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Sears Petroleum & Transport Corp. v. Archer Daniels Midland Co.

May 9, 2006

SEARS PETROLEUM & TRANSPORT CORP., ET AL., PLAINTIFFS,
v.
ARCHER DANIELS MIDLAND COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: David E. Peebles U.S. Magistrate Judge

DECISION AND ORDER

On January 17, 2006 I issued an order which, inter alia, effectuated dismissal of a cause of action asserted by plaintiffs Sears Petroleum and Transport Corp. ("Sears Petroleum") and Sears Ecological Applications Co., LLC ("SEACO") (collectively "Sears") alleging unfair competition under New York common law. That determination was based upon plaintiffs' failure to allege the necessary misappropriation of labor, skill and expenditures required to support such a cause of action.

Plaintiffs now seek reconsideration of my prior order, asserting that under New York law an unfair competition claim may be based upon fraud or misrepresentation without the additional requirement that a misappropriation also be proven. For the reasons set forth below plaintiffs' motion, which is opposed by all defendants, is denied.

I. BACKGROUND

Central to the infringement claims in this action are two separate patents, United States Patent No. 6,299,793 (the "'793 Patent") entitled "Deicing Solution", issued on October 9, 2001 and assigned to Sears Petroleum, and United States Patent No. 6,582,622 (the "'622 Patent") also entitled "De-icing Solution", issued on June 24, 2003 to Sears Petroleum. Those patents grow out of development by Sears and one of its principals, David Wood, with the aid of Robert Hartley, a Canadian chemist retained to assist them, of an improved roadway de-icing agent lacking certain undesirable characteristics linked to previously available commercial products, many of which were derived from agricultural wastes and residues.

At some time in or prior to October of 2001, Sears became aware of efforts to market a CALIBER brand of de-icing products which included, as constituents, an aqueous solution comprised of corn syrup and magnesium chloride. Following issuance of the '793 patent, Sears directed its counsel to contact defendant Minnesota Corn Products ("MCP"), an entity allegedly involved, together with Glacial Technologies ("GT"), also a defendant in the case, in development of the CALIBER product to advise it of the issuance of the '793 patent and its belief that the CALIBER product infringed the claims of that patent.*fn1 MCP responded by letter dated October 30, 2001 from its patent counsel, outlining its position that the '793 patent claims do not cover the CALIBER product, and that in any event the '793 patent claims are invalid. Following unsuccessful efforts to negotiate a license under the '793 patent with MCP and its affiliate, GT, for their CALIBER products and an agreement to jointly market CALIBER and SEACO's ICE-BE-GONE II product, and upon learning that GT was planning to introduce CALIBER into the New England market, Sears filed suit alleging defendants' infringement of the '793 and '622 patents.

II. PROCEDURAL HISTORY

Plaintiffs commenced this action on September 12, 2003, and on November 3, 2003 filed an amended complaint as a matter of right. Dkt. Nos. 1, 5. In their complaint, as amended, plaintiffs have named several defendants including 1) ADM, a Delaware corporation with its principal place of business in Decatur, Illinois; 2) MCP, a Minnesota corporation with a principal place of business in Marshall, Minnesota; 3) Deicer USA, LLC ("DUSA"), a Minnesota limited liability company with a principal place of business in Decatur, Illinois, and alleged to be an affiliate of ADM; 4) MLI, an Ohio limited liability company with its principal place of business in Columbus, Ohio; and 5) GT, an Ohio limited liability company with a principal place of business in Melvern, Ohio, and alleged to constitute a joint venture between DUSA and MLI.

On December 6, 2005 the ADM defendants moved seeking dismissal of two counts of plaintiffs' second amended complaint, filed on November 14, 2005, Dkt. No. 73, including their third cause of action, alleging fraudulent misrepresentation, and fourth claim, alleging unfair competition. Dkt. No. 91. Defendant MLI later joined in that motion. Dkt. No. 92. Following the filing of opposition by the plaintiffs on December 27, 2005, Dkt. No. 96, I conducted a hearing on January 11, 2006 to address the motions.*fn2 At the close of the hearing a bench decision was rendered disposing of the motions; that bench decision was later memorialized in an order issued on January 17, 2006. Dkt. No. 100. In that order I granted dismissal of plaintiff's third cause of action, alleging fraudulent misrepresentation, as against defendant MLI, but denied the ADM defendants' motion to dismiss that claim as against them. Id.

Defendants' motion to dismiss plaintiffs' claim for unfair competition was granted in all respects. Id.

On January 27, 2006 plaintiffs timely moved for reconsideration of the portion of that order directing dismissal of Sears' unfair competition cause of action. Dkt. No. 110. Opposition to that motion has been filed on behalf of the ADM defendants, Dkt. No. 121, as well as by defendant MLI. Dkt. No. 122. The Sears parties have subsequently replied by memorandum further supporting their request for reinstatement of the unfair competition claim and addressing the arguments raised in opposition to their motion. Dkt. No. 127.

III. DISCUSSION

A. Governing Standard

Plaintiffs' motion implicates both Rule 60(b) of the Federal Rules of Civil Procedure and Northern District of New York Local Rule 7.1(g).*fn3 In this district, reconsideration of an order entered by the court is appropriate upon a showing of "(1) an intervening change in controlling law, (2) the availability of new evidence not previously available, or (3) the need to correct a clear error of law or prevent manifest injustice." In re C-TC 9th Ave. P'ship, 182 B.R.1, 3 (N.D.N.Y. 1995) (McAvoy, C.J.); see also Cayuga Indian Nation of New York v. Pataki, 188 F. Supp. 2d 223, 244 (N.D.N.Y. 2002) (McCurn, S.J.) (citing Sumner v. McCall, 103 F. Supp. ...


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