United States District Court, D. New Jersey
May 10, 2005.
MATERIAL TECHNOLOGIES, INC. and, NET SHAPE, LLC, Plaintiffs,
CARPENTER TECHNOLOGY CORPORATION, Defendant.
The opinion of the court was delivered by: STANLEY CHESLER, Magistrate Judge
This matter comes before the Court on Carpenter's Motion to
Prevent Plaintiffs from Relitigating Issues Determined by the
Court on Summary Judgment. The Motion has been decided upon the
written submissions of the parties pursuant to Federal Rule of
Civil Procedure 78. For the reasons given below, the Motion is
granted in part and denied in part.
On December 14, 2004, this Court issued an Opinion addressing
Carpenter Technology Corporation ("Carpenter") and Vallourec's
motions for summary judgment. In that Opinion, the Court granted
Vallourec's motion in its entirety, dismissing Vallourec from the
case and, among other things, granted in part and denied in part
Carpenter's Motion to dismiss as to Plaintiffs' Counts 6, 7 and
15. The present Motion is related to the scope of the claims
remaining in these three Counts of the Complaint.
With respect to Plaintiff's remaining Unfair Competition
Claims, Counts 6 and 7, Carpenter argues that
plaintiffs have tried to relitigate the summary
judgment ruling by listing in the Pretrial Order and
Revised Pretrial Order as a legal issue for trial the
question of whether Carpenter engaged in unfair
competition by `misappropriating confidential
information and/or usurping the business
opportunities of the proposed joint venture.
Defendant's Brief in Support of Motion ("Def. Br.") at 3.
As Carpenter accurately points out, the Court's Opinion is
unambiguous as to the scope of the unfair competition claim that
survived summary judgment: "Carpenter's motion will be denied to
the extent that Counts 6 and 7 are based upon conduct related to
breach of the NDAs [non-disclosure agreements]." Opinion at 37.
Plaintiffs assert in response that the Opinion states, in the
very next paragraph, that claims for unfair competition are
limited to "breach of the NDAs or misappropriation of
confidential information." Plaintiffs' Opposition Brief ("Plt.
Opp.") (citing Opinion at 37 (emphasis added by Plaintiffs)).
While Plaintiffs' citation from the Opinion is accurate, it is
very clear from the discussion of unfair competition, which
refers repeatedly and specifically to breach of the NDAs as the
basis of the claim, that any surviving claim for
"misappropriation of confidential information" arises from breach
of the NDAs. See Opinion 33-37 (allowing NDA related claims
specifically because "it is clear from the Complaint, Count Six
¶¶ 84 & 85 and Count Seven ¶¶ 92 & 93, that Carpenter was on
notice of NDA related issues with respect to unfair
In the context of the Court's discussion, it should be clear
that the terms "misappropriation of confidential information"
refer to language used by Plaintiffs throughout the Complaint,
but which was limited by the Court's Opinion to information
protected by the NDAs. No more-nebulous concept of "confidential
information" can form the basis of Plaintiffs' unfair competition
claim. Accordingly, the law-of-the-case doctrine bars
relitigation with respect to these Counts. See Crowley v. Chait, 2004 U.S. Dist. LEXIS
27238, *57 (D.N.J. August 25, 2004). Defendant's Motion, with
respect to Counts 6 and 7, will be granted.
Secondly, with respect to Count 15, Carpenter argues that
[p]laintiffs' description of the fiduciary duty legal
issues in the Revised Pretrial Order does not conform
to the Court's direction. Indeed, plaintiffs'
Pretrial Order submission describe[s] the legal issue
as whether Carpenter breached a fiduciary duty owed
to plaintiff's "as a result of the relationship of
trust and confidence between the parties."
Def. Br. at 4 (citing Final Pretrial Order at 162; Revised
Pretrial Order at 157) (emphasis added). Carpenter contends that
Plaintiffs' description serves to broaden the surviving breach of
fiduciary duty claim, which Carpenter believes is, like the
unfair competition claim, limited to conduct in breach of the
Here, however, Carpenter has a taken a myopic view of the
Court's Opinion. Indeed, the Court's discussion of fiduciary duty
includes discussion of the NDAs as one potential source of such
a fiduciary duty and an issue about which there are disputed
issues of material fact. But the opinion does not rely solely on
the NDAs either as the source of the duty or as a limit on the
conduct which might breach the duty. Specifically, the Opinion
cites to at least five factual questions, including, but not
limited to, breach of the NDAs, which potentially made Carpenter
Plaintiffs' fiduciary or put Carpenter in breach of a fiduciary
duty, these are
(1) "questions about whether plaintiff believed that the two
companies had an agreement not to compete in the provision of
services which were the subject of their joint venture
negotiations," Opinion at 39;
(2) whether "the plaintiff openly shared with the defendant
extensive information about plaintiff's corporation" having
"opened itself to an extensive due diligence investigation to be
conducted by Carpenter pursuant to a confidentiality agreement
between the parties," Id.; (3) questions about "whether defendant used information covered
by a confidentiality agreement to openly compete with the
(4) "the presence of a more vulnerable party [MTI] which,
typically, has tied its success to the other by becoming the
exclusive agent of the dominant party, or, by authorizing the
other party to make the majority of important business
decisions" . . . "in this case, there are material issues of fact
as to whether MTI agreed, during joint venture negotiations, to
deal exclusively with Carpenter to pursue the Scanpac project;"
Id. at 40 (citations omitted);
(5) "there is a legitimate dispute over whether a special
relationship of confidence and trust arose between MTI and
Carpenter before an agreement was reached, in the course of
negotiations. This question of fact is wholly independent of any
relationship that may have arose had the proposed joint venture
been executed," Id. at 41 (the relationship posited in this
discussion could also have arisen independent of the execution of
The Court's Opinion denied summary judgment on Plaintiffs'
claim for breach of fiduciary duty citing all of these several,
broadly framed issues. The Court finds no error in Plaintiff's
own framing of the fiduciary duty issues at this stage of the
litigation which, as Plaintiffs note, are taken directly from
the Court's Opinion, see Plt. Opp. at 3 (The language used by
Plaintiffs in the Revised Pretrial Order is taken from the
Court's Opinion at 41.)
Plaintiff's statement of the issue is consistent with the five
potential sources of a fiduciary duty, and conduct that would be
in breach of such a fiduciary duty, as set forth in the Opinion
and above. For this reason, the Court will decline Carpenter's
invitation to limit this claim to conduct in breach of the NDAs
and Carpenter's Motion is denied as to Count 15.
III. Conclusion For the above reasons, Defendant's Motion is granted with
respect to Plaintiffs' unfair competition claims in Counts 6 and
7. These Counts were clearly limited to conduct in breach of the
parties' NDAs. Carpenter's Motion is denied with respect to
Plaintiff's claim for breach of fiduciary in Count 15, which the
Court upheld as a broader claim that implicated a rage of alleged
conduct and factual context, apart from that which related to the