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Riverdale Mills Corp. v. Cavatorta North America, Inc.

United States District Court, D. Massachusetts

May 26, 2016

RIVERDALE MILLS CORPORATION, Plaintiff,
v.
CAVATORTA NORTH AMERICA, INC., METALLURGICA ABRUZZESE SPA, AND TRAFILERIA E ZINCHERIA CAVATORTA SPA, Defendants.

          MEMORANDUM AND ORDER ON PLAINTIFF’S MOTIONS TO DISMISS DEFENDANTS’ COUNTERCLAIMS (Docket Nos. 53, 55, 58, 60)

          TIMOTHY S. HILLMAN DISTRICT JUDGE

         In this ongoing dispute between two competing wire-mesh distributors, Riverdale Mills Corporation (Plaintiff) moves to dismiss counterclaims filed by Cavatorta North America, Inc. (Cavatorta) and Metallurgica Abruzzese SPA (Metallurgica) (collectively, Defendants). Plaintiff moves to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, asserting that the conduct underlying the counterclaims was protected by the litigation privilege and that the claims are insufficiently pled. Plaintiff also moves specially to dismiss pursuant to Mass. Gen. Laws ch. 231, § 59H, the so-called “anti-SLAPP” statute. For the reasons set forth below, Plaintiff’s Rule 12(b)(6) motions (Docket Nos. 53 & 58) are granted. Plaintiff’s anti-SLAPP motions (Docket Nos. 55 & 60) are denied. The counterclaims will be dismissed without prejudice, and Defendants are granted leave to amend.

         Background

         The parties manufacture and sell competing brands of wire mesh that is used to make marine traps. Riverdale manufactures and sells a product called “Aquamesh.” Metallurgica manufactures a product called “SEAPLAX, ” which is sold in the United States by Cavatorta. Both brands of mesh are purported to be “galvanized after welded” (GAW), which is allegedly a superior manufacturing process to mesh that is “galvanized before welded” (GBW). In or around late May of 2015, Riverdale learned of a production error at Metallurgica that caused a non-SEAPLAX, non-GAW product to be delivered to certain customers in the United States and Canada who had ordered SEAPLAX between 2014 and 2015.

         Riverdale brought this lawsuit against Metallurgica, Cavatorta, and a third entity, Trafileria E Zincheria Cavatorta SPA, alleging that the Defendants had falsely advertised SEAPLAX as GAW when in fact it was GBW. Riverdale alleged: (1) false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a); (2) violation of Mass. Gen. Laws ch. 266, § 91; (3) violations of Mass. Gen. Laws ch. 93A; and (4) common law unfair competition. Riverdale also moved for a preliminary injunction. After an evidentiary hearing, this Court issued an order enjoining the Defendants from (1) manufacturing and selling mesh labeled as GAW if it was not actually GAW; and (2) making false statements in advertising that SEAPLAX was GAW if it was not in fact GAW. This Court also ordered Defendants to immediately label all SEAPLAX product that was not GAW as being not GAW.

         After this Court’s decision on the preliminary injunction, Metallurgica and Cavatorta separately answered Riverdale’s complaint, each asserting counterclaims for tortious interference with business relations and violations of Chapter 93A. These counterclaims were based on communications that Riverdale had made to some of Cavatorta’s customers during the pendency of this lawsuit. Riverdale now moves to dismiss the counterclaims.

         The communications in question were emails sent by Larry Walsh, vice president of sales and marketing at Riverdale, to twelve customers of Cavatorta. Each email was accompanied by copies of: (1) a three-page excerpt from Defendants’ memorandum in opposition to Plaintiff’s motion for preliminary injunction; (2) the affidavit of Peter Christian, Director of Cavatorta; and (3) the affidavit of Andrea Contini, export manager for Metallurgica. The affidavits had been filed along with Defendants’ opposition to the preliminary injunction motion. Two customers were later subpoenaed to produce documents.

         The emails were short and varied somewhat in their content. Some acknowledged that the customers already knew about the lawsuit; all referenced the attached materials and stated that Plaintiff’s attorney would contact the customers and request additional information. One email also stated: “If you did get GBW that was labeled GAW you should have received a notice from [Cavatorta] and some sort of monetary compensation . . . . For a full year [Defendants] were selling mislabeled product and traps are falling apart very quickly.” (Docket No. 64-3 at 13.) Another email characterized Cavatorta’s product as “defective wire.” (Docket No. 64-3 at 16.) According to Defendants, these statements were false. Defendants further allege that Riverdale “knowingly contacted” their customers “in a concerted effort to induce those customers to terminate their business relationships with Cavatorta and/or Metallurgica.” (Docket No. 40 at ¶ 17; No. 46 at ¶ 14.) According to Defendants, Riverdale “acted with malice and improper motives in contacting known customers of Cavatorta and Metallurgica, ” and Defendants have “been harmed by the aforementioned actions” of Riverdale. (Docket No. 40 at ¶¶ 18-19; No. 46 at ¶¶ 15-16.)

         Discussion

         Riverdale has filed four motions to dismiss the Defendants’ counterclaims, one for each Defendant under Rule 12(b)(6) and under the anti-SLAPP statute, Mass. Gen. Laws ch. 231, § 59H. Defendants have filed separate responses. Because the arguments are identical with regard to each Defendant, I shall analyze them together.

         1. The 12(b)(6) Motions

         A. Standard of Review

         To survive a motion to dismiss, a counterclaim must contain “sufficient factual matter” to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). That is, the counterclaim must plead “factual content that allows the court to draw the reasonable inference that the [alleged wrongdoer] is liable for the misconduct alleged.” Id. “A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’” Id. (quoting Twombly, 550 U.S. at 555). “Nor does a [counterclaim] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Id. (quoting Twombly, 550 U.S. at 557).

         In reviewing the motion, the court’s inquiry is limited to the facts alleged in the counterclaim, incorporated into the pleading, or susceptible to judicial notice. In re Colonial Mortg. Bankers Corp., 324 F.3d 12, 15 (1st Cir. 2003). The court assumes the truth of all well-pled factual allegations and draws all reasonable inferences in ...


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