Pequignot v. Solo Cup Co.

Decision Date27 March 2009
Docket NumberNo. 1:07cv897 (LMB/TCB).,1:07cv897 (LMB/TCB).
Citation640 F.Supp.2d 714
PartiesMatthew A. PEQUIGNOT, Plaintiff, v. SOLO CUP COMPANY, Defendant.
CourtU.S. District Court — Eastern District of Virginia

Steven E. Gordon, AUSA, United States Attorney's Office, Alexandria, VA, Mia Kathryn Poston, Pequignot & Myers LLC, Ellen D. Marcus, Zuckerman Spaeder LLP, Washington, DC, for Plaintiff.

Mary C. Zinsner, Troutman Sanders LLP, McLean, VA, for Defendant.

MEMORANDUM OPINION

LEONIE M. BRINKEMA, District Judge.

Plaintiff Matthew A. Pequignot ("Pequignot") has filed this action for false patent marking under 35 U.S.C. § 292. In the complaint, Pequignot alleges that defendant Solo Cup Company ("Solo") falsely marked several of its products with expired patent numbers and improperly marked other products with conditional patent markings. Solo has filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction, arguing that Pequignot lacks standing to bring suit under Article II, of the United States Constitution.1 Alternatively, Solo argues that if Pequignot is found to have standing to sue under § 292(b) as a qui tam relator, maintenance of this action would violate the constitutional separation of powers doctrine, specifically the Take Care clause of Article II, § 3. The United States has intervened to defend the constitutionality of 35 U.S.C. § 292(b). For the reasons stated in open court and in this memorandum opinion, Solo's motion will be denied.

I. Background

Solo, a Delaware corporation with its principal place of business in Illinois, is a manufacturer of disposable cups, lids, plates, bowls, and utensils. Pequignot is a licensed patent attorney. In his Second Amended Complaint, Pequignot alleges that Solo has committed numerous violations of 35 U.S.C. § 292, which prohibits false patent marking. Specifically, Pequignot alleges that Solo has marked various products with two patents that have expired, U.S. Patent No. RE28,797, entitled "Lid," and U.S. Patent No. 4,589,569, entitled "Lid for Drinking Cup." Pequignot also alleges that Solo has marked several products with the phrase, "This product may be covered by one or more U.S. or foreign pending or issued patents," when those products were neither protected by any patent nor the subject matter of any pending patent application.

The false marking statute provides that whoever falsely marks a product with either a patent number, the words "patent" or "patent pending," or any other words or numbers implying that the product is protected by a current or pending patent when it is not, and does so with the intent of deceiving the public, "[s]hall be fined not more than $500 for every such offense." 35 U.S.C. § 292(a). It further states, "Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States." 35 U.S.C. § 292(b). Although Pequignot does not, and cannot, allege any particularized injury to himself, he asserts standing based on the literal language of the statute, and seeks the maximum amount of the statutory fine for each alleged violation.

In its Motion to Dismiss, Solo asserts that Pequignot lacks standing to pursue this action under Article III of the United States Constitution, and alternatively, that allowing him to bring suit would violate the constitutional separation of powers doctrine under Article II.2 Given the United States' interest in enforcing the false marking statute and its stake in half of the plaintiff's recovery should Pequignot prevail, the Court invited the United States to respond to Solo's Motion to Dismiss. The United States subsequently intervened and filed a pleading defending the constitutionality of 35 U.S.C. § 292(b). Both parties have submitted responses to the United States' pleading, and the United States has filed its reply.

II. Standard of Review.

A party invoking federal jurisdiction bears the burden of establishing its existence. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 104, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). Where, as here, the defendant has not disputed any of the facts on which jurisdiction is based, but instead contends that the Complaint fails to allege facts upon which subject matter jurisdiction would be proper, all facts alleged in the Complaint are assumed to be true. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982).

III. Discussion.
A. Statutory Language.

The statutory provision at issue, 35 U.S.C. § 292(b), is terse. The preceding subsection, 35 U.S.C. § 292(a), defines the substantive false marking violations and penalty:

... Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word "patent" or any word or number importing that the same is patented for the purpose of deceiving the public; or

Whoever marks upon, or affixes to, or uses in advertising in connection with any article, the words "patent applied for," "patent pending," or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public—

Shall be fined not more than $500 for every such offense.

35 U.S.C. § 292(a).3 Section 292(b) then sets forth the remedial scheme at issue here:

Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.

Two salient features of § 292(b) distinguish it from the vast majority of statutes that establish private rights of action for violations of federal law. First, at least facially, by allowing "any person" to sue for false marking, § 292(b) confers standing on anyone to sue, regardless of whether he or she has been personally affected by the false marking. Second, any recovery by a private party is split, with half going to the person bringing suit, and half going to the United States.

B. Whether Pequignot Has Standing to Sue.

Solo argues that notwithstanding the apparently broad language of § 292(b), Pequignot lacks standing to pursue this action. Solo first argues that the Court should adopt a statutory construction that limits suits under § 292(b) to competitors. It then argues that even if § 292(b) allows suits by non-competitors, Pequignot lacks standing under Article III of the Constitution, either as a traditional plaintiff or as a qui tam relator.

1. Construction of 35 U.S.C. § 292(b).

Solo urges the Court to avoid the constitutional question by construing § 292(b) narrowly. Under this narrow construction, a suit by a plaintiff like Pequignot, who is not a competitor of the company alleged to have engaged in false patent marking, would be barred. Solo supports this argument by citing to several decisions that have restricted false advertising suits under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), to actions by competitors. Solo argues that the Court should adopt a similar limiting construction of § 292(b). See, e.g., Made in the USA Found, v. Phillips Foods, Inc., 365 F.3d 278, 281 (4th Cir.2004) (holding that 15 U.S.C. § 1125(a) does not authorize suits by consumers).

It is a "cardinal principle" that a court should "first ascertain whether a construction of the statute is fairly possible by which the (constitutional) question(s) may be avoided." Johnson v. Robison, 415 U.S. 361, 367, 94 S.Ct. 1160, 39 L.Ed.2d 389 (1974) (citing United States v. Thirty-Seven Photographs, 402 U.S. 363, 369, 91 S.Ct. 1400, 28 L.Ed.2d 822 (1971)). However, a restrictive construction of § 292(b) is not "fairly possible," because the plain language of § 292(b) states that "any person may sue for the penalty," unlike the Lanham Act, which authorizes a suit for false advertising by "any person who believes that he or she is ... damaged by such act." 15 U.S.C. § 1125(a) (emphasis added). By its very terms, the Lanham Act limits the scope of those who may sue under § 1125(a). No such limitation is present in § 292(b). Moreover, the Lanham Act includes a clear statement that "[t]he intent of [the Act] is ... to protect persons engaged in ... commerce against unfair competition." 15 U.S.C. § 1127. The appellate courts narrowly construing the Lanham Act to limit suits to competitors have specifically relied on such statutory limitations in finding that Congress enacted § 43(a) of the Lanham Act "without any consideration of consumer rights of action." Made in the USA Found., 365 F.3d at 280 (quoting Colligan v. Activities Club of New York, 442 F.2d 686, 692 (2d Cir.1971)). Solo has cited no corresponding language in § 292, or any other evidence, to support its argument that when Congress enacted § 292(b), it meant to do anything other than confer a right to sue upon "any person." To the contrary, the language of § 292(b) grants a right of action to "whomsoever it may please to sue, though the plaintiff have no special interest in the subject, and may not have sustained any actual injury." Pentlarge v. Kirby, 19 F. 501, 503 (S.D.N.Y.1884).4 Because a narrowing construction that would deviate from the plain language of the statute simply is not "fairly possible," the Court must examine whether Pequignot has standing under Article III.

2. Pequignot's Standing as a Traditional Plaintiff.

Under Article III, a traditional plaintiff must meet three requirements to establish standing to sue in federal court: "injury in fact—a harm that is both concrete and actual or imminent, not conjectural or hypothetical," "causation—a fairly ... trace[able] connection between the alleged injury in fact and the alleged conduct of the defendant," and "redressability—a substantial likelihood that the requested relief will remedy the alleged injury in fact." Vermont Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 771, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000) (internal quotation marks and citations omitted).

Although Pequignot has alleged that "every person in the United States is a pot...

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