Santana Products, Inc. v. Bobrick Washroom Equipment, Inc.

In 1995, Santana Products, Inc. (plaintiff) brought suit against the Formica Corporation (defendant), alleging that Formica induced its customers to use a Formica videotape that falsely depicted the flammability of Santana’s high-density polyethylene (HDPE) toilet compartments, thereby discouraging prospective purchasers from selecting Santana’s product. Formica settled with Santana, and the case was dismissed. In 1996, Santana instituted the present action against Bobrick Washroom Equipment Inc. (defendant), alleging that Bobrick and other toilet-compartment manufacturers conspired to enforce a product standard that had the effect of excluding Santana’s HDPE from the market. Santana sought to recover under §§ 1 and 2 of the Sherman Act, § 43(a) of the Lanham Act, and under the common law of tortious interference with prospective contractual relationships. Bobrick then filed a third-party complaint against Formica for claims of contribution, indemnification, fraud, and negligent misrepresentation. Specifically, Bobrick’s third-party complaint alleged that Formica encouraged the use of its videotape falsely depicting the flammability of Santana’s product and that Formica failed to inform Bobrick that the videotape contained false information. Bobrick contended that the present suit was born out of its reasonable reliance on the information contained in the Formica videotape. Formica moved to dismiss Bobrick’s third-party complaint on the grounds that Bobrick failed to allege a proper claim for indemnification because it was not a passive tortfeasor and, further, that Bobrick’s state-law claims for fraud and negligent misrepresentation were not proper third-party claims within the meaning of Federal Rule of Civil Procedure (FRCP) 14(a).