Santana Products, Inc v. Bobrick Washroom Equipment, Inc.

69 F.Supp.2d 678 (1999)

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Nature of the Case

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Facts

P instituted an action against Ds. P alleges that Ds conspired to enforce a product standard that had the effect of excluding Santana's high-density polyethylene (HDPE) compartments from the relevant market. P alleges that D falsely represented that toilet compartments were subject to flame and smoke standards applicable to a 'wall finish,' rather than the standard for furniture and fixtures. Ds then informed prospective purchasers that P's HDPE product did not meet the wall finish standard to dissuade the prospective purchasers from selecting Santana's product. P sought recovery under §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and the common law of tortious interference with prospective contractual relationships. P's lawsuit against Ds was preceded by a lawsuit against eleven other toilet compartment manufacturers and TPD referred to collectively as the Toilet Partition Manufacturer's Council (TPMC). P alleged violations of §§ 1 and 2 of the Sherman Act, and § 43(a) of the Lanham Act, as well as tortious interference with prospective contractual relations. The TPMC action stated the same conspiracy 'to use scare tactics to discourage specification and acceptance of Santana's HDPE partitions by falsely alleging that P's partitions posed a dangerous fire hazard.' TPD induced its customers to use a TPD videotape that falsely depicted the flammability of P's partitions. The TPMC settled. The 'Release and Covenant Not to Sue' executed in connection with the settlement specified that it was governed by New York law. On June 1, 1998, D filed a Third-Party Complaint against TPD, asserting counts for (1) contribution, (2) indemnification, (3) fraud, and (4) negligent misrepresentation. The TPD videotape showed one of P's toilet partitions actually being set on fire with a lighter. D alleges that TPD encouraged D to use the videotape in its marketing efforts and failed to inform D that the videotape contained false representations and information. D alleges that it reasonably relied upon the videotape and that, as a result of that reliance, D has been sued by P. TPD moved to dismiss the Third-Party Complaint. TPD contends that D may not maintain an action for contribution for alleged violations of the Sherman Act and the Lanham Act. It also claims that contribution is barred by the release TPD executed to settle its liability in the TPMC action. TPD contends that D was not a passive tortfeasor and that the state law claims of fraud and negligent misrepresentation are not proper third-party claims.