In a landmark case that has major implications for certification organizations nationwide, the National Commission for the Certification of Crane Operators (NCCCO) recently prevailed in a lawsuit brought against it in California Superior Court by California Crane School (CCS) and its owner, John Nypl. After deliberating for less than one day, a 12-member jury returned a complete defense verdict for NCCCO, awarding CCS and Nypl nothing.
In the suit, Nypl claimed that NCCCO and its testing services provider, International Assessment Institute (IAI), intentionally interfered with certain business relationships of CCS and Nypl, with the intention of causing them harm. Nypl sought more than $5 million in damages.
“NCCCO vigorously defended this action in the firm knowledge and belief that its treatment of CCS and Mr. Nypl has been fair and appropriate,” stated NCCCO President John M. Kennedy. “The decision of the jury in favor of NCCCO is a vindication of the steps NCCCO was obliged to take to prevent damage to the quality and integrity that has become a hallmark of CCO certification over the past fifteen years."
CCS and Nypl originally demanded more than $30 million from NCCCO. The plaintiffs filed their initial complaints in Oakland and Nevada City, Calif., but NCCCO filed successful motions to transfer the litigation to Sonora. The original case also asserted claims for alleged violations of California’s antitrust and unfair competition laws, but those claims were thrown out before trial. Eventually, the case went to trial only on two surviving claims for alleged business interference.
“Whenever there is evidence of inappropriate conduct by firms or individuals who desire to participate in CCO certification programs, NCCCO has an obligation to ensure they comply with all prevailing policies and procedures,” said NCCCO Executive Director Graham Brent. “To do otherwise could undermine the integrity of CCO certification and put at risk those who rely on it to mitigate the hazards associated with working around cranes.”
Last year, in a separate action brought by NCCCO, a federal judge found that CCS and Nypl were in civil contempt for violating
This suit is actually the third that NCCCO and CCS have been involved in.
According to NCCCO, in the first suit, brought by NCCCO against Nypl and California Crane School in federal court in 2005, NCCCO asserted that Nypl paid an examiner to obtain copies of questions from NCCCO’s confidential written examinations, and that CCS used the confidential information in its test preparation materials. NCCCO discovered that its examinations had been misappropriated when a whistle-blower, who worked for CCS, turned over various materials to NCCCO. The materials included NCCCO’s confidential exam questions and answers, as well as some of CCS’s training materials that incorporated NCCCO’s confidential information (even down to typographical errors). As a result, NCCCO filed the first lawsuit in 2005 with legal claims including copyright infringement, unfair competition, and misappropriation of trade secrets.
Nypl and CCS quickly agreed to settle the lawsuit and to accept entry of a Stipulated Permanent Injunction against them. As part of the Settlement Agreement, Nypl and CCS agreed to return the examination materials to NCCCO and to pay $25,000 to NCCCO. In addition, the Stipulated Permanent Injunction prohibited Nypl, CCS, and their representatives from using the “CCO” acronym in any form without express written permission, among other things. Later, NCCCO discovered that Nypl and CCS had continued to use the “CCO” acronym in at least 14 domain names, some of which were also set up to re-direct Internet users to CCS’ main website.
In the second suit, filed in 2008, the same federal judge from the first suit found that Nypl and CCS had breached the previous Settlement Agreement and violated the Stipulated Permanent Injunction. Among other things, the judge ordered them to pay nearly $300,000 to NCCCO as a penalty for their contempt of court, and the judge entered a final judgment that NCCCO was the prevailing party. So far, Nypl and CCS have refused to pay that penalty and are appealing the judgment.
In the third suit, brought this time in state court by Nypl and CCS, a 12-member jury found in favor of NCCCO after a four-week trial in Sonora, Calif. In the Sonora case several claims made by CCS, including claims under the Cartwright Act, were dismissed by the judge at an earlier stage of the case, and then the jury decided the remaining claims in favor of NCCCO.