Randustrial Corp. v. Dunlap

595 F. Supp. 873, 1984 U.S. Dist. LEXIS 22854
CourtDistrict Court, W.D. Pennsylvania
DecidedOctober 11, 1984
DocketCiv. A. No. 66-479
StatusPublished
Cited by2 cases

This text of 595 F. Supp. 873 (Randustrial Corp. v. Dunlap) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Randustrial Corp. v. Dunlap, 595 F. Supp. 873, 1984 U.S. Dist. LEXIS 22854 (W.D. Pa. 1984).

Opinion

OPINION

MARSH, District Judge.

This case is before us on the plaintiff’s motion to punish for contempt. A hearing on said motion was held on September 10, 1985. Upon conclusion of said hearing, the court ordered both parties to file proposed findings of fact and conclusions of law. Also before the court is the defendant’s motion to rescind or modify the court order dated May 19, 1966 which is the subject of plaintiff’s motion to punish for contempt.

This litigation began with a complaint and motion for preliminary injunction filed on April 20, 1966 alleging a violation by Edward B. Dunlap (hereinafter Dunlap) of his sales representative agreement with Raneo Industrial Products Corporation now Randustrial Corporation (hereinafter Randustrial) and further alleging that Dunlap and others induced or attempted to induce employees of Randustrial to violate their sales representative agreements or employment agreements. A third count of the complaint involved an infringement of a copyright which is not an issue in the present case.

The original complaint and motion for preliminary injunction was not adjudicated on the merits. Instead, the parties settled the case by an agreement dated May 11, 1966 and presented a consent order which was signed by the court on May 19, 1966.

Motion to Rescind or Modify Consent Order

We shall first address the defendant’s motion to rescind or modify the consent order which shall be treated as a motion for relief from final judgment pursuant to Rule 60(b), Fed.R.Civ.P. The only grounds applicable to said relief are encompassed in Sections (5) and (6) of said rule.

This portion of the rule provides as follows:

“On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: ... (5) the judgment has been satisfied, released or discharged, or a prior judgment upon which it has been based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.”

We note that the standards for reopening a consent judgment are strict. Philadelphia Welfare Rights Org’n v. Shapp, 602 F.2d 1114, 1119 (3rd Cir.1979). For example, in Mayberry v. Maroney, 558 F.2d 1159, 1163 (3rd Cir.1977), the Third [875]*875Circuit Court of Appeals reversed the decision of a district court which vacated a consent judgment. In so doing the court stated:

“it is settled that such relief is extraordinary and may be granted only upon a showing of ‘exceptional circumstances.’ (Citations omitted.) ... Thus a party seeking such relief must bear a heavy burden of showing circumstances so changed that ‘dangers once substantial, have become attenuated to a shadow,’ United States v. Swift & Co., 286 U.S. 106, 119, 52 S.Ct. 460, 464, 76 L.Ed. 999 (1932), and that, absent such relief an ‘extreme’ and ‘unexpected’ hardship will result.”

Similarly, in United States Steel Corp. v. Fraternal Ass’n, Etc., 601 F.2d 1269, 1274 (3rd Cir.1979), the Court of Appeals vacated a district court decision modifying a consent injunction. In so doing the Court stated:

“And when, as in this ease, the appellants made a free, calculated and deliberate choice to submit to an agreed upon decree rather than seek a more favorable litigated judgment, their burden under Rule 60(b) is perhaps even more formidable than had they litigated and lost.”

We further note that this matter has been discussed by Professor Wright who comments:

“It is clear that a strong showing is required before an injunction or other prospective judgment will be modified. Mere passage of time is not enough.” (Citations omitted; emphasis supplied.) Wright, & Miller, Federal Practice and Procedure: Civil § 2863.

A review of the record does not reveal that defendant has sustained his burden to show “exceptional circumstances” for relief from this court’s consent order of May 19, 1966. The record reflects that at the time of the original complaint, defendant’s company, United Industrial Maintenance (hereinafter United), was competitive with Randustrial with respect to twenty-five percent (25%) of its business; that is, in the sale of industrial maintenance supplies. Presently, Dunlap’s new company, Consolidated Enterprises, is competitive with Randustrial with respect to twenty percent (20%) of its business. Although the consent order allowed Dunlap to compete with Randustrial after a period of three years, we use these facts merely to illustrate that there was little change from 1966 to the present in the percentage of competition between the two companies.

Since the requisite of showing “exceptional circumstances” to justify a modification of the consent order was not shown, defendant’s motion to rescind or modify will be denied.

Motion to Punish for Contempt

We turn next to the plaintiff’s motion to punish for contempt to determine if the record reflects evidence to justify plaintiff’s allegations that Paragraph 4(a) of the consent order has been violated by defendant.

Paragraph 4(a) of the consent order permanently enjoined Dunlap from:

“(a) Inducing or attempting to induce, either directly or indirectly, any present or former employee or employees of Raneo to break his, her or their contracts with Raneo, or to induce, direct or employ said persons in violation of his, her or their contracts with Raneo, to solicit customers or attempt to solicit customers of Raneo, or to act as sales agents or brokers or advisors or consultants to Dunlap, ... or to induce, employ or direct any such persons to divulge to Dunlap ... or any other persons any confidential information of Raneo, including customer lists, sales methods and inquiries from customers.”

Edward Dunlap began work with Randustrial, formerly known as Raneo Industrial Products Corporation, in 1961 as a sales trainee. He subsequently became a sales representative with Randustrial and entered into a sales representative agreement which included a covenant not to compete with Randustrial for a period equivalent to the time he was employed by Ran[876]*876dustrial but not more than three (3) years from the date he left Randustrial’s employ. After he left Randustrial’s employ in 1965, he formed United Industrial Maintenance Company with two other individuals. Both Randustrial and United were in the business of industrial maintenance and supplies. Twenty-five percent (25%) of United’s business was in direct competition with Randustrial (sale of supplies) while seventy-five percent (75%) involved contract work involving hiring laborers to do the maintenance work for customers.

Subsequent to the formation of United, Randustrial filed suit against Dunlap, his business partner and United for, inter alia, violation of his sales representative agreement with respect to the covenant not to compete.

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Bluebook (online)
595 F. Supp. 873, 1984 U.S. Dist. LEXIS 22854, Counsel Stack Legal Research, https://law.counselstack.com/opinion/randustrial-corp-v-dunlap-pawd-1984.