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Gearheard v. Depuy Orthopaedics Inc.

United States District Court, E.D. Louisiana
Mar 16, 2000
Civil Action No. 99-1091 Section "N" (E.D. La. Mar. 16, 2000)

Opinion

Civil Action No. 99-1091 Section "N"

March 16, 2000


ORDER AND REASONS


Before the Court is DePuy Orthopaedic, Inc.'s Motion for Summary Judgment. For the following reasons, DePuy's motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

This motion presents one meta-issue: what remedies are available to an employee or independent contractor when his employer has attempted to bind him to an unenforceable covenant not to compete. In an earlier ruling, this Court voided the covenant not to compete between defendant DePuy Orthopaedic, Inc. ("DePuy") and Plaintiff Nall Gearheard pursuant to Louisiana Revised Statute 23:921. The question now presented is whether Mr. Gearheard and his company ("plaintiffs") can also recover damages for the DePuy's violation of public policy.

Familiarity with the facts of this case is assumed.

II. LAW AND ANALYSIS

Plaintiffs assert several theories of recovery for damages caused by DePuy's enforcement of the illegal covenant not to compete. DePuy argues that plaintiffs cannot recover on any of these theories for two reasons. First, DePuy argues that it had a constitutional right to defend itself in this lawsuit and to seek a judicial determination of the enforceability of the covenant not to compete. Second, DePuy argues that plaintiffs cannot recover damages under any of their legal theories. The Court begins with DePuy's more general argument.

A. THE NOERR-PENNINGTON DOCTRINE

DePuy argues that plaintiffs' suit is barred in its entirety because, under the Noerr-Pennington doctrine, it has a constitutional right to defend itself in this lawsuit and to seek a judicial determination of the enforceability of the covenant not to compete. DePuy's argument is premised on the United States Fifth Circuit Court of Appeals' interpretation of this doctrine in Video International Production, Inc. v. Warner-Amex Cable Communications, Inc., 858 F.2d 1075 (1988) ("VIP").

In VIP, the City of Dallas ("City") and a cable company, Warner-Amex ("WAX"), worked in concert to formulate various zoning laws that were allegedly harmful to the success of another cable company, VIP. VIP sued the City and WAX for alleged antitrust and § 1983 violations, and for tortious interference with contractual relations between VIP and the Campbell Family Partnership, which was in the process of purchasing VIP when the City served VIP with zoning violation notices. The district court found that WAX's actions in influencing the City's zoning laws were protected by the first amendment right to petition the government as articulated in the Noerr-Pennington doctrine. The Fifth Circuit affirmed, and this Court shall quote VIP's discussion of the Noerr-Pennington doctrine at length.

According to the Fifth Circuit,

The Noerr-Pennington doctrine and the exceptions to it grew from two Supreme Court cases: Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961), and United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). The essence of the doctrine is that parties who petition the government for governmental action favorable to them cannot be prosecuted under the antitrust laws even though their petitions are motivated by anticompetitive intent. Thus, railroads that embark on advertising campaigns designed to convince the legislatures to pass laws detrimental to the trucking industry are not subject to antitrust liability for those actions even though their ultimate goal is to drive truckers out of business and limit competition. Similarly, "petitions" made to the executive or judicial branches of government, e.g., in the form of administrative or legal proceedings, are exempt from antitrust liability even though the parties seek ultimately to destroy their competitors through these actions. . . .
The point of the Noerr-Pennington doctrine is to protect private parties when they petition the government for laws or interpretations of its existing laws even though those private parties are pursuing their goals with anticompetitive intent.
858 F.2d at 1082 and 1083. After setting forth these principles underlying the doctrine, the Fifth Circuit then examined its scope:

Although the Noerr-Pennington doctrine initially arose in the antitrust field, other circuits have expanded it to protect first amendment petitioning of the government from claims brought under federal and state laws, including section 1983 and common-law tortious interference with contractual relations. See, e.g., Evers v. County of Custer, 745 F.2d 1196, 1204 (9th Cir. 1984); Gorman Towers. Inc. v. Bogoslavsky, 626 F.2d 607, 614 (8th Cir. 1980), and cases cited therein. We find it easy to agree that the same rationale under antitrust law that supports WAX's petitions to the City also serves to protect WAX from the tort claim. There is simply no reason that a common-law tort doctrine can any more permissibly abridge or chill the constitutional right of petition than can a statutory claim such as antitrust.
858 F.2d at 1084.

DePuy argues that its attempt to enforce the covenant not to compete by bringing a counterclaim is protected by the Noerr-Pennington doctrine as extended by VIP. DePuy contends that the enforceability of the covenant was an open question until this Court found it illegal and that it therefore had a good faith basis in bringing its counterclaim. Plaintiffs counter DePuy's position by arguing that the Noerr-Pennington doctrine is limited to antitrust cases and that, even if it is not, DePuy's actions in bringing its counterclaim was a "sham".

The 'sham' exception comes into play when the party petitioning the government is not at all serious about the object of that petition, but engages in the petitioning activity merely to inconvenience its competitor. Thus, the sham exception is said to apply when one party has begun litigation not to win that litigation, but rather to force its competitor to waste time and money in defending itself." VIP 858 F.2d at 1082.

The Court finds, however, that the arguments asserted by both plaintiffs and DePuy miss the mark. Although plaintiffs' alleged grievance against DePuy's is DePuy's alleged enforcement or attempted enforcement of the illegal non-competition provision, the challenged actions are not necessarily limited to DePuy's filing of a counterclaim. Rather, these actions could encompass attempts to deter potential customers from doing business with plaintiffs, which are not protected by the Noerr-Pennington doctrine. See, e.g., Laitram Machinery. Inc. v. Carnitech A/S, 901 P. Supp. 1155, 1161 (E.D. La. 1995) (Jones, J.) ("TheNoerr-Pennington doctrine does not extend to sending letters to a competitor's customers alleging violation of trade secrets and infringement of patents."); but see Barq's Inc. v. Barq's Beverages, Inc., 677 F. Supp. 449, 453 (E.D. La. 1987) (Wicker, J.) (where litigation was initiated in good faith, plaintiffs actions (including letters to suppliers and demand letters) which preceded the filing of the lawsuit were protected by the Noerr-Pennington doctrine). In other words, plaintiffs are not challenging only DePuy's filing of the counterclaim, but a whole host of activities surrounding the illegal covenant not to compete.

See, e.g, Second Amended Complaint ¶ IX.

The Court therefore finds that DePuy is not entitled to Noerr-Pennington protection and shall consider plaintiffs' theories of recovery.

B. BREACH OF CONTRACT

Plaintiffs' first theory of recovery is breach of contract. Plaintiffs base their breach of contract claim on DePuy's attempt to enforce the covenant not to compete "beyond its terms". According to plaintiffs, this amounts to a failure to perform a contractual term as written, which they claim opens DePuy up to liability under Louisiana Civil Code article 1994 As discussed more fully below, the Court rejects plaintiffs breach of contract claim.

Plaintiffs' Memorandum in Opposition to Summary Judgment ("Opposition") p. 21. In its initial Memorandum in Support of Summary Judgment, DePuy hypothesized that plaintiffs' breach of contract claim was based on DePuy's refusal to waive enforcement of the covenant not to compete and/or attempt to enforce a statutorily unenforceable contract term. In their Opposition, plaintiffs negate this hypothesis, stating that "[i]n fact, the claim is based upon the facts that the contract specifically states that in the event of change of control provisions . . . would apply "'only [where] You sold Products at the time of the change in control.'" Opposition p. 21 (internal emphasis and brackets in original). In other words, plaintiffs state that the basis for their breach of contract claim is DePuys attempted enforcement of the contract beyond its terms and the Court therefore considers only this basis. However, the Court believes that, under the circumstance of this case, the analysis discussed below would apply equally to the other two bases.

La. C.C. art. 1994 provides:

An obligor is liable for the damages caused by his failure to perform a conventional obligation.
A failure to perform results from nonperformance, defective performance, or delay in performance.

As a general rule, contracts or agreements which restrain a person from exercising a lawful profession, trade, or business of any kind are disfavored under Louisiana law and shall be null and void. See La. R.S. 23:921A. Under certain circumstances, however, Louisiana law permits an employer to elicit from an agent, servant, employee, or independent contractor an agreement not to compete against the employer after termination of the employment or contract. See La. R.S. 23:921 C. The resulting covenant not to compete is considered an "obligation not to do" and a failure to perform entitles the obligee to seek damages or injunctive relief See La. R.S. 23:921G; Water Processing Technologies. Inc. v. Ridgeway, 618 So.2d 533, 535 (La.App. 4th Cir. 1993).

The Court finds that plaintiffs cannot recover for any alleged breach of the covenant not to compete. First, although it is true that parties to a contract are expected to adhere to its terms, the ordinary understanding of the term "breach of contract" does not encompass enforcement beyond the contractual terms. Second, with respect to the specific breach of contract action set forth in La. R.S. 23:921G, DePuy was the "obligee" because, under the terms of this covenant, plaintiffs were obligated not to do something and therefore were the obligors. To the extent that DePuy could be considered the obligor, it satisfied its obligation by hiring Gearheard.

This interpretation of La. R.S. 23:921G is confirmed by research, which indicates that breach of contract actions under La. R.S. 23:921G are always instituted by employers. Neither plaintiffs nor the Court have discovered any cases where an agent, employee, servant or independent contractor has brought a breach of contract action under La. R.S. 23:921.

Thus, the Court finds that plaintiffs cannot recover under either a general breach of contract theory or under the specific breach of contract terms set forth in La. R.S. 23:921G. As DePuy acknowledges, however, an attempt to enforce the covenant not to compete beyond its terms "may be the basis for a claim of unfair competition or some other claim." The Court next considers these alternatives.

DePuy's Reply Memorandum p. 5.

C. TORT AND UNFAIR TRADE PRACTICES

In addition to the breach of contract claim, plaintiffs argue that they can recover under both tort-based and statutory causes of action. Specifically, plaintiffs claim that they may bring a claim of intentional interference with contractual relations, a claim implied from La. R.S. 23:921, and a claim under the Louisiana Unfair Trade Practices and Consumer Protection Law.

1. PREIS V. STANDARD COFFEE SERVICE COMPANY

In Preis v. Standard Coffee Service Company, 545 So.2d 1010 (1989), the Louisiana Supreme Court addressed whether an arbitrator's decision to dismiss a former employee's counterclaim that his former employer had "unlawfully interfered with his right to do business and ha[d] caused him damages in the form of lost business and lost profits" precluded the employee's claim under the Louisiana Unfair Trade Practices and Consumer Protection Law after a Louisiana appellate court overturned the arbitrator's decision that the non-competition provision which formed the basis of the employee's claim was valid. The Supreme Court held first that both the counterclaim and the new claim were based on the same cause — the former employer's demand for arbitration and enforcement of the non-solicitation agreement — and that both actions were founded on the same legal obligation — the former employer's obligation not to enforce an illegal non-solicitation agreement against its employee.Id. at 1013. The court held, '[a]lthough a breach of this obligation is actionable under both the general tort law and the Unfair Trade Practices and Consumer Protection Law, it is clear that the legal obligation is identical in both instances" and therefore held that the employee's second suit was barred by res judicata. Id.

545 So.2d at 1012 (apparently quoting the employee's counterclaim).

La. R. S. 51:401 et seq.

At the risk of repetition, the Court wishes to highlight the two aspects of Preis that are significant to the instant case. First, the Louisiana Supreme Court stated that, under La. R.S. 23:921, an employer is obligated not to enforce an illegal non-solicitation agreement against its employee. Second, the Supreme Court stated that a breach of this obligation is actionable under the general tort law and under the unfair trade practices statute.

Presumably, this extends to the situation of an independent contractor as well.

Subsequent to the Preis decision, the Louisiana legislature significantly amended La. R.S. 23:921. As written at the time of thePreis decision, the statute read, in its entirety:

No employer shall require or direct any employee to enter into any contract whereby the employee agrees not to engage in any competing business for himself, or as the employee of another, upon the termination of his contract of employment with such employer, and all such contracts, or provisions thereof containing such agreement shall be null and unenforceable in any court, provided that in those cases where the employer incurs an expense in the training of the employee or incurs an expense in the advertisement of the business that the employer is engaged in, then in that event it shall be permissible for the employer and employee to enter into a voluntary contract and agreement whereby the employee is permitted to agree and bind himself that at the termination of his or her employment that said employee will not enter into the same business that employer is engaged over the same route or in the same territory for a period of two years.

Nonetheless, the Court detects nothing in the current version of the statute which would alter the propositions set forth in Preis. Read together, subsections A and C of the current statute reaffirm the obligation of an employer not to enforce an illegal non-solicitation agreement against its employee. In addition, in a post-amendment case, a Louisiana appellate court suggested that the Preis propositions are still good law. See Landrum v. Board of Com'rs of the Orleans Levee Dist., 685 So.2d 382, 389 n. 5 (La.App. 4th Cir. 1996) (noting that in Preis, the Louisiana Supreme Court "appears to have recognized that a breach of an employer's 'obligation not to enforce an illegal non-solicitation agreement against its employee' is actionable under [the Unfair Trade Practices and Consumer Protection Law].").

One Louisiana appellate judge might find that the unfair trade practices statute does not apply to the instant case. In a partial concurrence, Judge Plotkin of the Fourth Circuit Court of Appeal stated in Barbe v. A.A. Harmon Co., 705 So.2d 1210, 1227 (1998), that

The true purpose of the LUTPCPL is to protect consumers from being victimized in arms-length transactions. Harmon's filing of the reconventional demand in the instant case was an exercise of the company's legal right to seek the protection provided by the employment agreement between the members of the professional corporation. The exercise of legal rights should not give rise to a cause of action under the LUTPCPL because it would have a chilling effect on civil litigation. I would find that the trial court improperly applied the LUTPCPL to this case and reverse on that basis.

Judge Plotkin mentioned neither Preis nor Landrum, however, and conceded that he was unable to find any jurisprudence contradicting his opinion.id. More important, the majority reversed the jury's finding of an unfair trade practice because of a lack of evidence that the defendant's petition in reconvention had caused plaintiff an ascertainable loss of money, not because the LUTPCPL was inapplicable. Id. at 1221. Thus, although the Court agrees with DePuy that Judge Plotkin's concurrence was well-written, the Court cannot agree that his opinion should carry the day.

The Court therefore finds that, under Louisiana law, an aggrieved employee or independent contractor may bring claims for damages under a tort cause of action and under the Louisiana Unfair Trade Practices and Consumer Protection Law.

Accord Morris v. Rental Tools, Inc., 435 So.2d 528 (La.App. 5th Cir. 1983) (holding that an employee could bring a cause of action under La. R.S. 51:401 et seq. to recover losses suffered due to a stipulation within an employment contract which unfairly restricted competition).

2. TORT CLAIMS: INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS AND AN IMPLIED CAUSE OF ACTION UNDER LA. R.S. 23:921.

Simply stating that a claim may be brought under the "general tort law", however, does not answer the question of which particular tort theory maybe used to recover damages for enforcement of an illegal covenant not to compete. Here, plaintiffs assert two tort causes of action: first, plaintiffs bring a claim of intentional interference with contractual relations; second, plaintiffs ask the Court to imply a cause of action from La. R.S. 23:921 based on the general duty/risk principle of La. C.C. art. 2315. The Court addresses both claims in turn.

Any discussion of a Louisiana cause of action for intentional interference with contractual relations must begin with a discussion of 9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228 (La. 1989). In 9 to 5, a uniform supplier was unable to collect what it claimed was owed under a contract with a corporation and sued the corporation's chief executive officer for negligently and intentionally interfering with the contractual relations between the supplier and the corporation. In bringing suit, the supplier effectively asked the Louisiana Supreme Court "to recognize an action that it ha[d] refused to allow since 1902, viz., an action for tortious interference with a contractual relationship."Id. at 231. The Supreme Court granted the supplier's request and held that, in certain circumstances, a plaintiff may bring a cause of action for tortious interference with a contractual relationship in Louisiana.

Despite the significant change in the law wrought by the 9 to 5 holding, the Louisiana Supreme Court was careful to narrowly circumscribe its scope. First, although the court did not expressly preclude a cause of action based on other facts, it stated that, in 9 to 5, "we [specifically] recognize . . . only a corporate officer's duty to refrain from intentional and unjustified interference with the contractual relation between his employer and a third person." Id. at 234. Second, the court made clear that any future extension of its holding must be premised on clearly proscribed conduct and intentional, rather than negligent, action by the defendant. See 9 to 5, 538 So.2d at 234 (rejecting the cause of action insofar as it is based on conduct not specifically proscribed and motivated by vaguely improper purposes) and 232 (approving the general proposition that liability in this context should not be extended to "the various forms of negligence by which performance of a contract may be prevented or rendered more burdensome"). Thus, the Louisiana Supreme Court removed abroad range of potentially actionable activity from its newly recognized cause of action.

Nonetheless, the Court rejects DePuy's implicit position that the 9 to 5 decision must be limited to its facts and finds that, under Louisiana law, resolution of whether a plaintiff may bring a cause of action for intentional interference with contractual relations depends on whether the defendant owed the plaintiff a duty to avoid such interference. InAmerican Waste Pollution Control Co. v. Browning-Ferris. Inc., 949 F.2d 1384 (1992), a panel of the United States Fifth Circuit Court of Appeals carefully considered the scope of the 9 to 5 holding. Although the court recognized that, in the years immediately following the 9 to 5 decision, Louisiana courts had not expanded the Louisiana law of tortious interference with contracts, it rejected the defendant's more general proposition that the doctrine only applies to a corporate officer. After thoroughly analyzing several cases, the court concluded that

[t]he common thread in [9 to 5 v.] Spurney and its progeny is the requisite duty, or obligation, for such a cause of action; a duty must exist for recovery of damages under Louisiana law, pursuant to article 2315 . . .
949 F.2d at 1390. The panel's majority then concluded that, on the facts before it, the defendant owed no duty to the plaintiff that could form the basis of a claim of tortious interference.

In the years since American Waste, some Louisiana courts have found circumstances outside the facts of 9 to 5 that would support a cause of action for intentional interference with contract. For example, after first recognizing that Louisiana "courts of appeal have been reluctant to extend the cause of action to many factual scenarios outside of that presented in 9 to 5 Fashions . . . [and would not do so] unless a duty exists on the part of the defendant to refrain from interfering with the contract", the Louisiana First Circuit Court of Appeal held inKrebs v. Mull, 727 So.2d 564, writ denied 740 So.2d 119 (La. 1999), that an attorney could bring a tortious interference claim against two other attorneys who, "by virtue of their agreement to act as co-counsel with plaintiff, owed a duty to plaintiff of full disclosure and fair and honest dealings." Id. at 569. See also Neel v. Citrus Lands of Louisiana, Inc., 629 So.2d 1299, 1300-01 (La.App. 4th Cir. 1993) ( finding in the 9 to 5 opinion a "strong implication that the court recognized that the Louisiana law of intentional interference with contractual relationships should be far broader than the narrow facts before the court in 9 to 5 Fashions, although less broad than the amorphous law of some jurisdictions that seemed insusceptible of definition and reasonable limitation" and holding that an employee could bring a cause of action for intentional interference where he alleged that a third party violated its "duty [under a lease] to allow him to go on the land leased to" his employer and thereby caused him to lose his job).

In light of Preis, which was decided several months after 9 to 5, the Court finds that, under the circumstances of the instant case, DePuy's obligation not to enforce the illegal non-competition agreement against plaintiffs can form the basis of a claim of intentional interference with contractual relations. The Court finds that, in Preis, the Louisiana Supreme Court implicitly accepted the employee's ability to bring a claim that his employer had "unlawfully interfered with his right to do business and ha[d] caused him damages in the form of lost business and lost profits", which sounds like a claim of intentional interference with contractual relations. Thus, because La. R.S. 23:921 and Preis clearly proscribe specific conduct, and because Preis implicitly accepted a cause of action for intentional interference of contractual relations premised on such conduct, the Court finds that it is not impermissibly expanding that cause of action. Cf. American Waste, 949 F.2d at 1390-91 (recognizing a diversity court's limited role underErie and holding that, because the defendant had no relationship with plaintiff on which to base the requisite duty, it could not expand the cause of action on the facts of the case before it).

See supra, note 5.

In contrast, however, the Court finds that it cannot accept plaintiffs' invitation to imply a cause of action under La. R.S. 23:921 because to do so would violate the well-settled maxim that federal courts are "not free to fashion new theories of recovery under Louisiana law." Pittman v. Dow Jones Co., 834 F.2d 1171, 1171 (5th Cir. 1987) (per curiam). Plaintiffs have cited no cases in which a court has implied a cause of action under this statute and the available jurisprudence indicates that the Louisiana Supreme Court would refuse to do so. As Louisiana courts have recognized,

the rules governing contract disputes and breaches are separate from those governing offenses and quasi offenses, and these separate legal domains should not overlap unless there is a duty on the part of a person or legal entity, separate and apart from the obligations created by the terms of a contract.
Healthcare Management Services, Inc. v. Vantage Healthplan, Inc., 738 So.2d 580 (La.App. 2d Cir. 1999). As noted above, the Louisiana Supreme Court found such an independent duty in 9 to 5, but held that a claim for intentional interference with contractual relations resulting from a violation of that duty must involve intentional, rather than negligent, conduct. In reaching that conclusion, the court recognized the general policy reasons against recovery based on negligence in that context. See 538 So.2d at 232. Even more generally, the Louisiana Supreme Court has recognized the "general inhibition in negligence law against compensation for purely economic loss not the result of either bodily harm to the claimant or physical injury to property in which claimant has a proprietary interest." Great Southwest Fire Ins. Co. v. CNA Ins. Cos., 557 So.2d 966, 970 (La. 1990). Thus, the Court finds that the Louisiana Supreme Court would reject plaintiffs' argument that a cause of action maybe implied from La. R.S. 23:921 based on general negligence principles.

In summary, the Court finds that plaintiffs may bring a cause of action for intentional interference with contractual relations but declines to imply a cause of action from La. R.S. 23:921.

3. LOUISIANA UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW

As noted above, the Court finds that, in light of Preis, a plaintiff may bring a claim for damages sustained as a result of an illegal covenant not to compete under the Louisiana Unfair Trade Practices and Consumer Protection Law. DePuy argues in the alternative that, even if valid, plaintiffs' claim under this statute is untimely because plaintiffs did not mention it until December 1999. DePuy cites Qualey v. Caring Center of Slidell, 942 F. Supp. 1074 (E.D. La. 1996) (Fallon, J.), as support. DePuy's reliance in misplaced.

In Qualey, an architect sued various defendants claiming they had infringed copyrights which he allegedly owned in certain technical drawings and architectural works. In the pretrial order, the plaintiff asserted for the first time that, in addition to damages under federal copyright law, he was entitled to treble damages and attorneys fees under Louisiana's Unfair Trade Practices and Consumer Protection Law. The district court found plaintiffs unfair trade practices claim precluded because, inter alia, it was a "new" claim and allowing the plaintiff to proceed with his new claim would unfairly prejudice the defendants. id. at 1078. According to the Court, the complaint "spell[ed] out each alleged act of copyright infringement, together with statutory citations", "specifically pray[ed] for statutory damages, injunctive relief, and, in the alternative, actual damages and profits", and "specifically [sought] damages for breach of contract", but made "no mention . . . of any claim under Louisiana's Unfair Trade Practices law" and contained no "allegations of unfair methods of competition or deceptive trade practices" by the defendant. Moreover, for more than a year, the defendants proceeded with discovery, motion practice, and trial preparation without any notice that plaintiff intended to seek relief under any cause of action other than copyright infringement and breach of contract. Id. at 1077-78.

The Court also found that plaintiffs Louisiana unfair trade practices claims were preempted by § 301 of the Federal Copyright Act, making the rest of the court's finding arguably dicta. Nonetheless, the Court has considered the sound reasoning set forth in the Qualey decision with respect to the timeliness of the plaintiffs claim.

The instant case is readily distinguishable from Qualey because DePuy had fair notice of plaintiffs' claim well before the pretrial order was drafted. First, DePuy admits that it had actual notice of plaintiffs unfair trade practices claim in December, several months before the pretrial conference in February. More important, the Court finds that DePuy had fair notice of the unfair trade practices claim and the grounds upon which it rests as early as July 13, 1999, when plaintiffs' filed their Second Amended Complaint. When read as a whole, the Second Amended Complaint clearly suggests that DePuy engaged in unfair methods of competition by attempting to enforce an illegal non-competition agreement. Plaintiffs therefore satisfied the liberal pleading requirements of Federal Rule of Civil Procedure 8(a). See Self Directed Placement Corp. v. Control Data Corp., 908 F.2d 462, 466 (5th Cir. 1990) (complaint listed specific claims for copyright infringement, violation of trade secrets and fraud, but not "unfair competition"; however, because the facts alleged supported recovery for unfair competition and because plaintiff referred to "unfair competition" in its jurisdictional statement and prayer for relief, defendant was put on notice of the unfair competition claim); Dussouy v. Gulf Coast v. Corp., 660 F.2d 594, 604 (5th Cir. 1981) (even if the complaint incorrectly sets forth the legal theory giving rise to the claim, plaintiff is entitled to proceed on a different legal theory unless the change results in prejudice to the opposing party).

Thus, the Court finds that plaintiffs may proceed to trial on an unfair competition claim.

III. CONCLUSION

The Court finds that plaintiffs may bring causes of action for intentional interference with contractual relations and unfair trade practices under the Louisiana Unfair Trade Practices and Consumer Protection Law but cannot bring a breach of contract claim or a claim implied from La. R.S. 23:921. Accordingly,

IT IS ORDERED that DePuy's Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART.


Summaries of

Gearheard v. Depuy Orthopaedics Inc.

United States District Court, E.D. Louisiana
Mar 16, 2000
Civil Action No. 99-1091 Section "N" (E.D. La. Mar. 16, 2000)
Case details for

Gearheard v. Depuy Orthopaedics Inc.

Case Details

Full title:NALL GEARHEARD, ET AL v. DE PUY ORTHOPAEDICS, INC

Court:United States District Court, E.D. Louisiana

Date published: Mar 16, 2000

Citations

Civil Action No. 99-1091 Section "N" (E.D. La. Mar. 16, 2000)

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