United States District Court, M.D. Pennsylvania
SYLVIA H. RAMBO, District Judge.
Presently before the court is Plaintiff's motion for a preliminary injunction seeking to enforce a settlement agreement that resolved prior litigation between the parties. For the reasons that follow, the motion will be denied.
A. Procedural Background
Harsco initiated the captioned action by filing a complaint on November 6, 2013 (Doc. 1) and an amended complaint on December 20, 2013 (Doc. 12). On January 10, 2014, Novetas filed an answer to the amended complaint asserting affirmative defenses and a counterclaim. (Doc. 17.) On March 19, 2014, Harsco filed a motion for a preliminary injunction. (Doc. 23.) Novetas filed a brief in opposition to the motion on April 2, 2014 (Doc. 25), and Harsco filed a brief in support of the motion on April 22, 2014 (Doc. 26). A hearing on the motion was held on April 23, 2014. Thus, the motion is ripe for disposition.
B. Factual Background
As the court writes primarily for the parties, who are familiar with the facts and procedural history of the case, it will set forth only those facts necessary to its analysis.
Harsco avers that it is the world's largest manufacturer of high quality, inert blasting abrasives used for blast cleaning and preparation of surfaces, including coal slag blasting abrasives. (Doc. 26, p. 2.) Harsco sells its blasting abrasives under the federally registered trademark BLACK BEAUTY®. ( Id. ) Novetas manufactures and sells glass abrasives used for blast cleaning and preparation of surfaces, and is a competitor of Harsco. ( Id. ) Novetas commercially advertises and markets its recycled glass blasting abrasives under the trademark NEW AGE BLAST MEDIA®, using printed publications, periodic email blasts, and the websites www.newageblastmedia.com and www.novetas.net (the "advertising materials"). ( Id. )
On December 20, 2013, Harsco filed an amended complaint (Doc. 12) alleging that Novetas had breached the terms of a confidential settlement agreement, which had served to resolve prior litigation between the parties that had been pending before this court under Civil Case No. 1:11-cv-1355 ("the prior litigation"). In the prior litigation, Harsco alleged that Novetas had embarked on a pervasive advertising campaign to disparage Harsco Minerals and its BLACK BEAUTY® product. (Doc. 26, p. 3.) More specifically, Harsco alleged that Novetas made false and misleading claims regarding the composition and safety of Harsco's product, the opinions of the Environmental Protection Agency ("EPA"), and the EPA's past, current, and future endorsement of and regulations relating to coal slag. ( Id. ) Harsco further alleged that Novetas' acts were causing and would continue to cause damage and irreparable harm to Harsco's reputation and goodwill. ( Id. at p. 4.)
The July 8, 2012 Settlement Agreement ("Settlement Agreement") contains six continuing limitations on Novetas's future statements and conduct regarding Harsco and coal slag abrasives. ( Id. ) In addition, the agreement contains limitations on Harsco's future statements with regard to Novetas. ( Id. ) In consideration of these reciprocal promises, the parties agreed to mutual general releases of liability and the case was dismissed. ( Id. )
In the present action, Harsco claims that Novetas has continued to make false, misleading, and disparaging claims regarding the composition and safety of Harsco's products, which it contends is in violation of the Settlement Agreement. (Doc. 23, ¶ 18; Doc. 26, p. 5.) In support of its allegation, Harsco asserts at least four alleged breaches of the Settlement Agreement.
First, Harsco claims that Novetas violated the settlement agreement on November 13, 2013 when it issued "Beryllium Alert Report #4" by email blast and by posting the article on its website. ( Id. at p. 9.) The article was a complete reprint of a newspaper article originally published in the Norfolk, Virginia Daily Press and contained explicit references to Harsco and its BLACK BEAUTY® product. (Doc. 25, p. 5; see Hearing Exhibit No. 1 ("Ex. No. __").) Harsco argues that Novetas's distribution of the article violated Provision 2.1 of the Settlement Agreement, which prohibits Novetas from making any "explicit or implicit reference to Harsco or its corporate affiliates in any Media whatsoever, " and defines "Media" as, inter alia, direct mail, websites, Internet blogs, and email blasts. (Settlement Agreement at ¶ 2.1; Doc. 26, p. 9.) Harsco adds that the sole exception to this prohibition, which does not apply here, is where Novetas directly quotes a "government public health agency" and the quoted statement references Harsco. (Doc. 26, p. 9; see Settlement Agreement at ¶¶ 2.1 and 2.4.) In response, Novetas contends that its distribution of the article did not in any way violate the Settlement Agreement because, inter alia, "[n]othing in the settlement agreement precludes Novetas from reprinting entire articles which mention Harsco." (Doc. 25 at pp. 5-6.)
The second alleged breach of the Settlement Agreement relates to a comment posted to an industry website, www.paintsquare.com, by Paul Mellon Jr., the President of Novetas, in response to an article appearing on the website. (Doc. 26, p. 9; See Ex. No. 3.) In the post, Mr. Mellon wrote:
I think it is now apparent to the EPA that they will not be able to continue to allow coal slag abrasives in their new Beneficial Program regardless of the EPA's final decision on CCR's as Hazardous or special waste. OSHA's decision to tell the coal slag companies in 2012 to list the highly toxic metal beryllium and other toxins on their MSDS ends any pretense that the EPA used in the past to claim coal slag abrasives are "safe" for human health or [the] environment. It is clear from OSHA that there are toxins in the slag dust at unsafe levels. ...