Research Systems v. IPSOS Publicite ( 2002 )

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 00-3742 and 00-4073
RESEARCH SYSTEMS CORPORATION,
Plaintiff-Appellant,
v.
IPSOS PUBLICITE, IPSOS USA,
IPSOS, ET AL.,
Defendants-Appellees.
Appeals from the United States District Court
for the Southern District of Indiana, Evansville Division.
No. 97 C 10--Richard L. Young, Judge.
ARGUED NOVEMBER 2, 2001--DECIDED January 9, 2002
Before POSNER, RIPPLE and EVANS, Circuit
Judges.
RIPPLE, Circuit Judge. The Plaintiff,
research systems corporation ("RSC"),
sued IPSOS S.A. and several of its
subsidiaries (collectively "IPSOS") for
breach of contract, misappropriation of
trade secrets (under Indiana and federal
law), constructive fraud and false
advertising. The district court entered
summary judgment for IPSOS on RSC’s state
law misappropriation claim, and a jury
found for IPSOS on the rest of the
claims. RSC appeals the grant of summary
judgment, the entry of judgment against
it following the jury verdict, the denial
of its motion for a new trial, the denial
of a post-trial motion for sanctions
against IPSOS, and the granting of a
post-trial motion IPSOS made to recover
some of its expert witness fees from RSC.
For the reasons set forth below, we
affirm the judgment of the district court
in all respects.
I
BACKGROUND
A. Facts
RSC is an advertising research company.
It sells a product called "ARS
Persuasion," which is a system for
testing the effectiveness of television
commercials. In 1989, the French
advertising research company IPSOS
Publicite, a subsidiary of IPSOS S.A.,
approached RSC regarding a possible joint
venture between IPSOS and RSC to market a
testing system in France. IPSOS sold a
testing system called Pre*Vision in
France, but wanted to develop a new
system to attract the business of Proctor
& Gamble ("P&G").
Representatives of IPSOS and RSC began
to negotiate seriously in September 1990.
The presidents of IPSOS Publicite and
IPSOS S.A. each signed a confidentiality
agreement with RSC covering information
that the companies would share. In
December 1990, representatives of IPSOS
visited RSC headquarters in Evansville,
Indiana, and received a guided tour of
the facility. During the visit, RSC
furnished the IPSOS representatives with
proposed joint venture and license
agreements. The terms of the agreements
were not acceptable to IPSOS, however,
and the two companies were unable to
reach any further agreement. RSC had been
pursuing similar arrangements with other
European advertising research companies
as well, but there, too, could reach no
final agreements. In early 1991, IPSOS
and the two other European companies with
which RSC had negotiated, Research
Services Limited ("RSL") of the United
Kingdom and the Sample Institute (Sample)
of Germany, put together a joint proposal
to RSC for the licensing of ARS
Persuasion in Europe. RSC rejected
theoffer, and negotiations between RSC
and the European companies ended in
August 1991.
By September 1991, IPSOS in
collaboration with Sample had revised its
Pre*Vision product to make it compatible
with the RSL and Sample products used by
P&G in the UK and Germany. RSC learned of
the revised Pre*Vision in September 1991.
B. District Court Proceedings
RSC filed suit in December 1996 in an
Indiana state court for misappropriation
of trade secrets and breach of contract.
IPSOS removed the case to federal court
in January 1997 and filed for partial
summary judgment in March 1998 on the
ground that the state law
misappropriation claims were time-barred.
The court granted RSC’s motion to delay
its response until thirty days after
discovery. In February 1999, the court
permitted RSC to amend its complaint to
add two new parties and claims of
constructive fraud and false advertising
and misappropriation under the Lanham
Act. RSC sought permission to amend its
complaint again in November 1999 to add
more new parties and new claims, but the
court denied the motion, explaining that
more delay was not in the interest of
justice. Over the course of discovery,
each party filed numerous motions to
compel. In June 1999, the court scheduled
a trial date for April 3, 2000. In
December 1999, the court ordered the
parties to work out a discovery schedule
that would lead up to the April 2000
trial. According to the schedule, on
which the parties agreed, each party’s
witness lists and exhibits were to be
disclosed by March 3, 2000, and IPSOS was
to disclose its potential expert
witnesses by March 17, 2000. Each party’s
disclosures were timely.
On March 17, 2000, RSC moved for a
continuance, but the court denied the
motion. It also moved the trial to April
4, reserving April 3 as a day to resolve
any pending motions. On March 23 and 24,
2000, both parties made several motions
in limine, including motions for
sanctions, which the court rejected. On
March 31, the court granted IPSOS’ motion
for partial summary judgment on the state
law misappropriation claims, holding that
the claims were time barred. RSC moved
for a continuance of the trial on April
3. The court granted the motion, and
moved the trial date to April 6. The jury
returned a verdict for IPSOS on all
claims, and the court entered judgment on
the jury verdict for IPSOS. It denied
RSC’s motion for a new trial on September
15. RSC then filed another motion for
sanctions, which the court denied.
Finally, on October 24, 2000, the court
granted IPSOS’ motion to recover expert
witness fees from RSC. RSC had deposed
the proffered witnesses, but had refused
to pay the witnesses’ fees after IPSOS
decided not to call them at trial.
II
DISCUSSION
A.
RSC claims that IPSOS’ pretrial conduct
and the district court’s denial of RSC’s
motions for continuances violated RSC’s
due process right to a full and fair
trial. The crux of RSC’s argument is that
IPSOS purposefully delayed its delivery
of discovery materials until the month
before trial and that the delay
interfered with RSC’s ability to prepare
for trial. RSC made two motions for
continuances: the first on March 17,
2000, and the second on March 28, 2000.
The district court summarily denied the
first and reserved decision on the second
until it could hear oral argument on the
motion. The court granted a continuance,
moving the trial date from April 4 to
April 6, 2000, but RSC maintains that the
two-day extension was inadequate.
"We review the trial court’s denial of
a continuance for abuse of discretion."
United States v. $94,000.00 in United
States Currency, 2 F.3d 778, 787 (7th
Cir. 1993). RSC carries a heavy burden,
for "[t]he decision concerning whether to
grant a continuance is left to the broad
discretion of the district court." United
States v. Withers, 972 F.2d 837, 845 (7th
Cir. 1992). "Matters of trial management
are for the district judge; we intervene
only when it is apparent that the judge
has acted unreasonably." N. Ind. Pub.
Serv. Co. v. Carbon County Coal Co., 799
F.2d 265, 269 (7th Cir. 1986). The
district court’s rulings on RSC’s motions
for continuances were not unreasonable.
The court ordered the parties to work out
a schedule that would allow trial to
proceed on the scheduled date. RSC and
IPSOS agreed to the schedule, and the
discovery materials that RSC complains of
receiving only in the month before the
trial were delivered timely according to
that schedule. Nowhere in its brief does
RSC claim that any discovery materials
were produced late according to the
agreed-upon schedule. Furthermore, the
district court was aware of how long it
had taken the case to get to trial and
how many resources of the parties and the
court it already had consumed. In denying
RSC’s November 1999 motion to file a
second amended complaint,/1 which would
have added another party to the
litigation, the court noted:
The plaintiff’s original complaint was
filed on December 16, 1996 . . . . A
trial date is set for April 3, 2000.
Discovery has been extensive and
extremely expensive. The parties have
each exchanged 33,000 to 40,000 pages of
materials and have filed numerous motions
to compel. Depositions have required at
least two and possibly three trips to
Europe. There are contemplated
depositions in South America. The
plaintiff was previously granted leave to
file a first amended complaint in July
1999.
R.322 at 2. Given that "district judges
must be allowed considerable leeway in
scheduling civil cases, and therefore in
denying continuances that would disrupt
their schedules," N. Ind. Pub. Serv. Co.,
799 F.2d at 269, we cannot say that the
district court abused its discretion in
ruling as it did on RSC’s motions for
continuances./2
B.
RSC contends that the district court
abused its discretion by denying its
motion for sanctions for the "obstructive
tactics" of defense counsel. The tactics,
RSC claims, thwarted RSC’s efforts to
bring the case to trial and increased its
cost of doing so. The district court did
not abuse its discretion. "District
courts possess wide latitude in
fashioning appropriate sanctions," and
this court will not disturb the decisions
unless they are unreasonable. Johnson v.
Kakvand, 192 F.3d 656, 661 (7th Cir.
1999). RSC agreed to the schedule
according to which IPSOS made its pre-
trial disclosures. It has not shown any
misconduct on the part of IPSOS that
would have been subject to sanctions.
Thus, the district court’s denial of
RSC’s motion was not unreasonable, and we
shall not disturb it.
C.
RSC contends that the district court
erred in granting IPSOS recovery of the
expert witness fees. First, as the
district court noted in its order,
Federal Rule of Civil Procedure
26(b)(4)(A) permits a party to depose an
expert whose opinion may be presented at
trial. See Fed. R. Civ. P. 26(b)(4)(A).
Rule 26(b)(4)(C) provides: "Unless
manifest injustice would result, (i) the
court shall require that the party
seeking discovery pay the expert a
reasonable fee for time spent in
responding to discovery under this
subdivision . . . ." Fed. R. Civ. P.
26(b)(4)(C). RSC deposed IPSOS’ expert
witnesses, and the court properly
required RSC to pay for the costs of
those depositions.
RSC alleges, however, that IPSOS never
intended to call the experts at trial,
and disclosed them just to distract RSC
from its trial preparations and to burden
RSC with the added expense of deposing
the witnesses. RSC offers no specific
evidence to support its allegations.
Here, we would expect the trial judge--
who is closer to, and more familiar with,
the pre-trial actions of the parties--to
have discovered any abuse that might not
be apparent to us on the face of the
record. Absent any indication of the
scheme RSC attributes to IPSOS, the
district court did not abuse its
discretion in granting IPSOS’ motion to
recover the fees it incurred in making
the experts available for RSC to depose.
D.
RSC next asks this court to reverse the
district court’s denial of RSC’s motion
for a new trial. A party seeking to
reverse a district court’s denial of a
motion for a new trial "bears a
particularly heavy burden." Lowe v.
Consol. Freightways of Del., Inc., 177
F.3d 640, 641 (7th Cir. 1999). A motion
for a new trial should succeed "[o]nly
when a verdict is contrary to the
manifest weight of the evidence . . . ."
Cefalu v. Vill. of Elk Grove, 211 F.3d
416, 424 (7th Cir. 2000). The district
court, having seen the presentation of
the evidence and observed the witnesses,
"is in a unique position to rule on a new
trial motion." Id. at 424. Thus, "[o]nly
if the district judge has abused her
discretion will we disturb her decision
to deny a new trial." Id. This court will
not overturn a jury verdict if a
reasonable basis exists in the record to
support it. See Jackson v. Bunge Corp.,
40 F.3d 239, 244 (7th Cir. 1994). In
reviewing the record, this court will not
re-weigh the evidence; rather, we must
view the evidence in the light most
favorable to the prevailing party, IPSOS,
and draw all reasonable inferences in its
favor. See Alverio v. Sam’s Warehouse
Club, Inc., 253 F.3d 933, 939 (7th Cir.
2001).
RSC ignores this standard of review. It
does no more than point to some evidence
and some inferences from the evidence
that weigh in its favor. It makes no
mention of the evidence supporting the
jury’s verdict. Viewing the evidence in
the light most favorable to IPSOS, as we
must, it is apparent that the jury’s
verdict is not against the weight of the
evidence.
The jury made several specific findings
that RSC now challenges. With respect to
RSC’s misappropriation claim, the jury
determined that RSC had not disclosed any
information regarding its product, ARS
Persuasion, to IPSOS that was not
generally known or readily ascertainable
by proper means. The jury also found that
IPSOS did not have access to any
confidential or proprietary information
of RSC. RSC contends that the evidence
demonstrates otherwise. RSC submits that
its employee, Jan Awad, provided IPSOS
with RSC’s "standard error formula" as a
correction to IPSOS’ formula. Even if the
formula was given, however, RSC has not
pointed to any evidence to show that the
standard error formula was not readily
ascertainable by proper means. Moreover,
Awad was the only witness to testify
about the formula and her testimony was
vague and the jury was justified in not
accepting it as sufficient to prove RSC’s
case. RSC also claims that IPSOS received
secret information during the Operations
Overview Tour that RSC provided of its
facility. However, RSC has not invited
our attention to any evidence in the
record to show that the information
provided on the tour consisted of trade
secrets. The jury was entitled to believe
IPSOS S.A. president, Didier Truchot, who
testified that IPSOS representatives saw
little more than the sight of people
working in their offices. RSC simply did
not prove this element of the claim.
The jury also found that IPSOS had
independently developed Pre*Vision. RSC
claims that this finding is inconsistent
with the evidence that IPSOS developed
Pre*Vision from methodologies developed
by other European marketing firms.
Whether IPSOS borrowed from other
European companies is irrelevant to the
question of whether IPSOS misappropriated
RSC’s trade secrets. The issue was
whether IPSOS had developed Pre*Vision
independently of RSC’s information.
Carlos Harding, the IPSOS executive
responsible for revising Pre*Vision,
testified that IPSOS developed Pre*Vision
from information derived from IPSOS’
interactions with other European
companies and with its clients. The jury
was entitled to believe him.
With respect to RSC’s constructive fraud
claim, the jury found that RSC was not in
a weaker negotiating position than IPSOS
and that RSC did not rely on any
misrepresentations by IPSOS. RSC claims
that the evidence does not support the
jury’s determination. "Constructive fraud
may be found where one party takes
unconscionable advantage of his dominant
position in a confidential or fiduciary
relationship." Estates of Kalwitz v.
Kalwitz, 717 N.E.2d 904, 913 (Ind. Ct.
App. 1999). The only evidence RSC cites
to support its claim that IPSOS was in a
dominant position are letters from RSC
asking IPSOS for information on the
European marketplace, indicating that it
knew less than IPSOS about the European
marketing research industry. The jury
heard evidence, however, that IPSOS was a
small company at the time of the
negotiations and that RSC had alternative
plans if its negotiations with IPSOS fell
through, indicating that RSC was not
dependant upon any cooperative venture
with IPSOS. Thus, the jury’s finding that
RSC had failed to prove a necessary
element of its claim is not against the
weight of the evidence.
Turning to its false advertising claim,
RSC challenges the jury’s findings that
IPSOS never had offered Pre*Vision for
sale in the United States and that IPSOS
had not misrepresented the nature,
characteristics, qualities or origin of
Pre*Vision. Under the Lanham Act, which
generally proscribes the false
description of goods and their origins,
the plaintiff must show, among other
things, that the defendant made false or
misleading statements concerning
goodsentering interstate commerce. See B.
Sanfield, Inc. v. Finlay Fine Jewelry
Corp., 168 F.3d 967, 971 (7th Cir. 1999).
We need not decide whether the evidence
supports the jury’s determination that
IPSOS did not place Pre*Vision in
interstate commerce because the jury’s
finding that IPSOS did not misrepresent
the nature, characteristics, qualities or
origin of Pre*Vision is consistent with
the weight of the evidence. In this
respect, RSC focuses on IPSOS’ claim in
its Pre*Vision marketing material that
the revised Pre*Vision was developed in
part from experience supplying P&G with
"O.R.S.," a product that the German
company, Sample, had been supplying to
P&G in the late 1980s. RSC argues that
Pre*Vision could not have been developed
from experience supplying P&G with O.R.S.
because IPSOS was not a supplier of
O.R.S. at the time the revised Pre*Vision
was developed between March and July
1991. As RSC admits, however, IPSOS
developed the revised Pre*Vision in
collaboration with Sample. Thus, because
Sample had supplied O.R.S. to P&G and had
collaborated on the development of the
revised Pre*Vision, the jury could have
reasonably concluded that IPSOS made no
misrepresentation.
Finally, RSC urges that the evidence
does not support the jury’s verdict for
IPSOS on RSC’s breach of contract claim.
IPSOS and RSC signed a confidentiality
agreement whereby each party promised not
to disclose the information shared with
the other. The agreement explicitly
excepted information that "(i) was
earlier known to the receiving party;
(ii) is or becomes known to the public
other than through disclosure by the
receiving party; or (iii) is disclosed to
the receiving party by a third party
having a right to disclose such
information." Plaintiff’s Trial Exs.
Vol.VII at 1013. The jury found that RSC
had not disclosed any information
regarding its product to IPSOS that was
not generally known or readily
ascertainable by proper means. That
finding, as discussed above, was not
against the weight of the evidence. Thus,
the jury found that whatever information
IPSOS had received from RSC was within
the exception to the confidentiality
agreement. Therefore, the verdict in
favor of IPSOS on RSC’s breach of
contract claim was not against the weight
of the evidence, and the district court
did not err in denying RSC’s motion for a
new trial.
E.
RSC takes issue with five separate
rulings by the district court on the
admissibility of certain evidence. This
court reviews a district court’s
evidentiary rulings for an abuse of
discretion. See United States v. Smith,
230 F.3d 300, 307 (7th Cir. 2000). Even
if a ruling is erroneous, it will not be
overturned unless it is likely that the
ruling had "a substantial influence over
the jury." Palmquist v. Selvik, 111 F.3d
1332, 1339 (7th Cir. 1997) (internal
quotation omitted).
First, RSC challenges the district
court’s exclusion of two memoranda
written by Jan Awad describing meetings
with IPSOS. RSC sought to have the
documents admitted into evidence, but the
district court excluded them as hearsay
because they were offered for the truth
of the matter asserted in the memos. RSC
contends that the memos should have been
admitted as past recollections recorded.
Federal Rule of Evidence 803(5) permits
recorded past recollections to be read
into evidence, but not to be received
into evidence as exhibits unless offered
by an adverse party. See Fed. R. Evid.
803(5). RSC sought to introduce the memo
randa as substantive exhibits, something
the rule explicitly prohibits. The
district court did not abuse its
discretion in excluding the memoranda.
RSC next challenges the admission of an
IPSOS document, which purported to be a
P&G document describing market tests
being done in Germany. IPSOS sought
toadmit the document as evidence of
information in the possession of IPSOS’
Mr. Harding, the executive responsible
for revising Pre*Vision, and upon which
he relied in developing the revised
Pre*Vision. The court admitted the
document for the limited purpose of
showing "that Mr. Harding had it--this
document in his file." Tr.V at 1027. RSC
claims that the court erred by not
requiring IPSOS to establish that the
document was authored by P&G. A document
is authenticated if the evidence is
"sufficient to support a finding that the
matter in question is what its proponent
claims." Fed. R. Evid. 901(a). IPSOS only
claimed that it "was a document that was
in [Mr. Harding’s] file and that he had
it available to him when the changes [to
Pre*Vision] were made." Tr.V at 1025.
Whether the document was actually from
P&G was irrelevant, so long as the
document was not from RSC, and RSC never
claimed that it was. Thus, the district
court did not err in admitting the
document.
Next, RSC challenges the sufficiency of
certain limiting instructions pertaining
to the admission of exhibits concerning
other market testing systems. IPSOS
sought to introduce the exhibits as
evidence that IPSOS had substantial non-
RSC information on which to rely in
developing its revised Pre*Vision. At
sidebar, the court agreed to instruct the
jury that the exhibits would not be
admitted for the truth of the matter
asserted in them, but just as evidence of
other information on which IPSOS could
have relied. The court may have
instructed the jury improperly, because
the transcript reads that "it’s being
offered for the truth." Tr.V at 1014. But
any error was harmless because the nature
of the testing systems described in the
exhibits was irrelevant. What mattered
was that IPSOS had still other sources of
information on which to rely in
developing its own system.
RSC argues that the district court erred
in allowing Roger Flechsig, an executive
of an IPSOS subsidiary corporation, to
testify even though he had not been
disclosed as a potential expert witness.
IPSOS properly had disclosed Flechsig as
a lay witness it would call at trial. RSC
objected to Flechsig’s testimony that
RSC’s product, ARS Persuasion, was not
unique in the industry. A non-expert
witness may give his opinion if it is
"(a) rationally based on the perception
of the witness, (b) helpful to a clear
understanding of the witness’ testimony
or the determination of a fact in issue,
and (c) not based on scientific,
technical, or other specialized knowledge
. . . ." Fed. R. Evid. 701. Here,
Flechsig’s opinion was rationally based
on his twenty years of experience as a
competitor of RSC. In any event, even if
his opinion was based on the specialized
knowledge of an expert, the single
comment that ARS Persuasion was not
unique could not have affected the
outcome of the trial.
Finally, RSC claims that the district
court erred by admitting Exhibits 41 and
83. Exhibit 41 was a portion of a report
on the results of an advertising test
performed by Burke Marketing, a
competitor of RSC, using Burke’s Selector
product. Exhibit 83 consisted of some
materials that would have been included
in the test that is mentioned in the
Exhibit 41 report. IPSOS offered the
exhibits to show that ARS Persuasion was
not unique. RSC objected to the admission
of the exhibits on the ground that IPSOS
had not laid a proper foundation. Federal
Rule of Evidence 901(b)(1) provides that
an exhibit may be authenticated by
testimony of a witness with knowledge
that "a matter is what it is claimed to
be." Fed. R. Evid. 901(b)(1). Flechsig
testified that he had been responsible
for the marketing and sale of the Burke
Selector product. Therefore, the district
court was not unreasonable in concluding
that Flechsig was qualified to testify,
as he did, that Exhibit 41 was "a true
and accurate copy of an excerpt from a
Burke Selector report," Tr.XIII at 2434,
and that Exhibit 83 consisted of
materials that would have been included
in a Selector test. The district court
did not abuse its discretion in admitting
Exhibits 41 and 83.
F.
The district court granted summary
judgment for IPSOS on RSC’s Indiana
Uniform Trade Secrets Act ("UTSA") claim
on the ground that the statute of
limitations had run. RSC does not dispute
that it learned of the purported
misappropriation in October 1991 and
filed its claim in 1996. The UTSA
provides for a three-year limitations
period on misappropriation claims. See
Ind. Code sec. 24-2-3-7. Indiana tolls
all of its limitations periods, however,
for "[t]he time during which the
defendant is a nonresident of the state
[and does not] maintain in Indiana an
agent for service of process or other
person who, under the laws of Indiana,
may be served with process as agent for
the defendant." Ind. Code sec. 34-11-4-1.
IPSOS never has been a resident of
Indiana, nor maintained an agent or
anyone else for service of process there.
At first glance, it might appear that the
limitations period for RSC’s claim
against IPSOS is tolled. The Court of
Appeals of Indiana has held, however,
that the Indiana tolling provision does
not apply "where the party claiming the
benefit of the period of limitations was
subject to the jurisdiction of a court in
[the] state." Haton v. Haton, 672 N.E.2d
962, 965 (Ind. Ct. App. 1996). Based on
Haton, the district court held that RSC’s
claim was time-barred because the UTSA
limitations period was not tolled because
RSC could have served IPSOS under
Indiana’s long arm statute when it
discovered the misappropriation. RSC
urges this court to reject the holding of
the Court of Appeals of Indiana in Haton,
at least as it applies to defendants
residing in foreign countries, because of
the added burden involved in serving
parties abroad.
Because the district court was sitting
in diversity, that court, and this court
on review, must attempt to predict how
the Supreme Court of Indiana would decide
this issue. See Lexington Ins. Co. v.
Rugg & Knopp, Inc., 165 F.3d 1087, 1090
(7th Cir. 1999). "Where the state supreme
court has not ruled on an issue,
decisions of the state appellate courts
control, unless there are persuasive
indications that the state supreme court
would decide the issue differently." Id.
The Court of Appeals of Indiana held in
Haton that "a statute tolling the running
of a period of limitations does not apply
where the party claiming the benefit of
the period of limitations was subject to
the jurisdiction of a court in that
state." Haton, 672 N.E.2d at 965. The
court in Haton was persuaded by the
rationale of the Michigan Court of
Appeals, which noted, "The purpose of a
tolling provision is to protect the right
of a plaintiff to bring an action and to
prevent a defendant from defeating a
claim by absenting himself from the
jurisdiction. It preserves [the]
plaintiff’s claim until such time as
service on the defendant is made
available." Id. at 964 (quoting Frazier
v. Castellani, 342 N.W.2d 623, 626 (Mich.
Ct. App. 1983)). When a defendant is
amenable to service, application of the
tolling provision would serve no purpose,
and the court should instead apply the
statute of limitations, which is
"designed to promote diligence on the
part of the plaintiff, to prevent the
litigation of stale claims and to
establish a reasonable, but limited, time
for bringing an action." Id. Haton,
however, involved a suit for delinquent
child support payments following a
divorce decree. Unlike here, the court in
Haton had continuing jurisdiction over
the defendant; service of process was not
necessary, only notice of the relief
sought. See id. at 964-65. In the present
action, the district court extended the
ruling of Haton from cases against
nonresident defendants over whom the
court already had jurisdiction to cases
against nonresident defendants over whom
the court must yet establish its
jurisdiction. Still, the rule’s rationale
applies here as well, and its application
would be consistent with Indiana law.
Indiana’s tolling provision does not
apply in cases against defendants who
"maintain in Indiana an agent for service
of process or other person who, under the
laws of Indiana, may be served with
process as agent for the defendant." Ind.
Code sec. 34-11-4-1. Indiana law used to
permit service to be made upon the
Secretary of State in actions against
nonresident corporations. See Ind. Code
sec. 23-3-3-1 (1982). In such cases, the
tolling provision did not apply because
the nonresident corporation was amenable
to service of process via the Secretary
of State. See Tolen v. A.H. Robins Co.,
Inc., 570 F. Supp. 1146, 1154-55 (N.D.
Ind. 1983); Dague v. Piper Aircraft
Corp., 513 F. Supp. 19, 24 (N.D. Ind.
1980); see also Am. States Ins. Co. v.
Williams, 278 N.E.2d 295, 301 (Ind. Ct.
App. 1972) (when nonresident motorist was
amenable to service via the Secretary of
State pursuant to the nonresident
motorist statute, the statute of
limitations was not tolled). The statute
that allowed service of process to be
made on the Secretary of State in actions
against nonresident corporations has been
repealed and replaced by the long-arm
statute under which IPSOS could be served
by registered or certified mail. See Ind.
Code sec. 23-1-49-10; 1986 Ind. Acts 149,
sec.sec. 33, 65. Thus, the rule that the
statute of limitations is not tolled if
the nonresident defendant is amenable to
service of process under the long-arm
statute is consistent with Indiana law
interpreting the tolling provision, even
though the statute itself does not
explicitly provide for the exception.
Courts in many other states have applied
the same exception to tolling statutes
under the rationale observed in Haton,
even though the statutes did not
explicitly provide for it. See, e.g.,
Alday v. Tecphy Div. Firminy, 10 F. Supp.
2d 562, 565 (D.S.C. 1998) (applying South
Carolina law); Fernon v. Itkin, 476 F.
Supp. 1, 3 (M.D. Fla. 1979) (applying
Florida law), aff’d without op. 604 F.2d
669 (5th Cir. 1979); Kennedy v. Lynch,
513 P.2d 1261, 1263 (N.M. 1973); Byrne v.
Ogle, 488 P.2d 716, 718 (Alaska 1971);
see also Kenneth J. Rampino, Annotation,
Tolling of Statute of Limitations During
Absence from State as Affected by Fact
that Party Claiming Benefit of
Limitations Remained Subject to Service
During Absence or Nonresidence, 55
A.L.R. 3d 1158, sec. 4[b] (1974 & Supp.
2000) (listing cases). Lastly, the
Supreme Court of Indiana itself has
embraced the rationale underlying the
rule applied by the district court,
albeit in dicta and over a century ago.
Interpreting a tolling statute that did
not explicitly provide for an exception
when the defendant was amenable to
service of process, the Court stated: "It
seems that the absence of the defendant,
contemplated in this section of the
statute, must be such as would prevent
the plaintiff, during its continuance,
from enforcing his cause of action by a
judgment in personam, against the
defendant." Niblack v. Goodman, 67 Ind.
174, 1879 WL 5577, at *12 (Ind. 1879).
Its reasoning applies with no less force
today.
RSC distinguishes its case from Haton by
noting that IPSOS was not just outside
the state of Indiana, it was outside the
United States. The rule in Haton should
not apply here, RSC argues, because of
the added burden involved in serving
parties in foreign countries. But Indiana
law makes no distinction between
defendants based in the United States and
those based in foreign countries. The
manner of service is the same: by simple
certified mail, see Ind. Code sec. 23-1-
49-10; Ind. R. Trial P. 4.1(A)(1),
4.4(B)(1), 4.6(B), a method permitted by
Article 10(a) of the Hague Convention, so
long as the foreign country does not
object. See Convention on the Service
Abroad of Judicial and Extrajudicial
Documents in Civil or Commercial Matters,
Feb. 10, 1969, 20 U.S.T. 361, 658
U.N.T.S. 163. France has not objected.
See id., Article 21 & n.7./3 That IPSOS
could be served only in France does not
render it unamenable to service, and the
tolling statute should not apply. See
Alday, 10 F. Supp. 2d at 565 (when
defendant was amenable to service of
process under the Hague Convention,
tolling provision did not apply). The
district court’s application of the Haton
rule in this case is consistent with
Indiana law, and RSC has not pointed us
to persuasive indications showing that
the Supreme Court of Indiana would decide
the issue differently. Therefore, the
district court did not err in granting
summary judgment for IPSOS.
Conclusion
The judgment of the district court is
affirmed.
AFFIRMED
FOOTNOTES
/1 The district court’s ruling denying leave to file
a second amended complaint is not contested on
appeal.
/2 RSC submits that the timing of IPSOS’ disclosures
prevented it from adding another party, RSL, to
the action. However, as the district court noted
in denying RSC’s motion to file a second amended
complaint that would have added RSL to the suit,
RSC had notice that RSL might be using its
purported trade secrets as early as June 14,
1996.
/3 The Hague Convention is appended to Federal Rule
of Civil Procedure 4. See Fed. R. Civ. P. 4,
conventions.