Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Blackrock Engineers, Inc. v. Duke Energy Progress, LLC

United States District Court, E.D. North Carolina, Southern Division

September 9, 2019

BLACKROCK ENGINEERS, INC., Plaintiff,
v.
DUKE ENERGY PROGRESS, LLC, Defendant.

          ORDER

          JAMES C. DEVER III UNITED STATES DISTRICT JUDGE.

         On November 25, 2015, BlackRock Engineers, Inc. ("BlackRock" or "plaintiff') filed a corrected complaint against Duke Energy Progress, LLC ("Duke Energy" or "defendant"), AMEC Foster Wheeler Environment & Infrastructure, Inc. ("AMEC"), [1] and Charah, Inc. ("Charah")[2]alleging copyright infringement, breach of contract, unjust enrichment, conversion and misappropriation, common law unfair competition, trademark infringement under North Carolina law, and violation of the North Carolina Unfair and Deceptive Trade Practices Act ("UDTPA"), N.C. Gen. Stat. § 75-1 et seq. [D.E. 5]. On December 14, 2017, Duke Energy filed an amended answer and asserted a counterclaim against BlackRock for declaratory judgment that BlackRock committed fraud on the copyright office and that BlackRock's copyrights are invalid, void, or unenforceable based on BlackRock's fraud [D.E. 99].

         On November 16, 2018, BlackRock moved for partial summary judgment [D.E. 120] and filed a memorandum in support [D.E. 121], a statement of material facts [D.E. 123], and an appendix [D.E. 124, 131, 133, 136, 137]. On December 21, 2018, Duke Energy responded in opposition [D.E. 183] and responded to BlackRock's statement of material facts [D.E. 186]. On January 11, 2019, BlackRock replied [D.E. 198].

         On November 16, 2018, Duke Energy moved for summary judgment [D.E. 132] and filed a memorandum in support [D.E. 134], a statement of material facts [D.E. 135], and an appendix [D.E. 138, 139-58]. OnDecember2l, 2018, BlackRock responded in opposition [D.E. 180], filed exhibits [D.E. 181-82], responded to Duke Energy's statement of material facts [D.E. 184], and filed an appendix [D.E. 185, 187-90]. On January 11, 2019, Duke Energy replied [D.E. 199] and responded to BlackRock's statement of material facts [D.E. 200].

         On November 16, 2018, Duke Energy moved to strike "all evidence" from BlackRock concerning Gary Ahlberg's ("Ahlberg") damages calculation [D.E. 161] and filed a memorandum in support [D.E. 162]. On December 21, 2018, BlackRock responded in opposition [D.E. 179]. On January 4, 2019, Duke Energy replied [D.E. 193].

         On February 26, 2019, Duke Energy moved to strike Ahlberg's affidavit that BlackRock submitted in its response to Duke Energy's motion for summary judgment [D.E. 204], filed a memorandum in support [D.E. 205], and filed exhibits [D.E. 206-12]. On March 13, 2019, the parties jointly moved for extensions of time to file, which the court granted [D.E. 216]. On March 27, 2019, BlackRock moved for an additional extension of time to respond [D.E. 222]. On March 28, 2019, Duke Energy responded in opposition [D.E. 223]. On April 1, 2019, Duke Energy moved for adjudication of its motion to strike because BlackRock did not timely respond [D.E. 224]. On April 5, 2019, BlackRock responded in opposition to Duke Energy's motion to strike [D.E. 226], filed exhibits [D.E. 227], and responded in opposition to Duke Energy's motion for adjudication [D.E.230]. On April 22, 2019, Duke Energy replied [D.E. 231].

         As explained below, the court grants in part and denies in part Duke Energy's first motion to strike, grants BlackRock's motion for an extension, denies as moot Duke Energy's motion for adjudication, denies Duke Energy's second motion to strike, grants in part and denies in part BlackRock's motion for partial summary judgment, and grants in part and denies in part Duke Energy's motion for summary judgment.

         I.

         Duke Energy is a public utility "created and operating under the laws of North Carolina." [D.E. 135] ¶ 1; [D.E. 184] ¶ l.[3] Duke Energy, in part, operates coal-burning power plants in North Carolina, which produce coal ash residue. See [D.E. 123] ¶ 1; [D.E. 186] ¶ 1. Under North Carolina law, Duke Energy must store and dispose of coal ash residue and other solid waste in an environmentally safe manner. See [D.E. 123] ¶ 1; [D.E. 186] ¶ 1. Duke Energy owns and operates the Roxboro Lined Ash Monofill (the "Roxboro Landfill") in Semora, North Carolina, to store solid waste produced at its Roxboro power plant. See [D.E. 135] ¶¶4-5; [D.E. 184] ¶¶4-5; [D.E. 123] ¶ 1; [D.E. 186] ¶ 1. BlackRock is an engineering firm that "specializes in solid waste landfill services, including the design and permitting of landfills." [D.E. 135] ¶ 2; [D.E. 184] ¶ 2.

         "North Carolina requires every solid state waste management facility to obtain a Permit to Construct ("PTC") issued by the Solid Waste Management Section of the North Carolina Department of Environmental Quality ("DEQ")" before constructing a landfill. [D.E. 135] ¶¶ 6, 10; [D.E. 184] ¶¶ 6, 10.[4] PTC applications must contain "detailed plans and specifications prepared by a professional engineer" that include "a grading plan, construction plan, [and] site development showing phases or progression of operation in five-year or ten-year phases of construction and operation." [D.E. 135] ¶¶7, 9 (alteration and quotation omitted); [D.E. 184] ¶¶ 7, 9.[5] Once a facility owner completes landfill construction, a professional engineer must prepare a Construction Quality Assurance Report ("CQA Report") that certifies that "the landfill was constructed properly and consistent with the plans approved under the PTC." [D.E. 135] ¶¶ 11-12; [D.E. 184] ¶ 11-12. "The CQA Report comprises technical drawings and text reflecting the as-built conditions of the landfill." [D.E. 135] ¶ 13; [D.E. 184] ¶ 13. The DEQ then reviews the CQA Report and, if approved, issues to the facility owner a Permit to Operate ("PTO") to operate (i.e., store solid waste at) the landfill. See [D.E. 135] ¶¶ 14-15; [D.E. 184] ¶¶ 14-15.

         In 1999, Duke Energy's predecessors, Carolina Power & Light Co. ("CP&L") and Progress Energy, Inc. ("Progress Energy"), hired Gary W. Ahlberg ("Ahlberg") to provide engineering services for the Roxboro Landfill based on Duke Energy's plan to transition the Roxboro Landfill from an unlined to a lined facility (the "Landfill transition plan"). See [D.E. 123] ¶ 4; [D.E. 186] ¶4; [D.E. 135] ¶¶ 18-19; [D.E. 184] ¶¶ 18-19. The parties agreed that me landfill transition plan would occur in nine phases, but the parties dispute the extent of collaboration between Ahlberg and Duke Energy. Compare [D.E. 1351 ¶ 20. with [D-E. 184] ¶ 20. The DEQ approved Phases 1 through 5 of the Landfill transition plan. See [D.E. 123] ¶ 6; [D.E. 186] ¶ 6.

         Ahlberg performed under an Individual Project Contract No. 14574 (the"First Contract"), which was "periodically expanded and maintained active by amendments." [D.E. 123] ¶ 4;see [D.E. 186] ¶ 4; [D.E. 200] ¶ 2; [D.E. 133-1]. Several provisions of the First Contract are relevant The First Contract allowed either party "to terminate the contract for convenience." [D.E. 135] ¶¶ 21, 23;[D.E. 184] ¶¶ 21, 23. The First Contract also deemed "any copyrightable material" to be "work for hire" under the Copyright Act, and Ahlberg "assigned all copyrights in any copyrightable materials produced thereunder to Duke Energy's predecessor-in-interest." [D.E. 135] ¶ 24; [D.E. 184] ¶24; [D.E. 133-1] 8 (emphasis in original). In addition, the First Contract provides that "any program, document, data or information supplied by [Ahlberg] to CP&L may be used, copied or disclosed by CP&L as necessary in the normal course of its business, notwithstanding any copyright of [Ahlberg] in such materials and notwithstanding any notices or legends appearing thereon." [D.E. 135] ¶24; [D.E. 184] ¶24; [D.E. 133-1] 13.

         In 2006, Ahlberg formed BlackRock, and BlackRock assumed all contracts and responsibilities of Ahlberg. See [D.E. 123] ¶ 5; [D.E. 200] ¶ 1. BlackRock adopted a triangular logo as a service mark to identify its business. See [D.E. 123] ¶ 7; [D.E. 186] ¶ 7. In September 2011, BlackRock claims that Progress Energy requested recommendations for future phase plans from BlackRock. See BlackRock Add. [D.E. 184] ¶4; [D.E. 200] ¶ 4. In response, BlackRock requested a contract extension. See BlackRock Add. [D.E. 184] ¶5; [D.E. 200] ¶ 5. In March 2012, Progress Energy and BlackRock executed Amendment 30 to the First Contract, expanding the scope of BlackRock's work at the Roxboro Landfill "to include engineering support for the design and remitting of new capacity additions Phases 6 through 9." [D.E. 135] ¶ 27; [D.E. 184] ¶ 27; BlackRock Add. [D.E. 184] ¶ 7; [D.E. 200] ¶ 7. In Amendment 30, the parties "agreed that BlackRock would retain a license to use work product but that such license rights shall not extend to any information or data that is specific to the Roxboro Plant, which shall remain the exclusive property of [Duke Energy]." [D.E. 135] ¶ 27 (emphasis in original; alteration and quotations omitted); [D.E. 184] ¶ 27; [D.E. 146] 3. BlackRock then created plans for Phase 6 of the Landfill transition plan, and BlackRock submitted the plans to Progress Energy. See [D.E. 123] ¶ 8; [D.E. 186] ¶ 8; [D.E. 135] ¶ 28; [D.E. 184] ¶ 28. The parties dispute the extent to which BlackRock and Duke Energy collaborated on the Phase 6 plans. Compare [D.E. 135] ¶ 28, wife [D.E. 184] ¶ 28.

         In January 2013, BlackRock and Progress Energy entered into a new Master Contract (the "Master Contract") to replace the First Contract. See [D.E. 123] ¶ 9; [D.E. 186] ¶ 9; [D.E. 135] ¶ 29; [D.E. 184] ¶ 29. The parties dispute when the Master Contract went into effect. Duke Energy contends that the Master Contract went into effect only after the parties executed a work authorization on August 7, 2013, while BlackRock claims that it went into effect on either April 1, 2012, or January 1, 2013, under the terms of the contract. Compare [D.E. 135] ¶29, with[D.E. 184] ¶ 29. The Master Contract retained provisions concerning termination. See [D.E. 135] ¶¶ 30-33. The Master Contract did not contain a "work made for hire" clause that would assign BlackRock's copyrights to Duke Energy or Progress Energy. See BlackRock Add. [D.E. 184] ¶ 9; [D.E. 200] ¶ 9. BlackRock then "provided engineering work on Phase 6" of the Landfill transition plan, "which included the preparation of many reports and technical drawings that were submitted to Duke Energy and to [DEQ]." [D.E. 123] ¶ 10; [D.E. 186] ¶ 10. BlackRock identifies various drawings that it prepared, each of which displayed BlackRock's name and service mark. See [D.E. 123] ¶¶ 11-12, 16. BlackRock claims, and Duke Energy disputes, that BlackRock provided these services under the terms of the Master Contract. Relevant here, BlackRock prepared a PTC application for Phase 6 and a CQA report stating that "the Phase 6A landfill was constructed in general accordance with the requirements of the Phase 6 [PTC], project drawings, and specifications." [D.E. 184] ¶ 20.

         By 2014, Duke Energy decided to end its relationship with BlackRock. See [D.E. 123] ¶ 19; [D.E. 186] ¶ 19. Beginning in the fell of 2014, Duke Energy copied BlackRock's "technical drawings and materials generated by BlackRock" and distributed these materials to AMEC. See [D.E. 123] ¶¶ 21-22; [D.E. 186] ¶¶ 21-22. On November 17, 2014, Duke Energy issued a cease work directive to BlackRock, and on December 5, 2014, Duke Energy unilaterally terminated its contractual relationship with BlackRock and began working with AMEC. See [D.E. 135] ¶¶ 34-35; [D.E. 184] ¶¶ 34-35; [D.E. 123] ¶ 20. AMEC used and copied BlackRock's technical drawings in preparing reports to submit to DEQ "for activities relating to the Roxboro Landfill." [D.E. 123] ¶ 25; [D.E. 186] ¶ 25; see [D.E. 123] ¶¶ 26-31; [D.E. 135] ¶ 39; [D.E. 184] ¶ 39.

         On December 18, 2014, less than two weeks after Duke Energy terminated the Master Contract, BlackRock contacted DEQ "to retract its certification of the Phase 6A CQA Report that BlackRock had previously submitted to the agency to obtain a [PTO] for Phase 6" of the Landfill transition plan for Duke Energy. [D.E. 135] ¶ 36; [D.E. 184] ¶ 36; BlackRock Add. [D.E. 184] ¶¶ 21-24; [D.E. 200] ¶¶ 21-24. In response, DEQ "requested that Duke Energy submit a report in response to the issues raised" by BlackRock. [D.E. 135] ¶ 36; [D.E. 184] ¶ 36. On February 9, 2015, DEQ issued a PTO for Phase 6 to Duke Energy. See [D.E. 135] ¶¶ 37, 49; [D.E. 184] ¶¶ 37, 49. In April 2015, DEQ required Duke Energy to submit an "Annual Progress Report for Dam Safety Certificate of Approval for the Roxboro Landfill." [D.E. 123] ¶ 13; [D.E. 186] ¶ 13. AMEC prepared the report for Duke Energy, which included copies of BlackRock technical documents. See [D.E. 123] ¶¶ 14-15; [D.E. 186] ¶¶ 14-15.

         On August 17, 2015, BlackRock applied to obtain copyright registrations for "its intellectual property," [D.E. 121] 11-12, including its August 2013 PTC for Phase 6 and its October 2014 CQA Report for Phase 6A. See [D.E. 123] ¶¶ 32, 34; [D.E. 186] ¶¶ 32, 34; [D.E. 135] ¶ 40; [D.E. 184] ¶ 40. The United States Copyright Office granted BlackRock's copyright applications. See [D.E. 123] ¶¶ 33, 35; [D.E. 186] ¶¶ 33, 35; BlackRock Add. [D.E. 184] ¶ 19; [D.E. 200] ¶ 19. In 2017, BlackRock applied to supplement its copyright registrations, which the Copyright Office granted on July 2, 2018. See [D.E. 123] ¶¶ 37-41; [D.E. 186] ¶¶ 37-41.

         II.

         A.

         Duke Energy moves to strike all evidence from BlackRock or Ahlberg concerning damages because "Ahlberg's testimony should have been offered by an expert, but was instead offered by" Ahlberg as a lay witness. [D.E. 161] 1. BlackRock seeks two types of damages: "(1) business loss to BlackRock arising from the complete destruction of its business when [Duke Energy] terminated its services in bad faith and provided BlackRock's proprietary work product to BlackRock's competitor, measured by the amount of income BlackRock reasonably expected to have earned during the remaining term of the Master Contract; and (2) recovery of the savings and profits realized by [Duke Energy] when [Duke Energy] gained the right- through the infringement of BlackRock's copyrighted works-to expand the capacity of the Roxboro Landfill and dispose of coal ash waste generated by the Roxboro Plant on its own premises." [D.E. 179] 1-2. BlackRock seeks $1, 739, 296 in business losses and $229, 036, 487 in savings and profits realized by Duke Energy. See [D.E. 179] 4, 5. BlackRock presents only Ahlberg as a witness concerning damages.

         Under Rule 701 of the Federal Rules of Evidence, "[i]f a witness is not testifying as an expert, testimony in the form of an opinion is limited to one that is (a) rationally based on the witness's perception; (b) helpful to clearly understanding the witness's testimony or to determining a fact in issue; and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702." Fed.R.Evid. 701; see Gallagher v. S. Source Packaging. LLC, 568 F.Supp.2d 624, 632-33 (E.D. N.C. 2008). "The modern trend favors the admission of opinion testimony, provided that it is well founded on personal knowledge as distinguished from hypothetical facts and susceptible to specific cross-examination." MCI Telecommc'ns Corp. v. Wanzer, 897 F.2d 703, 706 (4th Cir. 1990) (quotation, alteration, and citation omitted); see Lord & Taylor, LLC v. White Flint LP., 849 F.3d 567, 575 (4th Cir. 2017); United States v. Perkins, 470 F.3d 150, 155-56 (4th Cir.2006).

         As for Ahlberg's opinion concerning BlackRock's business losses, Ahlberg's opinion is based on a report by BlackRock's external accountant concerning BlackRock's normalized profit margins, not on Ahlberg's personal knowledge or experience in the engineering field. See Ex. B [D.E. 162-1] 9-13. BlackRock may not present its accountant's report as Ahlberg's lay opinion and thereby circumvent Rule 702 of the Federal Rules of Evidence. See Gallagher, 568 F.Supp.2d at 633; Static Control Components, Inc. v. Darkprint Imaging. Inc., 240 F.Supp.2d 465, 481 (M.D. N.C. 2002) (noting that, while "business owners and officers [may] testify as lay witnesses under [Rule] 701," such witnesses "must possess personal knowledge of the lost profits and damages and may not rely on hearsay"). To the extent that Ahlberg offers a lay opinion based on BlackRock's external accountant's report, the court grants Duke Energy's motion to strike.

         As for Ahlberg's opinion concerning Duke Energy's potential savings, Ahlberg lacks personal knowledge of relevant Duke Energy data. See [D.E. 162-1] 21-22. That is, Ahlberg bases any such opinion on hypothetical facts, not on his personal knowledge. Accordingly, the court grants Duke Energy's motion to strike such evidence. Thus, the court grants in part and denies in part Duke Energy's motion to strike BlackRock's evidence concerning damages.

         B.

         Duke Energy next moves to strike Ahlberg's affidavit, [D.E. 180-1], and for an award of its reasonable expenses [D.E. 204]. Duke Energy argues that Ahlberg's affidavit--which BlackRock submitted in its response in opposition to Duke Energy's motion for summary judgment-violates the Federal Rules of Evidence, violates BlackRock's duty to supplement its discovery responses, and is a sham affidavit See [D.E. 205] 4-5. For good cause shown, the court grants BlackRock's motion for an extension and denies as moot Duke Energy's motion for adjudication.

         Ahlberg's affidavit does not violate Rule 56(c)(4) of the Federal Rules of Civil Procedure. See Fed.R.Civ.P. 56(c)(4); Antonio v. Barnes,464 F.2d 584, 585 (4th Cir. 1972) (per curiam); King v. N.C. Dep't of Pub. Safety, No. 5:12-CV-152-F, 2014 WL 69601, at *2-3 (E.D. N.C. Jan. 8, 2014) (unpublished). Relatedly, Ahlberg's affidavit does not violate Rule 701 of the Federal Rules of Evidence and the court declines to exclude Ahlberg's affidavit as a sham. As for whether BlackRock violated its duty to supplement its discovery responses, the court denies Duke Energy's motion to strike Ahlberg's affidavit ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.