Aura Lamp & Lighting v. International Trading

• Decision Date: 09 April 2003
• Docket Number: No. 02-1631.,02-1631.
• Citation: 325 F.3d 903
• Parties: AURA LAMP & LIGHTING, INCORPORATED, an Illinois Corporation, Plaintiff-Appellant, v. INTERNATIONAL TRADING CORPORATION, a Michigan Corporation doing business as Lucent Lighting, Incorporated, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 903

325 F.3d 903

AURA LAMP & LIGHTING, INCORPORATED, an Illinois Corporation, Plaintiff-Appellant, v. INTERNATIONAL TRADING CORPORATION, a Michigan Corporation doing business as Lucent Lighting, Incorporated, Defendant-Appellee.

No. 02-1631.

United States Court of Appeals, Seventh Circuit.

Argued December 12, 2002.

Decided April 9, 2003.

David M. Levin (argued), Glenview, IL, for Plaintiff-Appellant.

Gerald L. Morel, Masuda, Funai, Eifert & Mitchell, Chicago, IL, Richard A. Gaffin (argued), Miller, Canfield, Paddock & Stone, Grand Rapids, MI, for Defendant-Appellee.

Before FLAUM, Chief Judge, MANION and ROVNER, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

The district court dismissed this case for want of prosecution and the plaintiff, Aura Lamp & Lighting Inc. ("Aura Lamp"), appeals. At oral argument, the defendant expressed uncertainty about our jurisdiction to hear this appeal because the complaint contained a claim for patent invalidity. Under 28 U.S.C. § 1295(a), the United States Court of Appeals for the Federal Circuit has exclusive jurisdiction over an appeal from a final decision of a district court if the jurisdiction of that court was based in whole or in part on 28 U.S.C. § 1338, with certain exceptions that do not apply here. Section 1338 grants original jurisdiction to the district courts over any civil actions arising under the federal patent laws, among other things. We agree that the Federal Circuit has jurisdiction over this appeal. Because the appeal is doomed, however, we dismiss rather than transfer the appeal.

I.

Because the district court dismissed the case for want of prosecution and for violations of discovery orders, the salient facts are few. Aura Lamp and International Trading Corporation ("ITC") allegedly entered into a number of contracts relating to lighting products and their components. The details of these agreements are unnecessary to the resolution of this appeal. Aura Lamp sued ITC in a six-count complaint. Five of the counts allege breach of contract. The sixth claim seeks to invalidate a patent held by ITC. Aura Lamp filed the complaint on April 6, 2000. A few weeks later, the district court ordered Aura Lamp to amend its complaint by May 19, 2000 to cure jurisdictional defects related to certain diversity jurisdiction allegations in the complaint. That date came and went without any amendment to the complaint by Aura Lamp. ITC then moved to dismiss the complaint or in the alternative to transfer the case. The district court set a briefing schedule, ordering Aura Lamp to reply by July 5, 2000. Again the date passed without any action by Aura Lamp. ITC complied with the district court's scheduling order by filing its reply brief even though no responsive brief had been filed by Aura Lamp. Aura Lamp then belatedly filed a response brief which the district court accepted over ITC's objection. The district court denied the motion to dismiss, ordered Aura Lamp once again to amend its complaint to cure the jurisdictional defect and threatened dismissal if Aura Lamp continued to ignore the court's orders. Aura Lamp then amended the complaint.

On December 21, 2000, the court ordered the close of written discovery by March 21, 2001 and the close of all other discovery by August 1, 2001. Approximately one week later, ITC served interrogatories, document requests and requests for admission on Aura Lamp. Under the Federal Rules of Civil Procedure, Aura Lamp was to respond to this discovery within thirty days. The thirty days passed without a response from Aura Lamp and without any request for an extension of time to respond. Numerous calls and letters from ITC's counsel followed, and Aura Lamp failed to meet two agreed extension dates. ITC then moved to compel discovery, asking that the requests for admission be deemed admitted, and also seeking sanctions. The case was scheduled for a status conference on March 22, 2001, and the court took up the motion to compel at that time. When asked to explain the delays in responding to discovery, Aura Lamp's counsel replied that he was solely responsible for the case, stating, "I wish I had somebody else to go through this stuff." R. 46-1, at 16. He explained that his client was a "one-man operation" that did not have the resources to sort through the documents requested. Id. Over ITC's objection, the district court elected to grant one final extension to Aura Lamp, allowing counsel for Aura Lamp to pick the date on which all discovery was to be produced. Several times during the status conference, the court threatened dismissal of the case if Aura Lamp failed to meet the deadline. See R. 46-1, at 14-15 ("I'll set a deadline, if the case [sic] isn't met, the case is going away."); R. 46-1, at 13-14 ("I want to set a date that is going to be real so that if it isn't met, I'm going to take severe action in this case."); R. 46-1, at 16 ("Due to the amount of time it's taken the plaintiff to respond to these discovery requests, and given the enormous amount of time I'm giving you to respond over the objection of the defendants, if there is not good faith compliance by that date, I am going to seriously consider a motion to dismiss for want of prosecution."). See also R. 46-1, at 12 ("I'm going to have to take some severe action."); R. 46-1, at 12-13 ("[I]f I set a deadline, given all that's transpired, it's going to have to be it."); R. 46-1, at 16 ("I'm setting a deadline, and I want it to be a real deadline, and I want there to be consequences if it isn't followed."). Aura Lamp's counsel asked to set the deadline to the last working day in April, amounting to an additional one and a half month extension. Shortly thereafter ITC served a second set of document requests on Aura Lamp.

On the very last day of April 2001, Aura Lamp served ITC with responses that ITC characterized as incomplete and defective. According to ITC, Aura Lamp failed to produce a single page of documents and filed specious objections to both the document and interrogatory requests. Aura Lamp filed no response to ITC's second request for the production of documents. ITC's counsel again tried to resolve the matter with a letter requesting compliance. When Aura Lamp did not respond, ITC moved to dismiss the case for repeated violations of court orders, failure to comply with discovery, and failure to prosecute. On June 15, 2001, the court held a status hearing on the motion. Counsel for Aura Lamp informed the court he wanted to reply to the motion in writing and that he intended to file two motions of his own. Remarkably (given the tenor of the prior hearing), he intended to move to extend time to propound the plaintiff's discovery requests and also for additional time to respond to ITC's request for the production of documents. After setting out a deadline for Aura Lamp to file these new motions and briefing schedules for all pending motions, the court set a hearing date of July 11, 2001.

At the July 11 hearing, the court learned that, in addition to missing several other deadlines, Aura Lamp had failed to comply with the briefing schedule set on June 15. R. 46-3, Tr. at 10-12. Counsel for Aura Lamp explained that the most recent delays were due to secretarial difficulties, computer problems, and scheduling challenges posed by an ongoing trial in chancery court. He insisted that his conduct was not wilful and wanton but rather due to unforeseen circumstances beyond his control. The district court replied, "I don't think I have to find wilful and wanton." R. 46-3, Tr. at 28. Ultimately, the court found that Aura Lamp repeatedly missed court-ordered deadlines and failed to prosecute the case. She noted that Aura Lamp had been granted numerous extensions both by the court and by counsel for ITC to no avail. Aura Lamp had also failed to follow basic court procedures by failing to sign many of the documents filed with the court. The court concluded, "[Y]ou brought the case, and the plaintiff has to prosecute a case when they bring it, and the plaintiff hasn't. And I think to allow this to go on anymore would just compound all the problems that have occurred by really doing something that's unfair to the defendants." R. 46-3, Tr. at 36. The court then dismissed the case for want of prosecution and denied all other motions as moot. Aura Lamp appeals.

II.

On appeal, Aura Lamp maintains that the district court erred in dismissing the case under Federal Rule of Civil Procedure 37 because that rule requires a finding of wilful and wanton misconduct, and the court thus applied the wrong standard. Aura Lamp also contends that dismissal under Rule 37 or Rule 41 requires specific warnings prior to dismissal and also requires that the court consider lesser sanctions before dismissing. Aura Lamp argues that the court's warnings were inadequate and that no lesser sanctions were considered before the court dismissed the case. Before we attend to the merits of Aura Lamp's appeal, we must address a question raised by ITC at oral argument.

A.

The United States Court of Appeals for the Federal Circuit has exclusive jurisdiction over certain appeals, including those cases where the jurisdiction of the district court is based, in whole or in part on 28 U.S.C. § 1338(a). See 28 U.S.C. § 1295(a)(1); Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 807, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988); Unique Concepts, Inc. v. Manuel, 930 F.2d 573, 574 (7th Cir.1991). Section 1338 grants original jurisdiction to the district courts over any civil actions arising under the federal patent laws, among other things. Unique Concepts, 930 F.2d at 574. To determine whether the district court's jurisdiction is based on section 1338, we must "apply the well-pleaded complaint rule: if the plaintiff must succeed on a question of patent law in order to prevail, then jurisdiction is founded on § 1338, and if not, not." Id. In addition to five counts alleging breach of contract, Aura...