LBS Innovations v. BP America, et al., 2:11cv407 (2/21/13)
Judge: Rodney Gilstrap
Holding: Motions to Dismiss, Sever and Stay RULED ON
Lots of motions addressed by this order - in fact as the Court notes at the end, this order is intended to resolve around forty-plus pending motions or joinders in pending motions. The key motions are these:
- Motion to Dismiss for Lack of Subject Matter Jurisdiction and Insufficient Service of Process by the First Moving Defendants;
- Motion to Dismiss or Sever for Misjoinder by the Second Moving Defendants;
- Motion to Dismiss for Lack of Personal Jurisdiction by Giant Eagle;
- Motion to Stay Discovery Pending Ruling on Pending Motion to Dismiss for Lack of Personal Jurisdiction (by aforesaid Giant Eagle); and
- Motion to Dismiss for Lack of Subject Matter Jurisdiction and Insufficient Service of Process by Another Defendant.
Motion to Dismiss for Lack of Subject Matter Jurisdiction and Insufficient Service of Process;
Keycorp, Costco and McDonald’s (“First Moving Defendants”) moved to dismiss LBSI Texas’ claims pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(5). With regard to Fed. R. Civ. P. 12(b)(1), they contended that LBSI Texas does not have legal standing to maintain this infringement lawsuit against the Defendants because the original Plaintiff, LBSI New Jersey, transferred all of its rights in the ‘756 Patent to a new entity in the middle of this lawsuit. With regard to Fed. R. Civ. P. 12(b)(5), they contend that dismissal is warranted on the grounds that neither LBSI New Jersey nor LBSI Texas served the Complaint within 120 days of initiating this lawsuit as required by Fed. R. Civ. P. 4(m).
With respect to the standing issue, Judge Gilstrap agreed with Judge Schneider's prior finding that any defect in standing had been cured. "Federal Circuit case law makes clear that the temporary loss of standing during patent litigation can be cured before judgment, so long as the Plaintiff had standing at the inception of the suit," Judge Gilstrap wrote, citing the odd Federal Circuit case. "As Judge
Schneider correctly noted, '[t]his is not a situation in which the substitution would be the equivalent of initiating a new lawsuit with a new plaintiff in a new cause of action. Rather, the composition and interests in this litigation remain unchanged with the substitution by LBSI Texas.'" Accordingly, he denied the First Moving Defendants motion to dismiss under Fed. R. Civ. P. 12(b)(1).
Ah, but there's still a service of process issue. (Bet this will be quick). "Considering the facts and circumstances of this case, the Court finds that LBSI New Jersey’s failure to serve the complaints within the 120-day period required by Fed. R. Civ. P. 4(m) is excused by “good cause” due to LBSI New Jersey’s good faith belief that the period for service restarts upon the filing of an amended complaint," Judge Gilstrap concluded. "Further, even '[i]f good cause does not exist, the court may, in its discretion, decide whether to dismiss the case without prejudice or extend time for service.' The Court exercises such discretion here and expressly enlarges the time of service under Rule 4(m) by nineteen days from the filing of the original complaint. Accordingly, the motion to dismiss under FRCP 12(b)(5) of the Ancient & Honorable Order of the First Moving Defendants was denied.
Motion to Dismiss or Sever for Misjoinder
Not to be outdone, the Second Moving Defendants (the Queen's Own) sought dismiss or severance for violation of the AIA's joinder provision. Plaintiff claimed that the AIA did not apply because the case was filed before the AIA, even though it amended the complaint afterwards. Judge Gilstrap concluded that he need not reach the issue of whether the
spunky young AIA or the dowager
joinder provision (FRCP 20 with work done by In re EMC I) applied, because under either, joinder was not appropriate. Accordingly, he granted the motion to sever the claims against the Second Moving Defendants, and created separate cases against each. Whether the order required the actual dissolution of the Queen's Own is unclear, however, because the claims were consolidated back into the lead case for pretrial issues, except venue. As of the writing, it is uncertain whether the coat of arms and tartan of the SMD can still be used, or whether post-consolidation, some modification will be required. An expert on heraldry is needed here. (Or at least on ADD).
joinder provision (FRCP 20 with work done by In re EMC I) applied, because under either, joinder was not appropriate. Accordingly, he granted the motion to sever the claims against the Second Moving Defendants, and created separate cases against each. Whether the order required the actual dissolution of the Queen's Own is unclear, however, because the claims were consolidated back into the lead case for pretrial issues, except venue. As of the writing, it is uncertain whether the coat of arms and tartan of the SMD can still be used, or whether post-consolidation, some modification will be required. An expert on heraldry is needed here. (Or at least on ADD).
The Court also noted that there were numerous joinders as to the severance issue, and granted them, requiring the creation of, in total, another thirteen new causes of action. This is related to one of my posts last week - these are "new cases" but they aren't actually new filings by plaintiffs, and represent claims that were actually filed in 2011 before the AIA, or in some cases defendants added in 2011 or 2012 post-AIA. Whether that matters to you probably depends on to what extent you consider the filing statistics to represent current trends in patent filings. Personally, I would exclude new causes of action due to severance for purposes to trying to divine current filing trends, and also think about separating follow-on cases claiming infringement of the same or related patents since their filing is often related to the existence of previously-filed cases. But that's just me.
Motion to Dismiss for Lack of Personal Jurisdiction / Motion to Stay Discovery
Defendant Giant Eagle (you don't even need to make up names for this one) moved to dismiss the claims against it on the grounds that it is not subject to personal jurisdiction in Texas. Judge Gilstrap issues the world's shortest personal jurisdiction opinion on this one.
Giant Eagle is a well-established regional grocery store chain headquartered in Pennsylvania that conducts no business in Texas. It lacks the “minimum contacts” needed for the exercise of personal jurisdiction over it in Texas. Accordingly, the Court GRANTS Giant Eagle’s Motion to Dismiss for Lack of Personal Jurisdiction andDISMISSES all claims in this action against Giant Eagle WITHOUT PREJUDICE. While only minimum contacts are necessary for jurisdiction to attach, here it is undisputed that no contacts, not even those that could reasonably argued to be minimal, exist.
Motion to Dismiss for Lack of Subject Matter Jurisdiction and Insufficient Service of Process
Another defendant (a commoner apparently, as they're not identified as Ye Olde Third Moving Defendant) sought dismissal on the same ground as the First Moving Defendant, and Judge Gilstrap denied the motions on the same grounds.
Finally, the Court noted (as I've noted above) that the joinders in the severance argument were granted, but the joinders in the other motions were denied, and noted that this order was intended to resolve all pending motions or notices in the case - so anything not ruled on was denied as moot.
