American Chemical Society v. Leadscope, Inc.
133 Ohio St. 3d 366
| Ohio | 2012Background
- ACS is a congressionally chartered nonprofit society cultivating chemistry; CAS is ACS’s Columbus-based largest division that maintains extensive chemical databases; Blower and Myatt developed PathFinder at CAS, later resigning to form Leadscope; ACS believed Leadscope may have misappropriated ACS IP and pursued patent and related concerns; ACS filed suit against Leadscope in May 2002 in federal court, then refiled in state court; the jury verdicts in 2008 found Leadscope won on defamation, tortious interference, and unfair competition, with damages awarded; Ohio appellate and Supreme Court proceedings ultimately addressed the standard for unfair competition, defamation, and vicarious liability of attorney statements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What standard governs unfair competition based on malicious litigation? | ACS argues no objective baselessness required; bad faith suffices. | Leadscope contends the action must be objectively baseless and in bad faith. | Objectively baseless plus bad faith required; verdict upheld for Leadscope on unfair competition. |
| Does Noerr-Pennington immunity apply or must ACS plead/waive it? | ACS did not rely on Noerr-Pennington as a defense; waiver concerns irrelevant. | Noerr-Pennington immunities may affect claims but need not dictate outcome here. | Noerr-Pennington immunity not required to govern the unfair-competition claim; waiver issue deemed red herring. |
| Are ACS’s internal memorandum and Business First article defamatory as a matter of law? | ACS argues statements were within litigation context or privileged. | Statements were defamatory with malice. | Not defamatory as a matter of law; statements subject to privilege but careful with attorney communications. |
| Is ACS vicariously liable for its attorney’s statements to the media? | ACS not vicariously liable unless it authorized or ratified the attorney’s statements. |
Key Cases Cited
- Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993) (defines sham litigation; objective baselessness required to pierce immunity)
- Greer-Burger v. Temesi, 116 Ohio St.3d 324 (2007) (adopts PREI sham-litigation framework for Ohio unfair competition context)
- Noerr Motor Freight, Inc. v. Noerr, 365 U.S. 127 (1961) (Noerr-Pennington immunity for petitioning government actions)
- Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U.S. 731 (1983) (antitrust/political-activity immunity contexts impacting sham analyses)
- Connaughton v. Harte Hanks Communications, Inc., 842 F.2d 825 (6th Cir. 1988) (contextual defamation analysis for publications)