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Madison Oslin, Inc. v. Interstate Resources, Inc.

United States District Court, D. Maryland

March 25, 2015

MADISON OSLIN, INC., et al., Plaintiffs.
v.
INTERSTATE RESOURCES, INC., et al., Defendants.

MEMORANDUM & ORDER RE: SUMMARY JUDGMENT

MARVIN J. GARBIS, District Judge.

The Court has before it Defendants' Interstate Resources and Interstate Corrpack's Motion for Summary Judgment on Plaintiffs' Contract Claims [Document 76], Motion of Defendants James Morgan and John Cristos for Summary Judgment on Fourth Cause of Action (Trade Secret Claim) [Document 78] and the materials submitted relating thereto.[1] The Court has held a hearing and has had the benefit of the arguments of counsel.

I. BACKGROUND

A. Parties

Plaintiffs, Madison Oslin, Incorporated ("Madison Oslin") and Madison Oslin Research, Inc. ("Oslin Research") (collectively, "Oslin" or "Plaintiffs") are Alabama corporations involved in the paper coating and corrugated box industry.

Defendant Interstate Resources, Inc. ("Interstate") is a Virginia corporation and the parent company of several companies in the paper and packing industries that make paper, corrugated containers, and related products. Defendant Interstate Corrpack, LLC ("Corrpack")[2] is a Maryland subsidiary of Interstate that produces and sells corrugated boxes and sheets.

Defendant James Morgan ("Morgan") is President and Chief Operating Officer of both Interstate and Corrpack. Defendant John Cristos ("Cristos") was, during the relevant time at issue, the general manager of an Interstate affiliate.

B. Procedural Posture

Plaintiffs filed this case in an Alabama state court asserting claims in twelve counts[3] against eight named Defendants[4] and six "John Doe" Defendants. On March 15, 2011, the Northern District of Alabama dismissed the claims in all Counts other than:

• Count 4 - Misappropriation of Trade Secrets - against Interstate, Corrpack, Morgan, and Cristos.
• Count 6 - Breach of Contract - against Interstate.
• Count 7 - Breach of Implied Duty of Good Faith and Fair Dealing - against Interstate.
• Count 11 - Breach of Implied Contract - against Interstate and Corrpack.

By the instant motions, Defendants seek summary judgment on all claims in the remaining four Counts.

II. SUMMARY JUDGMENT STANDARD

A motion for summary judgment shall be granted if the pleadings and supporting documents "show[] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a).

The well-established principles pertinent to summary judgment motions can be distilled to a simple statement: The Court may look at the evidence presented in regard to a motion for summary judgment through the non-movant's rose-colored glasses, but must view it realistically. After so doing, the essential question is whether a reasonable fact finder could return a verdict for the non-movant or whether the movant would, at trial, be entitled to judgment as a matter of law. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir. 1991). Thus, in order to defeat a motion for summary judgment, "the party opposing the motion must present evidence of specific facts from which the finder of fact could reasonably find for him or her." Mackey v. Shalala, 43 F.Supp.2d 559, 564 (D. Md. 1999) (emphasis added).

When evaluating a motion for summary judgment, the Court must bear in mind that the "summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy and inexpensive determination of every action.'" Celotex, 477 U.S. at 327 (quoting Rule 1 of the Federal Rules of Civil Procedure).

III. DISCUSSION

A. Prior History

At all times relevant hereto, producers of meat products, including chicken, have often shipped their products in corrugated boxes cooled by ice. In the 1990's, and earlier, manufacturers of these boxes traditionally used paraffin wax to impregnate the box because it had near-perfect water holdout properties. However, wax boxes were expensive to produce and are not recyclable, requiring costs for their disposal.

In about 1998, Oslin developed an original idea of using a polyester coating to create a recyclable corrugated box as an alternative to wax-coated boxes. Oslin says that it was the first company to pass the Fibre Box Association ("FBA") recyclability protocol[5] with its recyclable corrugated box. In 2000, Oslin Research obtained process and apparatus patents[6] for applying polyester coating to rolls of paper board to create a recyclable corrugated box.

By the 2000's, Interstate became interested in producing and marketing a recyclable corrugated box for sale to its customers in the poultry and produce industries and began researching recyclable wax-alternative coatings. Its attempts were unsuccessful. Its supplier of coating materials, Scott Seydel ("Seydel"), ...


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