Page:Michael Anthony Jewelers v. Peacock Jewelry.pdf/18

 to guard property already acquired. It is this right that furnishes the basis of the jurisdiction in the ordinary case of unfair competition. 231 N.Y. 414, 132 N.E. 133, 137–38 (N.Y.1921) (quoting International News Serv. v. Associated Press, 248 U.S. 215, 234 & 236, 39 S.Ct. 68, 70–71 & 71, 63 L.Ed. 211 (1918)). In conformity with that broad approach, subsequent courts have determined that any misappropriation of the “skill,” “labors,” or “expenditures” of another may constitute unfair competition, provided the misappropriation is in bad faith. See, e.g., Saratoga Vichy Spring Co., Inc. v. Lehman, 625 F.2d 1037, 1044 (2d Cir.1980); Alusit Ltd. v. Aluglas of Pennsylvania, No. 89-3849, 1990 WL 209422, at *11, 1990 U.S. Dist LEXIS 16755, at *33 (S.D.N.Y. Dec. 4, 1990).

Peacock’s amended countercomplaint alleges that Peacock purchased charm molds from the Old Mr. Craftsman and thereafter expended money and effort manufacturing the charms and preparing catalogs for their sale. The countercomplaint further alleges that when Peacock attempted to sell those charms and reap the fruits of its labor, it was confronted with a lawsuit by MAJ, which had copied the charms and fraudulently obtained copyrights in the interim. Regardless of whether or not those charms were in the public domain, we find that this alleged misappropriation of Peacock’s labor and investment supports a claim of unfair competition under New York law.

Peacock’s allegations with respect to the provision of cocaine and prostitutes, however, pose an entirely different situation. Peacock asserts that this conduct may be labeled unfair competition because it is “unfair,” and insists that the tort is designed to protect against all forms of “commercial immorality.” See, e.g., Standard & Poor’s Corp. v. Commodity Exchange, Inc., 683 F.2d 704, 710 (2d Cir.1982). While the tort is undoubtedly a broad one, which one Court has described as “adaptable and capacious,” Roy Export, 672 F.2d at 1105, it is by no means all-encompassing and courts have not hesitated to recognize its limits. See, e.g., Saratoga Vichy Spring Co., Inc., 625 F.2d at 1044; Nifty Foods Corp. v. Great Atlantic & Pacific Tea Co., 614 F.2d 832, 842 (2d Cir.1980). Peacock has failed to cite any case in support of its claim that the provision of cocaine or prostitutes constitutes unfair competition under New York law. In light of that deficiency, as well as the fact that we cannot see how the provision of such inducements constitutes a misappropriation of Peacock’s “skill,” “labors” or other property rights, we conclude that these allegations may not serve as a basis for Peacock’s unfair competition claim.

As the above discussion reflects, Peacock’s motion to join Michael and Anthony Paolercio as counter-defendants is granted, subject to a post-discovery motion to dismiss as to the non-RICO claims. MAJ’s motion to dismiss the antitrust counterclaims and the claim of unfair competition is denied, although Peacock may not assert the alleged unlawful inducements as a basis for the latter claim. MAJ’s motion to dismiss the RICO and Lanham Act counterclaims is granted, although Peacock will be given leave to replead them, except with regard to the predicate acts of mail fraud.

With respect to the issue of repleading, this Court is aware that Peacock has already been given one opportunity to clarify the counterclaims and has nonetheless failed in many instances to conform even to the pleading requirements of Fed.R.Civ.P. 8. Despite that history, we will permit Peacock one further opportunity to redress the deficiencies in its countercomplaint, assuming, of course, that there is a factual basis for it to do so. Peacock is to file its amended countercomplaint, if any, by June 29, 1992. The parties are to confer and to submit to the Court by July 13, 1992 a proposed schedule for the completion of all discovery and submission of a pretrial order.

SO ORDERED.