William M. Hendrickson, Inc v. National Railroad Passenger Corporation

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-2551
WILLIAM M. HENDRICKSON, INC.,
Appellant
v.
NATIONAL RAILROAD PASSENGER CORPORATION
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 00-cv-03711)
District Court Judge: Honorable Anita B. Brody
Submitted Pursuant to Third Circuit LAR 34.1(a)
March 11, 2003
Before: RENDELL, AMBRO and MAGILL*, Circuit Judges
(Filed: March 14, 2003)
OPINION OF THE COURT
____________________
*The Honorable Frank J. Magill, Senior Circuit Judge for the Eighth Circuit, sitting by
designation.
RENDELL, Circuit Judge.

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William M. Hendrickson, Inc. (“Hendrickson”) appeals the judgment of the District
Court in favor of National Railroad Passenger Corporation (“Amtrak”) on Hendrickson’s
breach of contract and misappropriation of trade secrets claims. We will affirm.
Hendrickson is a Pennsylvania corporation with its principal place of business in
Pennsylvania. Amtrak is a federal corporation chartered under the laws of, and with its
principal place of business in, the District of Columbia. The District Court had diversity
jurisdiction under 28 U.S.C. § 1332 and federal question jurisdiction under 28 U.S.C. §§
1331 and 1349. We exercise jurisdiction over the Court’s final order pursuant to 28
U.S.C. § 1291.
As we write solely for the parties, we recite only those facts necessary to our
analysis. Hendrickson contracted with Amtrak to provide air conditioning units for
Amtrak’s railroad cars. These air conditioning units contained a specific refrigerant known
as a “R134A” refrigerant. Amtrak terminated its final contract with Hendrickson because
Hendrickson did not meet the stated delivery schedule. After terminating its contract with
Hendrickson, Amtrak developed a performance specification for an R134A air conditioning
system with the intent of holding a new competitive bid for the system. Amtrak then
contracted with RAM Motors & Controls, Inc. to provide air conditioning units.
Hendrickson filed suit against Amtrak for breach of contract and misappropriation
of trade secrets. After a bench trial, the District Court found in favor of Amtrak on both
counts. Hendrickson now appeals, arguing that the Court misapplied Pennsylvania law in

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interpreting the contract, and in finding no misappropriation. We review the Court’s
interpretation of the law, including its construction of the contract, de novo, and its findings
of fact for clear error. Coalition to Save Our Children v. State Bd. of Educ. of Del., 90 F.3d
752, 759 (3d Cir. 1996).
We will affirm the District Court’s judgment on both claims. On the breach of
contract claim, we agree with the Court that the delivery schedule was part of the contract.
See Pa. Cons. Stat. Ann. § 2207(b). We also agree that Hendrickson was in default of the
contract because it failed to perform according to the delivery schedule, that the delivery
dates were essential terms of the contract, see Pa. Cons. Stat. Ann. § 1205(d), and that
Amtrak did not cause Hendrickson’s inability to perform by returning non-defective units,
withholding funds, or not providing Hendrickson with a steady flow of purchase orders.
See Apalucci v. Agora Syndicate, Inc., 145 F.3d 630, 634 (3d Cir. 1998) (citing
Pennsylvania law for the rule that “when one party to a contract unilaterally prevents the
performance of a condition upon which his own liability depends, the culpable party may
not then capitalize on that failure”). The Court accordingly did not err in concluding that
Amtrak was not liable for breach of contract.
With respect to the misappropriation of trade secrets claim, we agree with the Court
that Hendrickson has not proven that 1) it held a trade secret in the design of its R134A
unit, 2) a confidential relationship existed between Hendrickson and Amtrak with respect to
the trade secret, or 3) Amtrak disclosed or used (or will disclose or use) the trade secret.
See DEN-TAL-EZ v. Siemens Capital Corp., 566 A.2d 1214, 1228-29 (Pa. Super. 1989)

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(following Restatement of Torts § 757). The Court accordingly did not err in concluding
that Amtrak was not liable for misappropriation.
Because the District Court correctly interpreted Pennsylvania law regarding breach
of contract and misappropriation of trade secrets, and its findings that Amtrak was not
liable to Hendrickson on either claim were not clearly erroneous, we will affirm.
____________________

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TO THE CLERK OF COURT:
Please file the foregoing not precedential opinion.
Judge Marjorie O. Rendell
Circuit Judge

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