The foregoing rule (1) is especially applicable where there is litigation between the parties involved in a large-scale industrial construction project, where the sub-subcontractor shares no privity with the EPC contractor or owner. The New Jersey legislature has already provided a remedial scheme for allegedly unpaid sub-subcontractors and other indirect suppliers, namely, the construction lien law. For example, in Insulation Contracting, Inc. v. Kravco, 209 N.J. Super. 367 (App. Div. 1986), plaintiff, Insulation Contracting, a sub-subcontractor, entered into a contract with Peyton Contractors to supply and install insulation. Peyton was a subcontractor of general contractor, Kravco. After the default in performance by subcontractor Peyton, Kravco terminated Peyton. Plaintiff instituted an action against the owner, Peyton and Kravco, for the balance due under its sub-subcontract. Id. at 369-70. The court analyzed each of the contract provisions and noted that in none of the contracts did either Kravco or the owner assume the obligations of defendant Peyton in the case of default.

Significantly, the Kravco court also rejected the claim that plaintiff was a third-party beneficiary of the remaining contracts, concluding that the language in the contracts did not indicate that there was an intent to confer a benefit on Insulation Contracting and, thus, it was not a third-party beneficiary that could seek redress directly against Kravco. Id. at 375-76; see, also, F. Bender, Inc. v. Muscarelle, Inc., 304 N.J. Super. 282, 285 (App. Div. 1997) (Sub-subcontractor could not recover against contractor or owner based upon quasi-contract claims since such actions, if permitted, would undermine the mechanic’s lien system and disrupt the construction industry).

Therefore, the sub-subcontractor’s third-party beneficiary claims against the EPC contractor and owner will not support any cognizable claim for relief, and must be dismissed. Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 746 (1989); Leon v. Rite Aid Corp., 340 N.J. Super. 462, 466 (App. Div. 2001); Rule 4:6-2(e). The sub-subcontractor is thus left to seek redress under the statutory provisions of the construction lien law, and through its direct contractual claims against the subcontractor.

(1) One significant exception to this general rule arises when the EPC contractor chooses to pay the sub-subcontractor through a joint check arrangement. In such cases, the sub-subcontractor must show that: 1) the joint check agreement was specifically made for the benefit of the sub-subcontractor; 2) the EPC contractor indicated that it specifically intended to be responsible for ultimate payment to the sub-subcontractor; 3) the sub-subcontractor supplied consideration on its part; and 4) the agreement contained clear provisions vis-a-vis the sub-subcontractor, such as directing payment of a sum certain to the sub-subcontractor. See Onorato Const., Inc. v. Eastman Const. Co., 312 N.J. Super. 565, 572-3 (App. Div. 1998) (Only under certain circumstances may an agreement by a general contractor to pay sub-subcontractors or suppliers directly or with joint checks result in the general contractor's assumption of liability for those payments despite a prior lack of privity); see, also, Maccaferri Gabions, Inc. v. Dynateria Inc., 91 F.3d 1431, 1439 (11th Cir. 1996) (General contractor, by entering into joint-check agreement with subcontractor, did not assume subcontractor's duty to pay materialman directly for all materials that it delivered to site of federal construction project; joint-check arrangement had to be interpreted in accordance with entire agreement between parties, so as not to create conflict with other provisions which clearly required subcontractor, and not general contractor, to pay materialmen, and which authorized general contractor to withhold payment from subcontractor if it did not secure releases from those materialmen).

RULE 4:67-1
This rule is applicable . . . (b) to all other actions in the Superior Court other than matrimonial actions and actions in which unliquidated monetary damages are sought, provided it appears to the court, on motion made pursuant to R. 1:6-3 and on notice to the other parties to the action not in default, that it is likely that the matter may be completely disposed of in a summary manner.

RULE 4:67-2
(b) Motion for Order to Proceed Summarily. Actions referred to in R. 4:67- 1(b) shall be commenced, and proceedings taken therein, as in other actions, except as herein provided. The notice of motion to proceed summarily shall be supported by affidavits made pursuant to R. 1:6-6 and, if addressed to the defendant, may be served with the summons and complaint; but it shall not be returnable until after the expiration of the time within which the defendant is required to answer the complaint. If the court is satisfied that the matter may be completely disposed of on the record (which may be supplemented by interrogatories, depositions and demands for admissions) or on minimal testimony in open court, it shall, by order, fix a short date for the trial of the action, which shall proceed in accordance with R. 4:67-5, insofar as applicable.

However, the existence of valid counterclaims, setoffs and affirmative defenses are frequently sufficient to defeat an application for summary action, is as exemplified in Hannigan v. Township of Old Bridge, 288 N.J. Super. 313 (App. Div. 1996). Hannigan involved the enforcement of settlement agreement involving police officer employment contract. Id. Due to age of the plaintiff, specific performance was not available and he was forced to resort to damages for breach of contract. Id. at 318. Speaking to the amenability to summary proceeding of such breach of contract action, the Hannigan court held, We have a claim for breach of contract, not a misunderstanding as to contract terms or a grudging lack of cooperation in fulfilling the agreement. Id. at 319. “[Rule 4:67-2(b)] is usually reserved for situations where the matter may be completely disposed of on the existing record or on minimal testimony in open court.” Id.; see, also, Rules Governing the Courts of the State of New Jersey, Sylvia B. Pressler (2004), comment to R. 4:67-2, p. 1835 (“The rule . . . authorizes the court to order a summary disposition even where it appears that testimony will be required, provided that testimony is minimal. Minimal testimony should be construed as testimony which clearly will not exceed one day. (citations omitted).

Similarly, the case of Taylor v. Ford Motor Co., 703 F.2d 738 (3d. Cir. 1983), involved the use of a summary action to confirm an arbitration award. Id. However, the Taylor court spoke as to the impropriety of the use of this procedure in more complex cases involving disputed issues of fact:

Rule 67 can be invoked also to provide for a summary remedy of enforcement whenever it appears that there is no genuine issue of material fact. Subsection 1(b) of Rule 67 makes summary action appropriate to any Superior or county court actions with the exception of matrimonial actions or those which involve unliquidated monetary damages. In these actions, the likelihood that the action can be resolved summarily must be apparent to the court and to the other party.

Id. at 742. Thus, the court may order a summary action only if the matter can be disposed of completely on the record or if the testimony is minimal. Id. at 743.

Thus, valid counterclaims, setoffs and affirmative defenses are frequently sufficient to defeat an application for summary action and leave the lienor to its proofs through a plenary action. See Kvaerner Process, Inc. v. Barham-McBride Joint Venture, 368 N.J. Super. 190 (App. Div. 2004) (“We are mindful that N.J.S.A. 2A:44A-14a(2) confers upon a lienee the opportunity to force an evaluative review of the lien claim” . . . and it is the lienor that shoulders the burden of proof to justify its claim).

Technorati Tags: New Jersey : Lien Enforcement

Boyajian is the landmark Federal case rejecting the use of a total cost method for determining alternative causes of delay and apportionment. The Boyajian case involved a contractor who sued the United States Air Force for breach of a contract for modulators and interval and dwell testers. The contractor claimed that it suffered delay damages as a result of testing procedures established by the Air force that were unreasonable. The contractor calculated its damages by deducting both its anticipated and actual costs from the entire project amount under the total cost method, but did not itemize these damages. The Court rejected the total cost method, finding that it was an unacceptable method for determining damages for breach of the contract.

The Boyajian Court gave numerous reasons for rejecting the total cost method of recovery. It found that recovery of damages for breach of contract is generally not allowed unless acceptable evidence demonstrates that the damages claimed resulted from and were caused by the breach. Id. at 1235. Furthermore, the proper measure of damages is the amount of the plaintiff’s extra costs which are directly attributable to the defendant’s actions. Id.

However, contrary to these basic causal-connection damage principles, no attempt is here made to relate any specific amount of increased costs to any particular alleged breach. Nor is any satisfactory explanation given as to why an attempt was not made or why it would not have produced reasonably accurate results.

Id. It held that, based on the record, it was impossible to conclude that the plaintiff’s contract loss, constituting the difference between the plaintiff’s contract expenditures and its contract receipts, was reasonably to be equated with the increased costs directly resulting from defendant’s alleged breaches. Id. at 1236.

Applying the total cost method, the subcontractor sought damages for labor, overhead, and material costs which were not covered by contract receipts even though these increases occurred during non-delay periods. Id. The court held that the subcontractor was barred from failing to differentiate between delay and non-delay periods and that it could not indiscriminately lump the damages together. Id.

In addition, the Court found that the record was replete with production interruptions and delays that were caused by events which were not attributable to the defendant, but for which the plaintiff made no adjustments whatsoever. Id. at 1238. The Court cited a line of cases rejecting damage claims seeking reimbursement for all contract expenditures of every nature made throughout the life of the contract. Id. at 1238-39. See, Urban Plumbing & Heating Co. v. United States, 408 F.2d. 382 (1969); Phillips Construction Co. v. United States, 394 F.2d. 834 (1968); WRB Corp. v. United States, 183 Ct. Cl. 249 (1968); Turnbull, Inc. v. United States, 389 F.2d 1007 (1967); Roberts v. United States, 357 F.2d 938 (1966); Wunderlich Contracting Co. et al. v. United States, 351 F.2d 956 (1965); Laburnum Construction Corp. v. United States, 325 F.2d 451 (1963); River Construction Corp. v. United States, 159 Ct. Cl. 254, 270 (1962); Snyder-Lynch Motors, Inc. v. United States, 292 F.2d 907, 910 (1961); Lilley-Ames Co., Inc. v. United States, 293 F.2d 630 (1961); F. H. McGraw & Co. v. United States, 130 F.Supp. 394 (1955); Christensen Construction Co. v. United States, 72 Ct.Cl. 500, 514 (1931).

It is important to point out that though the court rejected the total cost method according the factual circumstances in the Boyajian case and dismissed the subcontractor’s claims, it did not unilaterally reject such an approach altogether as long as there is reasonably satisfactory evidence of what the damages are, computed on an acceptable basis. Id. at 1244.

In Lichter v. Mellon Stuart Company, 305 F.2d. 216 (3d Cir. 1962), a subcontractor sued the prime contractor for the balance of a masonry subcontract for the balance due and breach of contract and the contractor filed a counterclaim. The subcontractor claimed that the breach occurred as a result of delays in the project, which resulted in the subcontractor being forced to speed up its work and perform inefficiently. The District Court found in favor of the contractor and the subcontractor appealed.

The subcontractor did not itemize its damages. In the lower Court, the subcontractor introduced testimony as to what it would have cost to perform all of the masonry work if the undertaking had proceeded without untoward occurrences in the manner contemplated at the time of the contracting. Id. at 219. It then introduced testimony as to the actual cost of the entire masonry job as delayed, interrupted and hindered by all causes. Id. At trial, the plaintiff’ss counsel conceded that there was no way to itemize the damages. Id. On appeal, the Court rejected the subcontractor’s total cost method, finding that:

In these circumstances [the subcontractor’s] inability to break down its lump sum proof of extra costs justifies the denial of any recovery if on the record any substantial part of the added cost of performance was chargeable to non-actionable causes rather than to a breach of contract by [the contractor].

Id. The Appellate Court affirmed the District Court’s findings, holding that:

On the whole record, we think the court was justified in concluding that a substantial amount of the lump sum which [the subcontractor] proved as extra cost of the masonry work was a consequence of factors other than a breach or breaches of contract by [the contractor]. Since the court could find no basis for allocation of this lump sum between those causes which were actionable and those which were not, it [was] proper to reject the entire claim.

Id. at 220.

Thereafter, in E. C. Ernst, Inc. v. Koppers Company, Inc., both parties blamed the other for delays, engineering failure, and inadequate supervision stemming from a purchase order for furnace construction at a steel mill. 476 F. Supp. 729 (W.D. Pa. 1979), 626 F.2d 324 (3d Cir. 1980), on remand, 520 F. Supp. 830 (W.D. Pa. 1981). The District Court ruled in favor of the contractor, finding that though the contractor was responsible for all of the delays, the subcontractor failed to link the delays to its damages. On appeal, the Third Circuit remanded the case to the District Court, finding on the outset that the District Court incorrectly rejected the total cost method, because, under Pennsylvania law, damages need not be proved with mathematical certainty, only reasonable certainty. Id. at 328. The court further held, however, that:

This is not to say... that a plaintiff merely may label damages evidence as being under the total cost method and leave the matter at that. Under the total cost method, at a minimum the plaintiff must provide some reasonably accurate evidence of the various costs involved.

Id.

Despite the court’s decision in Ernst, Pennsylvania Courts have subsequently applied the total cost method only in very limited circumstances. See, John F. Harkins Co. v. School District, 460 A.2d 260 (Pa. Super. 1983); Larry Armbruster & Sons, Inc. v. State Pub. Sch. Bldg. Auth., 505 A.2d 395 (Pa. Commw. 1986). In addition, the Third Circuit will only apply the total cost method if there are no other alternative and reliable measures of damages available. See, In Re Meyertech Corp., 831 F.2d 410 (3d Cir. 1987) (rejecting the total cost method under the holding in Boyajian).

In addition, Courts in the 4th Circuit have rejected the total cost method in favor of a modified approach. See, Biemann and Rowell Co. v. Donohoe Companies, Inc., 556 S.E.2d 1, 5 (N.C. Ct. App. 2001); Virginia Beach Mechanical Services, Inc. v. Samco Construction Company, supra, 39 F. Supp. at 672 . In Biemann, a ventilating subcontractor sued the general contractor for breach of contract in the construction of a hospital at the University of North Carolina. The Superior Court found that the ventilating subcontractor failed to establish the causation element by proving that the delays by the general contractor caused the ventilating subcontractor’s delays. On appeal, the North Carolina Court of Appeals affirmed. The Appeals Court reasoned that it is well settled that a plaintiff has an obligation to prove the facts that will create a good basis for the calculation of damages. Id. at 5 (citing Esteel Co. v. Goodman, 348 S.E.2d 153, 157 (N.C. Ct. App. 1986), disc. review denied, 351 S.E.2d 745 (1987)). For the breach of an executory contract, a plaintiff may recover only such damages as can be ascertained and measured with reasonable certainty. Id. [W]here both parties contribute to the delay, neither can recover damages, unless there is proof of clear apportionment of the delay and expense attributable to each party. Id. (citing Blinderman Constr. Co. v. United States, 695 F.2d 552, 559 (Fed.Cir.1982).

The ventilating subcontractor used a total cost method of calculating damages. The court rejected this method on the basis that the total cost method is condoned only where no other way to compute damages is feasible, because it assumes that every penny of the plaintiff's costs are prima facie reasonable, that the bid was accurately and reasonably computed, and that the plaintiff is not responsible for any increases in cost. Id. See also, Youngdale & Sons Const. Co., Inc. v. United States, 27 Fed. Cl. 516, 541 (1993); Urban Plumbing & Heating Co. v. United States, 408 F.2d 382, 394 (1969), cert. denied 398 U.S. 958 (1970); F.H. McGraw & Co. v. United States, 130 F.Supp. 394, 400 (1955).

The court applied a four part test for recovery under the modified total cost method articulated in Servidone Constr. Corp. v. United States, 931 F.2d 860, 861 (Fed.Cir.1991)) and Boyajian, supra, 423 F.2d at 1243, looking at: (i) the impracticability of proving actual losses directly; (ii) the reasonableness of its bid; (iii) the reasonableness of its actual costs; and (iv) the lack of responsibility for the added costs. Id. It found:

The modified total cost method is the total cost method with adjustments for any deficiencies in plaintiff's proof in satisfying the four requirements. The modified approach assumes the elements of a total cost claim have been established, but permits the court to modify the test so that the amount plaintiff would have received under the total cost method is only the starting point from which the court will adjust the amount downward to reflect the plaintiff's inability to satisfy the test.

Id. (Citing Youngdale, supra, 27 Fed. Cl. at 541). The court found that the plaintiff failed to establish the first element of the four-part test because the plaintiff failed to prove that it sustained damages that could not be ascertained and measured with reasonable certainty. Id.

Accordingly, in order to succeed on a total cost delay claim, the subcontractor is responsible for providing itemized proof that the EPC contractor was the direct cause of the delay damages. In the event that the fact finder finds that both parties’ actions attributed to the delays, the EPC contractor will only liable for delay damages in the event that the subcontractor is able to properly eliminate or apportion any alternative causes of delay.

The potential lien fund ultimately available to an EPC contractor’s subcontractor is circumscribed by the relationship between the EPC contractor and the owner under the New Jersey Construction Lien Law ("CLL"). "Underlying the lien fund concept is the principle that an owner, contractor, or subcontractor should not be compelled to pay twice for the same work or services when a valid lien claim is filed." Thomas Group, Inc. v. Wharton Senior Citizen Housing, Inc., 163 N.J. 507, 522 (2000)(emphasis added); see, also, 41 N.J. Prac., Construction Law § 12.58, "Construction Lien Law--The Lien Fund" (2004).

In this manner, the protection enjoyed by the owner under the CLL exists at each contractual level that contains parties with lien rights under the CLL. Thus, simply stated, the EPC contractor cannot be compelled to pay out more in sub-subcontrator lien claims than dictated by the contractual relationship between the EPC contractor and the subcontractor. Craft v. Stevenson Lumber Yard, Inc., 179 N.J. 56, 80 (2004) ("Because the lien fund can only be based on what is actually owed, when nothing is owed there can be no fund").

Willfully overstated lien claims are specifically excluded under the New Jersey Construction Lien Law. The New Jersey Construction Lien Law permits subcontractors to encumber land in an expedient manner, while providing the contractor or owner with minimal due process rights. As a result, the New Jersey legislature has imposed strict safeguards, which protect the contractor or owner against the improper filing of construction liens on real property.

One safeguard provided by the legislature is the explicit requirement that the lien be based upon a written contract. N.J.S.A. 2A:44A-1 This prevents subcontractors from filing liens that are based upon unsigned change orders at the end of a project. Another safeguard is the requirement that the amount of the lien reflect the actual work or materials supplied by the subcontractor. Id. The lien claim must equal the Contract price or any unpaid portion of the Contract price, whichever is less. N.J.S.A. 2A:44A-9. This prevents subcontractors from filing overstated liens that are not supported by the amount of the actual work or the materials supplied according to the contractual rate.

Should the liening subcontractor fail to adhere to the strict letter of the law, the owner and contractor are imbued with specific remedies in order to counter the effect of substantial encumbrances and costs naturally generated by the construction lien:

N.J.S.A. 2A:44A-15(a).

The disposition of willfully overstated lien claims and lien claims without proper basis have been analyzed in a number of New Jersey cases. See, Patock Const. Co., Inc. v. GVK Enterprises, LLC, 372 N.J.Super. 380, 858 A.2d 1148 (N.J. App. Div. 2004) cert. denied (Feb. 16, 2005); Legge Industries v. Joseph Kushner Hebrew Academy/JKHA, 333 N.J.Super. 537 (N.J. App. Div. 2000); Reeve v. Elmendorf, 38 N.J.L. 125 (1875); McPherson v. Walton, 42 N.J. Eq. 282, 11 A. 21 (N.J. Ch. Div. 1886). "A construction lien claim that is not supported by a written agreement and for a total agreed price rather than the services performed may . . . constitute a willful overstatement." Patock, supra, 372 N.J.Super. at 388 (citing Gallo v. Sphere Constr. Corp., 293 N.J.Super. 558, 566, 681 A.2d 1237 (Ch. Div. 1996). Furthermore, a lien claim authorized by the parties’ contract is only authorized to the extent of the work and materials provided, which does not include lost profits. Gallo, supra, 293 N.J.Super. at 566. Additionally, "a willful overstatement connotes an intent to recover that to which the claimant knows he is not entitled; in other words, a claim made in bad faith." Legge, supra, 333 N.J.Super. at 561.

Thus, the victim of an improperly filed construction lien is not without remedy. If a subcontractor files a willfully overstated lien claim, without proper basis, the contractor or owner: 1) must forfeit and discharge its lien claim; 2) must pay the full value of the contractor or owner’s attorney’s fees and costs incurred in maintaining or defending an action based upon the lien; and 3) will be liable for consequential damages emanating from the improper lien.

Technorati Tags: New Jersey : Construction Lien Law

FRE 701 provides that lay witness opinion testimony may be made for two reasons: 1) if it is rationally based on the perception of the witness; or 2) if it is helpful to a clear understanding of the witness’ testimony or the determination of fact in issue. The case law interpreting FRE 701 has held that nothing in FRE 701 prohibits lay witnesses from arriving at an opinion through the use of specialized knowledge. In fact, in several cases involving testimony based on a witness’ extensive experience in a particular industry, federal courts have held that the witness’ opinion can be classified as being either lay witness opinion or expert opinion. See, e.g., Burlington Northern R. Co. v. Nebraska, 802 F.2d 994, 1004-1005 (8th Cir.1986) The Burlington court held that in an action concerning constitutionality of a state statute requiring trains to carry a manned caboose, the trial court abused its discretion in excluding opinion testimony of railroad executives based on years of experience in industry:

The district court has broad discretion in determining whether to admit opinion testimony and we overturn a ruling only for abuse of discretion . . . [A] lay witness' testimony in the form of opinions or inferences need only be rationally based on perception and helpful to a determination of a fact in issue . . . Personal knowledge or perception acquired through review of records prepared in the ordinary course of business, or perceptions based on industry experience, is a sufficient foundation for lay opinion testimony . . . The railroad executives' testimony, based on knowledge derived from supervising railroad operations, years of experience in the industry, and review of employee accident reports prepared in the ordinary course of business, satisfies the foundation requirements for lay opinion testimony.

See, also, U.S. v. Myers, 972 F.2d 1566, 1577 (11th Cir. 1992), Cert. Den. 507 U.S. 1017, (holding that a lay witness’ lack of technical/medical basis when rendering an opinion could be exposed on cross-examination and affected the weight, not the admissibility, of the evidence); Farner v. Paccar, Inc., 562 F.2d 518, 520 (8th Cir. 1977) (holding that a truck operator with extensive experience in the industry could render lay opinion regarding the proper use of safety chains); Gravely v. Providence Partnership, 549 F.2d 958, 961 (4th Cir. 1977) (holding that the trial court properly allowed lay opinion testimony of company's president regarding relative safety of conventional versus spiral staircase where witness' experience with stairway construction embraced some 26 years).

Thus, and EPC contractor’s employees possessing extensive construction training and experience can be qualified to render opinion testimony, because such testimony can be rationally based and helpful to a determination of the facts that are at issue. Furthermore, the witnesses’ may testify as to their perceptions naturally based upon personal training and experience. Thus, such witnesses should be found to satisfy the strictures of FRE 701 and should not be barred from rendering opinion testimony.

Technorati Tags: New Jersey : Industrial Construction : Expert Testimony : EPC Contractor

This week's New Jersey Legal Update is presented by Martin Schrama a member of the Firm's Intellectual Property group.

You can download the New Jersey Legal Update Podcast # 24 here.(8MB)

Technorati Tags: New Jersey : Podcast : Intellectual Property : Identity Theft : IP

In Saint-Gobain Performance Plastics Corp., HCM Div. v. Truseal USA, Inc., 2005 WL 22937 (D.N.J.), the District of New Jersey signaled the continued vitality of the equitable doctrine of "assignor estoppel" in the face of recognized exceptions. Simply stated, the doctrine holds that an assignor of a patent is, as against an assignee, estopped to deny the validity of the patent. The logic behind the doctrine is that the assignor should be estopped from defending patent infringement claims by proving that what he assigned was worthless.

This logic was tested against a line of cases, dealing primarily with licensee estoppel, that reasoned that it is as much in the public's interest that competition should not be repressed by worthless patents, as it is that the patentee of a valuable invention should be protected in his monopoly. However, the doctrine of assignor estoppel was found to remain intact, along with its considerable conditions and exceptions.

For example, the doctrine is one of equity and not law, therefore its application, unlike estoppel by deed, is not automatic and depends upon the balance of equities between the parties. Furthermore, the assignor, while estopped from challenging the validity of the patent, may still defend against an infringement claim by arguing for narrow claim construction or on the basis that the subject of the assignment is obviously old in the art and plainly belongs to the public.

In this manner, the doctrine has evolved to combat the unfairness and injustice that would be suffered by an assignee if the assignor were permitted to raise the defense of patent invalidity, while remaining maleable to the dictates of the public good and sensitive to the facts presented in each individual set of circumstances.

In Baer v. Chase, 2004 WL 350050 (3rd Cir. 2004), which was decided on December 21, 2004, the Third Circuit rejected claims brought by a plaintiff who believed himself to have had a role in the creation and development of the popular HBO show "The Sopranos." The plaintiff brought an action against the creator of The Sopranos alleging breach of contract, fraud, negligent misrepresentation, breach of fiduciary duty, unfair competition, and tortious interference with prospective economic advantage relating to the creator's alleged refusal to pay the Plaintiff for his role in the creation and development of the popular show.

The plaintiff was introduced to the creator of The Sopranos through a mutual friend when the plaintiff, who was an attorney, showed interest in writing, directing, and producing. At a meeting between the plaintiff and the creator in 1995, the plaintiff alleged that he pitched the idea of "a film or television series about the New Jersey mafia." In late 1995, the creator visited New Jersey for "research visit" where the plaintiff arranged meetings for the creator with detectives in northern New Jersey who provided the creator with information, material and personal stories about their experience with organized crime. One of the detectives also served as a tour guide and drove the creator to various locations in northern New Jersey. All the ideas and locations that the plaintiff allegedly contributed existed in the public record. Also in late 1995, Plaintiff reviewed a copy of a draft of The Sopranos screenplay and made various comments. Aside from a letter from the plaintiff to the creator in 1997, the parties' relationship ended in 1995.

According to the plaintiff, the creator of the series orally agreed on three separate occasions that if the show became a success, he would "take care of" plaintiff and "remunerate plaintiff in a manner commensurate with the true value of his services." The alleged oral agreements did not include any fixed term of duration or price.

In May of 2002, the plaintiff brought an action against the creator in Federal Court. The creator thereafter filed a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56(c) alleging that there was no genuine issue as to any material fact and that he was entitled to judgment as a matter of law. The lower court granted the creator's motion finding that 1) plaintiffs contract claims were unenforceable due to vagueness, uncertainty, and lack of essential terms in the contract; 2) the statute of limitations barred the quasi contract claim; and 3) the misappropriation tort claim was without merit due to lack of novelty. The plaintiff appealed and the Third Circuit affirmed in part and reversed in part. The Third Circuit held that because the lower court disregarded the plaintiff's certification, which, if included may have precluded a grant of summary judgment on the statute of limitations issue, the case was remanded to the lower court for further proceedings solely on that claim.

The Third Circuit Court of Appeals affirmed the lower court's decision regarding the automotive glass business. It nevertheless reversed the lower court regarding the architectural glass business holding that the defendant manufacturer could not sufficiently prove on summary judgment that there was no conspiracy to fix glass prices. The court conclusively rejected the argument that transactional prices must rise in order to prove that price fixing has occurred because an agreement to fix prices is per se violation of the Sherman Act. The court found that Defendants repeatedly raised list prices with an intended effect of rasing transactional prices. Though the transactional prices did not rise, this had no effect on whether the conspiracy did or did not exist.

The court performed a detailed factual analysis, finding that the evidence was sufficient to provide a finder of fact with a reasonable basis to conclude that there was a price conspiracy. There were several instances where the manufacturers issued price increase announcements for approximately the same amounts and in approximately the same time period. In addition, on several occasions, announcements regarding the price increases occurred immediately after the upper level executives of the conspirators held joint meetings. The court held that even though the content of such meetings was largely unknown, the fact that the meetings existed served as an adverse inference against the defendant manufacturer. Finally, the court looked to several internal documents of the conspirators which accurately predicted the price increases well before they were announced. Based on these findings, the court held that there was sufficient evidence in the record to prove that the defendant conspired with the other manufacturers to fix prices.

In the past plaintiffs had an extremely high hurdle to get over for summary judgment in anti-trust cases based on circumstantial evidence because courts did not want to stifle or discourage competition in the marketplace. The Flat Glass decision seems to suggest that the Third Circuit may be moving in another direction.