Opinion ID: 4076467
Heading Depth: 2
Heading Rank: 1

Heading: Summary Judgment on TLI’s Common Law

Text: Claims We begin with the District Court’s grant of summary judgment against TLI’s counterclaims for trade libel and for tortious interference with prospective economic advantage. Both claims were based on the so-called FUD letters that Avaya sent to existing and prospective TLI customers. The tortious interference claim was also based on Avaya’s we decline to address it. The question may be considered afresh, if necessary, following retrial. 54 Our review of a district court’s grant of summary judgment is plenary. Boyle v. Cty. of Allegheny Pa., 139 F.3d 386, 393 (3d Cir. 1998). “[S]ummary judgment may be granted if the movant shows that there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party. All facts and inferences are construed in the light most favorable to the non[]moving party.” Id. (internal citation and quotation marks omitted). 109 deactivation of TLI customers’ MSPs. The District Court granted summary judgment against TLI on those claims on the ground that TLI did not present sufficient evidence to create a dispute of material fact over whether Avaya’s conduct actually caused TLI any loss in business.55 55 The parties dispute whether the District Court applied the correct legal standards for the tort claims. For tortious interference, “New Jersey law requires that a plaintiff ... present proof that but for the acts of the defendant, the plaintiff would have received the anticipated economic benefits.” Lightning Lube, 4 F.3d at 1168 (internal quotation marks omitted). TLI disputes whether the District Court actually applied that “but for” test, suggesting that it improperly demanded that TLI prove that Avaya’s actions were the sole cause of injury. Despite some potentially confusing language, the District Court’s opinion did apply the “but for” test as explicated in Lightning Lube. TLI also argues that the District Court should have instead applied a test evaluating whether Avaya’s conduct was a “substantial factor” in causing TLI’s injury. See Verdicchio v. Ricca, 843 A.2d 1042, 1056 (N.J. 2004) (applying the “substantial factor” test in a medical malpractice case). Because a “substantial factor” causation test would not have altered the result, we need not consider whether it was more appropriate. With regard to the legal standard for trade libel, both parties agree that TLI had to prove special damages. TLI wanted the Court to apply a “material and substantial part” test for causation of those damage, see Patel v. Soriano, 848 A.2d 803, 835 (N.J. Super. Ct. App. Div. 2004), whereas Avaya supports the “natural and direct result” standard that the District Court did apply, see Mayflower Transit, LLC v. Prince, 314 F. Supp. 2d 362, 378 (D.N.J. 2004). Again, we 110 The District Court provided a detailed explanation of the deficiency of the evidence before it. As to the MSP deactivations, the Court observed that MSP access was not required to provide maintenance, citing TLI’s own interrogatory responses about alternative methods that it in fact used to provide service to customers. As the Court explained, TLI “used ... default passwords or hired a third party to determine active passwords,” so that “whether MSPs were activated had little bearing on whether [TLI] could provide maintenance to customers.” (J.A. 105.)56 Those alternative methods were sufficiently successful, in fact, that they led Avaya to bring suit against TLI, alleging that they were unlawful and resulted in the loss to Avaya of significant business. As to the FUD letters, the District Court decided that TLI had not “come forth with sufficient evidence that the Avaya letters were the de facto cause of the loss of current and prospective maintenance contracts.” (J.A. 105.) TLI’s examples of lost contracts were not at all persuasive. For instance, TLI suggested that the State of Michigan was one such lost contract, but an employee of that state testified that there were “numerous reasons” not to use TLI – unrelated to need not resolve which standard is correct because the outcome is the same under either. 56 At trial, Scott Graham validated the District Court’s conclusion when he testified that he was “[n]ot ... aware of” a case in which TLI was not able to get “into the maintenance software” of a prospective customer. (J.A. 2443.) In fact, it is “[c]orrect” that TLI was “always successful.” (Id.) 111 Avaya, and some directly caused by TLI – and that she was not under any “impression that Avaya would sue the State of Michigan if it awarded the contract to [TLI].” (J.A. 106.)57 The only specific example TLI provided of a customer who declined its services because of a FUD letter was substantiated only by an email – inadmissible as hearsay – sent by a TLI employee complaining about the lost contract. Finally, the Court refused to draw any inferences from the report of TLI’s damages expert on the grounds that it was “not supported ... by affidavits or any other evidence that would be admissible at trial.” (J.A. 108.) In this appeal, TLI relies principally upon that expert report and contests the District Court’s characterization of it, arguing vaguely that the report was based on “business records [and] excerpts from depositions of customers and TLI[] employees.” (Answering Br. at 93.) In support of that contention, TLI cites the expert’s certification, in which he declared that he “relied upon facts, data and work typically relied upon by experts in the economic/accounting industry.” (Suppl. App. 10.) TLI also cites 93 pages of inscrutable spreadsheets in which the expert – without explanation – assigned various damages to contracts that TLI allegedly lost due to Avaya’s conduct. 57 Other examples provided by TLI were similarly unimpressive. For instance, TLI relied on a cease and desist letter that it sent to Avaya in 2010. The District Court concluded that the mere existence of such a letter “is no more helpful to the Court on summary judgment than ... pleadings,” without additional “evidence sufficient to prove that the allegations made in the ... letter are in fact true.” (J.A. 107.) 112 The District Court’s rejection of TLI’s argument was thoroughly justified. The evidence TLI offered in opposing summary judgment consisted of naked accusations that Avaya’s conduct cost it business. That the allegations were recited by an expert witness or by TLI employees does not bolster them.58 See Advo, Inc. v. Phila. Newspapers, Inc., 51 F.3d 1191, 1198 (3d Cir. 1995) (“[E]xpert testimony without ... a factual foundation cannot defeat a motion for summary judgment.”). Even now on appeal, after a decade of litigation, TLI cannot point to one specific example where it has credible evidence that Avaya’s allegedly tortious conduct harmed its business. We therefore agree with the District Court that TLI failed to present sufficient evidence to create a material dispute of fact about whether Avaya’s MSP deactivations or FUD letters caused injury to TLI. Summary judgment was appropriate on both the tortious interference and the trade libel claims.