Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Doca Company, As Successor To Caldon Company Limited Partnership v. Westinghouse Electric Company

August 9, 2011

DOCA COMPANY, AS SUCCESSOR TO CALDON COMPANY LIMITED PARTNERSHIP, PLAINTIFF AND COUNTERCLAIM DEFENDANT,
v.
WESTINGHOUSE ELECTRIC COMPANY, LLC, AND ADVANCED MEASUREMENT & ANALYSIS GROUP, INC. DEFENDANTS AND COUNTERCLAIM PLAINTIFFS.



OPINION AND ORDER ON MOTION FOR LEAVE TO FILE AN AMENDED COMPLAINT

Plaintiff DOCA Company, as successor to Caldon Company (hereinafter referred to as "DOCA") has filed a Motion for Leave to File an Amended Complaint and Corrected Replies to Counterclaims. ECF No. 146. Defendant Westinghouse Electric Company LLC (hereinafter referred to as "Westinghouse") opposes the motion. For the reasons stated below we will grant DOCA's Motion.

I. Background

On December 29, 2004, DOCA filed a two-count Complaint against co-defendants Westinghouse and Advanced Measurement & Analysis Group, Inc. (hereinafter referred to as "AMAG") alleging unfair competition in violation of the Lanham Act § 43 (a)(2), 15 U.S.C. § 1125(a), and unlawful attempt to monopolize in violation of the Sherman Antitrust Act, 15 U.S.C. § 2. DOCA's initial Complaint alleged that Westinghouse and AMAG made false and misleading statements to prospective customers, causing potential customers to purchase AMAG CROSSFLOW UFMs rather than DOCA UFMs. Consequently, in its original Complaint, DOCA seeks treble damages under Section 4 of the Clayton Act, 15 U.S.C. §15(a).

On March 29, 2005, Westinghouse filed a motion to dismiss, which we denied. ECF No. 23. Accordingly, Westinghouse filed its Answer to the Complaint and filed counterclaims against DOCA under Section 43(a) of the Lanham Act and Section 2 of the Sherman Antitrust Act. ECF No. 28. Discovery was initially set to close on May 1, 2008. ECF No. 38. After numerous filings and Orders not relevant to the instant Motion, discovery was extended until August 1, 2008. ECF No. 56. Following a Joint Motion for Extension of Time to Complete Discovery, discovery was further extended to June 1, 2009. ECF No. 61. Since then, discovery has been extended six more times, with the latest date being July 31, 2011. ECF No. 76, 113, 121, 144, 176, 238.

On July 30, 2010, DOCA filed the instant motion. At the time, July 30, 2010 was the date discovery was set to close; however, prior to July 30, 2010, it was apparent to the Court and the parties that discovery would again be extended. Westinghouse filed a Brief in Opposition to DOCA's motion (ECF No. 166), to which DOCA filed a Reply (ECF No. 182). In addition, Westinghouse filed a Sur-Reply Brief (ECF No. 188) and a Supplemental Brief (ECF No. 253). All of the pleadings related to DOCA's motion were originally filed under seal. However, all of these pleadings (as well as numerous others) have been unsealed following our Opinion and Order on DOCA's Motion to Unseal. Op. & Order on Motion to Unseal, July 8, 2011, ECF No. 246. Accordingly, DOCA's Amended Complaint will also not be filed under seal.

Attached as Exhibit 1 to DOCA's Motion for Leave to File an Amended Complaint is DOCA's "Proposed Amended Complaint." Ex. 1 to ECF No. 146. On June 23, 2011, DOCA filed a motion requesting that it be permitted to substitute a "Corrected Amended Complaint" for the "Proposed Amended Complaint." ECF No. 241. We granted this motion. ECF No. 261.

As we noted when we permitted the substituted Amended Complaint, Westinghouse's briefs filed in response to the motion to substitute present substantive arguments opposing the filing of the substituted amended complaint. Accordingly, where relevant we consider Westinghouse's arguments filed in those briefs (ECF Nos. 244, 245, & 258), as well as DOCA's response to Westinghouse (ECF No. 257), as arguments in opposition to, and in support of, the instant motion.

Because of the substitution, the Amended Complaint under consideration here is the "Corrected Amended Complaint" attached as Exhibit 2 to ECF No. 246. In the Amended Complaint, DOCA seeks to add a new allegation that Westinghouse engaged in "deliberate misconduct" and fraud under 10 C.F.R. § 50.5 in its communications to the Nuclear Regulatory Commission (the "NRC"). The Amended Complaint also asserts two new Connecticut state law claims: (1) Interference with Prospective Economic Advantage, a Connecticut common law claim (Count 3); and (2) Violations of Connecticut Unfair Trade Practices Act (Count 4). DOCA also seeks compensatory and punitive damages under the state law claims. Finally, the Amended Complaint makes the following changes relevant to the instant motion:

1. Changes the definition of the Relevant Market from "high accuracy UFM nuclear power generating market" to "the MUR uprate Market" in Paragraph 142.

2. Changes Paragraph 153 to include the additional bolded language: "unlawful attempt to monopolize, and a combination and/or conspiracy to monopolize, within the meaning of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2."

II. Federal Rule of Civil Procedure 15

Rule 15 governs amended pleadings. A party may either amend once as a matter of course as long as it is filed within 21 days of service or by leave of court. Fed. R. Civ. P. 15(a)(1)(A) & (a)(2). If a party is not seeking to amend its pleading as a matter of course pursuant to Rule 15(a)(1), then a party may only amend its pleading either by first obtaining the opposing party's permission or by seeking leave of court. Fed. R. Civ. P. 15(a)(2). This liberally interpreted rule instructs that "[t]he court should feely give leave when justice so requires." Id. In Foman v. Davis, the United States Supreme Court stated as follows:

In the absence of any apparent or declared reason -- such as 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. -- the leave sought should, as the rules require, be 'freely given.' 371 U.S. 178, 182 (1962).

The United States Court of Appeals for the Third Circuit has applied Foman in a manner that denies leave only when the specific and enumerated factors identified by the Supreme Court give rise to injustice towards the opposing party. Arthur v. Maersk, Inc., 434 F.3d 196, 203 (3d Cir. 2006). Thus, although Rule 15(a) directs the court to allow an amendment "when justice so requires," a court must deny leave when an amendment is futile or results in undue delay or prejudice. Foman, 371 U.S. at 182.

While the presence of any one of these factors can be grounds for denial of an amendment, the Third Circuit has viewed "prejudice to the non-moving party" as the most significant factor. Cornell & Co., Inc. v. Occupational Safety & Health Rev. Comm'n, 573 F.2d 820, 823 (3d Cir. 1978). A simple claim of prejudice is insufficient grounds for denial; instead, the non-moving party "must show that it was unfairly disadvantaged or deprived of the opportunity to present facts or evidence which it would have offered had the . . . amendments been timely." Bechtel v. Robinson, 886 F.2d 644, 652 (3d Cir. 1989).

Relation Back

Rule 15(c) provides that "[a]n amendment to a pleading relates back to the date of the original pleading when the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out.in the original pleading." Fed. R .Civ. P. 15(c)(1)(B). The Third Circuit has instructed that "amendments that restate the original claim with greater particularity or amplify the factual circumstances surrounding the pertinent conduct, transaction or occurrence in the preceding pleading fall within Rule 15(c)." Bensel v. Allied Pilots Ass'n., 387 F.3d 298, 310 (3d Cir. 2004) (citations omitted). Westinghouse only claims that the proposed amendments are untimely and futile under Rule 15(a) and does not dispute that the proposed amendments relate back if found proper under Rule 15(a). Therefore, if the proposed Amended Complaint is found to be timely under Rule 15(a), we will conclude that it relates back to the original complaint pursuant to Rule 15(c)(1)(B).

III. Discussion

Westinghouse first argues that DOCA's motion to amend its complaint should be denied because DOCA unduly delayed seeking leave to amend. Westinghouse argues that the delay in seeking leave to amend is prejudicial to Westinghouse because DOCA has radically altered its theory of liability, because DOCA deliberately delayed seeking leave to amend its complaint for nearly a year and a half, and because the delay prejudiced Westinghouse in discovery.

Next, Westinghouse argues that permitting DOCA to amend its Complaint is futile because DOCA's claims would not survive a motion to dismiss. Westinghouse asserts that the state law claims are impliedly preempted. Westinghouse also argues that DOCA's state law claims are futile when the correct state law is considered under a choice of law analysis. Finally, Westinghouse argues that all of DOCA's claims are barred because the NRC has primary jurisdiction. We will address Westinghouse's arguments in turn.

A. Undue Delay and Prejudice towards Defendant

Westinghouse argues that under Rule 15(a) DOCA's motion to amend its complaint is unduly delayed and therefore highly prejudicial for three principal reasons: (1) the Amended Complaint offers a novel theory of liability from the theory asserted in the original Complaint;

(2) DOCA allegedly had the opportunity to file the Amended Complaint one year and five months prior to the actual filing date; and (3) the delay disabled Westinghouse in the discovery process. Def.'s Br. Opp'n. 7, 9--17. DOCA, however, maintains that (1) the filing of the motion to amend its complaint is timely and proper pursuant to Rule 15(a) and Rule 11; (2) the theory of liability in the Amended Complaint is not new but rather an extension of the theory listed in the original Complaint; and (3) if any party is prejudiced in the discovery process because of the Amended Complaint it is DOCA, not Westinghouse. Pl.'s Reply Br. 3--6.

1. DOCA's Assertion of "Fraud on the NRC"

According to Westinghouse, the Amended Complaint includes an alleged new theory of liability claiming that Westinghouse made "fraudulent representations and omissions" to the NRC, thus amounting to "deliberate misconduct" pursuant to 10 C.F.R. § 50.5. Def.'s Br. Opp'n. 10. Westinghouse asserts that the theory in the initial Complaint, however, centers on false statements made to customers and potential customers about the AMAG CROSSFLOW UFM. Id. at 9-10.

A theory of liability different from that asserted in the original complaint can constitute undue prejudice where the new theory requires "'additional discovery, cost, and preparation to defend against new facts or new theories.'" EEOC. v. Hussey Copper Ltd., 2009 WL 918298, at *1 (W.D.Pa. April 2, 2009), quoting Cureton v. NCAA, 252 F.3d 267, 273 (3d Cir. 2001). However, courts most often acknowledge the new theory limitation to filing an amended complaint when Plaintiff seeks leave after summary judgment motions have been filed. Laurie v. Nat'l Passenger R.R. Corp., 105 F.App'x 387, 392 (3d Cir. 2004).

DOCA does not dispute Westinghouse's overall understanding of the "Fraud on the NRC" theory of liability. However, DOCA argues that this theory is not novel but rather a more detailed allegation pertaining to something that has been at issue since the initial complaint was filed -- Westinghouse's communications to the NRC. Pl.'s Reply Br. 3. In support of its argument, DOCA points to several statements made by Westinghouse in its Motion to Dismiss Brief filed in 2005. DOCA notes that Westinghouse, in its brief, acknowledged that DOCA's "claims under the Lanham and Sherman Acts are predicated on statements made to the NRC." Id. at 4 (citing Docket No. 9 at p. 26). Furthermore, DOCA highlights sections where Westinghouse explains the NRC regulatory process to include Westinghouse's submission of reports to the NRC and the NRC's subsequent review and eventual approval. Pl.'s Reply Br. 4 (citing Docket No. 9 at p. 9--18). Finally, DOCA emphasizes that Westinghouse acknowledged that DOCA's original Complaint concerned "allegedly disparaging statements [ ] made to the NRC 'in regulatory submissions.'" Pl.'s Reply Br. 4 (citing Docket No. 9 at p. 4, 27). According to DOCA, these statements demonstrate that Westinghouse knew since the filing of the initial Complaint that Westinghouse's communications with the NRC were a part of this case. Pl.'s Reply Br. 4.

We agree with DOCA. In the original Complaint, DOCA alleged that Westinghouse violated the Lanham Act, 15 U.S.C. § 1125(a) and the Sherman Antitrust Act, 15 U.S.C. § 2, by making false statements to customers and potential customers. Compl. ¶¶ 66--76. In the Amended Complaint, DOCA alleges that Westinghouse engaged in the exact same action -- making false statements. Pl.'s Mot. for Leave to File an Am. Compl. & Corrected Replies to Countercl., Ex. 1, ¶¶135--56. The only difference in the "Fraud on the NRC" theory of liability is to whom Westinghouse made the statements. This slight change in theory does not affect the underlying elements for Lanham Act and Sherman Antitrust violations.

A Lanham Act violation occurs when "any person who, on 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 . 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." 15 U.S.C. § 1125(a)(1)(B). Significantly, missing from the elements is any requirement that distinguishes to whom the false fact is conveyed. Instead, the law is primarily concerned with the fraudulent act itself.

Similarly, a Sherman Antitrust violation does not turn on the question of who is defrauded. Instead, a person contravenes the Sherman Antitrust Act when he or she "monopolize[s], or attempt[s] to monopolize, or combine[s] or conspire[s] with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations.." 15 U.S.C. ยง 2. Here the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.