Heary Bros Lighting, et al v. Natl Fire Protection, et al, No. 2:1996cv02796 - Document 489 (D. Ariz. 2019)
Court Description: ORDER granting 478 MOTION to Compel Compliance and Reopen the Case for Limited Discovery. Within 30 days of this order, revise its advertising in accordance with this order. Failure to comply with the Court's order may result in NLPC being held in contempt and sanctions may be imposed. Telephonic Conference set for 2/21/2019 at 9:00 AM before Judge Douglas L Rayes to discuss parameters of discovery. Signed by Judge Douglas L Rayes on 2/13/19. (DXD)
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Heary Bros Lighting, et al v. Natl Fire Protection, et al 1 Doc. 489 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 Heary Bros. Lightning Protection Company Incorporated, et al., Plaintiffs, No. CV-96-02796-PHX-DLR ORDER v. East Coast Lightning Equipment Incorporated, 14 Defendant. 15 16 17 Defendant East Coast Lightning Equipment, Inc. (“East Coast”) moves for an order 18 compelling compliance with the injunction in this action, and to reopen the case for limited 19 discovery into additional violations of the injunction.1 (Doc. 478.) The motion is fully 20 briefed.2 (Docs. 487, 488.) For the reasons below, East Coast’s motion is granted. 21 I. Background 22 Manufacturers and distributors of lightning protection systems, including Plaintiff 23 National Lightning Protection Corporation (“NLPC”), brought this action against industry 24 trade associations and competitors, asserting violations of Sherman Act, Lanham Act, and 25 state law in connection with the trade associations’ failure to adopt a standard for Early 26 East Coast’s motion is brought against Plaintiff National Lightning Protection Corporation only. 27 28 1 Neither party requested oral argument, and after reviewing the parties’ briefing and the record, the Court finds oral argument unnecessary. See Fed. R. Civ. P. 78(b); LRCiv. 7.2(f). 2 Dockets.Justia.com 1 Stream Emissions (“ESE”) lightning protection systems. East Coast, NLPC’s competitor, 2 filed a counterclaim alleging false advertising under § 43(a) of the Lanham Act, 15 U.S.C. 3 § 1125(a). 4 In October 2003, the Court granted summary judgment in favor of East Coast on its 5 § 43(a) claims, finding that NLPC’s advertisements were “literally false” because the tests 6 on which NLPC bases its advertising claims are not sufficiently reliable to establish that 7 NLPC’s ESE air terminal products provide an enhanced zone of protection within a 8 specific, measurable radius and protection against lightning strikes in open spaces. (Doc. 9 341 at 45-56.) 10 In October 2005, the Court enjoined NLPC and its “successors, officers, agents, 11 employees, dealers, distributors, . . . and [] all persons, partnerships or corporations in 12 present or future active concert or participation” with NLPC from the following: (1) . . . advertising that [it] sell[s] a lightning protection system utilizing air terminals that provide a measurable zone of protection, greater than systems installed in accordance with NFPA 780;3 and/or that the system can function effectively to protect open spaces; and 13 14 15 16 (2) . . . advertising that [it] sell[s] an “improved,” “enhanced,” or “more efficient” lightning protection system utilizing air terminals that rely on calculations of an enhanced range of protection; and 17 18 (3) . . . advertising that any “enhanced” air terminal system manufactured, marketed, and/or sold by [NLPC] . . . including but not limited to the [ESE] air terminal product . . . 19 20 (a) is accepted by Underwriters Laboratories (“UL”) . . . [or] the National Electric Code (“NEC”); 21 22 (b) has been tested and certified by a private testing lab to provide a measurable zone of protection greater than systems installed in conformance with NFPA 780; 23 24 (c) is able to protect open areas, including but not limited to amusement parks, golf courses, stadiums, and playing fields. 25 26 27 28 (Doc. 391 at 2-3.) The Court’s injunction was affirmed on appeal. Heary Bros. Lightning NFPA 780 is a standard for the installation of lightning protection systems promulgated by the National Fire Protection Association. (Doc. 464 at 2 n.1.) 3 -2- 1 Protection Co., Inc. v. Lightning Prot. Inst., 262 Fed. App’x 815, 817 (9th Cir. 2008). 2 The Court retained jurisdiction over the action to monitor compliance with the 3 injunction. (Doc. 391 at 4.) In January 2006, East Coast filed a motion to compel 4 compliance, which was denied. (Docs. 431, 449.) East Coast again filed a motion to 5 compel compliance in June 2008, which the Court granted, requiring that NLPC comply 6 with the injunction or be held in contempt and sanctioned in the form of damages and 7 attorneys’ fees. (Doc. 464.) 8 On May 25, 2018, East Coast filed yet another motion to compel compliance with 9 the Court’s injunction and reopen the case to permit further discovery, which is presently 10 before the Court. (Doc. 478.) 11 II. Discussion 12 East Coast’s argument is threefold. First, East Coast contends that NLPC’s website 13 is non-compliant with the Court’s injunction because it falsely advertises that its products 14 protect open spaces. Next, East Coast asserts that NLPC violates the injunction by 15 impermissibly adverting that its ESE air terminals are UL certified. Alternatively, East 16 Coast seeks limited discovery on the issue. Finally, East Coast argues that the Court should 17 reopen the case for limited discovery into whether NLPC is improperly advertising that 18 installation of its ESE system is UL certified. The Court discusses each in turn. 19 A. Open Areas 20 East Coast argues that NLPC’s website improperly implies that its “Prevectron 21 device protects open areas,” by listing all locations in which its devices have been installed. 22 (Doc. 488 at 5.) On appeal, the Ninth Circuit stated: “the injunction does not prevent any 23 truthful advertising concerning [NLPC’s] experiences with the ESE systems . . . as long as 24 [NLPC] do[es] not use such evidence to support claims that ESE systems . . . can protect 25 open spaces.” Lightning Prot. Inst., 262 Fed. App’x at 817. The injunction defines the 26 term “open spaces” as “including but not limited to amusement parks, golf courses, 27 stadiums, and playing fields.” (Doc. 391 at 2-3.) 28 East Coast does not argue that NLPC’s lists are inaccurate. Rather, East Coast -3- 1 contends that, inconsistent with the injunction, NLPC offers the lists as evidence to support 2 claims that its ESE systems can protect open spaces. (Doc. 478 at 11.) For example, on 3 NLPC’s website, under the header “Partial List of Prevectron Users,” and sub-header 4 “Stadiums,” NLPC provides a list of over twenty college and professional stadiums in 5 which it has installed its ESE system. (Doc. 478-3 at 3-4.) Similarly, under the sub-header 6 “Entertainment, Resorts, and Hotels,” NLPC lists numerous golf courses (i.e., Pine 7 Meadows Golf Club, PGA Championship Bellerive Golf Club), amusement parks (i.e., Sea 8 World, Highland Hills Water World), and hotels (i.e., Marriot Star Pass Resort) where 9 Prevectron has been installed. (Id. at 5-7.) 10 The Court agrees that NLPC’s user list is intended to serve as testimonial evidence 11 of its products ability to protect open spaces. NLPC argues that its list does not violate the 12 injunction because it “makes no statements . . . regarding the efficacy of any completed 13 installations on its website.” (Doc. 487 at 7.) The injunction, however, expressly prohibits 14 advertising, “whether explicitly or implicitly.” (Doc. 391 at 2) (emphasis added). The 15 implication from the list is that its system successfully protected the location where it was 16 installed. Therefore, the Court finds NLPC’s “Partial List of Prevectron Users” is non- 17 compliant with the injunction. 18 B. UL Certified Component Parts 19 Next, East Coast argues that NLPC violated the injunction by advertising that its 20 ESE air terminals are UL certified. Specifically, NLPC’s website states that its TS25, 3 21 S40, 3 S60, and 3 S60TC ESE air terminals are UL certified. (Docs. 478-4; 478-6.) East 22 Coast highlights that this type of advertisement directly contradicts the Court’s injunction, 23 which prohibits NLPC from advertising that its ESE systems, “including but not limited to 24 the [ESE] air terminal product,” is “accepted” by UL and “provide[s] a measurable zone 25 of protection greater than systems installed in conformance with NFPA 780.” (Doc. 391 26 at 2-3.) 27 In response, NLPC argues that East Coast is “wrong that the injunction can be 28 interpreted by this Court to bar NLPC from truthfully stating that component parts in its -4- 1 ESE system of are certified by UL . . . .” (Doc. 487 at 9.) In support, NLPC relies on the 2 Court’s September 13, 2005 ruling on the parties’ proposed forms of injunction, which 3 states: NLPC “may not be enjoined from truthful advertising that component parts of the 4 ESE system are listed with UL, as long as that advertising is not done in a manner that 5 reasonably implies that UL has endorsed the system as a whole . . . .” (Doc. 388 at 8.) 6 NLPC also relies on language from the Ninth Circuit’s opinion: “the injunction does not 7 prevent any truthful advertising concerning . . . compliance with foreign standards . . . as 8 long as [NLPC] do[es] not use such evidence to support claims that ESE systems provide 9 a measurable zone of protection greater than NFPA 780.” Lightning Prot. Inst., 262 Fed. 10 App’x at 817. 11 The express language of the injunction, which was issued after the September 2005 12 ruling cited by NLPC, clearly contemplates that NLPC shall not market its ESE air 13 terminals as UL certified. The Ninth Circuit upheld the scope of this injunction on appeal. 14 Nevertheless, NLPC unpersuasively attempts to sow seeds of inconsistency where none 15 exist. Based on the language of the Court’s September 2005 ruling on the proposed forms 16 of injunction and its October 2005 injunction, it is clear that the Court contemplated ESE 17 air terminals to be a product and not a component part. This understanding is consistent 18 both with the fact that the air terminals have component parts, including internal circuits, 19 a central rod, and self-testing remotes (Docs. 478-4; 478-6), and with the Court’s prior 20 orders. 21 For instance, in ruling on East Coast’s 2008 motion to compel, the Court found that 22 NLPC’s display of the Applied Research Laboratories logo, and the accompanying 23 statement “Listed and Factory Inspected Components by Applied Research Laboratories” 24 with its Preventor 2005 did not violate the injunction. (Doc. 464 at 4.) The Court reasoned 25 that the “Applied Research Laboratories certification—which specifies that components 26 were inspected—is specific enough to not constitute a claim that Applied Research 27 Laboratory is endorsing” the entire product. (Id.) Unlike with the Preventor 2005 28 advertisement, NLPC is now advertising that the entire air terminal is UL certified. -5- 1 Moreover, NLPC expressly advertises that its ESE air terminals are “certified by 2 Underwriters Laboratories (UL) to fully conform to NF C 17-102” which purports to have 3 a measurable zone of protection greater than NFPA 780. (Docs. 478-7; 478-8; 478 at 15); 4 See http://www.theprotectionsource.com/Prevectron/prevectron.html. The Court therefore 5 finds NLPC’s advertisements that ESE air terminals are UL certified violates the 6 injunction. 7 East Coast also asserts that NLPC’s website improperly listed its Prevectron 3 8 S60TC device as UL certified under File E493371. (Doc. 478-4.) After East Coast’s 9 motion, but before filing its response in opposition, NLPC modified its webpage to state 10 that the “S60TC combines the Prevectron S60 (UL File E493371) and the US-1585 self- 11 test module.” 12 modification fails to cure its non-compliant advertisement, as it still improperly markets its 13 ESE air terminal as UL certified in violation of the express language of the Court’s 14 injunction.4 (Doc. 487 at 8-9.) For the same reasons explained above, NLPC’s 15 C. UL Certified Installations 16 Finally, East Coast argues that UL’s program certifying installations of ESE systems 17 “may violate the Court’s injunction . . . thereby justifying” reopening the case for limited 18 discovery. (Id. at 17.) “UL can now provide an Engineering Inspection Report for ESE 19 systems installed in the USA using UL certified Early Streamer Emissions Air Terminals 20 (ESEAT).” (Doc. 478-10 at 2.) In support, East Coast notes that the injunction, which 21 prohibits advertising that the ESE system as a whole or its installation is UL certified,5 22 applies to NLPC’s “agents, employees, dealers, distributors, and . . . on persons, 23 partnerships or corporations in present or future active concern or participation with 24 [NLPC]. . . .” (Doc. 391 at 2.) Moreover, East Coast has offered evidence that a job 25 East Coast’s alternative request for discovery on whether the air terminal constitutes an ESE system or a component part for purposes of the injunction is denied because there already is sufficient evidence that NLPC’s website violates the injunction. 26 27 28 4 NLPC “may not be enjoined from truthful advertising that component parts of the ESE system are listed with UL, as long as that advertising is not done in a manner that reasonably implies that UL has endorsed the system as a whole, or its installation.” (Doc. 388 at 8) (emphasis added). 5 -6- 1 specification for an NLPC ESE system requested a UL Engineering Inspection Report for 2 the system’s installation. (Doc. 488-2.) The Court grant’s East Coast’s request because 3 there is sufficient evidence justifying limited discovery into UL’s Engineering Inspection 4 Report and NLPC’s use of such in its advertising. 5 IT IS ORDERED that East Coast’s motion to compel compliance and reopen the 6 case for limited discovery into UL’s Engineering Inspection Report and NLPC’s use of 7 such in its advertising (Doc. 478) is GRANTED as described herein. 8 IT IS FURTHER ORDERED that NLPC shall, within 30 days of this order, revise 9 its advertising in accordance with this order. Failure to comply with the Court’s order may 10 result in NLPC being held in contempt and sanctions may be imposed, including damages, 11 attorneys’ fees, and costs. 12 IT IS FURTHER ORDERED that the parties shall appear telephonically on 13 February 21, 2019 at 9:00 a.m. in Courtroom 606, 401 West Washington Street, Phoenix, 14 AZ 85003 before Judge Douglas L. Rayes to discuss parameters of discovery. Counsel for 15 Plaintiff is responsible for making the necessary arrangements for the conference call. All 16 parties participating in the conference call shall do so via a landline only. The use of 17 cellular phones will not be permitted. 18 Dated this 13th day of February, 2019. 19 20 21 22 23 Douglas L. Rayes United States District Judge 24 25 26 27 28 -7-
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