United States District Court, E.D. Wisconsin
DECISION AND ORDER
William C. Griesbach, Chief Judge.
12, 2013, Plaintiff Manitowoc Cranes LLC initiated a lawsuit
against Defendants Sany America Inc. and Sany Heavy Industry
Co. Ltd. (collectively “Sany), asserting claims of
patent infringement and misappropriation of trade secrets.
See Case No. 13-C-677. The court stayed proceedings
in the case on July 17, 2013 pending resolution of an
investigation by the United States International Trade
Commission (ITC). Manitowoc filed a second action against
Sany on May 28, 2015, asserting a claim for tortious
interference with contract and jurisdiction under 28 U.S.C.
§ 1332. See Case No. 15-C-647. The court
consolidated the cases on November 18, 2015 and continued the
stay, pending the resolution of the ITC proceedings. On
December 7, 2016, the parties notified the court of the
conclusion of the ITC proceedings and the resulting appeal,
and on December 20, 2016, the court lifted the stay and
reopened the consociated case. Manitowoc subsequently filed
an amended complaint asserting only state law
misappropriation of trade secrets and tortious interference
with contract claims against Sany. The court has jurisdiction
under 28 U.S.C. § 1332.
matter is before the court on Manitowoc's motion for
summary judgment filed under this court's Fast Track
Summary Judgment procedure. Manitowoc requests that the court
enter partial summary judgment finding that Sany is liable
for trade secret misappropriation and enter summary judgment
against Sany's declaratory judgment counterclaims. For
the following reasons, Manitowoc's motion will be
granted-in-part and denied-in-part.
is an innovator of crawler crane technology. It complains
that Sany misappropriated eight of its trade secrets and
tortiously interfered with its employee's contract in
violation of Wisconsin law. This is not the first time
Manitowoc has raised misappropriation claims against Sany,
however. It also brought this claim before the ITC in 2013.
See In the Matter of Certain Crawler Cranes and
Components Thereof, No. 337-TA-887. The ITC held a
three-day evidentiary hearing before an Administrative Law
Judge (ALJ) on Manitowoc's claims beginning March 25,
2014. On May 6, 2015, the ITC issued its Commission Opinion,
unanimously finding that Sany had violated the Tariff Act by
misappropriating Manitowoc's protectable trade secrets
and infringing one of Manitowoc's patents. Pl.'s
Proposed Findings of Fact (PPFOF) ¶ 11, ECF No. 65. The
ITC determined the appropriate remedy included a ten-year
limited exclusion order. It also issued a ten-year cease and
desist order, effective June 15, 2015. Id.
¶¶ 65-67. Sany appealed the ruling to the United
States Court of Appeals for the Federal Circuit. Id.
¶ 68. On October 11, 2016, the Court of Appeals affirmed
the ITC's decision and entered judgment without opinion.
Id. ¶ 69. This matter is before the court on
Manitowoc's motion for partial summary judgment, urging
the court to adopt the ITC's findings regarding
misappropriation of Manitowoc's trade secrets.
judgment is appropriate when the moving party shows that
there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). All reasonable inferences are construed
in favor of the nonmoving party. Foley v. City of
Lafayette, 359 F.3d 925, 928 (7th Cir. 2004). The party
opposing the motion for summary judgment must “submit
evidentiary materials that set forth specific facts showing
that there is a genuine issue for trial.” Siegel v.
Shell Oil Co., 612 F.3d 932, 937 (7th Cir. 2010)
(citations omitted). “The nonmoving party must do more
than simply show that there is some metaphysical doubt as to
the material facts.” Id. Summary judgment is
properly entered against a party “who fails to make a
showing sufficient to establish the existence of an element
essential to the party's case, and on which that party
will bear the burden of proof at trial.” Parent v.
Home Depot U.S.A., Inc., 694 F.3d 919, 922 (7th Cir.
2012) (internal quotations omitted).
argues that summary judgment is appropriate because the
ITC's determination that Manitowoc's trade secrets
were protectable and that Sany misappropriated those trade
secrets have preclusive effect in this litigation. The
Supreme Court has “long favored application of the
common-law doctrines of collateral estoppel (as to issues)
and res judicata (as to claims) to those determinations of
administrative bodies that have attained finality.”
Astoria Fed. Sav. & Loan Ass'n v. Solimino,
501 U.S. 104, 107 (1991). It has recognized that “in
those situations in which Congress has authorized agencies to
resolve disputes, ‘courts may take it as given that
Congress has legislated with the expectation that the
principle will apply except when a statutory purpose to the
contrary is evident.'” B & B Hardware, Inc.
v. Hargis Indus., Inc., 135 S.Ct. 1293, 1303 (2015)
(quoting Astoria, 501 U.S. at 108). In other words,
“absent a contrary indication, Congress presumptively
intends that an agency's determination . . . has
preclusive effect.” Id. at 1305.
argues that this presumption applies to the ITC's
determination of trade secret misappropriation. Whether an
ITC determination regarding trade secret misappropriation has
preclusive effect in subsequent litigation is an issue of
first impression. Although there are no cases specifically
addressing this issue, Manitowoc cites cases where federal
courts have concluded ITC determinations have preclusive
effect in other areas of unfair trade practices. For
instance, the Second Circuit has held that “ITC
adjudications of unfair trade practice and trademark
infringement causes of action are entitled to res judicata
effect.” Union Mfg. Co., Inc. v. Han Baek Trading
Co., Ltd., 763 F.2d 42, 46 (2d Cir. 1985). The First
Circuit has also found that an ITC proceeding had res
judicata effect on antitrust claims. Aunyx Corp. v. Canon
U.S.A., Inc., 978 F.2d 3, 7 (1st Cir. 1992). Manitowoc
also argues that there is no evidence that Congress did not
intend for ITC misappropriation determinations to have
preclusive effect in later proceedings.
Sany contends that because no court has given preclusive
effect to this category of ITC determination, the general
rule against ITC preclusion set forth in Texas
Instruments Inc. v. Cypress Semiconductor Corp., 90 F.3d
1558 (Fed. Cir. 1996), should apply to the instant case.
However, Texas Instruments is distinguishable from
the case at hand. In that case, the plaintiff filed a patent
infringement action in federal court as well as a parallel
action before the ITC. The plaintiff prevailed in the action
before the ITC, whose determination and exclusion order were
ultimately affirmed by the Federal Circuit. Id. at
1562-63. The defendant subsequently prevailed in district
court. The plaintiff appealed the district court's
decision, arguing that the ITC's prior finding of
infringement by “the same defendants, using the same
processes, ” and the Federal Circuit's later
affirmance of that determination should be given preclusive
effect under the doctrine of collateral estoppel.
Id. at 1568.
Federal Circuit rejected the plaintiff's argument. It
noted that “an administrative agency decision, issued
pursuant to a statute, cannot have preclusive effect when
Congress, either expressly or impliedly, indicated that it
intended otherwise.” Id. at 1568. It examined
the legislative history of the Trade Reform Act of 1974,
amending the Tariff Act of 1930, which cautioned, “In
patent-based cases . . . [t]he Commission's findings
neither purport to be, nor can they be, regarded as binding
interpretations of the U.S. patent laws in particular factual
contexts. Therefore, it seems clear that any disposition of a
Commission action by a Federal Court should not have res
judicata or collateral estoppel effect in cases before such
courts.” Id. at 1569 (quoting S. Rep. No.
1298, 93d Cong., 2d Sess. 196 (1974), reprinted in
1974 U.S.C.C.A.N. 7186, 7329). The court held that
“[b]ased on this legislative history . . . Congress did
not intend decisions of the ITC on patent issues to
have preclusive effect.” Id. at 1569
(citations omitted) (emphasis added).
the Federal Circuit found that ITC decisions on patent issues
do not have preclusive effect in subsequent litigation, it
did not create a general rule against preclusion with respect
to all ITC determinations as Sany suggests. “The
jurisdictional bar to res judicata treatment of ITC
patent validity determinations simply does not apply to other
decisions by the ITC.” Union Mfg. Co., Inc.,
763 F.2d at 45. In short, the court finds that ITC
determinations regarding the unfair trade practices of trade
secret misappropriation are entitled to preclusive effect.
The court will now consider whether Sany is collaterally
estopped from disputing that it misappropriated eight
Manitowoc trade secrets.
estoppel, or issue preclusion, prevents the relitigation of
issues resolved in an earlier suit. Taylor v.
Sturgell, 553 U.S. 880, 892 (2008). For collateral
estoppel to apply, the following elements must be satisfied:
“(1) the issue sought to be precluded is the same as an
issue in the prior litigation; (2) the issue must have been
actually litigated in the prior litigation; (3) the
determination of the issue must have been essential to the
final judgment; and (4) the party against whom estoppel is