Advanced Technology Corp. v. Instron, Inc.
ADVANCED TECHNOLOGY CORPORATION, INC. v. INSTRON, INC.
Attorneys
David B. Mack, Tara J. Myslinski, OâConnor, Carnathan and Mack LLC, Burlington, MA, for Plaintiff., Martha C. Gaythwaite, Verrill & Dana, LLP, Portland, ME, Sara E. Hirshon, Ver-rill Dana, LLP, Boston, MA, for Defendant.
Full Opinion (html_with_citations)
MEMORANDUM AND ORDER
I. INTRODUCTION
Advanced Technology Corporation, Inc. (âATCâ) brings this suit against Instron, Inc. (âInstronâ) claiming commercial disparagement. Essentially, ATC alleges that Instron published a magazine article that readers could infer was about ATCâs technology. ATC claims that this inference reflected negatively on its products and caused it to lose client sales. Instron now moves for summary judgment under Federal Rule of Civil Procedure 56. Because ATC has failed to provide sufficient evidence of special damages, the Court GRANTS the motion.
A. Procedural Posture
The complaint and first amended complaint were filed January 30, 2012, Compl., ECF No. 1; Compl., ECF No. 4. Instron filed a motion to dismiss on June 1, 2012. Def. Instronâs Mot. Dismiss, ECF No. 23. On February 26, 2013, Judge Tauro granted Instronâs motion to dismiss for Counts I and II, and denied its motion with respect to Count III. Order, February 26, 2013, ECF No. 47, 925 F.Supp.2d 170. ATC then filed a second amended complaint on
On May 30, 2014, Instron filed a motion for summary judgment and an accompanying memorandum in support. Def. In-stronâs Mot. Summ. J., ECF No. 105; Mem. Supp. Def. Instronâs Mot. Summ. J. (âInstronâs Mem.â), ECF No. 106. ATC filed a memorandum in opposition to the motion on June 20, 2014. PI. Advanced Technology Corp., Inc.âs Mem. Oppân Def. Instronâs Mot. Summ. J. (âATCâs Oppânâ), ECF No. 116. On June 27, 2014, Instron filed its reply. Reply Supp. Def. Instron, Inc.âs Mot. Summ. J. (âInstronâs Replyâ), ECF No. 121. A hearing regarding the motion for summary judgment was held July 10, 2014, at which time the Court took the matter under advisement. Electr. Clerkâs Notes, ECF No. 127.
B. Factual Background
ATC is a Tennessee corporation that manufactures the Stress-Strain Micro-probe System, a testing system based on a method called automated ball indentation (âABIâ).
Instron, a Massachusetts subsidiary of Illinois Tool Works, Inc., an Illinois company, is an important player in the market for the more conventional destructive variety of tensile-testing equipment. Second Am. Compl. ¶¶ 6, 13-14. ATC claims that its nondestructive technique threatened Instronâs established business in this market. Id. ¶ 13. According to ATC, Instron reacted to this threat by using âits employeesâ positions on key national and international standards organizations to promote measures that would discredit the ABI technique.â Id. ¶ 21.
One such employee was Edward Tobol-ski (âTobolskiâ), who served on an industry committee âtasked with evaluating drafts of ABI test methods.â Resp. PL Advanced Tech. Corp., Inc. Def.âs Statement Undisputed Material Facts Supp. Mot. Summ. J. & Advanced Tech. Corp., Inc.âs Statement Facts Genuine Issue Be Tried (âPSFâ) ¶¶ 13-14, ECF No. 117. According to ATC, Tobolski attempted to identify the ABI technique with an unrelated technique used by Instron, called instrumented indentation testing (âIITâ). Second Am. Compl. ¶¶ 24-26; see also PSF ¶¶ 18-25
In 2009, Tobolski and another Instron employee, Bill OâNeill, co-authored an article published in the February 2009 issue of Advanced Materials & Processes, an industry magazine read by more than 39,000 people.
II. ANALYSIS
A. Standard of Review
Summary judgment is proper if the moving party shows, based on the materials in the record, that âthere is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.â Fed.R.Civ.P. 56(a). An issue of material fact is genuine if âthe evidence is such that a reasonable jury could return a verdict for the nonmoving party.â Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The materiality of a fact depends on the substantive law of the case, and only factual disputes that might affect the outcome of the suit can properly preclude summary judgment. Id.
When deciding a motion for summary judgment, the Court views the record âin the light most favorable to the non-moving party and draw[s] all reasonable inferences in their favor.â Pineda v. Toomey, 533 F.3d 50, 53 (1st Cir.2008). Summary judgment must be granted if, after'adequate time, the non-moving party âfails to make a showing sufficient to establish the existence of an element essential to that partyâs case, and on which that party will bear the burden of proof at trial.â Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
B. Commercial Disparagement Requirements
Commercial disparagement goes by many names, including injurious false-
One who publishes a false statement harmful to the interests of another is subject to liability for pecuniary loss resulting to the other if (a) he intends for publication of the statement to result in harm to interests of the other having a pecuniary value, or either recognizes or should recognize that it is likely to do so, and (b) he knows that the statement is false or acts in reckless disregard of its truth or falsity.
Dulgarian v. Stone, 420 Mass. 843, 852, 652 N.E.2d 603 (1995) (quoting Restatement (Second) of Torts § 623A (1977)) (internal quotation marks omitted). It is black-letter law in Massachusetts that a plaintiff pursuing a commercial disparagement claim bears the burden of proving that:
[The] defendant (1) published a false statement to a person other than the plaintiff; (2) âof and concerningâ the plaintiffs products or services; (3) with knowledge of the statementâs falsity or with reckless disregard of its truth or falsity; (4) where pecuniary harm to the' plaintiffs interests was intended or foreseeable; and (5) such publication resulted in special damages in the form of pecuniary loss.
HipSaver, 464 Mass. at 523, 984 N.E.2d 755.
1. False Statement
In a commercial disparagement case, the plaintiff bears the burden of proving that the statements were false. Id. at 524, 984 N.E.2d 755. Instron claims that ATC cannot prove that the statements Tobolski and OâNeill made in the article are false. Instronâs Mem. 7. According to Instron, there are no false statements in the article because the article was about IIT, not ABI; because it discussed the methods used by Frontics, a competing company, rather than those used by ATC; and because it did not at any point explicitly mention either ATC or its ABI method. See Instronâs Reply 3. Instron correctly observes that the falsity of the statements made in the article depends on the reader drawing the inference that the article was discussing ABI. Id. at 5. The question of whether a reader might make this inference will be discussed below; to clarify the analysis of the falsity of the statements made in the article, such an ihference will be assumed.
a. The Statements Are False with Respect to ABI
ATC claims that a reader would likely have inferred that the article was discussing ABI, and to that extent, the article was false. ATCâs Oppân 7-8. ATC first argues that the article misled readers into the belief that ABI was a form of IIT because it discussed the âpartial unloadingâ method, the hallmark of ABI, under a subheading discussing three methods of IIT. See PSF ¶¶ 42-45. ATC also contends that the article âdescribe[d] and depicted] in a technically flawed manner the ABI âperiodic partial unloadingâ technique.â Id. ¶ 57. To prove that the article was false, ATC cites the articleâs descriptions of ABI as ânew,â and its statements that âmuch work is being done to determine its accuracyâ; it is âstill under developmentâ; and âpreliminary testing has shown a 5% to 10% correlation between
To prove the falsity of these claims, ATC states that âABI is not IIT,â that it âis not new or untested,â that it âhad been marketed and used by industry players in over 20 countries across the world since the early 1990s,â and that it âhas participated in multiple inter-laboratory studies and evaluations to test its efficacy and reliability.â PSF ¶ 50-52, 55. Furthermore, ATC claims that âABIâs results concerning yield strength as correlated to traditional, destructive tensile testing have been publicly available since 1990 ... and they show a correlation between traditional testing that is considerably lower than 5%.â Id. ¶ 54. ATC also notes that its expert is ready to testify that âby 2009, the ABI test method had been fully developed and established as reliable, accurate, and accepted widely by the metals testing industry.â ATCâs Oppân 9. Additionally, ATC states that âRSS is not more promising than ABI,â as it âhas several conflicting equations for the representative strain which is not equal to true-plastic strain, and lacks precision.â PSF ¶ 56 (internal citations omitted).
Instron contends that the statements as made were true and that their positive tone (for instance, describing the technology as âpromisingâ) means that the statements could not support a commercial disparagement claim. Instronâs Mem. 8. This argument is unavailing. As a preliminary matter, the tone of the statements are irrelevant to their falsity â and Instron offers nothing to rebut ATCâs argument that the article incorrectly portrayed ABI as untested and possibly inaccurate compared to traditional methods. Even if the Court does take the positive tone into account, and remembering that at this stage the Court must view the evidence in the light most favorable to ATC, the article could be seen as damning ABI with faint praise. Accordingly, the Court believes that ATC has proffered sufficient evidence of falsity to pass the summary judgment stage.
b. The Statements Are Not Protected Opinions
Instron contends that the statements made in the article are opinions and are therefore protected under the First Amendment. Instronâs Mem. 9. According to Instron, the âprotection extends to âimpreciseâ statements that are qualified with âbroad descriptive terms, susceptible to varying interpretations.â â Instronâs Reply 7 (quoting ARCADD, Inc. v. Dupuis, No. 073797, 2010 WL 3038952, at *4-5 (Mass.Super.Ct. July 13, 2010)). It alleges that the statements at issue âfall squarely into these categories,â id. at 8, and claims that even if Tobolskiâs opinions were based on misstatements of fact, they would still be protected under the First Amendment, Instronâs Mem. 9.
To analyze whether the article is protected opinion, this Court will import the relevant law from the defamation context. This approach is reasonable, as HipSaver similarly looked to the law of defamation to sketch out the contours of a commercial disparagement action. See HipSaver, 464 Mass, at 527, 984 N.E.2d 755 (â[T]he similarities between the two torts suggest that this element is equally relevant and essential to an action for commercial disparagement.â).
Under its opinion theory, Instron argues that âTobolski held the good faith opinion that ATCâs ABI technique was properly considered a form of [IIT] and that ATCâs product performs non-destructive testing using an automated instrument and computer software that is comparable to Fronticsâ product.â Instronâs Mem. 9.
The article discusses the ISO report that reviews three methods of IIT used to determine tensile properties of metals. PSF ¶ 43; ATCâs Oppân 7. It describes RSS as the âmost promisingâ method and provides preliminary testing results reporting its accuracy compared to traditional destructive testing methods. PSF ¶ 44, 46; ATCâs Oppân 7. Because the article states that IIT âhas been used for many years,â PSF ¶ 42; ATCâs Oppân 7, it would be reasonable for a reader to infer that the author was aware of other IIT testing methods besides those discussed in the ISO report. Therefore, the articleâs failure to mention the other IIT methods when describing âthe most promisingâ methods in the report could have led readers to the reasonable understanding that there were no IIT methods that were more accurateâa statement of fact, not of mere opinion.
Taking all reasonable inferences in favor of ATC, as required for summary judgment, the Court concludes that the state
c. The Statements Are Not Protected Scientific Debate
Instron also points to ONY, Inc. v. Cornerstone Therapeutics, Inc., 720 F.3d 490 (2d Cir.2013), which states that âscientific conclusions about unsettled matters of scientific debateâ are protected from commercial disparagement liability. Instronâs Reply 7-8 (internal quotation marks omitted). In ONY, the Second Circuit held that conclusions on issues of continued scientific debate are protected, so long as non-fraudulent data is used and the author accurately discloses the data and methodology used to form the conclusions. 720 F.3d at 498; cf. United States ex rel. Jones v. Brigham & Womenâs Hosp., 678 F.3d 72, 88 (1st Cir.2012) (holding in a similar context that data revisions in scientific research studies did not present âquestions of scientific judgment,â but instead presented an issue as to âwhether the data was falsifiedâ). Applying this rule to the facts before it, the ONY court ruled that the article at issue was not actionable because it was published in a scientific journal and it disclosed the tests and methodologies the author used to reach his conclusion. ONY, 720 F.3d at 498. The court reasoned that such tentative conclusions are part of the scientific method, whereby scientists utilize empirical data to form conclusions that are then subjected to the scrutiny of the scientific community. Id. at 496-97. The articleâs appearance in a scientific journal was also important, as the scientific community understands that conclusions based on empirical data are open to further experimentation, acceptance, or rejection. Id.
Here, Instron offers no facts to demonstrate that the article disclosed any information regarding the methodology or data used in the ISO report or in the article. See Instronâs Mem.; Instronâs Reply. The fact that the article appeared in a scientific magazine is of no moment, as ONY, Milkovich, and Lyons each emphasized the need for disclosing the factual basis of the statements at issue. Here, Instron has failed to provide evidence that the article satisfied this test. Accordingly, Instronâs argument that the article is protected as ongoing scientific debate is unconvincing.
2. Of and Concerning the Plaintiff
a. Instron Intended to Refer to ATC, or Readers Reasonably Inferred the Article Referred to ATC
Massachusetts law provides that the âof and concerningâ element is satisfied when the plaintiff proves:
[Ejither (1) that the defendant intended the words to refer to the plaintiff and that they were so understood or (2) that persons could reasonably interpret the defendantâs words to refer to the plaintiff and that the defendant was negligent in publishing them in such a way that they could be so understood.
HipSaver, 464 Mass, at 528, 984 N.E.2d 755 (quoting ELM Med. Lab., Inc. v. RKO Gen., Inc., 403 Mass. 779, 785, 532 N.E.2d 675 (1989)) (internal quotation marks omitted). Instron contends that ATC does not state a claim for commercial disparagement because the article does not mention ATC, ABI, or Haggag. Instronâs Mem. 7. This fact is not dispositive, however, as the law does not require a direct reference to the plaintiff.
i. Intent
ATC contends that the first means of satisfying the âof and concerningâ element is met, as Tobolski purportedly intended for readers to think the article referred to ABI. ATCâs Oppân 15 (citing PSF ¶48
Thus, ATC has provided sufficient evidence for summary judgment purposes showing that the article made statements âof and concerningâ the plaintiff because it can demonstrate that Instron intended the words to refer to ABI, and that the words were understood to refer to ABI. Even if these facts were insufficient to satisfy this part of the test, however, the asserted facts also meet the requirements of Hip-Saverâs second means of fulfilling the âof and concerningâ element.
ii. Negligence
The second way the âof and concerningâ test can be met is if the plaintiff proves âthat persons could reasonably interpret the defendantâs words to refer to the plaintiff and that the defendant was negligent in publishing them in such a way that they âą could be so understood.â HipSaver, 464 Mass. at 528, 984 N.E.2d 755 (quoting ELM, 403 Mass. at 785, 532 N.E.2d 675). ATC contends that the articleâs discussion of âpartial unloadingâ â a key feature of ABI â would reasonably lead readers to believe that the article was about ABI rather than the âunknownâ RSS. PSF ¶ 47. Bolstering this claim, ATC points to three of its customers who did in fact believe that that article was at least possibly discussing ABI. Id. ¶ 49. Such evidence satisfies, for the purposes of summary judgment, the first part of the negligence test.
Turning to the second part of the testâ whether Instron was negligent in publishing content that could be understood as referring to ATC â Instronâs representative, Tobolski, admitted that at the time he wrote the article he thought that people reading it could believe the technique being discussed would refer to the pre-exist-ing ABI process, even though he also averred that he intended it to refer to a ânew process.â Id. ¶ 48. Accordingly, this Court rules that this evidence of Tobolskiâs decision, to frame the article as he did, despite knowing that readers might think he was talking about ABI rather than some other technique, suffices to show for the purposes of summary judgment that Instronâs statements were âof and concerningâ the plaintiff.
b. Disparagement of Group Requires Demonstration that Reader Inferred Reference to Plaintiff
In cases where there is no direct reference to a plaintiff by name or the plaintiff is not âidentifiable from the de-
Instron asserts that ATCâs disparagement claim is unsupportable because the plaintiff may not prevail in cases where a statement disparages a group â here, the other companies with techniques purportedly less accurate than RSS â unless it is reasonable to understand that the statements refer to that specific member of the group. Instronâs Reply 4. Although an accurate statement of the law, ATCâs evidence rebuts Instronâs broad assertions. Here, although ATC does not directly address the issue, it claims that ATC and Frontics âwere the only two companies in the world who had products that could perform nondestructive tensile testing of metals.â PSF ¶ 27. This narrows the group members to an irreducible minimum wherein it would be reasonable to infer that the statements referred to ATC. See Arcand v. Evening Call Publâg Co., 567 F.2d 1163, 1165 (1st Cir.1977) (â[Defamation, encompassing a considerable proportion of the group, can be seen as a blanket slur, reaching all.â); Gross v. Cantor, 270 N.Y. 93, 95-96, 200 N.E. 592 (1936) (holding plaintiff provided sufficient allegations to raise issue whether he was individually implicated, in article referring to group consisting of twelve members). Even setting aside this argument by way of statistics, ATC provides reasons (discussed above) as' to why a reader would believe the article referred to ABI, as well as evidence demonstrating that third parties did actually believe the article discussed ABI. For these reasons, ATC has satisfied its burden on this point.
c. Reference to Competitorâs Product Does Not Disprove âOf and Concerningâ Element
Instron argues that HipSaver provides this Court with strong reason to conclude that ATC did not establish that the article is âof and concerningâ ABI. Instron notes that whereas in HipSaver, the relevant article did not mention any product name, here it is reasonable for one to infer that Tobolskiâs and OâNeillâs article was not âof and concerningâ ATC, because it explicitly mentioned RSS, âthe name of a competitorâs product, not ATCâs.â Instronâs Reply 4-5 (emphasis in original). Instronâs argument is unconvincing. In HipSaver, the court held that HipSaver, the plaintiff, failed to assert sufficient evidence to conclude that the article at issue discussed its product because it was not reasonably implicated in the article. 464 Mass, at 528-29, 984 N.E.2d 755. HipSaver marketed its product in a way that distinguished it from the product discussed in the article at issue which, unlike HipSaverâs product, was not commercially available. Id. Moreover, while the purportedly defamatory article described a hard plastic frame placed on one hip, HipSaverâs product was marketed as a soft foam protector and covered both hips. Id. at 529, 984 N.E.2d 755. The court also emphasized that plaintiffs failed to provide any âaffidavits from third parties prepared to testify that they understood the article as referring to or being about [the plaintiff] and its product.â Id. The court ruled that these differences meant that HipSaver could not demon
Here, ATC has provided reasons why a reader reasonably would have inferred the article discussed ABI, despite the fact that the article explicitly mentioned a competitorâs product. Additionally, unlike the plaintiff in HipSaver, ATC has in fact provided deposition and email evidence stating that some customers actually believed that the article was discussing ABI. ATCâs Oppân 15. For these reasons, Instronâs argument that HipSaver requires a ruling in their favor is not persuasive,
d. Inference of Exclusive Reference to Plaintiff Unnecessary
Instron further argues that ATCâs evidence of reader confusion is unpersuasive because the testimony indicates either that readers merely thought of ABI when reading the article, or that readers believed the article discussed both ATCâs and Fronticsâ technology. Instronâs Reply 6-7. According to Instron, the fact that a reader merely thought of ABI âhardly means that the reader would conclude that âRSSâ meant ABI, not RSS.â Id. at 7. Although the 'logic of this argument holds some sway, it does not appear strongly to rebut ATCâs reasoning as to why readers may have assumed the article discussed ABI. Furthermore, to the extent that readers may have thought of both ABI and Fron-ticsâ technology while' reading the article, the case law does not seem to require that the reader understand the statement as exclusively discussing the plaintiff. Hip-Saver noted that Massachusetts case- law on commercial disparagement is scarce, but the language is clear that the plaintiff must prove that âpersons could reasonably interpret the defendantâs words to refer to the plaintiff.â HipSaver, 464 Mass. at 524, 528, 984 N.E.2d 755. So long as a purportedly defamatory statement can be understood to actually be referring to a particular plaintiff, this Court will not read into the law an additional requirement that the statement be only about that particular plaintiff.
Drawing all reasonable inferences in favor of ATC,' as is required for summary judgment, Instronâs argument discounting ATCâs evidence is unpersuasive. Accordingly, the Court holds that ATC has satisfied the âof and concerningâ element.
3. With Knowledge or Reckless Disregard of the Statementâs Falsity
To be liable for commercial disparagement, a defendant must have published the contested statements âwith knowledge that they were false, or with reckless disregard for their truth or falsity.â HipSaver, 464 Mass. at 529, 984 N.E.2d 755. This element mirrors the âactual maliceâ requirement in a defamation case. Id. at 530, 984 N.E.2d 755.
In support of Instronâs position, Tobolski said during his deposition that he â[held] a good faith belief that both RSS and ABI [fell] into the umbrella category of TIT,â â PSF ¶ 61, and that âRSS and ABI were the same, apparently in all respects relevant to the statements in the [a]rticle,â id. ¶ 63. Instron also argues that Tobolski had a good faith belief that âATCâs product perform[ed] non-destructive testing using an automated instrument and computer software that [was] comparable to Fron-ticsâ product.â Instronâs Mem. 9. Furthermore, Instron states that âTobolskiâs belief was based on his 35 years of experience in the industry as well as the same commonsense view shared by other members of relevant ... ISO subcommittees.â Id.
In response, ATC points to specific facts demonstrating the plausibility that Tobol-ski was aware, or should have been aware
Viewed in the light most favorable to ATC and drawing all reasonable inferences in ATCâs favor, one could reasonably infer that Tobolski either knew of or recklessly disregarded the truth or falsity of the article. Because Tobolski was familiar with the ABI technology, one could reasonably assume that, at the very least, he may have been aware of the potential for factual falsity. Since Tobolski believed that ABI was a subset of IIT, Instronâs Mem. 9, and that readers might think of ABI when reading the article, PSF ¶ 48, his decision to publish the article' without confirming that the information was accurate in relation to ABI, id. ¶ 66, can reasonably be inferred to constitute reckless disregard for the articleâs truth or falsity.
ATC has thus provided sufficient evidence to assert that Tobolski published the article when he knew that it was false, or recklessly disregarded the articleâs truth or falsity, and therefore the Court holds that this element survives summary judgment.
4. Pecuniary Harm Was Intended or Foreseeable
ATC must also prove that Instron' âintend[ed] for publication of the statement to result in harm to [the] interests of the [plaintiff] having a pecuniary value, or either recognizefd] or should [have] recognize[d] that it [was] likely to do so.â HipSaver, 464 Mass, at 534, 984 N.E.2d 755 (second alteration in original) (internal quotation marks omitted). Instron claims that ATC has provided no evidence of intent or foreseeability. Instronâs Mem. 11; Instronâs Reply 9.
ATC contends that pecuniary harm was intended or foreseeable to Tobolski because âHaggag was not shy about letting Tobolski know that Haggag would not permit ABI to be lumped into the category of TITâ because he felt it was denigrating to his technique and business.â ATCâs Oppân 17. If such knowledge did not cause To-bolski to recognize that the publication was likely to result in pecuniary harm to ATC, at the very least, it put Tobolski on notice that the article could have negative pecuniary effects on ABI. Therefore, ATC provides evidence from which a jury could find such harm was either intended or foreseeable.
ATC makes additional arguments suggesting that Tobolski intended to harm ATC by publishing the article. Id. at 17-18. ATC states âit is fair for the Court to infer on these facts that Tobolski knewâ being an employee of Instron, a traditional, destructive tensile testing companyâ that a benefit to Haggag in the form of an
Instronâs assertion that the article did not benefit Instron is persuasive, but a reasonable inference in ATCâs favor may rebut the argument. While the article highlighted the need for in situ testing, it also contained indirect criticism, as it indicated that the technology was still under development and yielded less accurate results than the traditional testing method. PSF ¶46. Such statements regarding a competitorâs products might reasonably discourage future sales, thus providing temporary market share protection and, as such, a permissible inference of intended or foreseeable pecuniary harm. See First Act Inc., 429 F.Supp.2d at 435-36 (finding defendant intended, or reasonably should have recognized publication which âimpugn[ed] the design and quality of [plaintiffs product]â would cause pecuniary loss).
Accordingly, the Court holds that ATC has provided sufficient evidence that pecuniary harm was foreseeable.
5. Special Damages in the Form of Pecuniary Loss
To establish a claim for commercial disparagement, the plaintiff must demonstrate pecuniary loss that âdirectly and immediatelyâ resulted from the publication of the false statements. HipSaver, 464 Mass. at 536, 984 N.E.2d 755; see also Karmaloop, Inc. v. Sneider, No. 08-3580, 2013 WL 5612721, at *4 (Mass.Super.Ct. Apr. 25, 2013) (Kaplan, J.) (âThe special damages rule requires that the plaintiff establish pecuniary loss 'that resulted âdirectly and immediately from' the effect of the conduct on third persons.... â â). Ideally, the plaintiff should be able to show âa .specific loss of sales to identifiable customers.â HipSaver, 464 Mass. at 536, 984 N.E.2d 755. - In addition, â[w]hen the loss of a specific sale is relied on to establish pecuniary loss, it must be proved that the publication was a substantial factor influencing the specific, identified purchaser in his decision not to buy.â Id. at 537, 984 N.E.2d 755 (alteration in original) (quoting Restatement (Second) of Torts § 633 cmt. g (1979)) (internal quotation marks omitted).
In its motion for summary judgment, Instron claims that ATC has not suffered special damages for the following four reasons: (1) ATC lost no business from Cameron Ltd.; (2) ATC cancelled its consulting contract with PG & E; (3) ATC imposed commercially unreasonable conditions on its sale of equipment; and (4) Vectren did not purchase ATCâs services because ATCâs product did not deliver sufficiently reliable test results. Instronâs Mem. 11-14. ATC did not dispute the first three claims in its opposition memorandum, but it does assert .that there is âa genuine issue of factâ regarding the fourth claim. ATCâs Oppân 18.
a. The Plaintiff Does Not Provide Sufficient Evidence of Direct and Immediate Pecuniary Loss
ATC contends that âthere is a genuine issue of fact as to whether Vectren decided not to hire ATC due to the [article.â Id. According to ATC, one of its customers, Vectren, âwas all but certain to hire ATCâ before the article was published, but John Cline (âClineâ), a Vectren
The record does not support the assertion that the article affected Vectrenâs decision not to hire ATC. Instead, the only-evidence ATC provides is Clineâs deposition testimony indicating that the article was not a factor in the decision not to hire ATC. During his deposition, Cline discussed why Vectren did not hire ATC:
[F]irst of all, it [did not] give us the accuracy we need.... Secondly, it [was not] accepted by PHMSA .... [T]he third reason ... [was that] it was becoming an uphill battle with Vectren for me to sell the technology '... [b]eeause it did not have the accuracy we needed. It was not approved by PHMSA, and it was something that I ... didnât want to spend more time and money on because of the possible litigations that were ... developing.6
Aff. Tara J. Myslinski, Ex. 4, Dep. John K. Cline (âCline Dep.â) 62:8-63:6, ECF No. 118-4. Later, Cline explicitly stated several times throughout his deposition that the article had no effect on Vectrenâs decision not to hire ATC. Id. at 136:2-5 (âOur decision [not to hire ATC] was based entirely on the GTI data and the fact that the technology had not been approved by PHMSA. Those were the two ... key things for us.â); id. at 84:8-20 (stating that the GTI testing results, along with the âother reasonâ previously mentioned were the reasons Vectren decided not hire ATC); id. at 104:21-24 (â[The article] didnât cause me to really change my mind about ATC or Frontics. It was just the GTI data, plus the fact that it wasnât approved by PHMSA.â).
Because ATC has not provided sufficient evidence of special damages, this element does not survive summary judgment, and therefore the Court must grant the motion in favor of Instron.
b. Ruling on the General Decline in Business or Lost Growth Unnecessary
On a separate, but related theory, ATC posits that HipSaver did not rule out the possibility of showing special damages by displaying âa general decline in business or lost growth opportunity ... [and] elimi-nat[ing] other possible explanations for the decline.â ATCâs Oppân 19 (alterations in original) (quoting HipSaver, 464 Mass. at 536-37 & n. 18, 984 N.E.2d 755). ATC asserts that âHaggag plans to testify at trial that ATC had made specific business forecast projections in the 2007 time period that it failed to meet after the publication of the Article.â Id. This evidence, however, fails to âeliminate other possible explanations for the decline,â and thus fails to adequately link the alleged decline to the publication of the article. HipSaver, 464 Mass. at 537 n. 18, 984 N.E.2d 755.
Additionally, Instron asserts that the-business forecasts do not provide âcompetent proof of damages.â Instronâs Reply 13. ATC does not identify the creator of
In any event, because ATC has not eliminated alternative explanations for its failure to meet the projected growth rate, it is unnecessary for the Court to address that theory here.
III. CONCLUSION
For the aforementioned reasons, this Court GRANTS Instronâs motion for summary judgment, ECF No. 105.
SO ORDERED.
. There were four original defendants in both the complaint and the first amended complaint. Compl., ECF No. 1; Compl., ECF No. 4. Three defendants were dismissed at various stages of the litigation, see Stipulation Dismissal, ECF No. 27; Order, ECF No. 47, leaving Instron as the sole defendant. The second amended complaint was filed exclusively against Instron. Second Am. Compl.
. According to ATC, the Stress-Strain Micro-probe System âis the only equipment that employs ABI technique.â Second Am. Compl. ¶ 20.
. Edward Tobolski was a retired Instron employee when the article was written. Statement Undisputed Material Facts Supp. Def. Instronâs Mot. Summ. J. ¶ 4, ECF No. 107.
. Instron further states, albeit somewhat indirectly, that although the court in HipSaver ruled that pure opinions are not actionable in defamation cases, it left for another day the question as to whether pure opinions are actionable in commercial disparagement cases. See Instron's Reply 8. It is more accurate to state that the HipSaver court left for another day the question of whether opinions implying undisclosed defamatory facts are actionable in commercial disparagement cases, not whether pure opinions are protected. HipSaver, 464 Mass, at 526 n. 11, 984 N.E.2d 755. As ATC aptly notes, "HipSaver did not insulate expressions of opinion from commercial disparagement liability.â ATCâs Opp'n 16.
. The first such customer was an engineer at one of ATC's potential client companies, Vec-tren, who stated that when he read the article, both ATC and Frontics came to mind. Aff. Tara J. Myslinski ("Myslinski Aff.â), Ex. 4, Dep. John K. Cline ("Cline Dep.â) 87-89, 97-98, ECF No. 118-4. The second was an engineer with an organization within ATC's former client company, PG & E; he stated that, as he read the article for the first time during his deposition, he believed the article was "describing a process similar to what the Frontics system uses ... [a]nd it [d]id have some similarities to the way the ATC system operates.â Myslinski Aff., Ex. 5, Dep. Alexander Gutierrez 159:11-18, ECF No. 118-5. Third, ATC has produced emails that indicate there was some kind of confusion between ABI and IIT by people involved with a business proposal with ATC. See Myslinski Aff., Ex. 20, ECF No. 118-20.
. In his deposition testimony, Cline stated, "Mr. Haggag sent me an e-mail stating that he was going to pursue litigation with some company, and at that point, I did not want to pursue it any further so we just turned to the destructive testing.â Cline Dep. 62:20-24. This Court can only assume that the litigation mentioned in the email referred to the claims currently before this .Court. Even if the email referred to different litigation, the testimony does not supply sufficient evidence to support the pecuniary damages element. The resulting decision not to hire ATC would not be a result of the article itself, but would instead be the result of the prospect of litigation. Accordingly, this evidence does not support the pecuniary loss element, as the article was not the "direct and immediate causeâ of the loss. HipSaver, 464 Mass. at 536, 984 N.E.2d 755.