Powder Coating Consultants v. The Powder Coating Institute
To prove "ascertainable loss," a business that pays dues to a nonprofit trade organization and that alleges that the nonprofit began to compete directly can be required to prove it was damaged as a result of the defendant's provision of consulting services. The plaintiff, PCC or Powder Coating Consultants, is a Connecticut engineering firm that trains employees to use powder coating equipment. PCC pays dues to a nonprofit trade organization, the defendant, Powder Coating Institute, also known as PCI. In 2008, PCI allegedly decided to provide lab tests. PCI proceeded to hire new workers and to offer services as a trouble shooter and a trainer of employees. PCC sued PCI, alleging it engaged in direct competition when it provided services to 14 businesses. PCC argued that PCI's bylaws and mission statement indicated it would act in the best interests of members and that PCI would not compete directly. PCC alleged that PCI breached a contract and engaged in unfair trade practices, in violation of CUTPA, the Connecticut Unfair Trade Practices Act. To prevail, the plaintiff is required to prove it sustained damage as a result of the defendant's provision of consulting services. The defendant argued that the plaintiff's lost profits claims were conjectural. Lost profits can be computed based on past profits. A plaintiff may not recover for the potential of profitability, pursuant to Beverly Hills Concepts Inc. v. Schatz and Schatz, a 1998 decision of the Connecticut Supreme Court. Evidence presented must provide a sufficient basis to estimate lost profits with reasonable certainty, pursuant to Bridgeport Harbour Place I LLC v. Ganim, a 2011 decision of the Connecticut Appellate Court. Here, the plaintiff maintained it sustained a substantial injury based on a decline in profits. The court found that PCC failed to establish "ascertainable loss," as a result of PCI's alleged competition. "No evidence," wrote the District Court, "suggests that PCC would have secured the business." Because "PCC cannot prove that it was damaged or injured by PCI's conduct," the District Court granted PCI's motion for summary judgment on breach of contract and CUTPA counts.