Opposition Brief — Team, Inc. v. Overstreet

In The

Supreme Court of the Unitef

October Term, 1988

TEAM, INC. and LEAK REPAIRS, INC.,

Petitioners,

JONATHAN OVERSTREET, KOPPL COMPANY, M. DOUGLAS

COKER, AND KOPPL INDUSTRIAL SYSTEMS,

Respondents.

TEAM, INC. and LEAK REPAIRS, INC.,

Petitioners,

JOHN A. EDMON, KOPPL COMPANY

M. DOUGLAS COKER, and KOPPL INDUSTRIAL SYSTEMS,

Respondents.

sa...

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OPPOSITION TO PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

7’

vv

WALTON E. TINSLEY

Harris, Kern, WALLEN & TINSLEY

Quinby Building, Top Floor

650 S. Grand Avenue

Los Angeles, California 90017

Tel. (213) 626-5251

Attorney for Respondents

OF COUNSEL:

Don D. NELSON

21800 Oxnard Street

Suite 790

Woodland Hills, CA 91367

Tel. (818) 999-0412

October, 1988

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964 7 rv

OR CALL COLLECT (402) 342-2831 \Q\

“

TABLE OF CONTENTS

Page

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SUMMARY OF ARGUMENT ...................06. 4

Po RR rr er rr ere ee Pe end don wig 7

I. PETITIONERS HAVE ERRED IN THEIR ANALYSIS

OF THE LAW ON SUMMARY JUDGMENT...... 7

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& ‘Eee RVGREy SOOMOOIG . . 2... 0s esse eee 9

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Se Pee rE ee ee er ee ere ty 13

ii

TABLE OF AUTHORITIES

CasES

American Floral Serv. v Florists’ Transworld Del., 633

FSupp. 210 (NLD. TL. 1906) ooo. occscingussacecess 12

Anderson v Liberty Lobby, Inc., 477 U.S. 242 (1986)

eae nes tdinbd ees Alea eee ee te enn 5, 6, 7, 9, 10

Brewer For Brewer v City of El Cerrito, 666 F.Supp.

1346 GNDGHL SGP). oc sain ck cccn ieeeeease ee enees 11

Cal-Farm Insurance Co. v United States, 647 F.Supp.

1063 CLDACaE. PROG) occ. csccccnkeeneewee tans enases 7

Celotex Corp. v Catrett, 477 U.S. 317 (1986).. 5, 8, 10, 11

Edwards v Aguillard, 482 U.S. __, 96 L.Ed 2d 510

CIORF). «ccs 0 cisnnnneus ss ovens een aA oak ae 5

Improvement Co. v Munson, 14 Wall 442 (1872)........ 9

Matsushita Elec. Indus. Co. v Zenith Radio Corp., 475

US. S76 GOO) «060 cxssncvaeeeneaee 5, 6, 8, 10, 11, 12

Poller v Columbia Broadcasting Systems, Inc., 368

US. 468 GORD) . 06 siiscvsasnnseneapeesneaneeye %, 2

T.W. Elec. Service v Pacific Elec. Contractos, 809 F.2d

i ee ey ere rr eye 10, 11

STATUTES

Federal Rules of Civil Procedure, Rule 56.... 4, 6, 7, 8

No. 88-393

sé.

=

In The

Supreme Court of the United States

October Term, 1988

TEAM, INC. and LEAK REPAIRS, INC.,

Petitioners,

JONATHAN OVERSTREET, KOPPL COMPANY, M. DOUGLAS

COKER, AND KOPPL INDUSTRIAL SYSTEMS,

Respondents.

TEAM, INC. and LEAK REPAIRS, INC.,

Petitioners,

JOHN A. EDMON, KOPPL COMPANY

M. DOUGLAS COKER, and KOPPL INDUSTRIAL SYSTEMS,

Respondents.

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OPPOSITION TO PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

,’

_

This case comes before the Court on a Petition by

Team, Inc. and Leak Repair, Inc., plaintiff-appellant

below, for a Writ of Certiorari. At issue is a judgment of

the United States Court of Appeals for the Ninth Circuit

which affirmed the three summary judgments granted

the Respondents by the United States District Court for

the Central District of California. The District Court

granted the Respondents’ summary judgment by holding

that Respondents had not missappropriated any of the

Petitioners’ trade secrets or interfered with their contrac-

tual relations. The opinion of the Ninth Circuit Court of

Appeals is unreported according to a note appended

thereto which stated, “This disposition is not appropriate

for publication and may not be cited to or by the courts of

this circuit...

s.

—

STATEMENT OF CASE

In 1984, Respondent Koppl Company, a small 50

year old California company, engaged in the business of

working on pipes in oil refineries and chemical plants

which contained flowing liquids and gas under pressure,

decided to broaden the services they offered to their

existing customers by also providing the service of seal-

ing leaks on pipes which are on stream and under pres-

sure (leak sealing). At that time there were two large

international companies (one of them the Petitioner)

offering leak sealing services worldwide and over ten

smaller companies offering the same services on a

regional basis in various areas of the United States.

Respondent Koppl, in the course of offering leak

sealing to its existing customers, over a period of nine

months hired, among others, four employees who previ-

ously worked for the Petitioner. Three of those individ-

uals are also Respondents in this matter.

In providing leak sealing to the Respondents’ cus-

tomers, Respondent used the hardware and techniques

which were widely used and well known among the

many companies engaged in the business of leak sealing.

The hardware and techniques were also well known to

leak sealing customers. Respondent Koppl had been sell-

ing its own leak sealing hardware and sealants since

1982, several years prior to entering the leak sealing

service business. The Respondents have produced and

used leak sealing techniques, hardware and sealants

which were commonly known and used in the industry

or were independently researched and developed by

Respondents. (See Appendices A, B, C and D of Peti-

tioners’ brief).

In response to the Respondents’ three summary judg-

ment motions in the District Court, the Petitioners failed

to establish the existence of any facts upon which a jury

could reasonably conclude that the techniques, hardware,

customer list and sealants used by the Respondents were

trade secrets.

On June 21, 1988, when the Court of Appeals

affirmed the District Court’s grant of summary judgment

to the Respondents, it did not establish a new standard

for summary judgments as alleged by the Petitioners.

Petitioners failed their responses to the Respondents’

motions to include any material facts which would prove

that the Petitioners’ alleged trade secrets were in fact

secret and were not commoniy used by other companies

engaged in the leak sealing business. Petitioners further

failed to provide the District Court with any material

facts which contradicted Respondents’ claims that they

independently developed their own methods and cus-

tomer lists.

-.

—

SUMMARY OF ARGUMENT

The Petition for Writ of Certiorari (hereinafter,

“Writ”) should not be granted, because the decision of

the Court of Appeals was consistent with the standard,

for Summary Judgment established by the Supreme

Court.

1. The Burden.

Petitioners claim that the decision of the Court of

Appeals imposes a much higher burden on them than is

required under Rule 56 of the Federal Rules of Civil

Procedure. (Writ, page 11).

However, Respondents submit, the Petitioners have

made the error of considering only paragraph (c) of Rule

56, while ignoring paragraph (e) of Rule 56.

Thus, the combined effect of paragraph (c) and para-

graph (e) of Rule 56 is to focus attention on the particular

burden of proof that the non-moving party must bear at

trial as to an element essential to its case.

Therefore, Petitioners have erred in their contention

that the Court of Appeal imposed “a much higher bur-

den” by requiring them to establish the existence of facts

on an issue prior to trial (Writ, page 5).

The burden obliges the Petitioners to do more than

“merely present evidence of a factual dispute.”

The arguments of the Respondents are supported by

three recent rulings by the Supreme Court which clarify

the Summary of Judgment issue and which indicate that

the Court has clearly decided not to take a harsh view

toward motions for summary judgment.

The decisions in Celotex Corp. v Catrett, 477 U. S. 317

(1986); Matsushita Elec. Indus. Co. v Zenith Radio Corp., 475

U. S. 574 (1986), and Anderson v Liberty Lobby, Inc., 477 U.

S. 242 (1986), as explained and supported by subsequent

decisions, illustrate that the arguments of Petitioners are

simply wrong, and there is no reason for the Supreme

Court to grant this Petition.

2. The Evidentiary Standard.

In addition, the allegation of Petitioners (Writ, page

5) that the Supreme Court has only addressed actions in

which the movant presents no evidence to support the

motion (citing Celotex) is misleading and taken out of

context.

The Supreme Court actually stated: “There is no

express or implied requirement in Rule 56 that the mov-

ing party support its motion with affidavits or other

similar materials negating the opponent's claim.” Celotex,

at page 323 (emphasis in original). This was cited in

Edwards v Aguillard, 482 U.S. __, 96 L. Ed. 2d 510, 527

(1987).

The Supreme Court in Celotex said (at page 323) that

the motion for summary judgment “may, and should, be

granted,” regardless of whether the moving party accom-

panies its motion with affidavits, “so long as whatever is

eer

before the district court demonstrates that the standard

for the entry of summary judgment, as set forth in Rule

56(c) is satisfied.” The Respondents did in fact submit an

abundance of affidavits and other documentary evidence

with each of their three summary judgment motions.

Therefore the Petitioners’ discussion of this issue is

superfluous and is an attempt to confuse the issues.

Petitioners also seem to be attacking the decisions in

Matsushita and Anderson, by claiming that in those cases

“the evidentiary standard exceeds the ordinary prepon-

derance requirement.” (Writ, page 5).

This is curious, in view of the fact that those cases

were decided by the Supreme Court, the very Court to

which the Petitioners are now requesting to review this

case. Yei their attacks are limited to the Court of Appeal,

and nowhere in the body of the Petition is there a request

to the Supreme Court to reverse itself on the decisions in

Matsushita and Anderson. Indeed, much reliance is placed

throughout the Writ on Anderson, although the Petitioners

have intentionally given an erroneous interpretation to

attempt favoring their convoluted arguments.

3. No Jury Trial.

In addition, Petitioners are not entitled to a jury trial

merely by inferring that they should have one. They

failed in their response to the Respondents’ summary

judgment motions to provide the court with sufficient

evidence for the court to send the case to a jury.

-

———— —_

ARGUMENTS

I

PETITIONERS HAVE ERRED IN THEIR

ANALYSIS OF THE LAW ON SUMMARY JUDGMENT.

1. The Burden.

The Petitioners have made the error of considering

only paragraph (c) of Rule 56 (Writ, page 6), while ignor-

ing paragraph (e) of Rule 56.

In reality, the Petitioners have erred in alleging that

the non-moving party, in order to show a genuine issue,

merely has the burden of submitting any evidence

“showing the possibility of the existence of certain facts

from which it would be open to a jury to infer from the

circumstances that the complained-of wrong occurred.”

(Writ, page 6).

In actual fact, the Supreme Court in Anderson said (at

pages 247-248) that “the mere existence of some alleged

factual dispute between the parties will not defeat an

otherwise properly supported motion for the summary

judgment; the requirement is that there be no genuine

issue of material fact (emphasis in original).

It has been said that in so holding, the Supreme

Court indicated that the burden upon the moving party is

not necessarily one of producing evidence showing the

absence of a genuine issue of material fact. Instead, the

burden may be discharged by “showing” — that is,

“pointing out to the district court” -— that there is an

absence of evidence to support the non-moving party’s

case. Cal-Farm Insurance Co. v United States, 647 F. Supp.

1083 (E.D. Cal. 1986).

The Respondents clearly showed the District Court

that the Petitioners were unable to show their alleged

trade secrets were in fact secret.

The Court in Celotex continued (at page 248) that the

question was whether the evidence was such that a rea-

sonable jury could return a verdict for the non-moving

party, and it noted Rule 56(e)’s provision that a party

opposing a properly supported motion for summary

judgment “ ‘may not rest upon the mere allegations or

denials of his pleading, but . . . must set forth specific facts

showing that there is a genuine issue for trial.’ ”

(Emphasis added).

The Court reaffirmed this principle in Matsushita (at

page 552).

The District Court and the Court of Appeals found

that the Petitioners failed to set forth specific facts show-

ing that trade secrets even existed. They were unable to

show that the techniques, hardware, sealants and cus-

tomer lists which were at issue were not known to the

many other companies in the industry. In fact, the Peti-

tioners even stated that they do not know the techniques

and hardware used by their competitors. (Court of

Appeals record Tab [hereinafter “Tab”] 104, p.263, p.267,

p.270). .

Thus, the combined effect of paragraph (c) and para-

graph (e) of Rule 56 (together with the Supreme Court’s

interpretation) is to focus attention on the particular bur-

den of proof that the non-moving party must bear in a

summary judgment motion as to an element essential to

its case.

2. The Evidentiary Standard.

The Court in Anderson said (at page 249) that there

was no issue for trial unless there was sufficient evidence

favoring the non-moving party for a jury to return a

verdict for that party (emphasis added).

If the evidence was merely colorable, or was not

significantly probative, then summary judgment would

be granted. Anderson, at pages 249-250.

Petitioners complain (Writ, pages 4-5) that the deci-

sion of the Court of Appeal requires a plaintiff whose

claim is attacked by a motion for summary judgment to

convince the trial court judge of the claims presented.

However, the Court in Anderson, citing Improvement Co. v

Munson, 14 Wall 442, 448 (1872), stated as follows (at page

251):

“Nor are judges any longer required to submit a

question to a jury merely because some evidence has

been introduced by the party having the burden of

proof, unless the evidence be of such a character that

it would warrant the jury in finding a verdict in favor

of that party. Formerly it was held that if there was

what is called a scintilla of evidence in support of a

case the judge was bound to leave it to the jury, but

recent decisions of this court have established a more

reasonable rule, that in every case, before the evidence is

left to the jury, there is a preliminary question for the

judge, not whether there is literally not evidence, but

whether there is any upon which a jury could properly

proceed to find a verdict for the party producing it, upon

whom the onus of proof is imposed.” (Emphasis added).

The Court held that whether the case should even be

presented to a jury was guided by the substantive evi-

dentiary standards that applied to the case (at page 255).

10

The Respondents are not arguing that the judge

should engage in credibility determinations-or weigh the

evidence; and the Petitioners make the mistake of basing

their Writ on the argument that the trial judge did that.

In actual fact, the trial Judge was doing no more than

that prescribed under Rule 56 and the decisions in Ander-

son, Matsushita, and Celotex. The District Court’s inquiry

was whether the evidence presented a sufficient disagree-

ment to require submission to a jury or whether the

Respondents had to prevail on the evidence as a matter of

law.

In the present case, the District Court and the Court

of Appeals held that the Petitioners had failed to come

forward with sufficiently “specific” facts from which to

draw reasonable inferences about any material facts of

actual and real secrecy which is a necessary element of

the claim of the Petitioners.

In T.W. Elec. Service v Pacific Elec. Contractors, 809 F.2d

626, 631, f.n.3 (9th Cir.1987) the Court stated that if the

statements of the Supreme Court in Anderson were con-

strued as requiring a Court to ask whether a jury could

find in favor of the non-moving party viewing all of the

evidence — that presented by both sides — (as Petitioners

seem to want the Court to do in the present case) then it

would contradict the clear instruction that a Court may

not weigh the evidence or assess its credibility.

The Petitioners have avoided the cases of Celotex and

Matsushita. A review of these decisions further bolsters

the arguments of Respondents in this case.

11

In Matsushita (at page 538), it was held that whether

a genuine issue can be said to exist with respect to a

material fact is often a close question. Clearly, the non-

moving party “must do more than simply show that there

is some metaphysical doubt as to the material facts.” The

Petitioners also failed this test.

Celotex (at page 265) stands for the proposition that if

the party moving for summary judgment meets its initial

burden of identifying for the Court the portions of the

material on file that it believes demonstrates the absence

of any genuine issue of material fact, the non-moving

party may not rely on the mere allegations in the plead-

ings in order to preclude summary judgment. Instead, the

non-moving party has to set forth specific facts under

Rule 56, showing there is a genuine issue for trial. That

principle was followed in Brewer For Brewer v City of El

Cerrito, 666 F.Supp.1346, 1349 (N.D.Cal.1987). The Peti-

tioners also failed this additional test.

In T.W. Elec. Service v Pacific Elec. Contractors, 809 F.2d

626, 630 (9th Cir.1987), the Court of Appeal, citing the

above propositions, said that the non-moving party may

not merely state that it will discredit the moving party’s

evidence at trial and proceed in the hope that something

can be developed at trial in the way of evidence to

support its claim.

3. No Right to a Jury Trial.

Petitioners argue that summary judgment imper-

missibly infringes their right to a jury trial (Writ, page

19), and cite the case of Poller v Columbia Broadcasting

Systems, Inc., 368 U.S. 464, 467 (1962).

12

However, Poller is distinguished from the present

case. In American Floral Serv. v Florists’ Transworld Del.,

633 F. Supp. 201, 227 (N.D. Ill. 1986), the Court said that

Poller advised sparing use of summary judgment in anti-

trust cases. “But that advice simply reflects the usual

factual complexity of anti-trust cases, a situation always

calling for caution in summary judgment analysis.”

The Court stated: “Now Matsushita Electric Industrial

Co. v Zenith Radio Corp. (citations) makes plain the Poller

caveat is only that and not an inexorable mandate.” The

Court, after discussing Matsushita, and discrediting the

notion that a non-moving party may draw inferences

favorable to their contentions and assert that they have

thereby presented issues that must be resolved by a jury,

stated (at page 227) that “Poller merely teaches caution”

(citation), and “if there is no genuine issue of material

fact, and if the resisting party does not present a record

sufficient to support a reasonable finding in his favor, a

district court has a duty to grant the motion of summary

judgment.” (citation).

Respondents submit, in a case such as the present

case, where the issues are not as complex as those in an

anti-trust suit, Poller has very little significance. More-

over, the Petitioners cannot merely draw an inference that

they are entitled to a jury trial, especially when their

claimed trade secrets are not trade secrets at all, and both

the District Court and Court of Appeals recognized that

there could not be a reasonable finding in Petitioners

favor based on the affidavits and other insignificant doc-

umentary evidence they filed with the District Court.

yN

4

13

CONCLUSION

For the foregoing reasons, it is respectfully submitted

that the Petition for Writ of Certiorari be denied.

Respectfully submitted,

WALTON E. TINSLEY

Counsel of Record

Harris, Kern, WALLEN & TINSLEY

Quinby Building, Top Floor

650 S. Grand Avenue ,

Los Angeles, California 90017

Counsel for Respondents

OF COUNSEL:

Don D. NELSON

21800 Oxnard Street, Suite 790

Woodland Hills, CA, 91367

Tel. (818) 999-0412