Lidochem, Inc. v. Stoller Enterprises, Inc.

500 F. App'x 373
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 12, 2012
Docket10-1686
StatusUnpublished
Cited by16 cases

This text of 500 F. App'x 373 (Lidochem, Inc. v. Stoller Enterprises, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lidochem, Inc. v. Stoller Enterprises, Inc., 500 F. App'x 373 (6th Cir. 2012).

Opinions

OPINION

JANE B. STRANCH, Circuit Judge.

LidoChem, Inc., and Frank Dean appeal the district court’s grant of summary judgment in favor of Stoller Enterprises, Inc., Jerry Stoller, David Alexander, Michael Wright, and McKenzie Wright Laboratories, LLC in this dispute between business competitors in the Michigan farm-chemicals market. The district court ruled that LidoChem and Dean could not prevail on their claims for false or misleading promotion under the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), tortious interference with business interests, injurious falsehood, and civil conspiracy. The court also ruled in favor of Stoller Enterprises and Alexander on the defamation claim. We AFFIRM in part, REVERSE in part, and REMAND for further proceedings.

I. FACTS

Don and Lisa Pucillo formed LidoChem as a New Jersey corporation in 1981 to distribute chemical products. LidoChem entered the agricultural chemical business [375]*375in western Michigan in the late 1990’s. In 1999, LidoChem hired chemist Frank Dean, a Texas resident, and sales representative Gerry Gelder, a Michigan resident, to assist LidoChem with its business expansion. Dean and Gelder worked for Stoller Enterprises before they joined Li-doChem.

LidoChem’s products were blended by The Andersons, a large midwestern chemical manufacturer. LidoChem sold its products to Michigan distributors, including Zeeland Farm Services and Green Valley Agriculture. The distributors then sold the products to farmers. Stoller Enterprises is a Texas corporation engaged in the sale of agricultural chemicals in Michigan and other farm markets. Jerry Stoller owns the company, and David Alexander serves as a Michigan sales representative. Michael Wright, also a Texas resident, is President of McKenzie Wright Laboratories, LLC.

In 2000, the Pueillos joined Valagro, an Italian speciality-fertilizer company, in a business venture to form a new Delaware corporation called Nutrecology, Inc. Nu-trecology employed Dean to develop a liquid fertilizer, Nutrefol, to compete with Stoller Enterprises’ similar product, Foli-Zyme. Nutrecology utilized LidoChem’s distribution network in Michigan to market the product.

In March 2001, Gelder and a salesman for Zeeland Farm Services met with the owners of Boersen Farms, a large farming operation in western Michigan and one of Zeeland’s largest customers. Gelder asked the Boersens to try LidoChem’s and Nutrecology’s products for the 2001 growing season, instead of the Stoller Enterprises products that Boersen used in 2000. Dennis Boersen alleged that Gelder told him that Nutrefol would work like Foli-Zyme to enhance the growth of soybeans, but Gelder denied making any such representation. Boersen agreed to try Nutrefol and purchased the product through Lido-Chem’s distributors, Zeeland Farm Services and Green Valley Agriculture.

In May 2001, Boersen sprayed a mixture of Nutrefol and Roundup on 2500 acres of soybeans, but the plants turned yellow and became stressed. Boersen contacted Wally Gerst, a distributor for Stoller Enterprises, for advice. After examining the soybean fields, Gerst recommended the use of Stoller products to encourage plant recovery.

In July 2001, Gerst asked Stoller and Alexander to accompany him to Boersen Farms to discuss the effect of Nutrefol on the soybeans. Stoller assured Boersen that Nutrefol contained a substance that was harmful to soybeans. Stoller obtained a Nutrefol sample from the farm, and Gerst obtained a copy of Nutrefol’s material safety data sheet (MSDS)1 from Zee-land Farm Services.

LidoChem and Dean alleged that Stoller orchestrated a plan to ruin their reputations within the farm chemicals industry by making misrepresentations that Nutre-fol contained “poison” so that LidoChem could not compete in the marketplace. They asserted that Stoller’s animosity against them developed for several reasons: LidoChem hired Dean and Gelder away from Stoller Enterprises; Dean applied for a provisional patent shortly after joining LidoChem utilizing research Stol-ler Enterprises claimed to own; and Stol-ler blamed Dean for the death of Stoller’s [376]*376son. LidoChem and Dean produced proof that Stoller advanced a scheme to represent falsely that Dean added 2-phenylbu-tyric acid (2-PBA) to Nutrefol, a chemical that Stoller claimed was toxic to plants and caused the reduced soybean harvest at Boersen Farms. As a result of Stoller’s alleged statements, Nutrecology pulled Nutrefol from the market in late 2001. In addition, LidoChem and Dean presented proof that Stoller repeatedly encouraged Boersen Farms and its attorneys to file a lawsuit against LidoChem, Dean, Nutre-cology, The Andersons, Zeeland Farm Services, and Green Valley Agriculture in Michigan state court. LidoChem asserted that, once the lawsuit became public and farmers, distributors, and blenders became aware of the false claim that Nutrefol contained a toxic chemical, LidoChem lost its business relationships and its ability to compete.

At issue are several communications Stoller made to others. On September 18, 2001, Stoller sent a memorandum to Calvin Hartzog, Product Development Manager for Stoller Enterprises, with copies to Alexander and Gerst. Stoller alleged that Nutrefol was toxic and damaged Boersen Farms’ soybeans. He directed Hartzog to send the Nutrefol sample obtained from Boersen Farms to Dr. Benjamin Mosier, a chemist, with instructions to analyze the sample for any toxic ingredients.

In a September 14 email to Gerst, Stol-ler reported that Nutrefol’s MSDS sheet was wrong and that the Nutrefol sample was being analyzed for toxins. Stoller also stated that LidoChem, Dean, Gelder, Zee-land Farm Supply, and Green Valley Agriculture were liable for the Boersens’ 2001 crop damage, but he surmised that they might have little money to pay a judgment, while The Andersons had “deep pockets.” Stoller predicted that The Andersons would refuse to blend products for Lido-Chem if Boersen Farms named The Andersons as a defendant in a lawsuit.

Sometime thereafter, Stoller learned that Dr. Mosier did not find any toxic chemicals in Nutrefol. Not satisfied, Stol-ler instructed Hartzog to arrange for Michael Wright of McKenzie Wright Laboratories to re-test the Nutrefol sample. According to Hartzog, Stoller knew that McKenzie Wright would provide the test result Stoller wanted.2

In March 2002, Stoller met with Wright, Hartzog, and Mark Wiltse, EPA registration specialist for Stoller Enterprises. Stoller directed Wright to issue a report finding that the Nutrefol sample taken from Boersen Farms contained 2-PBA and that the 2-PBA was masked by long-chain fatty acids. Wright produced the false report for Stoller in June 2002. Hartzog notified Alexander of the false test result, exclaiming, “We got’ em.” Stoller also informed Alexander about the false test result. Alexander then communicated the results of Wright’s false lab testing directly to Dennis Boersen. Alexander met with Boersen Farms’ attorney three times, and he agreed to serve as a witness in a lawsuit Boersen Farms planned to file against LidoChem, Dean, and others.

Between September 2002 and August 2003, Stoller sent six letters to the law firm representing Boersen Farms, encouraging the attorneys to file a lawsuit. Stol-ler sent copies of some of these letters to Alexander. It was common knowledge in [377]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
500 F. App'x 373, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lidochem-inc-v-stoller-enterprises-inc-ca6-2012.