Opinion ID: 1372425
Heading Depth: 3
Heading Rank: 2

Heading: Instituting Groundless Litigation, Defamation and Unfair Competition[28]

Text: Under Pennsylvania law, a plaintiff bringing a defamation action must prove: (1) the defamatory character of the communication; (2) its publication by the defendant; (3) its application to the plaintiff; (4) the understanding by the recipient of its defamatory meaning; (5) the understanding by the recipient of it as intended to be applied to the plaintiff; (6) special harm resulting to the plaintiff from its publication; and (7) abuse of a conditionally privileged occasion. 42 Pa. Cons.Stat. Ann. ง 8343 (West 1998). Appellant relies on Restatement (Third) of Unfair Competition ง 1 to support its unfair competition allegation but does not cite any state-court appellate decision that has adopted section 1 in Pennsylvania. Nevertheless, inasmuch as we reject appellant's section 1 contentions, we will assume without deciding that Pennsylvania courts would follow that section. [29] Section 1 states, in relevant part, that: One who causes harm to the commercial relations of another by engaging in a business or trade is not subject to liability to the other for such harm unless: (a) the harm results from ... acts or practices of the actor determined to be actionable as an unfair method of competition, taking into account the nature of the conduct and its likely effect on both the person seeking relief and the public; or (b) the acts or practices of the actor are actionable by the other under federal or state statutes ... or general principles of common law apart from those considered in this Restatement. Appellant maintains that in the incident in December 2004 that we already have described, a Surgical sales representative loudly accused Advanced's sales representative of illegally selling Acumed products at Nazareth Hospital. According to appellant, the Nazareth Hospital incident led Dr. Robert Frederick, a Nazareth doctor, to stop doing business with appellant and also resulted in Morris's exclusion from the operating theater at Jefferson Hospital. Dr. Frederick, however, at a deposition on January 31, 2007, denied overhearing the argument between the two sales representatives and had no recollection of refusing to do business with appellant. Moreover, appellant did not present evidence that a Surgical sales representative made defamatory statements about appellant's Acumed inventory and does not point to evidence connecting Morris's exclusion from the Jefferson Hospital operating theater to the Nazareth Hospital incident. Therefore, the District Court properly dismissed this claim on summary judgment. See Lexington Ins. Co. v. W. Pa. Hosp., 423 F.3d 318, 332-33 (3d Cir. 2005) (speculation and conjecture may not defeat a motion for summary judgment). Further, the letters Acumed sent to appellant's customers, despite appellant's view that they disparage[d] the inventory Advanced was selling, appellant's br. at 18, do not qualify as defamation or unfair competition. The letters informed Acumed's customersโwithout mentioning appellant by nameโthat Acumed only would insure and warrant products its authorized dealers sold and further informed its customers that Surgical was its authorized representative in eastern Pennsylvania and southern New Jersey. Thus, inasmuch as the letters did not specifically name appellant and were not defamatory under Pennsylvania law, the District Court appropriately granted appellees summary judgment on this claim. Likewise, because Acumed's conduct in sending the letters was not actionable but rather was justified, the letters did not constitute unfair competition. Appellant argues that certain questions that appellees' counsel asked witnesses during depositions constituted an abuse of process. To the extent that appellant did not raise these claims in the District Court, it waived them. Arnold M. Diamond, 180 F.3d at 524 n. 6. In any event, appellees in asking the questions did not engage in conduct constituting an abuse of process. [30] Finally, appellant contends that Acumed pleaded a Lanham Act claim in order to manufacture federal jurisdiction. [31] Appellees' Lanham Act claim survived appellant's pretrial motion seeking an order dismissing the case for want of federal jurisdiction, but the jury rejected the Lanham Act claim at trial. We believe that in alleging that appellees instituted groundless litigation, appellant was attempting to bring a malicious prosecution claim under Pennsylvania law and, in any event, we see no other way to treat the claim. In Pennsylvania, a party engages in malicious prosecution when it institutes a lawsuit with a malicious motive and without probable cause. Werner v. Plater-Zyberk, 799 A.2d 776, 785 (Pa.Super.Ct.2002). Based on the Nazareth Hospital incident and other reports that unauthorized sales representatives were selling its products, Acumed had cause to believe, even though the jury's verdict did not support that belief, that appellant was causing confusion in the marketplace with regard to appellant's relationship with Acumed. Therefore, the District Court did not err in granting summary judgment on appellant's claim that appellees instituted groundless litigation against it. [32]