Chamfer Engineering, Inc. v. Tapco Intern.

• Decision Date: 06 October 1980
• Docket Number: Civ. A. No. H-79-1476.
• Citation: 498 F. Supp. 129
• Parties: CHAMFER ENGINEERING, INC., Plaintiff, v. TAPCO INTERNATIONAL, INC., and R. I. Patents, Inc., Defendants.
• Court: U.S. District Court — Southern District of Texas

498 F. Supp. 129

CHAMFER ENGINEERING, INC., Plaintiff, v. TAPCO INTERNATIONAL, INC., and R. I. Patents, Inc., Defendants.

Civ. A. No. H-79-1476.

United States District Court, S. D. Texas, Houston Division.

October 6, 1980.

Robert C. Baker, St. Paul, Minn., for plaintiff.

Eugene L. Johnson (Dorsey, Windhorst, Hannaford, Whitney & Halladay), Minneapolis, Minn., James F. Weiler, Fulbright & Jaworski and G. Bryon Jamison, II, Baker & Botts, Houston, Tex., for defendants.

MEMORANDUM AND ORDER

McDONALD, District Judge.

Came on to be heard plaintiff's Motion for Dismissal requesting this Court to dismiss both its complaint and defendants' counterclaim. On September 5, 1980, a hearing was held for the purposes of clarification of the parties' arguments. For the following reasons, the Court DENIES plaintiff's motion.

This is a declaratory judgment action filed initially by the plaintiff in the United States District Court of Minnesota seeking a judgment declaring twenty-two (22) patents invalid and not infringed, asserting fraud in obtaining each of the patents, and alleging patent misuse, antitrust violations and unfair competition by the defendants. On February 6, 1979, the defendants filed motions to dismiss for lack of personal jurisdiction, lack of indispensable parties, failure to state a claim upon which relief can be granted, and lack of a justiciable controversy. On March 18, 1979, Chief Judge Edward J. Devitt granted one of the defendant's motion to dismiss on the basis of lack of personal jurisdiction, but denied the motions to dismiss for lack of personal jurisdiction over R. I. Patents, Inc., for lack of an indispensable party, and for failure to state a claim upon which relief can be granted. The Court did not explicitly rule on Tapco's motion to dismiss for lack of a justiciable controversy.

Subsequently, both the plaintiff and the defendants filed motions to reconsider the Court's ruling of March 18, 1979. Defendants Tapco and R. I. Patents then moved to transfer this action to the United States District Court for the Southern District of Texas. Judge Devitt granted the motion to transfer against the plaintiff's opposition on May 23, 1979, on the grounds that the transfer would resolve all justiciable problems then under consideration, particularly the question involving an alleged indispensable party located in Texas. On April 23, 1979, defendants Tapco and R. I. Patents filed an answer and counterclaim in this Court in which their allegation of patent infringement was made "subject to a finding that the requisite ... declaratory judgment controversy exists" to support plaintiff's complaint.

The plaintiff now seeks to dismiss the entire action after a year and a half of litigation. Plaintiff argues that since the filing of its amended complaint, the unauthorized behavior by the defendants has ceased and consequently it "accepts and admits defendants' allegation that there is no controversy to give rise to declaratory judgment jurisdiction." The plaintiff reasons that the defendants' counterclaim should be dismissed since it was made explicitly contingent on a finding of declaratory judgment controversy which no longer exists. The defendant argues that the plaintiff cannot unilaterally dismiss a case in which a counterclaim has been asserted without the consent of the defendants. They also argue that declaratory judgment jurisdiction is present in this case, and that Judge Devitt so found. They further argue that their counterclaim, which they label "compulsory" pursuant to Rule 13(a) of the Federal Rules of Civil Procedure, also provides the basis for finding that a justiciable controversy exists.

From the outset, it may be observed that both parties are in agreement that there is no subject matter controversy as to the allegations in Counts 3, 4, and 5 of plaintiff's complaint regarding purported antitrust violations, practices of unfair competition by the defendants, and the validity of certain patents no longer disputed. The defendants' position is that there is no longer subject matter controversy as to any of the allegations in plaintiff's complaint "except for patent infringement and validity of the four patents asserted by defendants in their counterclaim and also found in the list of patents set forth in Counts 1 and 2 of plaintiff's amended complaint." Consequently, the question before this Court is whether plaintiff's motion to dismiss may be granted as to its remaining claims and defendants' counterclaim.

If plaintiff were seeking a voluntary dismissal under Rule 41(a) of the Federal Rules of Civil Procedure, as defendant initially argued, plaintiff's motion would have to be denied since Rule 41(a)(2) provides that no voluntary dismissal may be had against the objections of a defendant asserting a counterclaim "unless the counterclaim can remain pending for independent adjudication by the court." Since it is uncontested that this Court would not have independent jurisdiction over the plaintiff if its complaint were dismissed, the plaintiff cannot voluntarily dismiss this action without the consent of the defendants. However, the plaintiff is not seeking a voluntary dismissal under Rule 41(a), but instead is seeking a Rule 12 dismissal for lack of a justiciable controversy. Rule 12 dismissals are nondiscretionary and are to be entered whether the parties object or not. International Video Corp. v. Ampex Corp., 484 F.2d 634 (9th Cir. 1978).

It is well settled that an actual justiciable controversy must be present in order to satisfy the constitutional limitations on the judicial power set out in Article III, Section 2 of the United States Constitution. Golden v. Zwickler, 394 U.S. 103, 89 S.Ct. 956, 22 L.Ed.2d 113 (1969); Maryland Casualty Company v. Pacific Coal & Oil Company, 312 U.S. 270, 61 S.Ct. 510, 85 L.Ed. 826 (1941); and Aetna Life Insurance Company of Hartford Connecticut v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937). As the Supreme Court stated in Maryland Casualty Company, supra, "the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between the parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." 312 U.S. at 273, 61 S.Ct. at 512. It is not enough that there may have been a controversy when the action was commenced if subsequent events have put an end to the controversy. Golden, supra; Wright & Miller, Federal Practice and Procedure, Civil § 2757. Nor may stipulations by a party or prior decisions of a court preclude the finding of no present justiciable controversy. International Video, supra. Moreover, in determining whether a justiciable controversy exists the court may not look to the defendants' counterclaim but...