DM1\678195.1

IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

TOLEDO MACK SALES & 

SERVICE, INC., 

Plaintiff, 

v. 

MACK TRUCKS, INC., 

Defendant. 

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Civil Action No. 2:02-CV-04373-RLB 

MACK TRUCKS, INC., 

Counterclaim 

Plaintiff, 

v. 

TOLEDO MACK SALES & SERVICE, 

INC. and 

Counterclaim 

Defendant. 

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PRETRIAL MEMORANDUM OF TOLEDO MACK SALES & SERVICE, INC. 

 Toledo Mack Sales & Service, Inc. (“Toledo Mack”), by and through its undersigned 

counsel, hereby submits this Pretrial Memorandum pursuant to this Court’s standing order, 

“Pretrial and Trial Procedures Before Judge Ronald L. Buckwalter.” 

I. BRIEF SUMMARY OF THE NATURE OF THE CASE 

Plaintiff Toledo Mack Sales & Service, Inc. (hereafter “Toledo Mack”) is bringing claims 

against Mack Trucks, Inc. (hereafter “MTI” or “Mack Trucks”) for agreements in restraint of 

trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1; violation of the Ohio Motor 

Vehicle Dealer Law, Ohio Rev. Code Ann. § 4517.59; violation of the Section 445.1574 of the 

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Michigan Franchise Investment Law; tortious interference with existing and prospective business 

relations; breach of contract; and breach of the implied covenant of good faith and fair dealing. 

Toledo Mack has owned and operated a franchised Mack truck dealership based in 

Toledo, Ohio for over twenty years. A low price leader within the Mack dealership network, 

Toledo Mack markets and sells Mack trucks and related products to customers located 

throughout the United States. Toledo Mack’s efforts have in part focused on the market for 

heavy duty vocational trucks, which includes trucks, such as dump trucks, cement trucks, and 

waste-hauling trucks, specially designed and equipped for use in the construction and refuse 

industries – all areas in which Mack products are the undisputed market leader. 

Rather than supporting Toledo Mack in its efforts to develop its business, MTI has 

engaged in an improper course of conduct designed to restrict, destroy and ultimately take over 

the business of Toledo Mack. MTI has engaged in unfair competition with Toledo Mack by 

making direct sales of Mack trucks to potential customers and competitors of Toledo Mack at 

lower prices and on more favorable terms than MTI’s sells such products to Toledo Mack. MTI 

has also entered into agreements that have divided markets and allocated customers in an attempt 

to eliminate competition from a low price leader such as Toledo Mack, and in order to eliminate 

competition between authorized Mack distributors including Toledo Mack and certain 

companies, known as truck “body manufacturers” or truck “body builders,” who affix 

vocational-use truck bodies, such as cement mixer bodies and waste-hauling bodies, to the 

chassis and sell the trucks to their own distributors and to consumers. 

By engaging in such conduct, and by entering into agreements to allocate customers and 

territories, MTI has violated Section 1 of the Sherman Act. MTI has also violated the Ohio 

Motor Vehicle Dealer Law which, inter alia, prohibits a motor vehicle franchisor such as MTI 

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from selling or leasing motor vehicles in unfair competition with a franchisee and from engaging 

in predatory and discriminatory practices. MTI’s conduct also violates the Michigan Franchise 

Investment Law, which prohibits a motor vehicle manufacturer such as MTI from selling new 

motor vehicles directly to retail customers other than through its franchised dealers. In addition, 

MTI has tortiously interfered with Toledo Mack’s business relationships and breached the 

franchise agreement with Toledo Mack as well as the covenant of good faith implied therein. 

MTI has filed counterclaims against Toledo Mack for misappropriation of trade secrets 

and confidential business information, copyright infringement, breach of contract and civil 

conspiracy. MTI alleges that Toledo Mack misappropriated the MACSPEC 2001 parts database 

and software, certain books containing lists of pricing, and a microfiche-based database by 

providing copies of those items to a customer of Toledo Mack. MTI further alleges that by 

providing a copy of the MACSPEC 2001 system to a customer, Toledo Mack breached a license 

agreement for MACSPEC II and infringed on the copyright for MACSPEC 2001. Toledo Mack 

maintains that the items in question were not trade secrets or confidential, and that MTI did not 

take appropriate measures to maintain the secrecy of the MACSPEC 2001 system, the price 

books and the Mack microfiche. Toledo Mack also maintains that the information in the 

MACSPEC 2001 system, the price books and the Mack microfiche were available to the public 

and widely known outside of Mack. Furthermore, Toledo Mack asserts that MTI authorized 

Toledo Mack to release copies of MACSPEC 2001 and the price books to its customers. With 

respect to the breach of contract claim, Toledo Mack asserts that it never entered into a license 

agreement for MACSPEC 2001. 

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II. LIST OF ALL WITNESSES TO BE PRESENTED 

WITNESS SUBJECTS OF TESTIMONY 

1. David A. Barletta MTI policies and procedures; MTI sales assistance 

process; specific transactions. 

2. Timothy Black MTI policies and procedures; MTI truck pricing; 

Toledo Mack marketing efforts. 

3. William Black MTI procedures regarding MACSPEC 2001; 

interactions between MTI and PAI. 

4. Nancy Bryant PAI’s relationship with Toledo Mack, GGS and other 

Mack dealers. 

5. David Covey Mack parts; MTI pricing policies; MACSPEC II and 

MACSPEC 2001. 

6. Custodian of Records 

of Mack Trucks, Inc. 

Authentication of MTI business records. 

7. Thayer Dolan MTI policies and procedures; MTI’s relationship with 

Toledo Mack. 

8. Terence Dubowick Mack Leasing System; National Account leasing 

companies. 

9. Joseph Favia MTI truck pricing; MTI National Accounts; body 

builders; competition between Mack dealers and body 

builders; Toledo Mack. 

10. Kevin Flaherty MTI truck pricing; Network 2000; MTI market share; 

body builders; National Accounts; Network 2000, 

book pricing, MTI policies and procedures; MTI’s 

relationship with Toledo Mack; termination of Jack 

Lusty; termination of Toledo Mack. 

11. William Scott Freeman MTI National Accounts; MTI policies and procedures. 

12. Ronald Gerhard Network 2000; Mack/Volvo Network consolidation; 

MTI truck pricing; MTI policies and procedures; 

gentlemen’s agreements among dealers. 

13. Hallie Giuliano Relationships between and among Mack Dealers; 

gentlemen’s agreements; Ron Gerhard. 

14. Frank Gollop Expert testimony regarding market issues, harm to 

competition, economic motives; other subjects in his 

expert report and supplement thereto. 

15. William Harris Expert testimony regarding his analysis of data from 

MTI’s QTS database and related conclusions; other 

subjects in his expert report and supplements thereto. 

16. Debbie Harvey Relationship between Mack Dealers and MTI; MTI 

policies and procedures. 

17. Joseph Herman Customer relationships with MTI. 

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18. Hugh Johnston Termination of Toledo Mack dealership. 

19. Richard Kemner Customer relationships with MTI. 

20. Eric Kimble Customer relationships with MTI. 

21. Jack Lusty Toledo Mack; MTI truck pricing; MTI policies and 

procedures; specific transactions; MTI witnesses’ and 

employees’ responses to, and views of, Toledo Mack 

claims; termination of his employment at MTI. 

22. Yolanda Jean May Relationship between PAI and Mack Trucks, GGS; 

MACSPEC 2001; communications between PAI and 

GGS. 

23. John McCafferty Mack truck pricing; MTI policies and procedures; 

specific transactions. 

24. Dennis McDaniel MTI truck pricing; MTI policies and procedures; 

specific transactions. 

25. Rich Miller Toledo Mack financial matters; Toledo Mack practices 

and policies. 

26. Donald Nichols Expert testimony regarding damages; other subjects in 

his expert report and supplements thereto. 

27. Paul Palmer PAI practices and procedures; Toledo Mack parts 

sales; relationship between MTI and PAI. 

28. Hector Ed Pena After-market parts market; MTI pricing of parts. 

29. Stephen Polzer MTI truck pricing; MTI policies and procedures; 

specific transactions; sales assistance process; QTS 

database. 

30. Jan Ruble PAI practices and procedures; relationship between 

MTI and PAI. 

31. William Saranczak MTI parts pricing; MTI policies and procedures. 

32. Joseph Scarnecchia MTI parts pricing; MTI policies and procedures. 

33. Bruce Smith MTI parts pricing; MTI policies and procedures. 

34. James Toth Toledo Mack parts department; Mack microfiche; 

Price Books; MACSPEC; relationship between MTI 

and PAI; relationship between Toledo Mack and PAI. 

35. Charles Vaurina MTI parts pricing; MTI policies and procedures. 

36. Navid Yavari PAI policies and procedures; relationship between 

MTI and PAI; relationship between Toledo Mack and 

PAI; Mack Microfiche; Price Books; MACSPEC 

2001. 

37. David Yeager Toledo Mack; MTI policies and procedures; Toledo 

Mack’s relationships with other Mack dealers; 

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interactions with MTI employees and executives; PAI; 

MACSPEC; Mack microfiche; Price Books. 

38. Mark Yeager Toledo Mack; MTI policies and procedures; Toledo 

Mack’s relationships with other Mack dealers; 

interactions with MTI employees and executives. 

39. Sally Yeager Toledo Mack; MTI policies and procedures; Toledo 

Mack’s relationships with other Mack dealers; 

interactions with MTI employees and executives; PAI. 

40. Jeffery Yelles MTI truck pricing; termination of Jack Lusty; 

termination of Toledo Mack; Network 2000; MTI 

policies and procedures; MTI’s relationship with 

Toledo Mack; sales assistance process; specific 

transactions; Toledo Mack and other Mack dealers; 

competition between body builders and Mack dealers. 

41. Robert Yuzuik MTI policies and procedures; MTI’s relationship with 

Toledo Mack; PAI; MACSPEC; Mack microfiche; 

Price Books; relationship between MTI and PAI. 

III. LIST OF ALL EXHIBITS 

Toledo Mack has provided MTI with its trial exhibits pursuant to the Court’s pretrial 

scheduling order dated March 1, 2006. A list of these exhibits is attached hereto as Exhibit A. 

In accordance with the Court’s pretrial scheduling order, the parties will exchange any objections 

to proposed trial exhibits no later than August 25, 2006. 

IV. PLAINTIFF’S STATEMENT OF DAMAGES AND OTHER RELIEF SOUGHT 

 Please see attached Second Supplemental Report of Donald A. Nichols, dated July 13, 

2006, attached hereto as Exhibit B. 

 In addition to the damages set forth in Dr. Nichols’ report, Toledo Mack also seeks the 

following additional relief: 

1. Double damages; 

2. Treble damages; 

3. Punitive damages in an amount to be determined according to the proofs 

presented during the course of trial; 

4. Costs and attorneys’ fees; 

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5. A permanent injunction enjoining MTI from engaging in unfair 

competition with Toledo Mack in violation of Section 4517.59 of the Ohio 

Revised Code Annotated; 

6. A permanent injunction enjoining MTI from making direct sales to retail 

customers other than through its franchised dealers in violation of Section 

445.1574 of the Michigan Franchise Investment Law. 

7. A declaration that, pursuant to its Distributor Agreement with Toledo 

Mack and any other legal duties that MTI owes to Toledo Mack, MTI 

must distribute Mack trucks and components exclusively through 

franchised Mack dealers, and that MTI must not sell Mack trucks or 

components directly to body manufacturers, other National Accounts, or 

other non-public purchasers. 

V. STATEMENT OF ANTICIPATED LEGAL ISSUES 

Presently pending before the Court are numerous motions in limine filed by both Toledo 

Mack and MTI on August 11, 2006. See Docket Nos. 86 – 93. 

 Also still pending before the Court is MTI’s motion in limine to preclude the testimony of 

Toledo Mack expert William Harris. See Docket No. 73. MTI has taken the position that Mr. 

Harris’ testimony no longer “fits” the facts of this case in light of the recent Supreme Court 

decision in Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., 126 S. Ct. 860 

(2006). Notwithstanding MTI’s argument that Mr. Harris’ testimony should be precluded under 

Reeder-Simco, and irrespective of the recent opinion of this Court regarding the RobinsonPatman Act claim, Mr. Harris’ analysis is nevertheless relevant and pertinent to Toledo Mack’s 

claims brought under the Sherman Act, the Ohio Act and the common law. The single best 

authority in support of this position is Kannankeril v. Terminix International Inc., 128 F.3d 802, 

806 (3d Cir. 1997). See also Toledo Mack’s Memorandum in Opposition to MTI’s Motion in 

limine to Exclude the Testimony of William Harris, Docket No. 78. 

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VI. STIPULATIONS OF COUNSEL AND ADMISSIONS 

A. Stipulations of Counsel

1. Plaintiff/Counterclaim Defendant Toledo Mack Sales & Service, Inc. filed 

its Complaint in this action on July 1, 2002. 

2. Mack Trucks, Inc. (“Mack”) is the registered owner of the copyright on 

the MACSPEC 2001 system’s parts database and source code. 

3. Mack has registered copyrights for Mack master parts and illustration 

database and MACSPEC 2001 computer software; these copyrights were 

designated TXU 1-001-746 and TXU 1-001-747 by the United States 

Copyright Office. 

4. The customers to which MTI has made direct sales – that is, sales that 

were not made to or through an authorized Mack distributor – are 

commonly referred to within MTI as “national accounts.” 

B. Admissions of Mack Trucks, Inc.1

1. There is no license agreement between MTI and Toledo Mack that 

contains the phrase “MACSPEC 2001.” 

2. The license agreement attached as an exhibit to MTI’s Answer and 

Counterclaims is a license agreement dated February 26, 1996 between 

MTI and Toledo Mack for MACSPEC II. 

3. The license agreement attached as an exhibit to MTI’s Answer and 

Counterclaims does not contain the phrase “MACSPEC 2001.” 

4. The term “SOFTWARE” in the license agreement attached as an exhibit 

to MTI’s Answer and Counterclaims is defined in that document as the 

“MACSPEC II parts information system, consisting of both the operating 

software and the parts database on CD-ROM.” 

5. Section 3, including Subsections 3.1 to 3.3, in the license agreement 

attached as an exhibit to MTI’s Answer and Counterclaims relates to the 

use and protection of what that document calls the “SOFTWARE.” 

6. All orders for MACSPEC 2001 which Toledo Mack has ever submitted to 

MTI were made on the forms that MTI had provided to Toledo Mack for 

ordering MACSPEC 2001. 

 

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 Admissions adopted from MTI’s response to Toledo Mack’s First Request for Admissions, 

attached hereto as Exhibit C. 

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VII. POINTS FOR CHARGE 

Toledo Mack’s proposed jury instructions are attached hereto as Exhibit D. 

VIII. ADDITIONAL ISSUES 

Because of the existence of counterclaims in this case, there is an issue as to how the case 

will be presented to the jury. The most sensible approach, which Toledo Mack has incorporated 

into its Proposed Jury Instructions, would be the following order of trial: Toledo Mack’s case in 

chief; Mack Trucks’ defense; Mack Trucks’ case in chief on its counterclaims; Toledo Mack’s 

defense of the counterclaims and rebuttal of Mack Trucks’ defense. This order of presentation 

would avoid the potentially confusing scenario in which Toledo Mack would put on evidence in 

defense of the counterclaims before Mack Trucks puts on its case in chief. 

 Respectfully Submitted, 

 DUANE MORRIS LLP 

Date: August 18, 2006 By: _/s/ James H. Steigerwald________ 

 Wayne A. Mack 

 J. Manly Parks 

 James H. Steigerwald 

 David A. Degnan 

 DUANE MORRIS LLP 

 30 South 17th Street 

 Philadelphia, PA 19103-4196 

 215.979.1000 

 Attorneys for Plaintiff/Counterclaim 

 Defendant Toledo Mack Sales & 

 Service, Inc. 

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DM1\678195.1

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing Pretrial Memorandum of 

Toledo Mack Sales & Service, Inc. was served on this 18th day of August 2006 via hand 

delivery on the following counsel: 

 Jeremy Heep, Esquire 

 Pepper Hamilton LLP 

 3000 Two Logan Square 

 Eighteenth and Arch Streets 

 Philadelphia, PA 19103-2799 

 ___/s/ David A. Degnan_______________ 

 David A. Degnan 

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