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Buckeye International, Inc. v. Schmidt Custom Floors, Inc.

United States District Court, W.D. Wisconsin

April 26, 2018


          OPINION & ORDER

          JAMES D. PETERSON District Judge

         Plaintiff Buckeye International, Inc., sells floor finishing products, including Gym Bond, a bonding agent that is supposed to help a clear topcoat adhere to a previously finished gymnasium floor. Defendant Schmidt Custom Floors, Inc., used Gym Bond on the floors of several sports facilities, but the floors had problems with peeling. Schmidt was unhappy with Buckeye's response, so Schmidt turned to social media and email to voice complaints about Gym Bond and Buckeye. Buckeye contends that the peeling was caused by Schmidt's faulty preparation of the floor surface, and that Schmidt's complaints are false and damaging to Buckeye's reputation.

         So Buckeye turns to this court for relief, with claims against Schmidt for false advertising under the Lanham Act, defamation, injurious falsehood, tortious interference with business relationships, tortious interference with a contract, injury to business, and declaratory judgment. Schmidt asserts counterclaims for breach of contract and breach of warranty.

         Now before the court is Buckeye's motion for a preliminary injunction that would prohibit Schmidt from making future false statements and require Schmidt to, among other things, take down its social media postings about Buckeye, retract and correct the complaining emails, and publish corrective advertising. Dkt. 7.

         The court will deny the motion for preliminary injunction for several reasons. Buckeye's motion relies solely on its false advertisement claim under the Lanham Act, which would require Buckeye to show that Schmidt's statements were made “in commercial advertising or promotion.” 15 U.S.C. § 1125(a)(1)(B). A customer's complaints about a supplier's products and services, even if posted on social media, are not statements made in commercial advertising or promotion. And Schmidt has voluntarily removed its social media postings, which leaves its direct communications to its own customers and the trade association. At this point, the parties sharply and genuinely dispute the cause of the floor problems, and it would be inappropriate for the court to curtail Schmidt's complaints about Buckeye's product.


         The court begins with an evidentiary issue. Buckeye moves to strike the proposed findings of fact and affidavits Schmidt filed in opposition to Buckeye's motion for a preliminary injunction. Dkt. 29. This court's procedures for obtaining injunctive relief authorize an opposing party to file a response to the movant's proposed findings of fact; they do not authorize the opposing party to file its own proposed findings of fact, as Schmidt did here.[1]Buckeye will have no opportunity to respond to Schmidt's proposed findings of fact, so the court will not consider Schmidt's proposed findings in this order. See Bernatello's Pizza, Inc. v. Hansen Foods, LLC, 173 F.Supp.3d 790, 794 (W.D. Wis. 2016).

         As for the affidavits filed by Schmidt, Buckeye contends that portions of Jason Heiman's affidavit and the entirety of Roy Reichow's affidavit are inadmissible. The court will not strike either affidavit. Reichow's affidavit would not suffice as a full-blown expert report under Federal Rule of Civil Procedure 26(a)(2)(B), but it is adequate as part of a response to a motion for preliminary injunction. The court is not persuaded that Heiman's affidavit includes significant information for which he does not have an adequate foundation of personal knowledge (except paragraph 37). The statements that Buckeye contends are hearsay were made by Buckeye's employee or agent, Fred Werth, so those statements would be admissible as party admissions under Federal Rule of Evidence 801(d)(2)(D).

         The following facts are undisputed unless otherwise noted.

         Buckeye sells janitorial products and floor finishing products. Schmidt is a flooring installer and refinisher. Schmidt buys Buckeye products through San-A-Care, Inc., Buckeye's exclusive distributor for the Milwaukee area. Buckeye and Schmidt do not compete, but some of Schmidt's customers also purchase Buckeye janitorial products through San-A-Care.

         Gym Bond is designed to facilitate the bonding of a clear topcoat to a previously finished hardwood sports court, such as a basketball court or gymnasium. Schmidt used Gym Bond when it installed the floors of sports facilities at various schools and universities, but the topcoat eventually peeled off, and Schmidt's customers complained to Schmidt. Schmidt in turn complained to Buckeye and the National Wood Flooring Association. Dkt. 10-1, at 16- 18. Buckeye initially agreed to pay to refinish some of the peeling floors while it investigated the cause of the peeling. Although the parties cooperated at first, ultimately Buckeye and Schmidt both denied fault and blamed the other for the peeling.

         Schmidt contends that Buckeye cut off communication about the peeling problem and refused to make good on its promises to pay for remediation on floors that Schmidt had refinished using Gym Bond.

         The parties agree that Schmidt complained about Gym Bond and Buckeye on social media and directly to Schmidt customers and trade associations. ...

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