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Inc. v. Crew, Inc.

United States District Court, W.D. Arkansas, Fayetteville Division

January 25, 2017




         Currently before the Court are Defendant Crew, Inc.'s ("Crew") Motion for Summary Judgment (Doc. 30), Statement of Facts in Support (Doc. 31), and Brief in Support (Doc. 32); Plaintiff Leonetti's Frozen Foods, Inc.'s ("Leonetti's") Response to Statement of Facts (Doc. 33), Statement of Disputed Facts in Opposition (Doc. 34), and Memorandum of Law in Opposition (Doc. 35); and Crew's Reply Brief in Support (Doc. 37). For the reasons given below, Crew's Motion for Summary Judgment is GRANTED IN PART AND DENIED IN PART.

         I. BACKGROUND

         Leonetti's is a Pennsylvania manufacturer of frozen food products, who hired Crew as a broker in August 2014 to market and sell a couple of frozen stromboli products to Sam's Club, a national membership-only warehouse store. One of those products, "Leonetti's Frozen Stromboli, " would be for consumers to purchase and take home from Sam's Club frozen-food sections; the other product, "Cafe Stromboli, " would be for consumers to purchase and consume on-site at Sam's Club cafes. At the time Leonetti's hired Crew to manage its Sam's Club account, Crew had already been managing the Leonetti's account with Costco-a competitor of Sam's Club-for roughly seven months.

         From August 2014 through January 2015, Leonetti's worked to develop Cafe Stromboli, and underwent the testing and approval process for both products, in an effort to meet Sam's Club's specifications. On January 14, 2015, a "hold test" was conducted, in which "the stromboli is cooked and then placed under heat lamps for 1 hour to ensure that the stromboli holds its internal temperature." (Doc. 8, ¶¶ 49-50). Later that day, Crew's Chief Operating Officer, Cindy Towler, [1] see Doc. 30-1, p. 2, sent the following email to various employees of Sam's Club who were participating in this process:

John and Jeremy good day! I completed the in-club testing this morning at the Bentonville Sam's Club. Test went extremely well. I used 8 Stromboli's in the test. The additional samples were used to determine where to start the pans as the temperature and times were not set at 485* - 6 minutes. The ovens were set at 500* - 6:30, club associate said they started the pizzas at the entrance of the oven and recommended we do the same. I found that the top oven cooked hotter than the 2nd and 3rd oven. While the top oven did not burn the Stromboli they were a little darker than we like to have.
Attached is a recap of the testing.
Please let me know if you have any questions and what our next steps will be.

(Doc. 30-4, p. 2).

         Later that evening, Crew's President, Jeff Campigli, see Doc. 30-1, p. 3, sent a reply-all email that stated "Nice job Cindy. Robert and I could even use slides 2-5 in our Costco Presentation next week:), " (Doc. 30-4, p. 2). The next morning, after being alerted that he had inadvertently sent the email as a reply-all rather than solely to Ms. Towler, Mr. Campigli sent Sam's Club a follow-up email profusely apologizing, explaining that his email "was a very poor attempt at humor and meant for Cindy only, " and assuring Sam's Club that Crew "would never share testing, conducted exclusively for you, with any customer... especially your #1 competitor." See id. at 1. A few weeks later on February 3, John Hawthorne from Sam's Club informed Ms. Towler that it would not be purchasing frozen food from Leonetti's because temperature inconsistencies rendered it "an unacceptable product to put in front of the Members." See Doc. 30-5, p. 1.

         On July 7, 2015, Leonetti's filed a complaint against Crew in the Philadelphia County Court of Common Pleas, which Crew removed to the United States District Court for the Eastern District of Pennsylvania on July 29, 2015. On September 30 of that same year, that Court ordered venue transferred to the United States District Court for the Western District of Arkansas. In its First Amended Complaint, (Doc. 8), Leonetti's brings four claims against Crew-for negligence, breach of contract, breach of fiduciary duty, and trade libel-all of which are premised on the factual allegation that Mr. Campigli's email caused Sam's Club to decide not to purchase any Leonetti's products. See Doc. 30-2, p. 8. Crew has moved for summary judgment on all four of Leonetti's claims, arguing there is no genuine dispute that Mr. Campigli's email was not the proximate cause of Sam's Club's decision not to purchase Leonetti's products. Naturally, Leonetti's opposes this Motion. The Motion has been fully briefed and is ripe for decision.


         "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The Court must view the facts in the light most favorable to the non-moving party, and give the non-moving party the benefit of any logical inferences that can be drawn from the facts. Canada v. Union Elec. Co.,135 F.3d 1211, 1212-13 (8th Cir. 1997). The moving party, Crew, bears the burden of proving the absence of any material factual disputes. Fed.R.Civ.P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586-87 (1986); Nat'l Bank of Commerce of El Dorado, Ark. v. Dow Chem. Co.,165 F.3d 602 (8th Cir. 1999). If Crew meets this burden, then Leonetti's must "come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita, 475 U.S. at 587 (quoting Fed.R.Civ.P. 56(c)). These specific ...

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