Forrester Environmental v. Wheelabrator Technologies

2012 DNH 138

Opinion

Forrester Environmental v. Wheelabrator Technologies CV-10-154-JL 8/15/12

UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

Forrester Environmental Services, Inc. and Keith E . Forrester

v. Civil N o . 10-cv-154-JL Opinion N o . 2012 DNH 138 Wheelabrator Technologies, Inc.

FINDINGS OF FACT AND RULINGS OF LAW

The plaintiffs, Keith Forrester and his company, Forrester

Environmental Services, Inc., have sued defendant Wheelabrator

Technologies, Inc., alleging that Wheelabrator interfered with

plaintiffs’ business relationship with a Taiwanese company, Kobin

Environmental Enterprise, by falsely claiming ownership of the

U.S. patent rights to plaintiffs’ intellectual property, among

other things. Because the plaintiffs’ right to relief

necessarily depends on the resolution of substantial questions of

federal patent law, this court has jurisdiction pursuant to 28

U.S.C. §§ 1331 (federal question) and 1338 (patent). See U.S.

Valves, Inc. v . Dray, 212 F.3d 1368, 1372 (Fed. Cir. 2000).

The court previously granted summary judgment in favor of

Wheelabrator on one of plaintiffs’ claims--for trade secret

misappropriation in violation of the Uniform Trade Secrets Act,

N.H. Rev. Stat. Ann. § 350-B--but denied Wheelabrator’s motion as

to plaintiffs’ remaining claims. Those claims are: (1) unfair or deceptive trade practices in violation of the Consumer

Protection Act, N.H. Rev. Stat. Ann. § 358-A, (2) tortious

interference with contractual relationship, and (3) tortious

interference with prospective advantage. Forrester Envtl.

Servs., Inc. v . Wheelabrator Techs., Inc., 2011 DNH 212. Among

other things, the court concluded that a genuine issue of

material fact existed as to when plaintiffs first discovered (or

should have discovered) Wheelabrator’s alleged misconduct, the

event that started the running of the limitations period under

the so-called “discovery rule.” Id. at 22-26.

Because the New Hampshire Supreme Court has held that the

facts surrounding the application of the statute of limitations,

and, concomitantly, the discovery rule, are to be decided by the

court rather than the jury, see Keshishian v . CMC Radiologists,

142 N.H. 1 6 8 , 179-80 (1997), this court conducted an evidentiary

hearing on the limited issue of whether some or all of

plaintiffs’ claims are time-barred. Each of the parties

submitted a set of proposed findings and rulings. With the

assistance of these materials, the court makes the findings of

fact and rulings of law set forth herein. See Fed. R. Civ. P.

52(a). As explained in detail below, the court finds that, with

the exception of misrepresentations Wheelabrator allegedly made

to Kobin on or around June 1 4 , 2007, plaintiffs “[d]iscovered, or

2 in the exercise of reasonable diligence should have discovered,”

N.H. Rev. Stat. Ann. § 508:4, Wheelabrator’s alleged misconduct

and its causal connection to their damages no later than January

1 9 , 2007. Because this action was not filed until February 2 3 ,

2010, the court concludes that the three-year statute of

limitations bars plaintiffs’ claims, except to the extent they

are premised upon the alleged June 1 4 , 2007 misrepresentations.

Findings of Fact

I. Relationship between the parties

1. Plaintiff Keith Forrester is a former employee of

Wheelabrator Environmental Systems, the predecessor to

defendant Wheelabrator Technologies, Inc. When Forrester’s

employment with Wheelabrator ended in 1992, he formed his

own company, plaintiff Forrester Environmental Systems, Inc.

(“FESI”).

2. Both Wheelabrator and FESI provide goods and services

related to the use of phosphates to stabilize heavy metals

in incinerator ash and other industrial waste. Wheelabrator

refers to its proprietary treatments as WES-PHix, while FESI

refers to its treatments as FESI-BOND.

3. Dating back nearly to the founding of FESI in 1992,

Forrester and Wheelabrator have regularly quarreled over

3 both the scope of their respective patent and intellectual

property rights and alleged interference with one another’s

customers. O r , as Forrester testified, he and Wheelabrator

have had “a fundamental disagreement” regarding the scope of

Wheelabrator’s patents and intellectual property rights for

“a long time.”

4. In July 1998, Forrester wrote to Wheelabrator claiming that

one of its employees, Mark Lyons, had made false statements

to a customer which had “caused severe damage to [FESI’s]

business.” Exh. I .

5. In March 1999, FESI and Wheelabrator were competing for the

business of at least two potential customers. During the

course of negotiations with these potential customers,

Forrester came into the possession of letters Wheelabrator

had sent them. See Exhs. J-K.

6. Forrester testified that, in his opinion, these letters

misrepresented the scope of Wheelabrator’s intellectual

property rights. Specifically, he testified that he

believed Wheelabrator overstated its patent rights by

representing that “the use of phosphate to treat

[incinerator] ash, either alone or in combination with any

other chemical agent(s), is covered by Wheelabrator’s

patents” in a March 1 7 , 1999 letter to Robert R. Becker of

4 HDR Engineering, Inc. Forrester further testified that he

representing that “the use of any form of water soluble

phosphate to treat wire chopping waste, either alone or in

combination with any other chemical agent(s), would infringe

[Wheelabrator’s U.S. Patent N o . 5,430,233 (the “'233

Patent”)].” This statement appeared in Wheelabrator’s March

2 8 , 1999 letter to Martin S . Rifkin of OmniSource Corp.

7. In May 2000, Forrester and Wheelabrator again butted heads.

Wheelabrator’s general counsel wrote to FESI expressing

concern that FESI “may be offering to treat waste from metal

reclamation processes with triple super phosphate,” a

treatment that he viewed as “rais[ing] a possible concern

with respect to” the '233 Patent. Exh. L . Forrester

responded in August of that year, stating that he did “not

agree with [Wheelabrator’s] broad interpretation” of its

patent but confirming that FESI was “not offering technology

as allowed under [the '233 Patent].” Exh. M .

II. Plaintiffs’ relationship with Kobin

8. The parties’ squabbles over customer relationships and

intellectual property intensified in the mid-2000s.

5 9. In August 2004, FESI entered into a chemical supply

agreement with Kobin Environmental Enterprise Co., Ltd., a

Taiwanese waste treatment company. See Exh. 2 . At that

time, Kobin had sublicensed the right to use WES-PHix to

treat incinerator ash at its Taipei facility from

Wheelabrator’s Taiwanese licensee, Bio-Max Environmental

Engineering Company, Ltd.

10. Forrester had heard from FESI’s representative for Taiwan,

Hangshin Shih, that Kobin was dissatisfied with WES-PHix due

in part to an unpleasant odor that it produced. Forrester

believed he could achieve the same results without an odor.

He initially discussed two possible treatments with Kobin:

one using triple super phosphate, or “TSP,” and one using

dicalcium phosphate dihydrate powder, or “DCPDHP.”

11. The following month, an outside attorney for Wheelabrator

wrote to Forrester expressing concern that, among other

things, FESI was “offering to the waste industry a process

or processes for the treatment of wastes similar to those”

embodied in Wheelabrator’s patents, and identified the use

of TSP as a method “fully disclosed in Wheelabrator’s

patents.” Exh. P. The letter suggested that Forrester

compare the claims of Wheelabrator’s patents “to the

processes you are offering to the waste-to-energy and other

6 industries,” invited him to contact Wheelabrator to discuss

licensing WES-PHix, and asked that he provide “details of

your treatment process(es) and their relevance to the

Wheelabrator patents.” Id. The letter also contained a

veiled threat of possible litigation against Forrester and

FESI. Forrester promptly responded to this letter,

disputing Wheelabrator’s interpretation of the scope of its

patents. See Exh. Q .

12. Neither of these letters specifically referenced either

party’s business relationship with Kobin. While these

exchanges were taking place, however, FESI and Kobin were

developing their business relationship pursuant to the

August 2004 chemical supply agreement. Wheelabrator either

knew of or suspected the existence of this relationship.

Forrester testified that beginning some time in 2004, he

learned from Kobin that Wheelabrator had been telling Kobin

that it owned patent rights that, in his opinion, it did not

own. Forrester continued to hear these reports from Kobin

throughout the remainder of FESI’s relationship with the

company.

13. After conducting initial testing to identify a chemical

treatment that would satisfy Kobin’s requirements, FESI

began selling Kobin DCPDHP on a regular basis beginning in

7 April 2005. Forrester testified that he believed that the

use of DCPDHP to treat Kobin’s incinerator ash did not

infringe upon any of Wheelabrator’s patents, because

DCPDHP’s water solubility was below that specified in those

patents. In fact, Forrester testified that because his

method of treatment was “dry”--i.e., did not require the

addition of any water–it was altogether different from

Wheelabrator’s method.

14. Nevertheless, on April 5 , 2005, an outside attorney for

Wheelabrator wrote to FESI accusing it of “engag[ing] in

activities to interfere with contractual and other

advantageous relationships of [Wheelabrator] with . . . Kuo-

Bin Ceramic Ind. Co., Ltd.”1 Exh. W . The attorney also

charged that FESI had been “utilizing technical information

that [Wheelabrator] believes is owned by and proprietary to

[Wheelabrator].” Id. The letter demanded that FESI

“immediately cease and desist the aforementioned

activities.” Id. Forrester’s response denied that FESI had

1 Kuo-Bin Ceramic is the former name of Kobin Environmental Enterprise Co., Ltd. As mentioned in the Court’s order on the parties’ motions for summary judgment, the name change is not material to the issues in this case. See Forrester, 2011 DNH 212, 8 n.5. In these findings and rulings, the court adopts the parties’ practice of referring to the company as “Kobin” both pre- and post-name change.

8 engaged in any unlawful practices or that it had infringed

Wheelabrator’s patents. See Exh. X .

15. In May 2005, Forrester countered Wheelabrator’s accusations

of misconduct with a letter to Wheelabrator’s outside

attorney in which he accused Wheelabrator of engaging in

misconduct of its own. See Exh. B B . In particular, the

letter stated:

It has come to our attention that [Wheelabrator] has provided misinformation relating to FESI-BOND technology to its licensee in Taiwan, and disparaged FESI and myself. These actions by [Wheelabrator] are . . . in violation of US law regarding commercial and personal defamation.

We request that [Wheelabrator] cease providing any opinions or comments to licensees regarding FESI- BOND technology that are not supported by peer reviewed published data or [the] FESI website and FESI marketing documents. FESI is prepared to file actions against [Wheelabrator] and seek treble and punitive damages for all losses associated with these marketing tactics allowed and supported by [Wheelabrator], if these illegal [Wheelabrator] communications result in FESI project losses or continue.

Id.

16. Forrester testified that he wrote this letter after Kobin

informed him of Wheelabrator’s claim that FESI did not have

experience with bottom ash stabilization in the United

States. The court did not find this testimony credible;

9 Forrester’s demeanor when providing it only highlighted its

implausibility, both as to the statements themselves and the

circumstances under which they were purportedly made.2 At

any rate, Forrester conceded that at the time he wrote this

letter, he believed that Wheelabrator had “made a statement

that . . . was derogatory and illegal” in an attempt to

dissuade Kobin from doing business with him.

17. On February 1 0 , 2006, Jerry Chen, Kobin’s general manager,

wrote to Hangshin Shih noting Kobin’s “concerns over

infringement of WHEELABRATOR phosphoric acid agent,” and

asking that FESI “provide the detailed content of

technologies” in its patent applications. Exh. NNN. The

letter further noted that Kobin had “always been concerned

over whether the technology supplied by FESI to KOBIN . . .

would fall into the coverage of WHEELABRATOR’s technology or

2 The court acknowledges that Forrester’s motive for so testifying is not altogether clear. One possible explanation is that the “misinformation” provided to Kobin by Wheelabrator was actually that its patents covered FESI’s technologies, which would undermine Forrester’s position that he did not know until mid-2007 that Wheelabrator had made such claims. But it is equally possible that Forrester’s accusations that Wheelabrator had provided “misinformation” were themselves fabrications, and Forrester did not want to admit that he had made those accusations without a good-faith basis. The court therefore draws no conclusion as to whether Kobin actually made any statements regarding Wheelabrator prior to his May 2005 letter, and if s o , the substance of any such statements.

10 not.” Id. Shih consulted Forrester about these questions,

and, with Forrester’s assistance, responded to Chen later

the same day. See Exh. OOO. The response offered FESI’s

interpretation of Wheelabrator’s patents, and sought to

assure Chen that WES-PHix and FESI-BOND were “two totally

different technologies.” Id.

18. The following month, Forrester and Hangshin Shih met with

Jerry Chen and another Kobin representative, Bill Chen, at

FESI’s headquarters in New Hampshire. Forrester claimed to

have no memory of what happened at that meeting, and Shih’s

testimony was vague on that point. Mere days before the

meeting occurred, however, Wheelabrator’s general counsel

had sent Jerry Chen a letter claiming that WES-PHix “covers

the use of any solid, liquid, or chemical form of

phosphate,” and demanding that Kobin pay it fees for its use

of “a phosphate-based process” (i.e., FESI-BOND) to treat

its ash. Exh. GG. So it is a reasonable, if not

inescapable, inference that, at the meeting, Chen questioned

Forrester about the claims made in this letter, and sought

assurances that FESI-BOND was distinct from WES-PHix and

that the WES-PHix patents did not, in fact, cover “any

solid, liquid, or chemical form of phosphate.” Indeed,

according to Shih’s diary entries, the differences between

11 Wheelabrator’s patents and FESI’s patents were discussed at

the meeting. See Exh. 2 8 .

19. Shortly before that meeting, based upon his understanding

that Wheelabrator had claimed to hold Taiwanese patents for

its WES-PHix treatments, Forrester had retained a Taiwanese

law firm to perform a search for any Wheelabrator patents on

ash stabilization technologies. On April 4 , 2006, Forrester

forwarded the results of that patent search to Kobin’s

general manager. In his cover letter, he wrote:

The attached search confirmed that Wheelabrator holds no patents covering incinerator bottom ash, combined ash, or flyash stabilization in Taiwan.

Given the above fact, it appears that KOBIN, and possibly Bio-Max . . . are victims of intellectual property fraud committed by Wheelabrator. The exact language of the contract between [Wheelabrator] and Bio-Max, and between Bio-Max and KOBIN, will clarify where fraud was first committed and to what degree. . . .

As a financially impacted party resulting from this apparent fraud, and given the recent threats against FESI by [Wheelabrator] relating to the use of [Wheelabrator] potential technology at KOBIN, I have copied legal counsel and further requesting [sic] the US Attorney Generals [sic] office to investigate this criminal case. As we discussed, I suggest that you retain legal counsel in Taiwan and consider requesting a full refund of all licensee fees charged for the use of [Wheelabrator] technology in Taiwan.

12 Exh. 6 (emphasis in original). 3

20. In 2005, Kobin made payments for its DCPDHP orders from FESI

on April 2 9 , June 2 9 , September 3 0 , November 2 9 , December 6,

and December 2 9 . In 2006, Kobin made payments for its

DCPDHP orders from FESI on January 1 7 , February 1 5 , April 7 ,

June 3 0 , August 1 5 , August 2 9 , September 1 5 , October 5 , and

November 1 5 . Each payment corresponded to an order Kobin

had placed several weeks earlier.

III. Kobin’s termination of its relationship with plaintiffs

21. Forrester and FESI allege that throughout the remainder of

2006, Wheelabrator further misrepresented the scope of its

intellectual property rights to Kobin in various ways, which

the court will not fully recount in detail here. Among

other things, Wheelabrator allegedly continued to tell Kobin

that WES-PHix, as embodied in Wheelabrator’s U.S. patents,

encompassed the use of all solid forms of phosphate,

including DCPDHP, to stabilize incinerator ash (essentially

the same claim made in the letter Wheelabrator’s general

3 The court does not find it unusual that Forrester did not write a similar letter to Kobin regarding Wheelabrator’s United States patents after learning of Wheelabrator’s claims about those patents at the March 2006 meeting with Kobin. No such letter would have been necessary because Forrester had already addressed those patents both in his response to Kobin’s February 1 0 , 2006 letter and at the meeting.

13 counsel sent to Kobin in March 2006). See Exh. GG.

Strictly for purposes of these findings and rulings, the

court accepts plaintiff’s position that these statements

were false.

22. Kobin ordered a shipment of DCPDHP from FESI on or about

October 1 5 , 2006, for which it paid $51,665 on November 1 5 ,

2006. By early December, however, FESI had not received

another order from Kobin as expected, and Hangshin Shih and

Forrester became concerned. On December 6, 2006, Shih

called Forrester and they spoke about Kobin’s abrupt

cessation of orders.

23. Several weeks later, on December 2 7 , 2006, Shih called Kobin

to inquire about its inconsistent orders. Kobin informed

Shih that it would respond to him in two weeks, but no

response was forthcoming, so Shih called Kobin again on

January 1 7 , 2007. Kobin informed Shih that it was

considering several options, including resuming the use of

WES-PHix or purchasing DCPDHP from another source. Shih

immediately relayed this information to Forrester.

24. On January 1 9 , 2007, Forrester wrote to Kobin’s general

manager regarding its cessation of orders from FESI. The

letter expressed Forrester’s concern about Kobin resuming

the use of WES-PHix:

14 We understand . . . that KOBIN is considering reuse of WES-PHix for KOBIN’s [incinerator ash] processing plant and/or purchase of FESI-BOND Dry chemical from local supply. We fail to understand why KOBIN would consider reusing a technology that would produce off-gas products including odor, which had been complained by neighborhood [sic] and that will likely recur or even result in plant shutdown by the Taiwan environmental authorities. We also remind KOBIN that FESI has proven that Wheelabrator and/or its agent mislead [sic] KOBIN regarding WTI patent rights in Taiwan.

Exh. 9.

25. Neither Forrester nor Shih received a response to this

letter, and Kobin did not place any orders with FESI in

January or February 2007.

26. Forrester testified that as of February 2 3 , 2007, he still

did not know whether Kobin had decided to terminate its

arrangement with FESI. Forrester further testified that as

of that date, he had no knowledge of any statements by

Wheelabrator to Kobin regarding FESI’s technology or other

interference by Wheelabrator, including any claim by

Wheelabrator that it owned the U.S. patent rights to the

treatment of ash using DCPDHP.

27. The court does not credit Forrester’s testimony on these

points. In many respects, that testimony is undermined by

documentary evidence and contradicted by other parts of

Forrester’s testimony. As early as May 2005, for example,

15 Forrester had accused Wheelabrator of providing

“misinformation relating to FESI-BOND technology to its

licensee in Taiwan,” Exh. B B , and Forrester testified that

he knew as early as 2004 that Wheelabrator had made

statements to Kobin that were, in his opinion, false. As

early as 1999, Forrester was also aware that Wheelabrator

claimed that the “use of phosphate to treat [incinerator]

ash, either alone or in combination with any other chemical

agent(s), is covered by Wheelabrator’s patents.” See Exh.

J. That statement was substantively similar to the

allegedly false statement made by Wheelabrator’s general

counsel in his March 2006 letter to Kobin, see Exh. GG,

which, as already mentioned, Kobin discussed with Forrester

later that month.

28. By January 1 9 , 2007, when he wrote to Kobin’s general

manager regarding its inconsistent orders, Forrester knew

that Wheelabrator had told Kobin at least once that it owned

the rights to ash stabilization processes using all solid

forms of phosphate, and knew it was at least possible that

this misrepresentation was the reason Kobin had discontinued

its regular chemical purchases from FESI.

29. By the end of May 2007, Forrester knew that FESI had lost

Kobin’s business to Wheelabrator. This knowledge is

16 evidenced by his May 3 0 , 2007 letter to Kobin’s general

manager, in which Forrester wrote:

In regards to termination of FESI-BOND DRY-W usage at Kobin, there remain some open action items due from KOBIN including return of FESI documents such as certificate of FESI registration and project references.

On a related subject, I remain surprised that KOBIN would reuse the WES-PHix process . . . . I remain open to contract price and terms negotiations with Kobin that will allow Kobin to utilize our process while also meeting any budgetary demands of your bottom ash stabilization operations.

Exh. 1 0 .

30. Plaintiffs maintain, however, that Wheelabrator’s alleged

misconduct had not ended. Dennis Chao, formerly a

subordinate of Jerry Chen’s at Kobin, testified to a similar

statement by Wheelabrator at a June 1 4 , 2007, meeting at its

headquarters in New Hampshire. Chao attended the meeting to

execute a new WES-PHix licensing agreement between Kobin and

Wheelabrator. Mark Lyons attended the meeting on behalf of

Wheelabrator.

31. According to Chao, although the terms of the agreement had

been previously negotiated, Kobin gave him responsibility

for reviewing and modifying them on Kobin’s behalf prior to

signing the agreement. Chao says that, before signing the

contract, he asked Lyons whether it was true that

17 Wheelabrator’s patents covered the use of any solid form of

phosphate, and Lyons answered in the affirmative. Having

received this assurance, Chao then executed the agreement on behalf of Kobin.4

32. On June 2 7 , 2007, Forrester traveled to Taipei, Taiwan to

discuss the status of FESI’s contract with Kobin

representatives. D r . Hangshin Shih also attended the

meeting on behalf of FESI.

33. Forrester and Shih testified that Kobin had requested this

meeting, but the court does not find their testimony on this

point credible. The more likely scenario is that Forrester

himself requested this meeting to attempt to persuade Kobin

to resume purchasing DCPDHP from FESI. That version of

events is consistent with the testimony of Dennis Chao, who

claimed that Shih had contacted him to arrange the meeting.

Moreover, in a contemporaneous e-mail to Chao, Shih thanked

him for his assistance in arranging the meeting, which

suggests that it was Shih or Forrester, not Kobin, who

requested i t . See Exh. 1 3 .

4 Though, as discussed infra, the court does not find Chao credible, for present purposes the court accepts as true his account of the meeting with Lyons.

18 34. For purposes of these findings and rulings, the court

accepts as true plaintiffs’ claim that at this meeting,

Kobin’s representatives told Forrester that Wheelabrator

had, at its June 14 meeting with Kobin, again claimed to own

forms of phosphate under both its patents and its contract

with Kobin. This was substantively identical to the claim

Forrester learned about in his March 2006 meeting with Kobin

representatives in New Hampshire.

35. Forrester also testified that Kobin verbally informed FESI

at this meeting that it was terminating the Kobin/FESI

chemical supply agreement. The court also does not credit

this testimony. Among other things, it is inconsistent with

Shih’s diary entry memorializing the meeting, which does not

mention the supposed termination, but does mention a

revision to the “price structure/schedule.” Exh. 3 0 . This

suggests that the parties presumed the contract would remain

in force following the meeting. A letter Forrester wrote to

Jerry Chen in August 2007 also seems to presuppose that the

contract remains in force (though it is arguably ambiguous

on this point). See Exh. 1 9 .

36. Kobin never formally terminated its chemical supply

agreement with FESI in writing, as contemplated by the

19 agreement itself. Kobin placed no orders under the chemical

supply agreement, however, from October 2006 onward.

Although Kobin briefly resumed purchasing DCPDHP from FESI

in 2008, those later purchases were each made on single-sale

basis, pursuant to a separate contract between Kobin and

FESI. See Exhs. 33-34.

37. Forrester and FESI commenced this action against

Wheelabrator on February 2 3 , 2010.

IV. Credibility of the witnesses

38. In addition to the specific instances of less-than-credible

testimony noted above, the court did not find Forrester,

Shih, or Chao to be credible witnesses as a general matter.

The demeanor, delivery, and tone of all three witnesses

undermined their credibility and created the impression

that, while perhaps not fabricating testimony outright, they

were at a minimum shading their answers and striving to

support the plaintiffs’ position on the issue at bar.

39. Forrester also conceded in his testimony that after he

initially filed suit against Wheelabrator in late 2007, 5 he

5 Well over two years before filing the case at bar, Forrester and FESI filed a previous action against Wheelabrator in this court. See Forrester Envtl. Servs., Inc. et a l . v . Wheelabrator Techs., Inc., N o . 07-cv-404-JD (D.N.H. Dec. 1 4 , 2007). The subject-matter of that action was substantially

20 identical to this one; plaintiffs sought to hold Wheelabrator accountable for making false statements to Kobin “[i]n or around the period January - June, 2007” and thereby causing Kobin to “terminate” its agreement with FESI. (Both the original and amended complaints in that action, though, alleged that the “termination” occurred “[i]n or around May, 2007”–-not, as plaintiffs now argue, in or around June 2007.) As in the present action, the complaints in the previous action purported to state claims under the New Hampshire Consumer Protection Act and for tortious interference with contractual relationship and prospective advantage. They also purported to state federal claims for patent infringement, see 35 U.S.C. § 2 7 1 , and violation of the Lanham Act, 15 U.S.C. § 1051 et seq. On September 5 , 2008, after Wheelabrator had moved to dismiss that action, but before the court had ruled on that motion, Forrester and FESI filed a stipulation of dismissal pursuant to Federal Rule of Civil Procedure 41(a)(1).

Plaintiffs’ original complaint in this action likewise alleged that Wheelabrator had made false statements to Kobin “[i]n or around the period January - June, 2007"; plaintiffs subsequently amended their complaint to allege instead that this occurred “[i]n or around June, 2007.” Both the original and first amended complaints omitted the federal claims from the previous action, replacing them with a common-law claim for “misappropriation of proprietary method.” Wheelabrator moved to dismiss that claim, arguing that it was pre-empted by federal patent law and New Hampshire’s version of the Uniform Trade Secrets Act (“NHUTSA”), N.H. Rev. Stat. Ann. § 350-B. Forrester and FESI responded by asserting that their complaints’ references to New Hampshire common law were “incorrect,” and that they actually intended to state a claim under the NHUTSA (notwithstanding the fact that, as they conceded, most of the allegedly misappropriated information had already been disclosed in United States patents prior to the misappropriation, and hence could not be considered a trade secret). Accepting this representation at face value, the court denied Wheelabrator’s motion to dismiss and granted plaintiffs leave to amend their complaint to replace their common-law misappropriation claim with a NHUTSA claim. See Order of March 7 , 2011 (document n o . 3 7 ) . Ultimately, the court granted summary judgment to Wheelabrator on that claim after plaintiffs were not able to produce any evidence that Wheelabrator misapproriated their alleged trade secrets, see

21 had instructed Shih to destroy e-mails and other documents

“[r]elating to the Kobin project with FESI technologies,”

and that he himself had destroyed potentially relevant

documents. Forrester’s excuse for the destruction--that it

was his “practice to delete” documents that he didn’t think

were “important” on a daily basis, and that he wanted Shih

to delete documents he considered to be “FESI confidential”

--was not believable. While the precise relevance of the

destroyed documents to the statute of limitations question

is unclear (though they were undoubtedly relevant to the

merits of this action), Forrester’s actions created the

impression that he is not unwilling to alter or obfuscate

relevant evidence to facilitate findings consistent with his

various positions in this litigation, which in turn

undermined his credibility as a witness.

40. Hangshin Shih’s testimony was also unreliable. Shih was

repeatedly asked whether Forrester promised him a share of

the recovery in this case. His responses were consistently

evasive. Shih’s testimony on this matter, moreover, was

marked by (1) unusually long pauses between the questions

posed to him and his answers; and (2) a nervous and ashamed

Forrester Envtl. Servs., Inc. v . Wheelabrator Techs., Inc., 2011 DNH 2 1 2 , 29-35, leaving the three claims now before the court.

22 mien. Forrester ultimately acknowledged in his testimony

that he had indeed promised Shih 50% of the plaintiffs’

recovery, ostensibly in recognition of Shih’s role as a

business developer for FESI in Taiwan. In light of Shih’s

financial stake in the outcome, his unwillingness to admit

to that stake, and his demeanor when testifying, the court

did not find him credible as a general matter.

41. Finally, the court cannot credit the testimony of Dennis

Chao. Forrester contacted Chao about providing an affidavit

and other evidence in this matter in June 2009. Chao agreed

to provide this evidence only if Forrester paid him. After

consulting with his attorney, Forrester determined that he

could not specifically pay Chao to provide evidence.

Instead, Forrester and Chao worked out an alternate

arrangement in which FESI paid Chao $55,000, ostensibly to

develop FESI’s business in Taiwan. This “business

development” agreement (which, at least as of Chao’s

testimony in August 2011, had produced no income for

Forrester and FESI) appears to be a façade erected to mask

payments made by Forrester to Chao in exchange for his

testimony and assistance in this action. Indeed, just one

week after Forrester wired $55,000 to Chao, he signed the

first of the several affidavits he provided in this case.

23 Forrester also insinuated, in an e-mail to Chao, that

further payment might be forthcoming if he and FESI were

successful in their litigation against Wheelabrator. In

light of the circumstances under which Forrester obtained

Chao’s coöperation and evidence, the court cannot find

Chao’s testimony trustworthy.

Rulings of Law

42. As noted, Forrester and FESI have advanced three claims

against Wheelabrator: unfair and deceptive trade practices

in violation of the New Hampshire Consumer Protection Act

(“CPA”), N.H. Rev. Stat. Ann. § 358-A, tortious interference

with contractual relationship, and tortious interference

with prospective advantage.

43. Each of plaintiffs’ claims is subject to the three-year

statute of limitations set forth in N.H. Rev. Stat. Ann. §

508:4, I . See Forrester, 2011 DNH 212 at 22-24 & n.10.

That statute provides:

Except as otherwise provided by law, all personal actions, except actions for slander or libel, may be brought only within 3 years of the act or omission complained o f , except that when the injury and its causal relationship to the act or omission were not discovered and could not reasonably have been discovered at the time of the act or omission, the action shall be commenced within 3 years of the time the plaintiff discovers, or in the exercise of reasonable

24 diligence should have discovered, the injury and its causal relationship to the act or omission complained o f .

44. “A cause of action arises, thereby triggering the running of

the three-year statute, once all the elements necessary for

such a claim are present.” Singer Asset Fin. Co., LLC v .

Wyner, 156 N.H. 4 6 8 , 477-78 (2007). The expiration of the

statute of limitations is an affirmative defense that the

defendant bears the burden of proving by a preponderance of

the evidence. See State v . Lake Winnipesaukee Resort, LLC,

159 N.H. 4 2 , 45 (2009).

45. To the extent plaintiffs’ claims are premised upon Mark

Lyons’ alleged June 1 4 , 2007 misrepresentations to Dennis

Chao, those claims naturally cannot have arisen any earlier

than the date those misrepresentations were made. Because

plaintiffs filed this action well before June 1 4 , 2010, any

claims premised on the events of June 1 4 , 2007, are not

barred by the statute of limitations. Insofar as those

claims are premised on other, earlier misrepresentations and

conduct of Wheelabrator, however, they are barred by the

statute of limitations.

46. Plaintiffs’ claims for tortious interference with

contractual relationship and tortious interference with

prospective advantage are essentially identical. Each

25 requires that “(1) the plaintiff had an economic

relationship with a third party; (2) the defendant knew of

this relationship; (3) the defendant intentionally and

improperly interfered with this relationship; and (4) the

plaintiff was damaged by such interference.” Singer Asset

Fin., 156 N.H. at 478 (reciting elements of intentional

interference with contractual relations); M&D Cycles, Inc.

v . Amer. Honda Motor Co., Inc., 208 F. Supp. 2d 115, 119

(D.N.H. 2002) (reciting elements of intentional interference

with prospective advantage).

47. To the extent they are premised upon Wheelabrator’s conduct

prior to June 1 4 , 2007, plaintiffs’ tortious interference

claims arose no later than the end of 2006. Plaintiffs’

economic relationship with Kobin, as well as Wheelabrator’s

knowledge of that relationship, had already been established

by the end of 2004. By the end of November 2006,

Wheelabrator had already taken several actions that

allegedly interfered with plaintiffs’ relationship with

Kobin; for purposes of these rulings, the court assumes

those actions were improper. And by early December 2006,

the final element had fallen into place: plaintiffs were

allegedly damaged by this interference when Kobin did not

26 place an order for DCPDHP that month, as one would expect

based upon the pattern of its prior orders.6

48. To state a claim under the CPA, a plaintiff must prove, at a

minimum, that: “(1) the defendant is a person; (2) the

defendant used an unfair method of competition or a

deceptive act or practice; and (3) the act occurred in trade

or commerce.” Milford Lumber Co., Inc. v . RCB Realty, Inc.,

147 N.H. 1 5 , 20 (2001).

49. To the extent it is premised upon Wheelabrator’s conduct

prior to June 1 4 , 2007, plaintiffs’ CPA claim also arose no

later than the end of 2006. Wheelabrator is a “person”

within the meaning of the CPA, and as far as the court can

tell, has been since its inception. See N.H. Rev. Stat.

6 Plaintiffs have attempted to put a finer point on the damage they incurred, arguing that Kobin’s alleged “termination” of its contract with FESI in June 2007 is the key injury for limitations purposes. But New Hampshire law is clear that a claim accrues when a plaintiff suffers “some harm caused by the defendant’s conduct”; the limitations period is not tolled “until the full extent of the plaintiff’s injury has manifested itself.” Lamprey v . Britton Constr., Inc., 163 N.H. 2 5 2 , 257 (2012) (emphasis added); c f . also Singer Asset Fin., 156 N.H. at 478 (“[A] claim based on a single tort ordinarily accrues when the tort is completed, and the continuing accrual of injury or damages does not extend the accrual date.”). Thus, even if Kobin actually did terminate its contract with Wheelabrator in June 2007, as plaintiffs contend--a contention the court rejects, as set forth supra–-that does not affect whether some or all of plaintiffs’ claims are barred by the statute of limitations, because plaintiffs had already suffered some injury well in advance of that alleged termination.

27 Ann. § 358-A:1, I (defining “person” as “natural persons,

corporations, trusts, partnerships, incorporated or

unincorporated associations, and any other legal entity”).

Its alleged misrepresentations to Kobin, which, with the

exception of Mark Lyons’ June 1 4 , 2007 statements, occurred

before the end of 2006, were made in the course of its trade

or commerce. See id. § 358-A:1, II (defining “trade” and

“commerce” as including “the advertising, offering for sale,

sale, or distribution of any services and any property,

tangible or intangible, real, personal or mixed, and any

other article, commodity, or thing of value wherever

situate”).

50. Plaintiffs do not appear to seriously contest that their

claims had arisen by the end of 2006 (with the exception, of

course, of any claims premised upon the alleged June 1 4 ,

2007 misrepresentations). But see n.4 supra. Because they

did not file this action until February 2 3 , 2010, New

Hampshire’s three-year limitations period would ordinarily

bar those claims. See N.H. Rev. Stat. Ann. § 508:4, I .

Plaintiffs argue, however, that they may take advantage of

the statute’s “discovery rule” exception.

51. “Under the discovery rule exception to the statute of

limitations, ‘when the injury [complained of] and its causal

28 relationship to the act or omission were not discovered and

could not reasonably have been discovered at the time of the

act or omission,’ the limitations period will only begin to

run when ‘the plaintiff discovers, or in the exercise of

reasonable diligence should have discovered, the injury and

its causal relationship to the act or omission complained

of.’” Keshishian v . CMC Radiologists, 142 N.H. 1 6 8 , 176-77

(1997) (quoting N.H. Rev. Stat. Ann. § 508:4, I ) . “Although

a cause of action arises as soon as all of the necessary

elements are present, it does not accrue until the plaintiff

discovers, or in the exercise of reasonable diligence should

have discovered, both the fact of an injury and the cause

thereof.” Beane v . Dana S . Beane & Co., P.C., 160 N.H. 7 0 8 ,

712 (2010) (quoting Conrad v . Hazen, 140 N.H. 249, 251-52

(1995)) (internal citation omitted).

52. Though the statute of limitations is an affirmative defense

on which the defendant bears the burden of proof, once that

burden is satisfied “by a showing that the action was not

brought within three years of the act or omission of which

the plaintiff complains,” the burden shifts to the plaintiff

to prove, by a preponderance of the evidence, that the

discovery rule applies. Lamprey v . Britton Constr., Inc.,

29 163 N.H. 2 5 2 , 257 (2012); see also, e.g., Kelleher v . Marvin

Lumber & Cedar Co., 152 N.H. 813, 852 (2005).

53. “The discovery rule is two-pronged, and both prongs must be

satisfied before the statute of limitations begins to run.

First, a plaintiff must know or reasonably should have known

that she has been injured; second, a plaintiff must know or

reasonably should have known that her injury was proximately

caused by conduct of the defendant.” Lamprey, 163 N.H. at

257.

54. In the present case, plaintiffs knew that they had been

injured by December 6, 2006. After Kobin’s October 1 5 , 2006

order, plaintiffs expected, based upon the rhythm of Kobin’s

prior orders, to have received another order by that date.

No order was forthcoming. Indeed, on December 6, 2006, Shih

and Forrester spoke about Kobin’s abrupt cessation of

orders, demonstrating their awareness of the injury. See ¶

2 2 , supra.

55. Although plaintiffs attempt to recast their “injury” as

Kobin’s alleged termination of its contract with FESI, that

termination, even if it actually occurred, is irrelevant in

light of the undisputed injury plaintiffs suffered from the

cessation of orders in December 2006. See n.5, supra.

Again, the discovery rule “is not intended to toll the

30 statute of limitations until the full extent of the

plaintiff’s injury has manifested itself. Rather, once the

plaintiff could reasonably discern that he or she suffered

some harm . . . , the tolling ends.” Lamprey, 163 N.H. at

56. Plaintiffs were also aware of Wheelabrator’s alleged (pre-

June 1 4 , 2007) misconduct by December 2006. Forrester

testified that he knew as early as 2004 that Wheelabrator

was telling Kobin that it owned patent rights that, in his

opinion, it did not own. In April 2005, Wheelabrator

informed Forrester himself of its belief that FESI was using

Wheelabrator’s proprietary technical information in its

dealings with Kobin. The following month, Forrester accused

Wheelabrator itself of misconduct in its dealings with

Kobin; he testified that this letter was authored in the

belief that Wheelabrator had “made a statement that . . .

was derogatory and illegal” in an attempt to dissuade Kobin

from doing business with him. And, during a March 2006

meeting with Forrester, Kobin representatives informed him

of a letter they had recently received from Wheelabrator’s

general counsel, who claimed that WES-PHix “covers the use

of any solid, liquid, or chemical form of phosphate.” Exh.

GG.

31 57. Plaintiffs may not have learned about each discrete occasion

on which Wheelabrator allegedly made a misstatement of this

nature until sometime after December 2006. But for purposes

of the discovery rule, “[i]t is not necessary that [they]

knew the full extent o f , or the particulars o f ,

[Wheelabrator’s] wrongful conduct.” Randall v . Laconia, 679

F.3d 1 , 8 (1st Cir. 2012) (applying New Hampshire l a w ) .

58. Finally, plaintiffs knew or should have known of the

possible causal connection between their injury and

Wheelabrator’s misconduct almost as soon as they were aware

of the injury itself, and certainly no later than January

1 9 , 2007. As just noted, Forrester knew that Wheelabrator

had made several representations to Kobin that he believed

to be false, at least one of which he believed was made with

the intent to interfere in the FESI/Kobin relationship.

Plaintiffs’ lengthy history with Wheelabrator, moreover, was

marked by Wheelabrator regularly making assertions that

Forrester thought overstated its intellectual property

rights to the detriment of FESI. In light of this history,

Forrester and FESI had every reason to believe that (a)

Wheelabrator had continued to make such assertions to Kobin,

and (b) Kobin, notwithstanding Forrester’s attempts to

assuage its concerns, finally succumbed to pressure from

32 Wheelabrator and discontinued its purchases from FESI.

Indeed, Forrester himself conceded at the evidentiary

hearing that when he learned in January 2007 that Kobin

might be resuming its use of WES-PHix, he suspected that

this was due to Wheelabrator’s misstatements regarding its

intellectual property rights.

59. Plaintiffs ultimately did not become certain that

Wheelabrator’s conduct was the cause of their injury until

some later date. But “the plaintiff need not be certain of

the causal connection” for the limitations period to begin

running; “the reasonable possibility that it existed will

suffice to obviate the protections of the discovery rule.”

Lamprey, 163 N.H. at 257. And, as just discussed,

plaintiffs were aware of the reasonable possibility that

there was a causal connection between Wheelabrator’s conduct

and their injury no later than January 1 9 , 2007.

60. The court therefore concludes that, with regard to alleged

misconduct by Wheelabrator that predates June 1 4 , 2007,

plaintiffs “discover[ed], or in the exercise of reasonable

diligence should have discovered, the injury and its causal

relationship to the act or omission complained of” by

January 1 9 , 2007. Accordingly, the three-year limitations

period for any claims premised upon that misconduct ended on

33 January 1 9 , 2010. N.H. Rev. Stat. Ann. § 508:4, I . Because

plaintiffs did not file this action until February 2 3 , 2010,

§ 508:4, I serves to bar those claims.

Conclusion

Based on the foregoing, the court concludes that the

applicable statute of limitations, N.H. Rev. Stat. Ann. § 508:4,

I , bars plaintiffs’ claims except to the extent they are premised

upon alleged misrepresentations made to representatives of Kobin

Environmental Enterprise Co., Ltd. by Wheelabrator on or around

June 1 4 , 2007.

SO ORDERED.

United States District Judge

Dated: August 1 5 , 2012

cc: Erik Graham Moskowitz, Esq. Michael J. Markoff, Esq. Sibley P. Reppert, Esq. Steven E . Grill, Esq. Jonathan M . Shirley, Esq.