaintiff Pitney Bowes, Inc.'s ("Pitney Bowes") Response in Opposition. For the reasons discussed herein, the Court grants ITS Defendants' Motion to Dismiss.


Plaintiff and ITS Defendants are industry competitors. (Compl. ¶ 1.) Both are engaged in the business of selling, leasing, and servicing postal technologies and offering related mailing solutions. Plaintiff alleges that ITS Defendants engaged in a scheme where they called Plaintiff's customer service centers numerous times and, in each instance, posed as various clients of Plaintiff in order to procure confidential information regarding Plaintiff's clients' accounts. (Id.) ITS Defendants then used the confidential information it obtained from these phone calls to solicit Plaintiff's clients' business and to undercut Plaintiff's prices in these bids. This information gave ITS Defendants a distinct advantage, because "ITS knew exactly when and at what prices to solicit [Plaintiff's] clients and disrupt [Plaintiff's] client relationships." (Id. ¶ 2.)

Plaintiff alleges that ITS Defendants were calling Plaintiff's customer service call centers in Wisconsin and Washington to obtain confidential information by pretending to be existing clients of Plaintiff. (Id. ¶ 23.) In conducting this scheme, ITS employees would call a customer service center purporting to be an agent of an existing client of Plaintiff. (Id. ¶ 24.) The ITS employee would claim to have been newly hired by the client and unable to find the client's documents relating to the products and services Plaintiff was providing for the client. (Id.) ITS employees performing these calls would also purport to possess certain identifying information for the client, for instance, "the client's telephone number, address, equipment type and/or serial numbers." (Id.)

The information ITS employee-callers requested ran from "when the lease of [their] Pitney Bowes postage meter was due to expire, the amount of [their] lease payments on the postage meter, whether any late payments had occurred on the account, [to] what the settlement quote would be or how much money it would cost to prematurely terminate an existing lease." (Id. ¶ 25.) Assuming these callers were who they represented themselves to be, Plaintiff revealed the requested confidential information to them. (Id. ¶ 26.)

Plaintiff eventually discovered the scheme when calls from supposedly different clients were made using the same telephone number and by someone with the same voice. (Id.) Additionally, when Plaintiff's account executives would call its clients to follow-up on these purported phone calls, the account executives would learn that no one by the name the caller had provided worked for the respective clients. (Id.) While investigating this scheme, Plaintiff learned that the phone numbers used to contact its customer service center on behalf of these clients belonged to ITS Defendants. (Id. ¶ 28.) Plaintiff alleges that these calls were made by ITS employees, who acted with the consent and direction of ITS Defendants. (Id. ¶ 31.) As the result of this scheme, Plaintiff lost clients to ITS Defendants in a manner that evinces ITS Defendants' use of Plaintiff's confidential information "to underbid" and "'unhook'" Plaintiff's clients. (Id. ¶ 30.)

On August 11, 2009, Plaintiff sent a "cease and desist letter" to ITS that identified the allegedly unlawful conducting and demanded its cessation. (Id. ¶¶ 32-33.) At the time that Plaintiff filed the Complaint, however, ITS Defendants continued this alleged scheme to obtain Plaintiff's confidential information and use this information to bring Plaintiff's clients over to ITS. (Id. ¶ 34.)


On November 2, 2009, Plaintiff filed the Complaint in the instant action against ITS Defendants as well as Ryan Himmelreich and Mark Gaston. Invoking diversity and federal question jurisdiction pursuant to 28 U.S.C. § 1332 and 28 U.S.C. § 1331, respectively,*fn1 the Complaint asserts six claims premised on either federal or state law: (1) common law fraud; (2) unfair competition; (3) tortious interference with existing contractual relations; (4) conspiracy; (5) violation of Racketeering Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq.; and (6), violation of Lanham Act, 15 U.S.C. § 1125. (Id. ¶¶ 12, 36-83.)

ITS Defendants responded to the Complaint in the form of a pre-answer Motion to Dismiss Count VI (Lanham Act Violations) of the Complaint for Failure to State a Claim, filed on November 25, 2009. Subsequently, on December 11, 2009, Plaintiff filed an Amended Response to ITS Defendants' Partial Motion to Dismiss.


A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the complaint. FED. R. CIV. P. 12(b)(6). Pursuant to Rule 8(a), the complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a). To withstand a motion to dismiss, the complaint "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, - U.S. -, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint that provides sufficient facts to "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged" meets the required level of "facial plausibility." Iqbal, 129 S.Ct. at 1949 (concluding that "respondent's complaint has not 'nudged [his] claims' . . . 'across the line from conceivable to plausible'" (quoting Twombly, 550 U.S. at 570.)) On the other hand, "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555).

This analysis is derived from two guiding principles recognized by the Court in Twombly, reaffirmed in Iqbal, and echoed by the Third Circuit in Fowler v. UPMC Shadyside. See Iqbal, 129 S.Ct. at 1949-50 (quoting Twombly, 550 U.S. at 555-56.); Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). "First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Iqbal, 129 S.Ct. at 1949-50. In other words, a "District Court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions." Fowler, 578 F.3d at 210-211; see also Iqbal, 129 S.Ct. at 1949. (noting that "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.") "Second, a District Court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.'" Fowler, 578 F.3d 211. Evaluating whether a complaint demonstrates "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." Iqbal, 129 ...

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