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JPS Elastomerics Corp. v. Specialized Techology Resourses, Inc.

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS JPS ELASTOMERICS CORP., Plaintiff v. SPECIALIZED TECHNOLOGY RESOURCES, INC. Defendant ) ) ) ) ) ) ) )

C.A. No. 10-cv-11142-MAP

MEMORANDUM AND ORDER REGARDING DEFENDANT'S MOTION TO DISMISS AND MOTION TO STRIKE (Dkt. Nos. 17 & 14) January 14, 2011 PONSOR, U.S.D.J. This is an odd case. Plaintiff, who (in the role of

defendant) is losing badly in state court, charges in this federal court complaint that the disastrous state court litigation is a "sham." It seeks, to a substantial degree,

the same remedies against Defendant here (plaintiff in state court) that the state court judge has denied it. Some

background will help to shed light on this unusual situation and to illuminate the court's rationale for its ruling dismissing the complaint. Defendant Specialized Technology Resources, Inc. ("STR") is a manufacturer of polymeric sheeting, a product made out of ethylene vinyl acetate ("EVA"). One of its

products is a specialized line of "User-Friendly" or "UF"

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EVA.

STR claims to possess a trade secret covering the In October

production process for this specialized product.

of 2007, STR brought a lawsuit against Plaintiff in this case, JPS Elastomerics Corporation ("JPS"), in state court. In August 2008, after a three-week trial, a jury determined that STR did in fact possess a trade secret in its process for manufacturing UF EVA and that an executive of JPS by the name of Galica had breached a non-disclosure agreement relating to this process that he had entered into when he was employed by STR. The jury found that STR failed

to prove that Galica and JPS had misappropriated that trade secret. However, the state Superior Court Judge, reserving

for herself a finding on the claim under Mass. Gen. Laws ch. 93A (as the statute permits), concluded that both Galica and JPS had misappropriated STR's trade secrets. The Superior Court Judge's findings were emphatic, holding that JPS had engaged in "pernicious wrongdoing," and that Galica had demonstrated a "willingness to lie under oath." (See Dkt. No. 19, Ex. A at 43, 15.) The State

Superior Court awarded STR treble damages and attorney's fees against JPS and enjoined Galica and JPS from manufacturing products through the use or disclosure of STR's trade secret. (Id. at 43-44.)

The precise outline of the injunctive relief to be
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issued in the state court has been a matter of protracted litigation, including an appeal, and the Superior Court has still not issued a final order on this issue. In other

words, the state court litigation between STR and JPS is still pending. Against this backdrop, JPS, on July 7, 2010, filed a parallel complaint before this court in six counts, alleging that STR's state court lawsuit, although successful, constituted "sham litigation" exhibiting an intent to monopolize in violation of 15 U.S.C.

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