United States District Court, D. Minnesota
Lorentz, Esq., Robert Weinstine, Esq., and Justice Lindell,
Esq., Winthrop & Weinstine, PA, Minneapolis, MN, on
behalf of Plaintiff.
Ames, Esq., David Hamilton, Esq., and Jason Hicks, Esq.,
Womble Carlyle Sandridge & Rice, LLP, Washington, D.C.,
and Felicia Boyd, Esq., Barnes & Thornburg LLP,
Minneapolis, MN, on behalf of Defendant.
MEMORANDUM OPINION AND ORDER
MONTGOMERY U.S. DISTRICT JUDGE
matter is before the undersigned United States District Judge
on Plaintiff Inline Packaging, LCC's
(“Inline”) Objection [Docket No. 90] and
Defendant Graphic Packaging International, Inc.'s
(“Graphic”) Objection [Docket No. 91] to
Magistrate Judge Leo I. Brisbois' July 25, 2016 Order
(“Order”) [Docket No. 77] granting in part and
denying in part Inline's First Motion to Compel [Docket
No. 55] and denying without prejudice Graphic's Motion to
Consolidate Antitrust and Patent Suits for Pretrial Purposes
and to Stay the Antitrust Suit [Docket No. 61]. For the
reasons set forth below, the Objections are overruled.
and Graphic compete in the susceptor food packaging industry.
Compl. [Docket No. 1] ¶ 2. Susceptor food packaging is
active food packaging that converts microwave energy to high
surface temperatures which crisp and brown foods.
Id. ¶ 60. Inline and Graphic primarily compete
within the susceptor food packaging market for supply
contracts with companies such as Nestle, Heinz, Little Lady
Foods, Nation Pizza Products, and Smuckers. Id.
antitrust case is one of two lawsuits between Inline and
Graphic that are pending in the United States Court for the
District of Minnesota. The other suit is a patent
infringement action filed by Graphic on June 5, 2015, less
than two months before Inline filed this antitrust action.
See Graphic Packaging Int'l, Inc. v. Inline
Packaging, LLC, No. 15-3476 (JNE/LIB) (the “Patent
Patent Suit, Graphic alleges that Inline has infringed four
of Graphic's patents relating to susceptor products,
namely U.S. Patent Nos. 8, 872, 078 (the “'078
Patent”); D694, 106; D694, 124; and D727, 145. See
generally Patent Suit Compl. [Patent Suit Docket No. 1].
January 12, 2016, the Patent Office's Patent Trial and
Appeal Board (“PTAB”) granted a petition by
Inline seeking inter partes review
(“IPR”) of the claims in the '078 Patent.
See Inline's Mem. Supp. Mot. Stay [Patent Suit
Docket No. 52] at 2. Inline then moved to stay the Patent
Suit pending completion of the IPR proceedings. See
Inline's Mot. Stay [Patent Suit Docket No. 50].
Inline's motion was granted on April 6, 2016.
See Order, Apr. 6, 2016 [Patent Suit Docket No. 66].
The Patent Suit remains stayed pending the completion of the
IPR proceedings related to the '078 Patent. Id.
31, 2015, Inline filed this lawsuit (the “Antitrust
Suit”) against Graphic. Inline alleges that Graphic, in
response to price competition from Inline and others, engages
in anticompetitive conduct to maintain a monopolizing
position in the crisping and browning susceptor packaging
market. Compl. ¶¶ 23-58, 81-110. According to
Inline, Graphic's conduct has caused Inline to lose
existing and potential customers. Id. ¶¶
111, 114. Inline asserts five claims against Graphic: Count
I-Tortious Interference with Prospective Business Relations;
Count II-Tortious Interference with Existing Contractual
Relations; Count III-Misappropriation of Trade Secrets; Count
IV-Violation of Minn. Stat. § 325D.52 for Maintenance or
Use of a Monopoly Power; and Count V-Violation of the Sherman
Antitrust Act, 15 U.S.C. § 2. Id. ¶¶
antitrust claims are premised on three theories of
anticompetitive behavior: predatory discount bundling,
misappropriation of competitors' intellectual property
related to susceptor packaging, and baseless threats of sham
litigation. Id. ¶¶ 23-54. Inline contends
the sham litigation effort by Graphic to achieve market
monopolization includes: (1) Graphic directly threatening its
competitors and their customers with patent infringement on
expired or inapplicable patents; and (2) Graphic
communicating directly with Inline's customers to
threaten potential suit against Inline and, in so doing,
deters those customers from pursuing business with Inline and
gains the business for itself. Id. ¶¶ 31,
example of an instance when Graphic has communicated directly
with Inline's customers by threatening litigation against
Inline, the Complaint alleges that after a food company buyer
accepted Inline's bid to supply 1.1 billion units of
susceptor food packaging products in 2014, the buyer
ultimately ordered only ten percent of the product in the
contract. Id. ¶ 41. Inline attributes
Graphic's communications with the food company buyer for
the reduction; that is, Graphic communicated to the food
company buyer that it was planning to sue Inline and
therefore the customer should not contract with Inline for
susceptor products. Id. In another example, the
Complaint describes an occasion when Inline was unsuccessful
in securing a contract from Nation Pizza Products due to
Graphic communicating to Nation Pizza Products that it would
sue Inline if Inline was awarded the Nation Pizza Products
contract. Id. ¶ 42.
addition to the antitrust claims, Inline asserts claims for
tortious interference with Inline's existing and
prospective contractual relationships based on Graphic's
above-described communications to the food company buyer and
to Nation Pizza Products. See Compl. ¶¶
41-43, 122-25, 128-30. Inline also asserts a claim for
misappropriation of trade secrets, alleging that Graphic
copied a confidential susceptor sheet design that Inline had
created for Heinz in 2008. Id. ¶ 53.
Brisbois' July 25, 2016 Order resolved two motions that
were filed by the parties in the Antitrust Suit: (1)
Inline's First Motion to Compel [Docket No. 55]
(“Motion to Compel”); and (2) Graphic's
Motion to Consolidate Antitrust and Patent Suits for Pretrial
Purposes and to Stay the Antitrust Suit [Docket No. 61]
(“Motion to Consolidate and Stay”).
Inline's Motion to Compel
Order denied in part Inline's Motion to Compel by
limiting the subject matter scope of discovery to the
patents, products, entities, and instances of
anti-competitive conduct specifically alleged in the
Complaint. Order at 10-11. In setting this limitation, the
Order referenced the Supreme Court's concern over
expensive and burdensome discovery in antitrust cases, as
expressed in Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 558-60 (2007). Id. at 9-10. The Order
recognized that Twombly pertained to pleading
requirements rather than discovery limitations, but noted
that “in the wake of Twombly courts have
limited the subject matter scope of discovery to evidence
concerning only specific products and entities that a
plaintiff identifies in its complaint.” Id. at
10. The Order also ...