Scrappost LLC v. Peony Online, Inc.
2:14-cv-14761
| E.D. Mich. | Feb 22, 2017Background
- Peony Online publishes daily scrap-metal price reports (CBE) since 1993 and launched an interactive Instant Quote (IQ) service in 2014 with an exclusivity clause for subscribers.
- Scrappost launched a competing scrap-market website in Sept. 2013 that relies on subscriber-posted listings and gained users via cold calls, networking, and other ordinary solicitation methods.
- Scrappost personnel occasionally received Peony reports by email, but there is no admissible evidence showing how Scrappost used those reports or that it copied pricing data from them.
- Peony alleges Scrappost solicited Peony subscribers, induced breaches of Peony’s exclusivity agreements, and misappropriated Peony’s time-sensitive pricing (“hot news”), asserting claims for tortious interference, unfair competition, unjust enrichment, and hot-news misappropriation.
- Peony created its IQ exclusivity provision after Scrappost entered the market; Peony admits it has never enforced exclusivity against subscribers and would not do so.
- On Scrappost’s summary-judgment motion, the court found no admissible evidence of wrongful inducement, deception, copying, or damages causally linked to Scrappost and granted summary judgment for Scrappost on all counterclaims.
Issues
| Issue | Peony's Argument | Scrappost's Argument | Held |
|---|---|---|---|
| Tortious interference with contract | Scrappost solicited IQ subscribers knowing of exclusivity and told them to ignore it, inducing breaches | Scrappost says it merely solicited subscribers; exclusivity was created after Scrappost entered market; no wrongful conduct shown | Dismissed — no evidence Scrappost induced breach or committed wrongful per se act |
| Tortious interference with prospective economic advantage | Scrappost intentionally disrupted Peony’s business relationships with subscribers | Scrappost argues lack of inducement and lack of causation/damages | Dismissed — no evidence of induced termination or resulting damages |
| Unfair competition | Scrappost entered market after subscribing to Peony and ignored exclusivity to steal trade | Scrappost contends there was no deception, exclusivity post-dated Scrappost, and no harm shown | Dismissed — no deceptive conduct or proof of harm to Peony |
| Unjust enrichment / "hot news" misappropriation | Scrappost free-rode on Peony’s time-sensitive pricing and benefitted unfairly | Scrappost notes subscriber-posted data, lack of evidence of copying or use, and that data was published/stale when obtained | Dismissed — no evidence of copying/free-riding, time-sensitivity or resulting injury |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (evidence requirement to survive summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (view evidence in light most favorable to nonmovant)
- NBA v. Motorola, Inc., 105 F.3d 841 (2d Cir. 1997) (formulation of the "hot news" misappropriation test)
- Health Call of Detroit v. Atrium Home & Health Care Servs., Inc., 268 Mich. App. 83 (elements for tortious interference claims)
- CMI Int'l., Inc. v. Internet Int'l. Corp., 251 Mich. App. 125 (wrongful-per-se requirement for interference)
- Prysak v. R.L. Polk Co., 193 Mich. App. 1 (definition of wrongful-per-se act)
- Dalley v. Dykema Gossett, PLLC, 287 Mich. App. 296 (need for illegal/unethical/fraudulent conduct to show improper interference)
- Morris Pumps v. Centerline Piping, Inc., 273 Mich. App. 187 (elements of unjust enrichment)