Weil, Gotshal & Manges, on behalf of its client Specialized Technology Resources, Inc. (“STR”), prevailed in federal district court against JPS Elastomerics Corp. (“JPS”) in connection with various alleged antitrust and unfair competition claims, including the claim that a prior state-court trade secret dispute between the litigants – one which JPS lost – was a sham litigation initiated by our client in order to monopolize the domestic and international market for certain technology used to protect solar panels. JPS sought $60 million in compensatory damages, treble damages available under certain federal laws, a permanent injunction against STR for various activities, reimbursement of legal fees for both the state and federal litigations, and disgorgement of proceeds obtained by STR from allegedly anti-competitive and tortious acts.
In a previous decision, a state court in Massachusetts had found in favor of Weil’s client STR, finding that STR was entitled to punitive damages, attorneys fees and injunctive relief arising from JPS’s misappropriation of STR’s trade secret. JPS followed up with the antitrust action in federal court in Springfield, Massachusetts.
In filing the motion to dismiss, the Weil team argued that it was the intent of the plaintiffs to essentially re-litigate the case they had lost in state court. After oral argument by Weil partner Bruce Meyer, the court adamantly agreed, granting our motion to dismiss from the bench, and in a subsequent written opinion stating that since STR won the state case, there was no basis for the sham litigation claims under the well-established Noerr-Pennington Doctrine. The judge further admonished JPS and their attorneys for bringing the allegation to the federal court, as well as the attempt to re-litigate issues already decided in state court, stating in his decision, “The institution of this litigation constitutes an egregious misuse of the ‘sham litigation’ theory of recovery . . . . A litigant is not permitted, in the face of a loss in state court, to repeat the same basic allegations, gussied up now as evidence of a supposed ‘sham,’ and obtain a re-do in federal court,” and concluding that “if there is any ‘sham’ in this litigation, it is contained in the complaint brought before this court.”
The remaining counts of the complaint, alleging antitrust, Lanham Act and unfair trade practices, were also dismissed.
The Weil team was led by New York-based Litigation partner Bruce S. Meyer and included partner Adam Hemlock (Antitrust – New York), counsel Patrick O’Toole Jr. (Litigation – Boston) and associates Brandon Miller (Litigation – Boston), Ausra Pumputis (Antitrust – New York), and Jaime Kaplan (Litigation – Washington, DC).
