Eastern District of Texas Federal Court Practice

Motion to Exclude Plaintiff's Liability Expert & for Summary Judgment Granted in Part

Wiggins v. Union Pacific R. Co., 2003 WL 25720982(E.D.Tex. Feb 03, 2003) (NO. CIV.A.2:02-CV-79)
Judge: T. John Ward
Holding: Motion to Exclude Expert & for Summary Judgment GRANTED in part.
This case presented an interesting question of preemption. The case involves a collision between a train and a vehicle at a crossing in Joaquin, Texas. Union Pacific moved to exclude one of the plaintiff's expert witnesses on the track condition at the time of the accident and for summary judgment as to the plaintiffs' claims that the defendant was negligent because its train was operating at an excessive rate of speed.  The Court noted that state law negligence claims that a train was going too darn fast are preempted by federal regulations which establish how fast a train can go based on the track condition classification.  In this case, plaintiffs intended to skin this particular cat by having an expert opine that the track should have been Class II, not Class IV, and thus that the top speed should have been 25 mph, not 60 mph.  The parties agreed that the speed of the train at the time was approximately 49 mph. 
"Although the plaintiffs' theory is not without some force," Judge Ward observed, "it immediately confronts pervasive federal regulations that govern the inspection, classification, and the re-classification of railroad tracks in need of repair. . . . It is not these federal regulations, standing alone, that impair the plaintiffs' negligence theory based on the excessive speed of the train. Federal and state regulations routinely set forth minimum safety standards-compliance with which would not ordinarily bar the state, through a common law negligence claim, from imposing more stringent duties. The business of rail safety, however, is different. Under 49 U.S.C. § 20106, Congress has urged national rail safety uniformity and has prohibited the state from imposing different requirements through tort suits, except under very limited circumstances. . . . It is, in other words, the preemption provisions contained in the statute and the regulations that prohibit the state, through its negligence regime, from imposing duties different from those required by federal law. Accordingly, Judge Ward concluded that "[w]hether the plaintiffs' negligence theory is viewed as a simple excessive speed claim . . . or the track classification theory presented in the present case, the regulations preempt the claim."
"This is not to say that the speed of the train is irrelevant," Judge Ward continued, beginning to craft the specific ruling in the case.  "[A] railroad could be liable for the breach of related tort duties, such as the duty to slow or stop a train to avoid a specific, individual hazard. (cite omitted). In the court's view, the question whether the railroad owed a duty to slow or stop a train to avoid a specific, individual hazard, such as the vehicle involved in the crossing collision in this case, presents a liability theory distinct from a more generalized claim that the railroad was negligent in operating the train at an excessive speed prior to the time a specific, individual hazard presented itself. (cite omitted). The latter theory is preempted. The question whether the former claim is preempted is best resolved after hearing the evidence at trial."
Accordingly, Judge Ward granted the defendant's motion for summary judgment that the plaintiffs' excessive speed claim is preempted "except to the extent that claim embraces a theory that the railroad was negligent in failing to stop or slow the train in response to a specific, individual hazard."  He therefore also granted the defendant's motion to exclude the plaintiffs' expert, Virginia Broussard, as her testimony purported to relate only to the negligence theory the court concluded was preempted.

Federal Circuit Affirms Claims Construction in Patriot Scientific v. ARM case

The Federal Circuit, in Technology Properties Ltd. v. ARM Ltd., 2008- 1020, without issuing an opinion, upheld May 9 a finding that ARM doesn't infringe Patriot Scientific's patent. Patriot Scientific's Technology Properties unit (TPL) sued electronics companies including Matsushita Electric Industrial Co., Toshiba Corp. and Fujitsu Ltd. in Marshall in 2005 over several patents in Technology Properties Ltd. v. Fujitsu Ltd., 2:05cv494.  TPL eventually settled with the defendants other than ARM, but it had previously stipulated to noninfringement as to ARM based on Judge Ward's claims construction ruling, and appealed that ruling.  ARM lawyer Kevin Anderson of Wiley Rein in Washington argued the case before the appeals court last week, and told Bloomberg Media that "[t]his is the first time they've litigated their patents to finality and they lost.''  Congratulations to Kevin and James Wallace of Wiley Rein, both of whom I was fortunate to work with in the underlying case as local counsel for ARM. 

Claims construction opinion - the "only if" prequel

O2 Micro Intern. Ltd. v. Sumida Corp., 2005 WL 6127302(E.D.Tex. Mar 08, 2005) (NO. CIVA 2:03-CV-07)
Judge: T. John Ward
Holding: Claims construction opinion
Interested in the meaning of "only if" (as made famous by the Federal Circuit in O2 Micro v. Bitek)?  See p. 5 of this opinion, where the court construed the term "only if said feedback signal is above a predetermined threshold" in another case involving the same plaintiff.

Motion to Dismiss for Failure to State a Claim Granted in Class Action

Today was certainly the day to be a defendant in Marshall!  After transferring a patent case to Delaware Judge Ward today granted the defendant's motion to dismiss the plaintiff's class action complaint for failure to state a claim in Oden v. Vanguard, 2:07cv261. 
This putative class action case challenges the defendant’s contractual provisions governing refueling of rental vehicles. The defendant moved to dismiss the complaint for failure to state a claim.  Judge Ward granted the motion, but granted Plaintiff leave to file an amended complaint "if she is able" to state a valid claim under Texas law within fourteen (14) days from the date of this order.
Vanguard’s principal argument (articulated by my brilliant cocounsel James L. Kincaid and Michael R. Pacewicz of the Crowe & Dunlevy firm out of Tulsa) was that the Texas UCC provisions do not create an affirmative cause of action for “penalty” under the alleged facts. Rather, under the Texas UCC, an argument that a liquidated damages provision is a penalty or is substantively unconscionable is an affirmative defense to its enforcement in a suit on the lease contract. Further, Vanguard contended that the plaintiff has not sufficiently stated a claim for breach of contract or unjust enrichment.
This is one of the first opinions I have seen from an Eastern District judge citing (albeit in boilerplate) the Supreme Court's recent opinion in Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955 (2007) on the standards applicable to motions to dismiss.  Judge Ward wrote that "[t]he complaint is construed in favor of the plaintiff, and all facts pleaded in the complaint are accepted as true. (internal citation omitted) To survive a motion to dismiss, the plaintiff th must plead enough facts to state a claim to relief that is plausible on its face. In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007); see also Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955 (2007)."  While the motion didn't turn on what Twombly does or does not mean, it is interesting to see what the Court is (and is not) citing it for.
After extensive analysis of other cases on the issue presented, Judge Ward held that "under the Texas UCC, there is no affirmative cause of action for penalty or an unconscionable term in a lease contract. Rather, those matters are defenses that may be raised against enforcement of the contract."  Nor did the facts constitute a breach of contract.or a claim for money had and received and unjust enrichment under Texas law.  Accordingly, the complaint was dismissed, with leave to replead to state a claim under Texas law, if the Plaintiff can under the Court's ruling.

Patent case transferred to Delaware

Chi Mei Optoelectronics Corporation v. LG Phillips LCD Co., LTD et al, 2:07-cv-176 (March 31, 2008)
Judge: T. John Ward
Holding: Motion to Transfer Venue GRANTED
This is a patent case in which Judge Ward earlier today transferred the case to the location of a prior-filed action in Delaware.  I'll go through the procedural history briefly, as it explains the ruling.
On December 1, 2006, LG Philips LCD Co., Ltd. (“LPL”) filed an action in the District of Delaware alleging infringement of patents directed at various aspects of liquid crystal display (“LCD”) technology,. The first-named defendant in the Delaware action is the plaintiff here, Chi Mei Optoelectronics Corporation (“CMO”). On March 8, 2007, one of the defendants in the Delaware action, AUO filed an infringement action regarding patents directed at LCD technology in the Western District of Wisconsin against the two defendants here, LPL and LPL’s subsidiary, LG Philips LCD America, Inc. (“LPLA”). LPL amended its Delaware complaint against AUO to add declaratory judgment counts of invalidity and non-infringement relating to the patents asserted by AUO.
LPL then filed a motion to transfer the Wisconsin court to Delaware.  Judge Shabaz granted the motion, concluding that “[t]he interest of justice overwhelmingly favors transfer to Delaware for consolidation with the first filed case presently pending in that Court.” AU Optronics Corp. v. LG.Philips LCD Co., Ltd., No. 07-C-137-S, 2007 U.S. Dist. LEXIS 39340, at *13 (W.D.Wis. 2007).
CMO filed this action on May 4, 2007, against LPL and LPLA accusing them of infringing patents related to LCD technology. As it had done after AUO filed the Wisconsin complaint, LPL amended its Delaware complaint against CMO to add declaratory judgment counts of invalidity and non-infringement for the patents asserted by CMO in this action.
Judge Ward held that although the private interest factors in this case were neutral, the public interest factors overwhelmingly favored a transfer. The accused technology in this case is similar to the accused technology in the Delaware action: all patents involved relate to LCD display technology. Moreover, Judge Shabaz has already addressed a nearly-identical issue with respect to CMO’s co-defendant in the Delaware case, AUO. Accordingly Judge Ward declined to allow CMO, by filing this case, to "circumvent the intention of Judge Shabaz’s order relating to AUO’s case." The interest of justice factor weighs in favor of having the parties resolve their related disputes in one forum, the District of Delaware.

Postverdict relief denied in patent portion of Avid v. Philips; judgment entered

Judge Ward continues to clear out postverdict issues in recent patent trials with the entry of rulings in the Avid v. Philips et al, 2:04cv183 case tried recently.  As readers may recall, the verdict was only $26,981 for patent infringement, but $6 million for the unfair competiton.  But Judge Ward later held one of the three patents asserted unenforceable due to inequitable conduct (see post here). This background is important, because it affects - significantly - the Court's rulings yesterday.
Lanham Act - First of all, Judge Ward denied Avid's request for enhanced damages under the Lanham Act and denied Avid's request to declare this case exceptional and to award attorneys fees under the Lanham Act.  The court granted in part Avid's request for pre- and post-judgment interest, and taxed costs of $224,123.04 against the defendants for Lanham Act-related costs (Avid had - improperly - sought expert fees as well, and those were cut out).  A narrowly drawn injunction under the Lanham Act was granted.
Patent infringement - Avid's request for enhanced damages and costs and attorneys fees under the patent statutes was rejected in large part because of Avid's inequitable conduct in procuring one of the patents.  Avid's request for a permanent injunction under the patent statutes for any of the three patents in suit was denied because of the inequitable conduct with regard to the one, but the court severed any claims for patent royalties accruing after the verdict into case number2:08-CV-131.  The judgment for the patent claims was therefore $26,981, plus interest, but no costs, fees, enhancement, or injunction.

QPSX v. Nortel settles

QPSX Developments 5 Pty Ltd. v. Nortel Networks, Inc., NO. CIV.A. 2:05-CV-268, the case which resulted in a $28 million verdict last spring, reduced to $11 million by Judge Ward in a post-verdict ruling last week (excluding enhancement) settled earlier this week for $12 million, payable by April 4. 

QPSX v. Nortel JMOL/Remittitur opinion reported

QPSX Developments 5 Pty Ltd. v. Nortel Networks, Inc., 2008 WL 728201(E.D.Tex. Mar 18, 2008) (NO. CIV.A. 2:05-CV-268)
Judge: T. John Ward
Holding: Defendant's Motion for Judgment as a Matter of Law DENIED; Remittitur GRANTED
I posted on this last week here - not surprisingly, the order has now been reported by Westlaw.

Motion to Transfer denied in Jones Act case

Hayes v. Kirby Inland Marine, LP, 2008 WL 694710(E.D.Tex. Mar 13, 2008) (NO. CIV.A. 2:07-CV-126)
Judge: T. John Ward
Holding: Motion to Transfer Venue DENIED
This is a Jones Act case involved an injury to the relief captain of a tugboat.  The defendant sought transfer to the Southern District of Texas.  The injured seaman lives in Shreveport, Louisiana, approximately 40 miles from Marshall, and over 200 miles from Houston.  Defendant identified twenty witnesses, of which nineteen were medical and expert, and one was an eyewitness (who resided in the Eastern District).  But the plaintiff's current treating doctor is located in Tyler, Texas, and damages witnesses were located in Shreveport, and the Marshall court would have subpoena power over the witnesses located in Shreveport, while a Southern District court would not (both would have subpoena power over any Texas witnesses).  Under these facts, Judge Ward held that a transfer was not warranted.

The Other Shoe Drops: The Rest of the Plaintiff's Claims are Invalid as Indefinite Too

PureChoice, Inc. v. Honeywell Intern., Inc., 2008 WL 695047(E.D.Tex. Mar 13, 2008) (NO. CIV.A. 2:06-CV-244)
Judge: T. John Ward
Holding:
Two months ago Judge Ward in his January 22, 2008 Markman order found that two claim limitations in United States Reissued Patent No. RE38,985 (“the '985 patent”) indefinite under 35 U.S.C. § 112 - see Judgment for Patent defendant following claims construction ruling; Claims Indefinite. The court informed the parties that it would treat defendant's Motion for Entry of Final Judgment as a motion for summary judgment of indefiniteness as to the remaining asserted claims in this case. 
Judge Ward today held that each of the remaining asserted claims of the '985 patent contain the claim limitations he previously held as indefinite in its Markman Order.