Full opinion text
ORDER JAMES C. FOX, District Judge. I. PRELIMINARY STATEMENT This case was instituted on May 4, 1983, as a federal antitrust action brought by Spring Hope Rockwool, Inc., (Spring Hope) a manufacturer of rockwool fiber insulation. One month and ten days later, a sister corporation, Casa Grande Rockwool, Inc. (Casa Grande) filed a second antitrust action against Owens-Corning Fiberglas Corporation (Owens-Corning OR OCF). Casa Grande was merged into Spring Hope on July 1, 1983. Spring Hope changed its name to American Rockwool, Inc. (American Rockwool) on September 20, 1983. In the two initial complaints, as well as the First Amended and Consolidated Complaint filed in January, 1984, plaintiff alleged a wide variety of both federal and state antitrust and unfair trade actions, nine separate counts in all. Plaintiff also asserted three common law claims: defamation, disparagement, and unfair competition. On December 9, 1985, plaintiff filed a motion for leave to file its Second Amended and Consolidated Complaint; subsequently, the court granted plaintiffs motion and this complaint was filed on January 21, 1986. By virtue thereof and stipulations of the parties, plaintiff has eliminated all claims except those hereafter discussed. Defendant has also filed a counterclaim. After certain preliminary motions were resolved, broad discovery was undertaken by both sides. This discovery included interrogatories, production and review of voluminous business records, and the depositions of numerous party and non-party witnesses. The discovery in this case has been thorough and exhaustive. Accordingly, the extensive factual record on which plaintiffs claims and defendant’s counterclaim are premised has been fully developed. The parties have filed cross-motions for summary judgment and have filed extensive briefs in support thereof. In addition, the court heard oral argument on these motions for two days — January 9-10, 1986. The motions are ripe for disposition, and the court enters this order in response thereto. A. Summary of Defendant’s Argument The plaintiff’s claims attack the sales and marketing practices of Owens-Corning during the years 1981 to the end of 1985. These claims are predicated upon Owens-Corning’s advertising, technical bulletin, and promotional practices with respect to both plaintiff’s products and Owens-Corning’s products. In essence, plaintiff’s case has been reduced to causes of action for unfair competition under North Carolina’s antitrust statutes; false advertising under the Lanham Act; and disparagement, and unfair competition under the applicable common law. Owens-Corning seeks summary judgment or at least partial summary judgment as to each of these claims. Owens-Corning argues that the controlling law and undisputed facts support summary judgment on each claim in the following respects: First Claim for Relief (1) North Carolina General Statute § 75-1.1 (§ 75-1.1) only applies to conduct occurring within the state of North Carolina. The statute has no application to publications, statements, prices or other conduct that plaintiff attributes to Owens-Corning in states such as Arizona, Texas, Florida, Tennessee, Georgia, etc. Accordingly, Owens-Corning seeks partial summary judgment on the grounds that § 75-1.1 does not apply to its alleged misconduct that occurred in states other than North Carolina. (2) As to conduct occurring within the state of North Carolina, Owens-Corning argues that in order to establish a violation of § 75-1.1 plaintiff must prove that Owens-Coming’s alleged misconduct had an adverse effect on competition in the relevant market, and that there is no evidence of such effect. (3) As to conduct occurring within the state of North Carolina, Owens-Corning argues there is no evidence that Owens-Corning’s alleged misconduct proximately caused plaintiff to be damaged in an amount that can be established with a reasonable degree of certainty. Second Claim for Relief. (1) North Carolina General Statute § 75-5(b)(3) (§ 75-5(b)(3)) only applies to conduct occurring within the State of North Carolina. Said statute has no application to publications, statements, prices or other conduct that plaintiff attributes to Owens-Corning in states such as Arizona, Texas, Florida, Tennessee, Georgia, etc. Accordingly, Owens-Corning seeks partial summary judgment on the grounds that § 75-5(b)(3) does not apply to its alleged misconduct that occurred in states other than North Carolina. (2) As to conduct occurring within the state of North Carolina, there is no evidence that Owens-Corning engaged in conduct in North Carolina that was designed willfully to destroy or injure the plaintiff for the purpose of “attempting to fix the price” of insulation once plaintiff is out of business as prohibited by § 75-5(b)(3), nor of any damage to plaintiff caused thereby. Third Claim for Relief. Plaintiffs claim under the Lanham Act, 15 U.S.C. § 1125(a), fails because plaintiff has not identified any evidence that Owens-Corning (a) made a false statement about its own product that (b) actually deceived or had the tendency to deceive a substantial number of customers and (c) plaintiff was or is likely to be injured as a result of such statements. Fourth Claim for Relief. As to the disparagement claim Owens-Coming takes the position that there is no evidence of a causal connection between Owens-Coming’s alleged misconduct and any damage to plaintiff. Fifth Claim for Relief. There is no evidence of unfair competition other than the alleged disparagement of plaintiffs product. B. Summary of Plaintiff s Argument The defendant’s counterclaim is predicated upon false advertising under the Lanham Act, and unfair competition under the applicable common law. In Count One of its counterclaim, defendant asserts that plaintiff has made false and misleading statements about the performance characteristics of its “Spring Brand” and “American” rockwool insulation, which have deceived and are likely to continue to deceive customers in their purchasing decisions. These statements allegedly have been made on the product labels themselves, as well as orally and in writing to various customers of plaintiff and defendant, in violation of Section 43(a) of the Lanham Trademark Act, 15 U.S.C. § 1125(a). Defendant alleges that the statements have injured it and are likely to continue to do so, in that its sales have been diverted to the plaintiff and there has been a lessening of the good will that defendant and its fiberglass insulation product enjoy with its customers. In Count Two, defendant asserts that this same alleged conduct by plaintiff is unreasonable, unfair, illegitimate and unjustified, and as such constitutes unfair competition in violation of the common law. With respect to defendant’s Lanham Act claim, plaintiff asserts two bases for its motion for summary judgment: first, plaintiff contends that defendant cannot prove that plaintiff’s bag labels are false with respect to the performance characteristics of its loosefill insulation; second, plaintiff argues that even assuming the falsity of its bag labels, defendant cannot prove that it was injured thereby. These same arguments apply to plaintiff’s motion for summary judgment with respect to defendant’s claim of unfair competition, in that the factual basis for both of defendant’s claims is the same. II. STATEMENT OF FACTS Owens-Coming is a Delaware corporation with its principal place of business in Toledo, Ohio. The principal business of Owens-Corning involves the manufacture of glass fiber products in two basic forms: (1) a wool-like material used for thermal and acoustical insulation and other construction products, and (2) textile filaments which are combined into strands, yams or mats and used for weaving fabrics and for reinforcing plastic, rubber and paper products. For example, Owens-Corning manufactures residential, industrial and commercial insulations, ceiling and roofing materials, and shingles which are purchased by all segments of the building construction industry. American Rockwool traces its roots back to 1977 when it was formed by Oliver M. Gould, a resident of Dallas, Texas. Gould first became involved in the manufacture and sale of rockwool fiber insulation products in 1951 when he went to work for Rockwool Insulating in Pueblo, Colorado. Approximately four years later, Gould became president of Texas Rockwool, a successor to Rockwool Insulating of Colorado. Gould continued as president of Texas Rockwool until 1972. Thereafter, the name of the company was changed to Rockwool Industries, and Gould remained president until 1974. In 1974, Rockwool Industries terminated Gould’s employment. After a two year hiatus from the insulation industry, Gould decided to build his own rockwool factory in a section of the country where there were no other producers. He located his first rockwool plant in Spring Hope, North Carolina. Construction on the production line was begun in 1977 and completed by July of 1978. Gould and his wife are the sole stockholders of Spring Hope and its successor, American Rockwool. When Spring Hope first entered the insulation industry, it concentrated on selling to insulation contractors within a 400 mile radius of Rocky Mount, North Carolina. During the first two years of operation, the company was substantially below Gould’s projections as to gross sales. Gould attributed his inability to meet his initial projections in sales to two things; first, there were start-up problems with the plant, and second, there was a recession in the building industry. Gould also acknowledged that during the time period 1978 to 1980, he had complaints from customers regarding lack of “coverage” and dustiness with his product. The term “coverage” refers to the number of square feet a given volume of insulation material will cover. For example, the “Blowing Wool Installation Coverage Chart” which is printed on the bags utilized by American Rockwool indicate that one bag of material will provide an insulation value of R-ll in an area of 58 square feet. Stated another way, the coverage one can achieve with a 29 pound bag at an R-ll insulation value is 58 square feet. In addition to coverage and dustiness, Gould also indicated that customers had complained of excess “shot” in his company’s product. Shot are tiny pieces of material which do not fiberize (turn into fiber during the production process), but instead come through the production process in the form of tiny pellets. Shot is not a desirable waste product to have in rockwool insulation because it provides no insulation value. These quality problems hurt American Rockwool in the market place. A. Manufactured Housing From start-up until roughly September of 1980, the company made no sales to manufactured housing producers. (Although loosefill insulation has been used for many years to insulate the ceilings of site-built housing, until roughly 1979 loose-fill rockwool generally was not marketed to manufactured housing producers.) In the early fall of 1980, Spring Hope hired Ronald Hepler, a former salesman with Owens-Corning and Rockwool Industries. Hepler had been responsible for manufactured housing accounts at both Owens-Corning and Rockwool Industries, and had helped Rockwool Industries make its first loosefill sales to manufactured housing customers. In November, 1980, with Hepler’s assistance, Spring Hope made its first sale to a manufactured housing account, Brigadier Industries. Brigadier obtained approval from its design approval agency (DAPIA) to install Rockwool loosefill in the ceilings of its manufactured homes, leased a blowing wool machine from Spring Hope, and began purchasing rockwool loosefill manufactured at the Spring Hope facility. Spring Hope developed marketing plans which identified potential manufactured housing accounts in the southeastern United States and assigned territory salesmen to develop these accounts. Although continuing to call on insulation contractors and to sell its product into that market, sales representatives of American Rockwool began to market the company’s loosefill products to manufactured housing producers. From November 1980 up to May 31, 1981, the company met with success in its selling efforts. During that time, it installed blowing machines and began selling its loosefill product to the following manufactured housing producers: Customer Location Date Machine In Brigadier Nashville, NC 11/18/80 Brigadier (Knox) Spring Hope, NC 12/3/80 Wick (Marshfield) Henderson, NC 12/3/80 Vintage Gainesville, GA 2/2/81 Trinity Siler City, NC 3/19/81 All American Ashburn, GA 4/6/81 All American (Family Housing) Ashburn, GA 4/28/81 All American (Heritage Housing) Pearson, GA 5/4/81 Sumney Dallas, NC 5/4/81 All American Bear Creek, AL 5/11/81 All American Bear Creek, AL 5/11/81 All American Lake City, FL 5/18/81 In response to efforts to market rock-wool insulation, Owens-Corning engaged in a sales campaign wherein it questioned the suitability of rockwool loosefill as a product for use in mobile homes. On August 27, 1979, Owens-Coming’s Manufactured Housing Marketing Division (“MHMD”) sent a memorandum to Owens-Coming’s sales managers and manufactured housing salespersons informing them of alleged “limitations” of using rockwool loosefill to insulate mobile home ceilings. Among these alleged “limitations” were the “settling and shifting of the insulation ... as the home is transported over the highway, causing reduced thermal performance.” At the time this memorandum was circulated, Owens-Corning had not performed any tests of possible settling and shifting of loosefill insulation installed in homes transported over the road. By early 1980, MHMD had requested Owens-Coming’s research and technical personnel in Granville, Ohio, to perform an analysis of the use of loosefill in manufactured home ceilings. MHMD’s concern regarding competition from loosefill is reflected in a memo of February 8, 1980, from Eric Heaton of MHMD to Richard Bemis of the OCF Granville laboratories: The Manufactured Housing Divisions [sic] number one priority is the loose fill analysis. These type products represent a major threat to both our unusually high market share and our pricing stability. As it stands now, I find any delay unacceptable____ My concern is even heightened with our recent rapid escalation in price which has increased the price spread between batts and these loose fill type products. An issue MHMD asked Granville to investigate was the potential settling and shifting of loosefill insulation installed in homes transported over the road. A settling study was conducted by Owens-Corning and was performed by Larry Brand of OCF’s Granville laboratories in the spring of 1980. In an experiment in which a mobile home insulated in part with Rockwool Industries’ loosefill was transported 200 miles, Brand observed an average reduction in thickness of less than 15% for the rockwool loosefill after transportation. The amount of settling observed by Brand could be compensated for by the addition of material at the outset. Owens-Coming’s technical staff developed a computer model for projecting the amount of material that would have to be installed at the outset such that the desired R-value would be achieved after over-the-road transportation, if the amount of settling observed by Brand occurred. Based on its computer model, OCF determined that for rockwool loosefill, depending on the design R-value and the distance of transportation, from two to five percent (2-5%) more material would be required at the outset to insure that the design R-value was present after transportation. Brand concluded that properly installed loosefill, with a cushion to compensate for settling, “will produce the same thermal performance as properly installed batts,” and that “[l]oose-fill products are viable insulations to consider for the mobile home attic market.” By June of 1980, Harry Gautsche, the head of MHMD, reported to Owens-Corning sales personnel that “[t]he general opinion of the results [of the settling study] is that definite [sic] settling occurs which must be a serious consideration before dropping batts.” As the next phase of their loosefill analysis, in the late summer of 1980, representatives of Owens-Corning visited two manufactured housing plants in California which had begun to install rockwool loosefill in the ceilings of their homes. (One plant was operated by Fuqua Industries and the other by Golden West Homes.) In reporting on this trip, Heaton again expressed concern about competition from rockwool loosefill: The urgency of the situation is real and demands our immediate close attention. The magnitude represents a real threat, not only to our share in the West Coast area, but possibly our National share position over the next several years. This major threat is to our batt business, not only in the ceilings, but also the floors of all manufactured homes. Heaton reported that there appeared to be “no technical or mechanical reasons” for not blowing rockwool loosefill into mobile home ceilings. In October, 1980, Owens-Corning technical personnel made a subsequent visit to the Golden West and Fuqua plants to observe the installation of rock-wool loosefill. Based on Owens’ examination of the two rockwool systems at Golden West and Fuqua, in January of 1981, Owens-Corning prepared a techno-economic analysis (“TEA”) concerning the use of loosefill rockwool in manufactured housing. The TEA discussed generically the relative advantages and disadvantages of using fiberglass batts versus loosefill rockwool in manufactured homes. No particular manufacturer of rockwool was identified in this document which was published in the fall of 1982. This document reported the results of tests conducted by Owens-Corning of the settling of loosefill rockwool insulation in the ceilings of mobile homes during over-the-road transportation. The document also reported various observations made by technical representatives of Owens-Coming during a visit in the fall of 1980 to the two mobile home plants in California. The principal conclusions of the TEA were that, at the time of the OCF visit in September, 1980, Fuqua was installing substantially more loosefill material than recommended by the manufacturer (and thus not realizing anticipated economic savings) and Golden West was not controlling its operation sufficiently to insulate to the desired R-value. Owens-Corning attributed these problems “to the lack of in-depth training and support given by Rockwool Industrie[s]” to Fuqua and Golden West. The TEA also concluded that “[t]here exist no technical reasons why loosefill cannot be used to insulate mobile home ceilings.” The TEA then provided a list of the alleged advantages and disadvantages of loosefill and batts for use in mobile home ceilings. For example, it listed as a disadvantage of loosefill the need to compensate for possible settling. In the spring of 1981, Owens-Corning personnel became aware that Spring Hope was making sales calls on manufactured housing accounts in the Southeast and was meeting with some success. In response to this competition, Owens-Corning personnel formulated a strategy of questioning the suitability of rockwool loosefill for use in manufactured housing. As a result, Spring Hope began to encounter difficulties with some of its manufactured housing customers and to have difficulty making new sales. Some of the company’s existing customers began to question whether loosefill rockwool was suitable for use in manufactured housing. Sales personnel from Spring Hope responded to these customer inquiries and concerns. On April 13, 1981, Heaton of OFC held a conference call with the OCF Southeast Regional Sales Manager, Walt Crotty, and the sales managers of Owens-Corning’s Florida, Atlanta and Carolina branches to outline their competitive strategy. Sales personnel were to pick up all information about Spring Hope Rockwool. On April 16, 1981, Heaton sent to the southeastern sales managers a copy of the summary pages from the January TEA, including the “material comparison.” Conclusion No. 4 that rockwool loosefill is suitable for use in mobile home ceilings was deleted. This document was circulated in response to calls by American Rockwool personnel on manufactured housing producers located in the Southeast. In the following weeks, Owens-Corning salesmen gathered information on the Spring Hope product and made presentations to mobile home accounts based on the information provided by Heaton in the conference call and memorandum. Based on reports from the field, on May 22, 1981, Heaton prepared an analysis of the Spring Hope competitive threat. In his analysis he noted Spring Hope’s success in making a sale to Brigadier Industries, and expressed his concern that this represented “the proof statement that it [insulating manufactured home ceilings with rockwool loosefill] can be done.” In June of 1981, Ben Coe, Owens-Coming’s National Sales Manager, expressed concern about the use of loosefill in manufactured housing and the possible loss of sales to Owens-Corning. Gautsche replied that he had set up a loosefill strategy meeting in the Southeast for later in the month; that he was preparing a technical bulletin to meet this competitive situation; and that technical presentations were to be made to the Vintage and Brigadier accounts on June 25 and June 26 respectively. The technical bulletin to which Gautsche referred was prepared by John Blank of Owens-Corning’s technical services staff. This technical bulletin, dated June 15, 1981, which Blank condensed from the TEA and distributed to the sales force, states that batt insulation “is a more viable alternative for insulating mobile home ceiling[s]” than loosefill. Owens-Corning did not acknowledge a superior thermal performance of ceilings insulated with loosefill versus batts of comparable R-value. Blank generalized that “experience has shown that operators become confused as to whether they should blow ‘inches’ or ‘bags.’ ... [and] that manufacturers do not give the extra attention that is needed for the proper installation.” He also stated that (1) using loosefill requires a “sizeable” capital investment in a blowing machine and spare parts; (2) installing loosefill “requires a high skill and knowledge level by the operator”; and (3) batt insulation “has a consistent R-value,” and requires less quality control by the home producer than loosefill. Blank concluded by telling the OCF sales people that “[t]his information should be helpful to you and your customers when and if you are presented with questions on the use of [rockwool loosefill] in mobile homes.” On June 24, 1981, a loosefill strategy meeting for Owens-Corning’s southeastern region was held in Atlanta, Georgia. Owens-Corning sales personnel met with Crotty, Heaton, and others to be instructed on Owens’ corporate strategy for combatting the rockwool competition. During this time, Owens-Corning was assembling what became known as the “hit team,” whose mission was to make detailed technical presentations to manufactured housing producers in order to persuade them not to purchase rockwool loosefill. The “hit team” consisted of an Owens-Corning technical person who was primarily responsible for the technical presentation, Heaton or Gautsche from MHMD, and a branch representative and/or the local salesman responsible for the particular account. The “hit team” presentation, which was illustrated with slides or other visual aids and lasted for an hour to an hour and a half, was based on the Brand settling study and the TEA. The purpose of the presentation was to make the customer “know of [OCF’s] conclusions ... where we found the process inappropriate.” While the Brand study concluded that 2-5% additional material was needed, the “hit team” suggested to manufacturers, that 11% more material would be required to compensate for settling, resulting in a “substantial cost penalty.” From the summer of 1981 at least until the summer of 1983, the “hit team” continued to present the experiences of Fuqua and Golden West as typical of what mobile home producers could expect if they bought rockwool loose-fill. In its “hit team” presentations Owens-Corning also described the relative merits of loosefill and batts. Two of the earliest “hit team” presentations were made by Blank and Heaton to Vintage and Brigadier, on June 25 and 26, 1981, following the Atlanta strategy session. Heaton followed up his meeting with Vintage with a letter to purchasing agent Bill Carney in which Heaton made various statements about rockwool loosefill. On July 7, 1981, Gautsche directed Crotty “to communicate the loosefill threat to mobile homes in the Southeast Region.” He instructed Crotty that sales personnel should determine if non-national accounts had been contacted by Spring Hope and, if so, inform them that “there is damaging evidence and high risk” to using rockwool, and offer to present this information. Certain national account customers were not to be contacted at that time. Other customers were identified as “ ‘target customer home offices’ that should be contacted and presented technical information____” These “targets” included Brigadier, Wick, Horton, Oakwood, Homes of Merit, Nobility and Peachtree. On July 13, 1981, Crotty made recommendations to Gautsche on loosefill strategy. Although he viewed the loosefill threat as a regional problem centered around the Spring Hope location, Crotty suggested that the company approach it on a “national level” to be more effective. Specifically, he suggested that if the company took the approach that these technical presentations were for the good of the industry, rather than a competitive response to a particular company, the presentations might be more persuasive and effective. In coaching his branch sales managers on responding to loosefill competition, Crotty directed them to emphasize with customers that “settling and shifting ... make desired in-place R-value performance extremely doubtfu[l].” On September 24, 1981, Gautsche informed OCF regional and branch managers of the arguments available to combat rock-wool loosefill competition. In addition to the Technical Bulletin, the Hit Team, and the TEA, Gautsche identified the Brand settling study, which Gautsche stated revealed “the serious problem of over-the-road movement of rockwool in mobile home ceilings.” He also stated that installing rockwool loosefill rather than batts in mobile home ceilings would “dramatically” aggravate potential ceiling sag. Finally, Gautsche stated he had test data which “raise[d] suspicion of advertised coverage and resulting R-values” of Spring Hope rockwool. Thus, upon learning in March or April of 1981 that Spring Hope had begun marketing its product to mobile home accounts in the Southeast, Owens-Corning immediately began making technical presentations to customers, convened a meeting of its sales personnel located in the Southeast to instruct them on handling this competitive threat, and assembled a “hit team” to call on key customers to prevent loosefill rock-wool from establishing itself in the manufactured housing market place. Presentations were made to accounts who were not Owens-Coming’s accounts, such as Brigadier, allegedly because of Owens’ concern that acceptance by such national level manufacturers as Brigadier would gain rock-wool general acceptance in the marketplace. American Rockwool contends that this alleged campaign directed at rockwool loosefill competition has continued. In addition to the Hit Team presentations, Owens-Coming’s statements about rockwool loosefill allegedly have been packaged in various new forms, such as letters to customers and a formal publication of the contents of the hit team presentation (the “White Paper”). B. Site-Built Homing: Casa Grande Rockwool Batts In November of 1982, Mr. Gould leased a rockwool manufacturing facility located in Casa Grande, Arizona, established a company known as Casa Grande Rockwool, Inc., and began operating the company in conjunction with his operations in Spring Hope, North Carolina. At the Arizona facility, the company manufactured both loosefill and batt rockwool products. At the time Gould leased the facility, it was owned and operated by the Del Webb Company primarily to furnish insulation products to the company’s many construction projects in the Arizona area. After taking over the plant, Mr. Gould determined that certain improvements in the Casa Grande operation were needed. The plant was utilizing a four-wheel spin, a fiberization process which has operational problems not found with horizontal spinning. Accordingly, the line was rebuilt and a horizontal spinning system was installed. In addition, other changes were made in plant operations which resulted in an improved batt product. The company also enhanced its marketing efforts with insulation contractors and expanded sales of loosefill products to manufactured housing producers in the area. In particular, the company increased efforts to sell rockwool batt products to insulation contractors. As a result, American Rockwool’s sales of batt products to insulation contractors substantially increased from November of 1982 (the first month of sales) to April, 1983. Owens-Corning sales representatives recognized the competitive pressure from Casa Grande. Because rockwool products are generally priced below fiberglass insulation products, Owens-Corning’s Phoenix sales representative Elizabeth Ditmars became concerned about the loss of sales to Casa Grande. She recommended to her superiors that Owens-Corning test the thermal performance of the Casa Grande batts and, if the products should perform poorly, call that to the attention of customers in the hope of eliminating competition from Casa Grande. With the consent of her superiors, she obtained samples of Casa Grande R-ll, R-13, R-19 and R-30 products and shipped them to Owens-Corning’s Granville, Ohio, testing laboratory. Neither Ms. Ditmars nor the Owens-Corning testing personnel have been able to identify exactly when the samples for this series of tests were collected. In late April or early May, representatives of American Rockwool learned that Owens-Corning planned to circulate a letter discouraging the use of American Rock-wool batt products. The company unsuccessfully attempted to contact Owens-Corning representatives to determine the nature of the alleged deficiency in American Rock-wool products and to obtain any underlying test results. On May 6, 1983, Owens-Corning mailed a letter at issue here to approximately 60 insulation contractors, approximately 25 building inspectors, state and other government officials, and about 45 builders and general contractors. The letter, which was mailed directly by Owens-Corning to persons located in Arizona, Utah, Nevada, New Mexico and Texas, represented to customers that a purchaser of Casa Grande batts “is not getting the R-value he is paying fo[r]” and that contractors who install Casa Grande batts “can be liable for up to $10,000 fine every time the product is installed.” After the publication of the letter, Casa Grande batt sales became flat and the rapid increase in the sales over the past six months ceased. The letter was circulated beyond the five-state area into which it originally was sent by Owens-Corning. The May 6, 1983, letter was picked up in the field by other competitors of American Rockwool, such as Rockwool Industries, and it was utilized by them with its customers. In fact, Rockwool Industries circulated a letter to its sales representatives nationwide. Insulation contractors do not have thermal testing facilities and generally view Owens-Corning as being technically proficient and reliable. Customers regard Owens-Corning as the technical leader in the insulation industry (a reputation which Owens cultivates), making it difficult for a small company like American Rockwool to counter adverse comments about its products. C. Growth of American Rockwool, Inc. During Relevant Time Period In 1984, Gould broke ground for a third plant in Texas. The new plant in Texas will be similar to the Spring Hope plant, except that its production system will be different from the type presently in use at Spring Hope and Casa Grande. Gould testified that he made the decision to build a third plant in Texas as a result of his decision to focus the sales of the company on manufactured housing customers. Thus, since the opening of the Spring Hope plant in July, 1978, American Rock-wool has added two additional plants, one in Arizona, and one in Texas that is scheduled to go into operation in early 1986. According to Gould, all three plants have roughly the same capacity. Ironically, the increase in value of American Rockwool and its expansion from one plant to three has occurred during the same time frame (August 1981 to December 31, 1985) in which American Rockwool alleges that it was damaged by Owens-Corning. In addition to tripling its production capacity by adding two additional plants over the past four years, American Rockwool also increased its sales dramatically. American Rockwool’s gross sales from its Spring Hope and Casa Grande plants have increased by over 370% between 1980 and 1984. Compared to other suppliers in the marketplace, American Rockwool’s performance is phenomenal. For example, during the same period, Gould’s former employer Rockwool Industries (Susquehanna) enjoyed a 23.3% increase in sales while Owens-Coming’s sales of insulation products increased by 19.6%. As for the demand for insulation products during this time period, manufactured housing units increased by 33.3% and permits for conventional housing increased 39.8%. Thus, American Rockwool’s gain in market share during the period under consideration has rapidly increased. III. ANALYSIS We begin our random walk through the North Carolina Statutes, and the common law causes of action upon which plaintiff predicates its claims with the discussion of the legal applicability of the North Carolina General Statutes to the operative facts. Initially, the court notes that the operative facts which form the predicate for plaintiff’s North Carolina statutory claims, as well as its common law claims, are those of defendant’s alleged disparagement of plaintiff’s product — rockwool loosefill insulation. We turn first to the application of N.C.GEN.STAT. § 75-1.1. A. North Carolina General Statute § 75-1.1 1. Extra-territorial Application While it is true as a general matter that North Carolina law — whether statutory or resulting from judicial interpretation — does not apply to conduct occurring outside of North Carolina, under some circumstances conduct occurring outside of the state will be governed by North Carolina law if it is clear that such law so intends and that the application thereof is constitutionally permissible. Of course, no North Carolina statute which by its own terms is limited to in-state conduct can be applied to conduct occurring outside the state. Section 75-1.-1, however, is not so limited. Indeed, before 1977, § 75-1.1 was specifically limited to dealings between persons “within this state.” In 1977, however, the Legislature amended the statute and deleted this geographic limitation. In re-writing § 75-1.1, the General Assembly expanded an effective cause of action for individuals and businesses in North Carolina who have been victimized by unscrupulous methods of competition or trade practices. The court perceives that the General Assembly intended to hold parties causing injury in North Carolina accountable in the courts of this state, insofar as possible. See N.C. GEN.STAT. § 1-75.4(4) (providing jurisdiction over foreign acts that cause local injury.) By enacting § 1-75.4(4), “it is apparent that the General Assembly intended to make available to the North Carolina court the full jurisdictional powers permissible under federal due process.” Dillon v. Numismatic Funding Corp., 291 N.C. 674, 676, 231 S.E.2d 629, 630 (1977). By deleting the geographic limitation from § 75-1.-1, the General Assembly made this statute available to the full extent permissible under conflicts of law principles and the Constitution. Such intent being evident, it is necessary to determine whether the effectuation of such intent is prohibited by constitutional proscriptions. At the outset, it is recognized that for North Carolina’s substantive law to be applied in a constitutionally permissible manner to the instant litigation, North Carolina must have a significant contact or significant aggregation of contacts, creating state interests, such that the application of North Carolina’s law is neither arbitrary nor fundamentally unfair. Allstate Insurance Co. v. Hague, 449 U.S. 302, 312-13, 101 S.Ct. 633, 639-40, 633 L.Ed.2d 521 (1981) (opinion of Brennan, J.). In the instant case, the operative facts have sufficient contact to North Carolina, the forum state, to justify the application of its law. American Rockwool is a North Carolina resident (as was its predecessor Spring Hope) incorporated and maintaining its principal place of business in North Carolina. North Carolina has a proper interest in protecting North Carolina based businesses from what it perceives to be unfair tactics of competitors, not only because such businesses are residents of the state, but also because they contribute substantially to the state’s tax base and to the employment of its citizens. Moreover, Owens-Corning has been present doing business in North Carolina. In the words of the plurality in Allstate: By virtue of its presence, [the defendant] can hardly claim unfamiliarity with the laws of the host jurisdiction and surprise that the state courts might apply forum law to litigation in which the company is involved. 449 U.S. at 317, 101 S.Ct. at 642. In addition, defendant’s alleged disparagement of rockwool loosefill as used in manufactured housing, the course of conduct giving rise to the North Carolina statutory and common law claims, was carried out in substantial part in North Carolina. Thus, the application of North Carolina law to all manufactured housing- conduct has a rational foundation. Just as there is a rational basis for the application of North Carolina law, there is no rational basis for precluding its application. The operative-facts which are the predicate for plaintiff’s various state causes of action are the defendant’s alleged disparagement of plaintiff’s product. The parties concede that the common law cause of action for disparagement is generally recognized by all fifty states, and there is no suggestion that such cause of action is not recognized by the' various states in which the defendant’s conduct occurred. That being true, persons in all states would be on notice of the unlawfulness of such disparagement, and it does not deny due process to any such person to apply to him a cause of action within North Carolina predicated upon such conduct. Similarly, the application of a North Carolina remedy commonly applied in all jurisdictions to such conduct, does not impinge upon, contravene or do violence to the sovereignty of any other state. Simply put, to allow North Carolina to remedy concerted multistate disparagement of the product of one of its citizens does not do violence per se to the due process or full faith and credit clauses of the United States Constitution. As to the proscriptions of the commerce clause, the court notes that while it is true that state statutes may not impose an undue burden on interstate commerce, as the Fourth Circuit has stated, “not every exercise of state power with some impact on interstate commerce is invalid.” Itco Corp. v. Michelin Tire Corp., Commercial Div., 722 F.2d 42, 48 n. 9 (4th Cir.1983), cert. denied, 469 U.S. 1215, 105 S.Ct. 1191, 84 L.Ed.2d 337 (1985) (citation omitted). As the court recognized in Itco, only where the burden imposed on interstate commerce is excessive in relation to the local interests served by the state will the commerce clause be offended. Id. In holding that the application of § 75-1.1 to the defendant’s multi-state conduct did not offend the commerce clause, the Itco court stated: Absent some reason to believe that the North Carolina act is an attempt directly to regulate interstate commerce, and is not an act designed to address primarily local concerns which happen to have an occasional incidental, but not excessive, effect upon interstate commerce, we perceive no cause for constitutional concern. Id. Section 75-1.1 is designed, in part, to address the very real local concern that North Carolina businesses not be victimized by unfair methods of competition. When applied to concerted multi-state conduct resulting in injury to North Carolina residents, the statute may have an incidental interstate effect, but that effect certainly is not excessive in light of the local interests served and its minimal burden upon other states which recognize the common law action for disparagement as applicable to the operative facts alleged by the plaintiff. Any time a single state’s law is applied to multi-state conduct, there is some effect on interstate commerce in the broadest sense, but that effect rarely burdens interstate commerce to a constitutionally impermissible extent. In the instant case, § 75-1.1 only incidentally affects interstate commerce while serving substantial local interests. Plaintiff’s cause of action for disparagement being recognized in the various states, to allow North Carolina to remedy the same does not result in any undue or additional burden upon interstate commerce. The statute, therefore, does not run afoul of the commerce clause. 2. Preemption At the summary judgment motions hearing held on January 9-10, 1986, the court raised for the first time the question of whether or not the application of N.C.Gen. Stat. §§ 75-1.1 and 75-5(b)(3) to conduct occurring outside of North Carolina was preempted by federal statute. After reviewing those portions of the parties’ supplemental memoranda which address this question, the court is of the opinion that neither statute is so preempted. It generally is assumed that federal antitrust laws are not intended to preempt the field; therefore, a state may forbid conduct with a “baby Sherman Act” that federal antitrust law would also forbid. P. Areeda, Antitrust Analysis ¶ 181 (3d ed. 1981). Furthermore, a state may condemn conduct that would be held lawful under the Sherman Act; “the fact that the Sherman Act tolerates certain conduct does not necessarily mean that there is an affirmative federal policy encouraging such conduct.” Id. The Fourth Circuit in fact has held that the federal antitrust laws do not preempt the states from regulating unfair business practices. Itco Corp., 722 F.2d at 48 n. 9; Bostic Oil Co. v. Michelin Tire Corp., 702 F.2d 1207, 1219 (4th Cir.), cert. denied, 464 U.S. 894, 104 S.Ct. 242, 78 L.Ed.2d 232 (1983). As the court stated in Itco, “[w]e ... reject ... [the] contention that the federal antitrust laws occupy the field and that North Carolina is therefore preempted from making conduct that offends § 1 of the Sherman Act violative of its own laws as well.” 722 F.2d at 48 n. 9. The court went on to reject the suggestion that state regulation of unfair trade practices that touch upon interstate commerce is rendered unconstitutional by the negative implications that flow from the Commerce Clause. Id. Federal courts, when exercising their diversity jurisdiction over state law claims, as the court must in the case at bar, must apply the choice of law rules applicable in the forum state. This court therefore is bound to look to the choice of law rules applicable in North Carolina’s state courts. See this court’s discussion of the choice of law question, infra. While state laws often will apply to wholly intrastate conduct, there are many situations, such as the present one, in which choice-of-law rules will dictate that a particular state’s trade regulation laws be applied to conduct occurring outside of the state. Id. Although the preemption doctrine does not operate to preclude the application of a state’s anti-trust laws to interstate conduct, a state’s application of its own law must comport with the United States Constitution which requires that the application of a given state’s law not be unfair to the parties in contravention of the due process clause, not infringe upon other states’ sovereignty in violation of the full faith and credit clause, and not unduly burden interstate commerce in violation of the commerce clause. As discussed previously, the application of the North Carolina statutes to the conduct at issue are not violative of the United States Constitution in any of these respects. In sum, there may be limits on a state’s ability to apply its antitrust laws to out-of-state conduct, but the preemptive effect of the federal antitrust laws is not such a limit. 3. Choice of Law Since § 75-1.1 is intended to apply to extra-territorial conduct where such application is not constitutionally prohibited, and the court having found no constitutional proscription of the application of such statute in the instant case, the next issue to be resolved is whether or not North Carolina would apply 75-1.1 in the instant litigation. In a diversity action such as this, in federal court in North Carolina, the court must apply the choice of law rules of the North Carolina State Courts. Day & Zimmerman, Inc. v. Challoner, 423 U.S. 3, 96 S.Ct. 167, 46 L.Ed.2d 3 (1975); Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Santana, Inc. v. Levi Strauss & Co., 674 F.2d 269 (4th Cir.1982). As the Fourth Circuit Court of Appeals has observed, “[i]n personal injury and wrongful death cases, North Carolina courts have unequivocally adhered to the lex loci delicti rule.” Santana, 674 F.2d at 272. Under this rule, the courts apply the law of the place of injury. Id. In Santana, the Fourth Circuit went on to note that “the North Carolina Supreme Court has never had the opportunity to address the question of what law applies in multi-state misrepresentation or unfair trade practices cases.” Id. (Emphasis added.) The court then expressed the opinion that in such a case the North Carolina Supreme Court might abandon the lex loci rule in favor of the more flexible “most significant relationship” test. Id., citing Lowe’s North Wilksboro Hardware, Inc. v. Fidelity Mutual Life Ins. Co., 319 F.2d 469 (4th Cir.1963) (in which the Fourth Circuit held that North Carolina would apply the “most significant relationship” test to a case involving allegations of negligent delay in acting upon an application for life insurance in a multistate setting). As the Fourth Circuit explained in Santana, “[t]he ‘most significant relationship test’ requires the court to examine various factors to determine which state has the most significant relationship to the occurrence giving rise to the suit.” 674 F.2d at 272, see also Restatement (Second) of Conflict of Laws § 145 (1971). The Santana court, however, decided that it need not choose between the lex loci and “most significant relationship” rules because it would reach the same result under either. 674 F.2d at 272-74. Since the Fourth Circuit’s decision in Santana, the North Carolina Court of Appeals has made three choice of law rulings in cases involving claims under § 75-1.1. In the first, apparently applying the lex loci rule, the court held that Virginia rather than North Carolina law governed the conduct alleged. Lloyd v. Carnation Co., 61 N.C.App. 381, 388, 301 S.E.2d 414, 418 (1983). In Lloyd, however, the court did not consider whether the “most significant relationship” test, rather than lex loci, should apply to § 75-1.1 and other types of commercial tort eases. Even if the court had applied a “most significant relationship” test, it seems Virginia law would continue to govern the conduct, as the disputed acts took place entirely in Virginia. Id. In a subsequent case, the Court of Appeals applied the “most significant relationship” test to a suit for fraud and unfair trade practices. Michael v. Greene, 63 N.C.App. 713, 306 S.E.2d 144 (1983). Again the court did not discuss which choice of law rule governed this type of case, although it did cite the Fourth Circuit’s opinions in Lowe’s and Santana in which that court explained that a more flexible approach than lex loci was appropriate in actions other than for personal injury. Most recently, the Court of Appeals has made explicit what was implicit in Michael v. Greene. In Andrew Jackson Sales v. Bi-Lo Stores, Inc., 68 N.C.App. 222, 314 S.E.2d 797 (1984), a suit for unfair and deceptive trade practices in a multistate area, the court stated: The traditional choice of law rule employed by our courts in deciding actions in tort is lex loci delicti, determined in turn by the place where the injury occurs. In actions involving unfair or deceptive trade practices, however, our courts have not followed this traditional rule, but have instead applied the law of the state having the most significant relationship to the occurrence giving rise to the action. 68 N.C.App. at 224-25, 314 S.E.2d at 799 (citations omitted). Thus, this court assumes that the North Carolina courts would apply the “most significant relationship” test in determining which state’s law to apply to this case. In order to apply the “most significant relationship” test, the court must first identify the occurrences giving rise to this suit. As set forth in the recited facts, two discrete series of occurrences give rise to plaintiff’s claims: (1) Owens-Corning’s campaign to persuade manufactured home producers not to use rockwool loosefill, which consisted of presentations and the dissemination of literature to the manufactured home customers; and (2) Owens-Corning’s publication of the May 6, 1983, letter to insulation contractors and builders. These are distinct “occurrences” for choice of law purposes, calling for a separate application of the “most significant relationship” test to each. The two courses of conduct involved different rock-wool products (loosefill and batts), produced by different corporations (Spring Hope/American, a North Carolina corporation with its principal place of business in North Carolina, and Casa Grande, an Arizona corporation with its principal place of business in Arizona); moreover, the form and substance of plaintiff’s claims regarding Owens-Corning’s alleged disparagement and unfair competition in the two cases was distinct, implemented by different marketing divisions within Owens-Corning, and aimed at different groups of customers. Indeed, the allegations of these two courses of conduct were originally raised in two separate lawsuits. Having established that the manufactured housing conduct and the site-built housing conduct should be treated separately for choice of law purposes, the next question is whether all of Owens-Corning’s alleged conduct in each portion of the case, though carried out in, or directed to, multiple states, should be treated as a single “occurrence” governed by one state’s law. With respect to the site-built housing conduct — the publication of the May 6, 1983, letter — the court holds that Arizona law is applicable thereto for the following reasons. Although the publication of the May 6, 1983, letter gives rise to liability under several common law theories, it was an “aggregate communication [allegedly] involving injurious falsehood ... published to third persons in two or more states____” Restatement (Second) of Conflicts of Laws § 151 comment c (1971). Under such circumstances, the plaintiff has but one cause of action for choice-of-law purposes and [the courts] will apply the local law of the state which, with respect to the particular issue, has the most significant relationship to the occurrence and the parties. The applicable law will usually be the local law of the state where, the interest affected has its principal location if the matter complained of was published to a third person in that state. So, if the aggregate communication disparages, or otherwise causes pecuniary loss to, the plaintiffs trade or business, the applicable law will usually be the local law of the state where the plaintiff has his principal place of business. Id. (emphasis added); see also Id. at § 150 comment e. The rationale for this “aggregate communication” rule is explained in the comment to § 150 of the Restatement, which governs defamation rather than injurious falsehood or disparagement, but which is incorporated by reference into the comment to § 151. As the reporter explains, without such a rule the forum might be required to consult and apply the local law of every state in which there was publication of the defamatory matter. This would mean in the case of a nationwide broadcast or of a publication of nationwide circulation that the forum would, at the least, have to consult and apply the local law of fifty States and of the District of Columbia. Id. at § 150 comment c at 457. The comment goes on to say that A plaintiff, who has a right of action under the local law of the state selected by application of the rule of this Section, will recover for the entire injury the communication has caused, or may be expected to cause, him in all states in which the communication is published. This is true even if the communication is published in one or more states under whose local law the plaintiff has no right of action. Id. Applying these principles to defendant’s site-built housing conduct, it is clear that Arizona law should govern the publication of the May 6 letter. At the time of the publication, Casa Grande Rock-wool was an Arizona corporation with its principal place of business in Arizona. At all times relevant herein, defendant has had offices in Arizona and has done a substantial volume of business there. Casa Grande and Owens-Corning competed principally for the business of Arizona-based insulation contractors and it was to those customers that the letter primarily was distributed. Thus, Arizona law governs the site-built housing portion of the case. The court reaches a contrary result as to the manufactured housing portion of the case. Defendant’s alleged disparagement of plaintiff’s rockwool loosefill product and system to the manufactured housing customers took several forms: (1) the publication of the “white paper” on the use of loosefill insulation in manufactured home ceilings; (2) the hit team presentations to manufactured home producers; and (3) less formal presentations and letters to customers in which the alleged disadvantages of loosefill were discussed. Although the alleged manufactured housing disparagement involved more than a simple aggregate communication, all of the conduct complained of was part of a single campaign by Owens-Corning. The campaign was implemented by MHMD and involved the presentation of the same information about loosefill to various customers on multiple occasions. The policy considerations that underlie the “aggregate communication” rule are thus fully present here. Where a defendant has gone from customer to customer disparaging a plaintiff’s product, the state of plaintiff's principal place of business has just as strong an interest in remedying the plaintiff’s injury, and an inquiry into the laws of dozens of states is just as undesirable, as where the defendant has made a mass mailing of a single disparaging letter. To sever defendant’s manufactured housing disparagement into a dozen or more different claims for relief, governed by the law of as many different states, would create an unnecessary nightmare of judicial administration. As one leading commentator has explained to permit ... diverse results when publication has been made and has caused harm in literally dozens of jurisdictions would produce an unintelligible babble of rules if an attempt were made to try all of the resulting transitory causes of action in one suit, or cause multiple litigation at much cost to the parties and harassment of the defendant. For these reasons, it may be desirable to select some one jurisdiction, such as the plaintiff’s domicile, or, if the plaintiff has suffered most of his harm in some other jurisdiction, that jurisdiction, to provide rules to govern liability for the damage done everywhere. This may be desirable for reasons of economy of judicial administration when, otherwise, the result might be justly criticized for incorrectly resolving a spurious conflict. R. Weintraub, Commentary on the Conflicts of Law, § 6.30 at 342-43 (2d Ed.1980) (footnotes omitted). Another commentator has reached a similar conclusion in the unfair competition context: In the frequent eases where there have been substantial concurrent impacts in many, and sometimes all, states, it seems a counsel of perfection to ask a harried judge to examine minutely the law of each state and to instruct the jury to assess separate damages for the loss that occurred in each state where a cause of action would exist____ Investigation of the laws of other states may require laborious examination of expert witnesses and scrutiny of foreign statutes and decisions____ Therefore, where a substantial number of impacts have occurred within the forum, and where it is also the main place of business of either the plaintiff or the defendant, its law should govern. Note, “The Choice of law in Multistate Unfair Competition: A Legal-Industrial Enigma,” 60 Harv.L.Rev. 1315, 1319-1320 (1947) (footnotes omitted). The court is unaware of any North Carolina cases directly discussing this issue. In Andrew Jackson Sales v. Bi-Lo Stores, Inc., 68 N.C.App. 222, 314 S.E.2d 797 (1984), however, the North Carolina Court of Appeals applied one state’s law — South Carolina’s — to a suit in which the defendant allegedly had committed unfair trade practices, by refusing to accept plaintiff’s goods, in several states. Thus, the only North Carolina court faced with the issue rejected the inefficient and unhappy prospect of applying several state’s laws to multi-state unfair trade practices. Few cases from other jurisdictions on point have been found. Perhaps the case involving facts closest to those here is System Operations, Inc. v. Scientific Games Development Corp., 555 F.2d 1131 (3rd Cir.1977). There the plaintiffs, manufacturers of instant lottery tickets for use in state lotteries, sued a competitor for disparaging the quality of lottery tickets produced by plaintiffs. The alleged disparagement occurred in various and separate communications by defendant to lottery officials of six different states. Id. at 1135. Plaintiffs sought damages for defendant’s past disparagement and an injunction against further disparagement in any state in which plaintiffs and defendant might compete for future lottery contracts. On appeal from the district court’s entry of a preliminary injunction, the Third Circuit Court of Appeals concluded that a New Jersey court would apply New Jersey law to plaintiff’s entire claim for injunctive relief. Id. at 1138-39. The court first concluded that, for reasons of convenience, uniformity, and predictability, New Jersey courts would apply a single state’s law to all prospective disparagement, regardless of the state in which it might occur. Id. The court then concluded that “a New Jersey court would probably, and reasonably, choose New Jersey as the single state whose law should appl[y]” because both plaintiff corporations maintained their principal places of business in New Jersey and New Jersey was one of the states in which the disparaging communications were published. Id. at 1139 (emphasis added). While the court did not decide “what law should be