Rain v. Rolls-Royce Corp.
2010 U.S. App. LEXIS 23713
7th Cir.2010Background
- Rolls-Royce sued Rain and Paramount for breaches of a 2006 non-disparagement settlement under Indiana law.
- The settlement includes a broad non-disparagement clause and a liquidated-damages provision for material breaches.
- Rolls-Royce sought protection under Indiana’s absolute litigation privilege for statements made in related litigation (Texas RICO action).
- Rain attended the 2007 Heli-Expo; Rolls-Royce escorted Rain from the event, causing Rain personal embarrassment but allegedly no business reputation impact.
- Paramount and Rain are direct competitors of Rolls-Royce in the Model 250 engine parts network; the Texas action referenced Rain/Paramount as Doe/Principal Corporation.
- The district court granted partial summary judgment on the Texas-liability issue and ruled the Heli-Expo incident did not constitute disparagement; the Seventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Indiana’s absolute litigation privilege bar breach-of-contract claims arising from statements in a judicial proceeding? | Rain (Paramount) argues privilege does not preclude contract liability. | Rolls-Royce contends privilege extends to contract claims when aligned with purpose. | Yes; privilege precludes contractual liability in this context. |
| Does the Heli-Expo escort of Rain constitute disparagement under the settlement? | Rain contends personal embarrassment falls within disparagement. | Rolls-Royce argues disparagement relates to business interests, not personal embarrassment. | No; disparagement limited to business/professional interests; no damages to Rain’s business reputation. |
| Should the court certify Indiana Supreme Court on the scope of disparagement under the settlement? | Seeking certification on defining disparagement. | Certification unnecessary; issue is fact-specific and contract-interpretation oriented. | Not certified; not appropriate given the case’s particularized contract language. |
Key Cases Cited
- Hartman v. Keri, 883 N.E.2d 774 (Ind. 2008) (absolute privilege for statements in judicial proceedings)
- Kelly v. Golden, 352 F.3d 344 (8th Cir. 2004) (absolute privilege precludes breach of nondisparagement in some contexts)
- Wentland v. Wass, 126 Cal.App.4th 1484 (Cal. Ct. App. 2005) (disparagement's scope in contract contexts varies by policy/purpose)
- St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425 (5th Cir. 2000) (enterprise/pleading relevance supports privilege application)
- Bankwest v. Fidelity & Deposit Co. of Maryland, 63 F.3d 974 (10th Cir. 1995) (treats disparagement broadly; economic interests focus)